IIMC-CRC-2018-05

IIMC C ASE RESEARCH C ENTER (IIMCCRC)

B ISWATOSH S AHA , S ANKALP P RATAP , M OUMITA ROY
DECEMBER , 2018

PAPERCUP –
THE JOURNEY OF A STARTUP (CASE – A)

INTRODUCTION
It was the summer of 2013 and Somrwita Guha was in her bedroom staring out of her window
thoughtfully. At 23, the young lady had some important decisions to make. She was the proprietor of a
fledgling startup, which she had founded with her collegemates a few years ago. While her friends had
moved on to more conventional pursuits, such as higher studies and corporate jobs, Somrwita was
determined to continue nurturing her young venture. Christened “Papercup”, the venture dealt in
handmade greeting cards, bookmarks, and hand-painted kettles, all of which were entirely manufactured
by Somrwita and a shifting set of two or three creatively inclined friends and collegemates.

Papercup operated from Somrwita’s bedroom in her family’s apartment, where she lived with her parents
and older sister. In her bedroom, Papercup jostled for space with her textbooks and clothes. Thus far, all
advertising had been through word-of-mouth and her personal Facebook page, and orders were fulfilled
through personal labor, thus earning Somrwita some handsome pocket money in the process. However,
she wanted to launch her website, employ a few workers, and have store inventory, but space was running
out in her bedroom, and she knew instinctively that she could not spread the clutter of her raw materials
and wares to other parts of her parents’ tastefully decorated apartment. As she turned her gaze from the
large, lush playground that her window overlooked, she could not help but notice the contrast — her
room was essentially an overcrowded warehouse!
_____________________________________________________________________________________

Biswatosh Saha, Sankalp Pratap and Moumita Roy of the Indian Institute of Management Calcutta
developed this case study as the basis for class discussion. It is not intended to illustrate the effective or
ineffective running of an organization.
This case study is meant for use in the ‘Post Graduate Program’ taught by Prof. Sankalp Pratap of IIM
Tiruchirapalli starting August 2020. Beyond limited printing rights, copying, distributing or posting of this
case study in any form on any media is strictly prohibited. The limited rights to use this case is only valid
for the duration of the program.
Copyright © 2018, Indian Institute of Management Calcutta.
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Another associated challenge was related to her academic future. Every single individual in her extended
family held a Master’s degree. Somrwita had just earned a Bachelor’s degree in economics from Jadavpur
University (JU), Kolkata. However, she was not keen on enrolling in another course or studying further,
though her mother was hopeful that she would pursue higher studies. Her mother was not at all against
her creative pursuits; in fact, she liked the crafts, colorful items and accolades that Papercup had
generated, but she was not convinced that the venture ought to play a central role in Somrwita’s career.
Summers in Kolkata had always been tough to negotiate but this particular one was going to be
particularly problematic, Somrwita thought wryly. She let out a deep sigh and turned back to the view
outside her window, hoping a solution to her problem would present itself.

THE FORMATIVE YEARS

Born in the summer of 1990, Somrwita was the second daughter of Tapas Kumar Guha and Chandra Guha.
Her immediate family of four was a part of a larger joint Bengali family, which lived in a two storey house
in Paikpara1, North Kolkata (see Exhibit 1 for more details). Her childhood was spent with numerous
cousins who all lived under the same roof and were playmates. The family was tightly-knit and had strong
bonds even with distant relatives. The girls of the Guha family in Somrwita’s generation were all sent to
Loreto Day School in Sealdah, Kolkata (see Exhibit – 2 for more details).

Loreto Day School, Kolkata, a reputed institution founded in 1857, focused on the education of the girl
child with particular attention to the underprivileged. Part of its quoted vision is as follows:
“Our goal is to form women alive to the needs of our world, with the knowledge which gives
them power to act, and motivated by the love which gives them purpose and wisdom in their
action. The education of girls from every social background has to be undertaken so that there
can be produced, not only women of refined talents but those with great souls, who are so
desperately needed by our times.”

