How to Sell Anything PAGE 43
IN BUSINESS AND IN WEALTH
The Magazine for Growing Companies
A NEW VOW OF LIFE
IN BUSINESS AND IN WEALTH Five couples share what it takes to live and work together. Page 30
SUCHNA and YOGESH SHAH run The Backpacker Co in Mumbai
The MAGAZINE for GROWING COMPANIES
A new column by Jason Fried Page 14
May 2010 | Rs.150 | Volume 01 | Issue 04 A 9.9 Media Publication
The Way I Work
Hummingbird Suites Page 64
Meet the rebel who built
Team Lease Page 54
30 Wedded to the company —and to each other Five couples share their compelling tales of building businesses and lives together—and successfully, too. by shreyasi singh
32 COOKING UP A STORM Reeta and Dheeraj Gupta of Jumbo King.
COVER PAGE: WARDROBE: HIS - REID & TAYLOR; HERS - NIMIRTA LALWANI. LOCATION COURTESY BMW INDIA
33 WALKING HAND-IN-HAND ON THE IT HIGHWAY Anupama Arya and Puneet Vatsayan of Mobera Systems. 36 A TALE OF TWO TRAVELLERS Suchna and Yogesh Shah of The Backpacker Co. 38 WORDS OF CAUTION Therapist Nivedita Singh on the pros and cons of working with your spouse. 39 BUILDING A DREAM FACTORY Gunita and Amarjit Singh of the Intec group. 41 WHEN ONE+ONE EQUALS ELEVEN Nirmala Sankaran and Harsh Rajan of Hey Math.
54 How I Did It Manish Sabharwal
He wanted to build a company that was good for India. And he did that with TeamLease, which provides employment to one person every five minutes. But he’s not willing to rest till he’s touched a million lives. as told to pooja kothari
43 Sales Special 44 Sales Tips From the World’s Toughest Customers Advice from executives at CocaCola, Dell, Intuit and other corporate giants. by kasey wehrum
48 The Secret of Their Success A psychoanalyst explains what makes salespeople tick. by leigh buchanan
50 Start-up Diaries
An investment banker-turned-social entrepreneur who’s running a courier service with deaf adults; a not-so-sunny update from two of our earlier ventures: My Sunny Balcony and RideInSync. by shreyasi singh
THIS EDITION OF INC. MAGAZINE is published under license from Mansueto Ventures LLC, New York, New York. Editorial items appearing on pages 9,12,14-15,22-23,25-27,43-49,57-59 were all originally published in the United States edition of Inc. magazine and are the copyright property of Mansueto Ventures, LLC, which reserves all rights. Copyright © 2009 and 2010 Mansueto Ventures, LLC. The following are trademarks of Mansueto Ventures, LLC: Inc., Inc. 500.
on the cover
Suchna and Yogesh Shah, founders of The Backpacker Co; photographed by Mexy Xavier in Mumbai. Cover design by Binesh Sreedharan
16 26 57
03 Editor’s Letter 04 Contributors 05 Mail
06 Behind the Scenes
18 On the Contrary By Mahesh Murthy HR is the secret weapon in every start-up—not IP.
The flags, t-shirts and luxury lounges: all the embroidery that dresses up the IPL matches.
22 Balancing Acts
Private equity’s back in action Flipping out for flip-flops The Ticker Interview with Deepak Kamra of Canaan Partners Business for Sale: A website for stock investors Blogger Logic: Derek Sivers on the true value of an idea
14 Get Real
By Jason Fried Is your business driving you nuts? In his debut column for Inc. Jason Fried has some advice: Relax. It just doesn’t matter.
Sharad Sanghi hits goat skin to relieve the week’s stress.
INC.INDIA | MAY 2010
How to be a great leader. Find the Guidebook following page 28.
SL Minda, 1930-2010 The man who created the Rs 3,000-crore Minda Group out of nothing.
A robot that can crawl into pipes and clean them.
By Meg Cadoux Hirshberg If you have a home-based business, you need to establish boundaries. Quickly.
