Startup stories: How two young men tried to make drinking tea cool with an investment of Rs 3 lakh

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22-05-2025

If you are still in college, you might have friends preparing for competitive exams such as the UPSC or MBA entrance exams, such as CAT and XAT. Some might also be thinking of starting their own businesses or ventures.
While in college, many people are enthusiastic, with age on their side and a zeal to make a mark. Young people don't just study but also dream of making a difference in the world. After classes, a different kind of adventure begins. Some students, armed with ambition and business ideas, are not just thinking about getting a job. They see their age as an advantage, a time to take risks and leave their mark. The energy to create something new drives them to explore ideas no one has tried before.
This was the story of Anubhav Dubey, a young soul born in the heartland of Madhya Pradesh, Rewa district, in 1993. However, Anubhav's journey was destined to deviate from the conventional paths etched by his family. Despite a business-oriented lineage, his father's vision painted a different future, one in which Anubhav would become an esteemed IAS officer.
Fuelled by familial expectations, Anubhav found himself in the bustling streets of Delhi, fervently preparing for the UPSC exams. But, as fate would have it, the corridors of bureaucracy weren't to be his only route. Faced with the challenges of competitive exams, Anubhav stood at a crossroads, his dreams of a nine-to-five job fading against the allure of entrepreneurship.
Anubhav had big dreams to start something of his own, but was stuck between his family's expectations and his own dreams. So, along with his friend Anand Nayak, he decided to take a leap of faith. They chose to pursue their dreams. For this, they chose to pursue their dream and start a business. They brainstormed various ideas and settled on something universally loved – tea! With just a modest sum they had saved up, they opened a humble tea stall in Indore in 2016.
When you wake up, you need tea (chai). When you come home exhausted from work, you're in desperate need of tea. From the fanciest restaurants to the littlest dhabas, chai is everywhere.
Anubhav and Anand, armed with a small investment of Rs 3 lakh, embarked on their tea business. They were well aware of their financial limitations, understanding that they couldn't afford any marketing, interior design or branding. But this didn't deter them. They decided to proceed with their idea and opened a small outlet outside a girls' hostel in Indore. They borrowed items from others and used a simple wooden plank with 'Chai Sutta Bar' handwritten on it. To their delight, this humble setup worked like a charm, proving that success can be achieved even with limited resources. This cafe with a handwritten board started getting so famous for its unique name that sometimes, they couldn't handle the rush.
Every business strives to answer a crucial question: why should customers choose them over competitors? The answer lies in a Unique Sales Proposition (USP). Your USP is the distinctive element that makes your business stand out in the market, giving customers a compelling reason to choose you. Identifying your USP involves completing the phrase, 'Customers will buy from me because my business is the only __________ .' (fill in the blank)
Your USP can evolve with changes in your business or the market, and you may have different USPs for different customer segments. These USPs can be effective because they are driven by what the customer looks for when buying. It's a good idea to review your USPs regularly.
Can you tailor your products or services to match your customers' needs better? Consider asking your customers why they buy from you. This will tell you what they think your USP is – this may differ from what you think your USP is.
It's also useful to constantly check what your competitor is doing. Remember – if your competitors are doing the same things as you, your USP is no longer your USP. At this point, you either need to strengthen your USP or your core or build another moat that can augment your existing USP.
The best way to KYC is through talking to your customers, being with them and spending time with them. Because when you are building a company, you need to have that sort of discipline to know the real problems and pain points of your customers. After all, they are the ones you are building the company for.
If you want to impress your customers, you need to know them. As simple as that. Anubhav and Anand understood this well, which is why Chai Sutta Bar was able to capture the attention of its customers and become incredibly popular.
But the question is: how did they truly understand their customers and turn that understanding into virality?
Well for that, they started deploying the following marketing strategy:
Word of Mouth and Social Proof: Anubhav and Anand demonstrated their entrepreneurial ingenuity by inviting friends and playing music to create a bustling atmosphere, sparking curiosity among passers-by. This clever tactic led people to believe there was something unique about the place, contributing to its initial success.
Free Tea: On the first day, they offered free tea, which was an irresistible draw. Once people experienced the quality, they were more likely to return as paying customers.
Organic Growth: Their marketing relied heavily on word of mouth and the organic buzz created by the initial free offerings and strategic location of their outlets, mainly right in front of girls' hostels at various locations.
Name and Branding: 'Chai Sutta Bar' cleverly played on words. While 'sutta' is Hindi slang for a cigarette, in Chai Sutta Bar's context, it denoted principles or basics, creating a unique and memorable brand identity.
After Chai Sutta Bar started gaining immense popularity, the next step was to expand the business and open outlets in other cities across Bharat. However, in a country where chai preferences change every 100 kilometres, the challenge lies in making standardisation scalable while respecting regional tastes.
Recognising the importance of local flavours, they embarked on a comprehensive market research journey, uncovering each new city's unique tastes and consumption patterns. They thought of keeping some chai varieties common across geographies and introducing special chai catering to local tastes, thereby fostering a sense of connection with local communities.
In the food and beverage space, especially in quick service restaurant (QSR) chains, standardisation is not just a preference, it's a necessity. Anubhav and Anand had to be committed to ensuring that every cup of chai served met the same high standards and same taste, regardless of location, so that they could instil confidence in the quality of their product. This was needed to ensure that they could scale.
To achieve this standardisation, Anubhav and Anand knew they had to go beyond just recipes. They focused on standardisation through stories and detailed Standard Operating Procedures (SOPs). By crafting these narratives around their core chai varieties, they ensured that each cup told the same story, creating a uniform customer experience.
With their deep-rooted research into understanding the product and customer, 'Chai Sutta Bar' has achieved remarkable success. Today, it boasts 600 stores across the world and serves over 4.5 lakh 'kulhad chai' every day.
Anubhav and Anand spotted an opportunity to make chai trendy among Bharat's youth. By focusing on what young people in urban areas value – authentic yet modern experiences – they aimed to make chai cool and appealing. This strategic move laid the foundation for broader customer interest as their business expanded, an authentication of the power of understanding your initial customers.
Now, Chai Sutta Bar is that one startup that aptly utilised the concepts of KYC, USP, customer needs and market requirements fully to their advantage. Your attention is again drawn to the fact that despite using the word 'sutta', they managed to keep their clientele away from the provision of the same and yet made their venture a success. The word 'sutta' may have drawn many a customer to their outlets, but they succeeded in satisfying their craving with a preferred choice of tea instead.
And no one's complaining. Get your own sutta, if you want to. But the question is, should you?
Excerpted with permission from The Startups of Bharat: Stories of India's Million-Dollar Founders Under Thirty, Aditya Arora and Surya Pasricha, Penguin India.