1 North Kolkata is the oldest part of Kolkata. It is dotted with narrow winding lanes and old buildings. This area was
largely occupied by landowners (zamindars) in the British times. Some pockets of north Kolkata have fallen into
disrepair. Paikpara is supposed to have derived its name from ‘Paik’, meaning “foot soldiers”, as apparently the foot
soldiers of the British were provided quarters in this locality. Newer parts of the city like Salt Lake were more
organized, modern, and navigable due to the planned approach to construction in these areas.

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The unique nature of Loreto Day School had a significant impact on Somrwita’s mental make-up, including
her ideas about compassion, service, and leadership. She stated:

“We had 1,400 students in our school then and 700 of them got free education. It was not a school
that was posh, neither did it have outstanding academic results, but there was something about
that school that was different. There were about 300 children who were staying on our school
rooftop, rescued from several places across the city. These street children got shelter, food,
education, and more at our school. Once we were in Standard V, we used to teach them every
week, everything from crafts and literature to art and math. We also used to go to the villages
every month to teach rural children. I did that for five years. Our Principal, Sister Cyril, had a lot of
influence in the formative years of my growing up. The school stressed extracurricular activities
and surprisingly was devoid of any peer pressure. I took a strong liking to art and crafts, dance,
theater, and teaching. In standard IX, I became the Prefect of one of the houses. That was my first
tryst with leadership. There were about 100 students who were my responsibility. My house went
from being in the last position to being second out of the six houses during my time as the Captain.
I loved it to the core and remember working really hard for it.”

The school curriculum required its young students to develop lesson plans with a teacher’s assistance for
rural children. A small group of students would visit a village every week and deliver the lesson. There was
a similar project for children from urban slums and street children as well. Such experiences shaped
Somrwita, and she developed a certain affinity for community work, including working with
underprivileged children.
Along with her school, a host of other influences were simultaneously working on Somrwita. As is the
norm in Bengali households,2 she was given special training in drawing and dance. She recalled:
“I was never great at painting or sketching, but I remember enjoying it a lot. It was almost like a
form of therapy. It was the same for dance as well. I was trained in classical Bharatnatyam for 15
years. Hence, my childhood was quite good and came to an end almost too early.”

2It is a norm in Bengali households to train their children in various art forms including music, dance, and drawing.
Tutors are appointed to help children learn various art forms, and typically a child is exposed to a minimum of two
art forms in early childhood. A child may subsequently choose to pursue only one of these.
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With all her extracurricular skills and activities, Somrwita was a popular student in school. She participated
in various events and activities, enjoying the adulation and attention they brought. Once, she was featured
on national television for winning the “Bournvita Confidence Champion” contest to the utter delight of
her family. She matriculated with honors, ranking third in the school. At this stage, following her family’s
advice and her own interests, she decided to study Humanities at the higher secondary level, with
Economics, Mathematics, and Computer Science as her core subjects. This combination of subjects was
not available at Loreto Day School, and Somrwita had to shift to another school, Patha Bhavan. This school
placed a heavy focus on Bengali culture and was very different from the missionary school culture that
she was used to. It took her some time to get accustomed to the new environment, but Somrwita adjusted
well, and along with a few friends, she co-founded a magazine of which she remained editor for the two
years she was at the school. She completed her higher secondary studies with an enviable score of 88%
and decided to pursue Economics in college. Eventually, she secured a seat in the prestigious Jadavpur
University, Kolkata, where she earned a Bachelor’s degree in Economics.