57 MANAGING How to offer low-cost items without cheapening your brand.
25 The Goods
58 SALES & MARKETING Using Groupon to attract new customers.
Tablets that rival the iPad Intel’s new netbook app store Four great new projectors Synchronising browser bookmarks A wine case worth gifting Extreme green dream machines Things that Sanjay Soni cannot live without
60 ELEVATOR PITCH Hangvertiser needs Rs 90 lakh to put advertisements in the wardrobes of India’s elite. 62 BRANDING Planning to sell you products abroad? Then read what Intertek’s COO, Mark Loughead, has to say about certification. 63 SALES & MARKETING This company wants to build India’s future villages with bamboo. Four entrepreneurs shoot out marketing ideas.
64 The Way I Work
Vivek Madappa built a Rs 22-crore business in five years by empowering his team and being an enabler. And, with no help from the Blackberry.
What an idea, Sirji! In our short existence in the print arena, we have covered quite a few extraordinary tales of partnership. Whether it was the trio at Avendus, which built an investment banking firm within a decade, or, the twosome at EXL Service, who weathered challenges one after another to build a robust outsourcing business—those were all inspiring tales of what we can do together. Our cover story for this issue sheds light on the ultimate partnership of all—couples who are not only wedded to each other, but also to the businesses they run together. All the five couples we have featured bring different skills to their businesses; yet, there are similarities in thought and behaviour that came to the fore even during our brief interactions. “The power of two people coming together and sharing a passion, and the singularity of purpose was simply beautiful. THINGS I LEARNT Despite their work encroachIN THIS ISSUE ing on their personal lives, There’s no such they felt it was the perfect scething as overnario,” says Shreyasi Singh, communication. who wrote the story. It’s possible to keep It doesn’t work for everythe family first and one, though. As Nivedita build a successful business. Singh, the marriage counsellor we consulted for this story, There are happy losers and sad explains—and, as is evident losers—the former from each of the couples feacome back after tured in our story—the going down and view spouses have to respect each their losses as a way other and bring complemento the ultimate win.
tary skills to the table for this partnership to succeed. Her inputs, especially on the existence of a conflict resolution system, are rather interesting. You will find them on Page 38. Last month, I landed up visiting Bengaluru for a few days. I was going there after six years, so the narrow roads—especially since I had spent the intervening period in Delhi—were absolutely shocking. But then, the entrepreneurs I met there more than made up for the time I spent on the road to get to them. One of them, Vivek Madappa, runs three businesses in tandem. It’s interesting how he plans his time to do justice to all of his businesses, while ensuring that his daughter remains his priority. Vivek, your time-juggling act is a real inspiration, although I have still not gotten around to making my bucket list. To know what that is, turn to The Way I Work on Page 64. There’s something about this new breed of professionalsturned-entrepreneurs. Their ability to view business as a means to an end is rather refreshing. Dhruv Lakra—who runs a courier service that employs adults with hearing impairment—left a cosy i-banking job to struggle with the highs and lows of setting up a business in a cut-throat field. Read about him in our Start-up Diaries section. And, it’s that time of the year again, when we are being judged on our contributions to the organisations we work for and the competencies we possess. Just in case some of you need a few tips on how to become better leaders, help is at hand in the guidebook after page 28. Do write and tell us what you think of the cover story.
Pooja Kothari firstname.lastname@example.org MAY 2010
MANAGING DIRECTOR: DR PRAMATH RAJ SINHA PRINTER & PUBLISHER: ANURADHA DAS MATHUR EDITORIAL EDITOR: POOJA KOTHARI ASSISTANT EDITOR: JACOB CHERIAN ASSISTANT FEATURES EDITOR: ROHINI BANERJEE CONSULTANT FEATURES EDITOR: PAYEL MUKHERJEE DESIGN SR CREATIVE DIRECTOR: JAYAN K NARAYANAN ART DIRECTOR: BINESH SREEDHARAN ASSOCIATE ART DIRECTOR: ANIL VK MANAGER DESIGN: CHANDER SHEKHAR SR VISUALISERS: PC ANOOP, SANTOSH KUSHWAHA SR DESIGNERS: PRASANTH TR & ANIL T CHIEF PHOTOGRAPHER: SUBHOJIT PAUL COMMUNITY TEAM PRODUCT MANAGER: MAHESH RAVI MANAGER: SHREYA PILANI ASSOCIATE: DEEPIKA SHARMA
