The Death of Armadillo Digital: An American startup in India
Updated: Mar 16, 2022
In 2017, the internet user base in India was 422 million. By 2021, it more than doubled to 845 million. This growth was foundational to the motivation to start Armadillo Digital; a digital creative agency focused on the growing Indian digital economy.
Founded by two Americans in India's capital of Delhi, this was a real experiment. First-time founders building a startup in a foreign market. And the most fundamental aspects turned out to be the most difficult.
Legally incorporating - turned out that required first having a commercial lease on physical space.
Also, we could not use either "Armadillo" or "Digital" in our official legal name. Exhausted we let our lawyer finalize it "Armadigi Design Private Limited." 🤷
Setting up a bank account 🏦 needed months of complicated paperwork and a literal rubber stamp to sign all the documents. Six months later, we are finally in business. Even officially recognized as a startup by the Indian government. 👇🏻
Our initial business development efforts were not successful. Our pricing was too high for the local market. Potential clients preferred local firms with family relationships with the decision-makers. In a few cases - we found out later - the client simply shared our proposals with competitors to implement at a lower cost.
We explored strategic partnerships with established public relations and communication firms. Firms with an existing client base looking to expand into digital services. That worked.
Our first client, a new modern art gallery and museum in Calcutta, India. We traveled from Delhi to Calcutta on a first-class train to meet them. They wanted an updated logo, brand guide, website, social media, brochures, flyers, and venue signage.
Next, we got contacted by a leading India-based alcohol company. They wanted to reimagine their branding entirely to attract the emerging young Indian consumer.
Seeing potential opportunities everywhere, we launched a venture studio in 2019. We partnered with local entrepreneurs, sharing equity and building new digital startups from the ground up. We collaboratively launched an e-commerce fashion brand startup and a digital media venture focused on tourism.
Armadillo Digital was a bootstrapped company, and we learned hard lessons about cash flow management while operating in India, notorious for slow-paying accounts receivable. 💸
We needed to pivot.
We began focusing on international clients, harnessing high-performing but lower-cost Indian talent for better margins. This worked. Within a few months, we had multiple clients in multiple countries. A Bill & Melinda Gates-funded healthcare company based in Kenya 🇰🇪, a new intelligent backpack startup based in Shenzhen, China 🇨🇳, an online learning platform based out of London 🇬🇧, and a global fintech company from Estonia 🇪🇪.
But it was difficult to sustain, and we lost focus. The new global strategy required higher-quality business development processes and growth capital, which we didn't have and couldn't get quickly.
Then, in April 2020, COVID hit, and the Indian economy went into a complete nationwide lockdown for several months.
The death of Armadillo Digital was a death by a thousand cuts. For years, we operated purely in survival mode.
The COVID lockdown provided time to pause, reflect and reaccess. We realized it was time to move on. But the lessons learned from this experience will last a lifetime.