FAMILY BACKGROUND
Somrwita came from a family of engineers and doctors, with a lot of pride and importance attached to
academic achievement. Her father, Tapas, was a civil engineer who had built a long and successful career
with the Kolkata Municipal Development Authority (KMDA), a state government body. A creatively
inclined person himself, he had kept his artistic interests alive by informally offering services such as event
management, interior design for homes, and wedding invitation design to his friends and relatives. In
time, however, he abandoned these pursuits due to passive discouragement from the extended family
and the demands of his full-time job at KMDA. The focus on higher education and stable employment was
systematically passed on to the next generation of the Guha family. Somrwita’s older sister, Anandita,
earned her Bachelor’s and Master’s degrees in Computer Application and went on to work at large
organizations such as Tata Consultancy Services and Dell Computers. It was clearly communicated that
the ideal child of the Guha family should have an engineering or Master’s degree at the very minimum;
anything less would be an embarrassment for the family.

With the youngsters in Somrwita’s generation growing up, space in the joint family home started
becoming a constraint and slowly, one by one, each nuclear unit of the family left the ancestral home and
moved to other parts of the city. Tapas purchased an apartment in Salt Lake and moved there with his
family. The new apartment also gave him an opportunity to exercise his interior designing skills, which he
employed to good effect. The joint family home was empty by the mid-2000s. It was used only for the

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annual “Kali Puja”,3 which the extended Guha family celebrated with fervor, temporarily shifting to their
old house for a few days and reliving old memories.

COLLEGE LIFE AND THE BIRTH OF PAPERCUP

In 2009, Somrwita joined JU to study Economics. This was her first experience of an unregimented
academic environment, and her network of friends started expanding. The culture at JU encouraged
debate, collaboration, and experimentation, and Somrwita lapped it all up (see Exhibit – 3 for more
details).

Jadavpur University: The university traces its origin to the partition of Bengal by the British in 1905 into
East Bengal (now Bangladesh), West Bengal, and Odisha (now separate states in India). While the British
cited administrative efficiency as the reason for this division, it effectively split Bengal along religious
lines — the Muslim majority East Bengal and the Hindu majority West Bengal. This partition was seen
by nationalists of the time as an instance of Britain’s “divide and rule” policy, which aimed to take the
wind out of the ongoing “Swadeshi” movement.4

The protests that followed in the city of Calcutta witnessed wide participation by the student
community, prompting the Chief Secretary of the Bengal government, RW Carlyle, to threaten the
withdrawal of government funding and grants to the University of Calcutta, the premier educational
institution in the region, which had been established by the British and was controlled by them.
As a reaction to this threat, and also in continuation of a decade-long effort by nationalists to establish
an alternative system of education beyond the control of the British, luminaries of the city including
Rabindranath Tagore, Subodh Chandra Mullick, and Aurobind Ghosh met and conceived the idea of a
National Council of Education to promote science and technology education as a part of the Swadeshi
movement. This led to the formation of Bengal National College and Bengal Technical Institute, which
later merged to form Jadavpur University.
Jadavpur University retained its original combative spirit through the years and also established itself
as a cultural hub. Located in the heart of the city, it offered students a unique combination of

3 Kali Puja is a Hindu festival dedicated to ‘Kali’, a feminine deity worshipped in Eastern parts of India.
4 The Swadeshi movement, a movement for Indian independence, was aimed at a national reawakening in all spheres

of economic and cultural life. It emphasized the local production and consumption of goods and the establishment
of indigenously run institutions of knowledge and culture.
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maddening activity and traffic outside its gates and a serene, peaceful environment inside its large
campus. The campus housed multiple disciplines including engineering, science, arts, management, and
several interdisciplinary schools as well.
Students from various disciplines had the opportunity to mingle and debate freely. They could be found
in the corridors and lawns of the campus loudly exchanging ideas, singing, creating music, and preparing
plans for the next protest or event — all in a day’s work. Given the wide range of academic programs
at the university, students had the opportunity to participate in college festivals of various hues all year
round. Some of the widely attended events at JU were Sanskriti, U-Turn, Arena, and Srijan. These fests
were a medley of music performances, drama, art, science, food, and various competitions. (see Exhibit
– 4 for more details)
The large and diverse student population also helped run various special interest clubs, such as
photography, quiz, debate, mountaineering, and music clubs, thus giving students multiple outlets to
freely pursue their interests.

As she prepared for her first exam at JU, Somrwita found that her mind was being pulled in various
directions. She was particularly captivated by the idea of making small decorative items with waste
material and selling them at events on campus, using live music performances to attract customers. She
called up her friend, Suranjana Endow, who liked the plan and agreed to come on board, and the pair
roped in another similarly inclined friend, Mahasweta Mitra. For two months there was no progress on
their plan, but in January 2010, the three friends got an opportunity to initiate their venture. Sanskriti,
JU’s popular annual college fest, was on the anvil and it appeared that the trio could set up a stall for free.
They got to work, investing their pocket money to create a small number of items for display and sale.
The venture was named Papercup. Somrwita said:
“We could not include live music as a part of our stall because the fest already had musical
performances of various genres. At our stall we sold items such as bookmarks, small diaries with
interesting cover pages, T-shirts with culturally relevant captions, wall hangings, and table lamps
fashioned out of discarded bottles. Together, the three of us spent INR 700,and were able to make
INR 4,700 at the end of three days.

All the items were hand-painted and crafted by the three friends (see Exhibit – 5 for more details). Having
fun at the fest, making money in the process, and being recognized for their initiative made the young trio
proud and motivated them to forge ahead. For the next two years, they were busy making similar and
new items at home, setting up stalls at various colleges festivals in Kolkata, and making a name, as well as
handsome pocket money, for themselves (see Exhibit – 6 for more details).
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The Papercup brand had begun gaining traction in Kolkata. It catered to the urban middle-class and upper
middle-class population, primarily college students in the age group of 18 to 25 years, offering them a
variety of products that had decorative and gifting utility. Indeed, the venues in which Papercup sold its
products were those mainly frequented by college students. The bulk of the purchases was made by
women, who accounted for around 70% of Papercup’s overall sales. The message the products conveyed
was contemporary, funny, and tongue-in-cheek. In line with the preferences of its young patrons,
Papercup offered a large variety of “fandom” merchandise featuring musical bands, sitcoms, and local
icons (see Exhibit – 7 for more details). The messages and themes often had a local feel that set Papercup
products apart from competing product lines on offer by existing players, such as Archies, which had
significant play in the Indian gift market through their retail stores. Other important competitors were
Chumbak and Happily Unmarried, both of which had a strong digital presence and also sold their products
through a shop-in-shop format in various shopping malls in the city. At every exhibition and venue,
Papercup also encountered some local competitor or other with similar product offerings.

MARCHING AHEAD, ALONE

By early 2012, Somrwita had become fairly serious about Papercup. She was spending a lot of time
thinking about new products, getting bulk orders, and fulfilling them. This was coming in the way of her
studies and resulting in below average grades, much to the dismay of her mother in particular. She
recalled:
“I was dabbling in a lot of things in college. I used to debate in college, was largely into public
speaking, then we had this economics meet and everything. There was Papercup, there were quite
a few other things, and I was not in the classroom at all. I was passionate about all of these things,
but gradually I realized that my passion for Papercup started increasing for several reasons. One
could be that this was my brainchild so there were a lot of emotions attached to this, and I am not
sure if that is good for business. On the other things like debating, I still do a bit of public speaking,
but we were a part of the debating society and I used to work for it; it was not so much my own
thing. I am probably not one of those people who could end up working for a company; instead,
I’d like to work for myself and something of my own.”

The other two co-founders were not as keen as Somrwita to make Papercup a central part of their identity
and wanted to pursue higher education. Somrwita, on the other hand, wanted to focus on increasing the
scale of Papercup’s activity, which required considerable time and effort, most of which would come at
the expense of their studies. Her friends also did not think it was right for them to be associated with the
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venture without contributing their share of the effort. The situation was becoming problematic for the
young trio. Together, they decided that Somrwita would proceed as the sole proprietor of Papercup while
they would provide whatever support they could from the outside, not as business partners but as friends
and well wishers of Papercup. She was not entirely on her own, however. During this period, Anandita
and Tapas supported her and helped her put up stalls at various events (see Exhibit – 8 for more details).
Around this time, another challenge cropped up in the form of rising costs. Putting up stalls at
independent events required an upfront rental fee of anywhere between INR 5,000 and INR 7,000.
Anandita chipped in with much needed working capital by sparing funds that she had accumulated
through home tutoring, which she undertook during her free time. To cover her costs, Somrwita had to
work longer hours to create a large number of items that could be sold at various events and exhibitions
(see Exhibit – 9 & Exhibit 10 for more details).

During this period, Papercup typically participated in two exhibitions every month, sold materials worth
INR 10,000 through its social media presence, and fulfilled orders worth another INR 2,500 that came
through various contacts. Somrwita began outsourcing some of her work to vendors. For example, she
would create covers for diaries and outsource the binding work. She also started feeling the need for extra
hands to create inventory.5 The need for a working space and proper office was becoming more and more
urgent as her bedroom filled to the brim with raw materials and finished goods. A casualty of all this
activity was her course work, and she had accumulated some back papers that she had to clear in order
to graduate. So while her friends graduated in 2012, it would be another year before Somrwita could
appear for a re-exam and clear the backlog. She recalled:
“My mother was very disappointed with the high priority that I was according to Papercup. When
relatives would ask her what the matter was, she would say things like ‘My daughter paints and
sells kettles and has stopped her studies, and nothing is going to happen in her career now! ’”

In 2013, Somrwita appeared for the re-exam and was confident of clearing it. There was a lot of implicit
and explicit pressure on her to pursue a Master’s degree or MBA if she was determined to enter the world
of business. Meanwhile, during the previous year, she had developed some contacts through Papercup’s
presence at various events and exhibitions, and these were slowly getting converted into orders, including
a bulk order for notebooks from an educational institute, another for branded bags for an organization’s
annual event, and yet another for customized T-shirts. Somrwita wondered whether to suspend Papercup
for a while in order to pursue higher studies, but she worried what would happen to her venture in the
intervening period. Alternatively, she could dive headlong into the business and expand the scale and

5 Graphic designers could be hired in Kolkata on a permanent basis at a monthly salary of INR 25,000-30,000.

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scope of Papercup, but for that she needed to have an office and some workers who would create the
items. Somrwita estimated that she would require around 300 square feet of space for her workshop, and
that rental on such a space would cost her anywhere from INR 8,000 to INR 15,000 per month, depending
on its location in the city. All of this would require some investment on her part. Should she invest in
renting a working space? Where would the funds come from? What kind of talent should she hire? It was
with these confusing thoughts running through her mind that Somrwita wistfully gazed out of her
bedroom window, searching for a way forward.

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EXHIBITS

Exhibit 1: The lane of ancestral house of the Guha family

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Exhibit 2: Loreto Day School, Sealdah, Kolkata

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Exhibit 3: Jadavpur University, Kolkata

Exhibit 4: College Fests at Jadavpur University, Kolkata

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Exhibit 5: Handmade items, bookmarks, kettles, and photo frames

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Exhibit 6: A typical stall put up by Papercup in college fest with Somrwita, Suranjana, and Mahasweta

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Exhibit 7: Fandom Merchandise

Exhibit 8: Somrwita with her father

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Exhibit 9: Participation in independent events

Items Price (Rs. per Unit) Units Sold Costs Incurred

Bookmarks 5 60 Kiosk hiring charges Rs. 5,000
Notebooks 80 30 Transport Rs. 500
Pen Stands 150 14 Material and manufacturing cost Rs. 6,300
Greeting Cards 50 40 In the run-up to the exhibition,
Kettles 600 3 three young interns worked for
Table Lamp 600 4 10 days, spending
variable
Coffee Mugs 220 5 approximately 3 hrs / day in
design and manufacturing
Coffee Coasters 300 8
activities
Candles 85 12

Exhibit 10: Record of materials sold at an exhibition

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