SALES & MARKETING VICE PRESIDENT: NAVEEN CHAND SINGH NATIONAL MANAGER (ONLINE SALES): NITIN WALIA NATIONAL MANAGER (EVENTS AND SPECIAL PROJECTS): MAHANTESH GODI REGIONAL MANAGER (SOUTH) VINODH K (+ 91 97407 14817) REGIONAL MANAGER (NORTH) PRANAV SARAN (+ 91 93126 85289) REGIONAL MANAGER (WEST) SACHIN MHASHILKAR (+91 99203 48755) MANAGER (KOLKATA) JAYANTA BHATTACHARYA (+91 93318 29284)
OFFICE ADDRESS 9.9 MEDIAWORX PVT LTD K-40, CONNAUGHT CIRCUS NEW DELHI -110 001 INDIA PRINTED, EDITED AND PUBLISHED BY ANURADHA DAS MATHUR 9.9 MEDIAWORX PVT LTD K-40, CONNAUGHT CIRCUS NEW DELHI -110 001 INDIA PRINTED AT NUTECH PHOTOLITHOGRAPHERS B-240, OKHLA PHASE-1 NEW DELHI – 110020 INDIA
PRODUCTION & LOGISTICS SR GENERAL MANAGER (OPERATIONS) SHIVSHANKAR M HIREMATH PRODUCTION EXECUTIVE VILAS MHATRE LOGISTICS MP SINGH, MOHD. ANSARI, SHASHI SHEKHAR SINGH
CONTRIBUTORS Shreyasi Singh is an independent journalist based in New Delhi. She writes regularly for several national and international publications reporting on issues as varied as sustainability, social entrepreneurship, women and interesting societal trends. Shreyasi finds the process of writing fascinating—how some thoughts, a few conversations, an empty Word document, and deft fingers can create a little slice of history. She also enjoys travelling and reading, and is working on a book of short stories.
Kasey Wehrum has written for Inc. magazine on subjects ranging from the businesses behind professional bull riding to gadget inventor and father of the infomercial, Ron Popeil. His work has appeared in the New York Times, Worth, Budget Travel, and on MSNBC.com. He lives in New York City. In this issue, he has put together sales tips from some of the world’s toughest customers.
Charu Bahri would like to say that she writes for the sheer love of it. But, in truth, she earns her living as a freelance writer. She enjoys writing on subjects as diverse as business and spirituality. She likes talking to people to learn more about how things work, almost as much as arranging words in a way that benefits readers the most. In the past five years, she has written 500 plus articles for a medley of Indian and overseas publications and websites. Bahri lives in Mount Abu with her parents and her dog.
INC.INDIA | MAY 2010
Good, better, even better
My compliments to you on thrilling me with a fantastic issue of April ’10. This is like a third relaunch of ‘new and improved’ Inc. The crispness of articles and a good dose of role model analysis are simply right. However, I felt that a little more detail and illustration on Dashboards could be more helpful. All the best. —DINESH JAIN, CEO, Zee Turner
Companies on the Cutting edge
Dhama Apparel Innovations
Braving the Weather
Kranthi Vistakula put into practice the theory of converting temperature differences into electric voltage, and vice versa, and built a technology, called ClimaCon. He used it to make apparel that can control the body temperature of the person wearing it. ClimaGear, the jacket, uses battery and Peltier chips to manipulate temperatures in the range of 18 to 40 degrees Celsius. In 2008 he founded Dhama Apparel Innovations. Still being run out of the NID Incubation Centre in Ahmedabad, with help from a five-member team, the company’s other products include a helmet and a neck accessory. Priced at Rs 40,000, ClimaGear may be keeping the Indian Army warm, but is unlikely to be civilian chic any time soon.
High Achiever Red Herring’s top 100 promising technology companies in Asia in 2009 First prize in Champion of Champions category in Intel India Innovation Pioneer Challenge in 2008 A 2008 finalist in the Intel Berkley Technology Entrepreneurship Gold medalist at Lockheed Martin Innovators competition in 2008 Won the MIT 1K business plan competition Won multiple grants from DSIR, Government of India
Fashionably Yours Made of micro-filament polyester Water resistant Detachable inner lining embedded with electronics and battery Accompanied by 150ml water tank Weighs 650gm
“While studying at the Massachusetts Institute of Technology, I never found mathematics challenging. It was the extreme cold and hot weather that was tough to tackle.” —Kranthi Kiran Vistakula, CEO and Founder, Dhama Apparel Innovations
The young and the restless Hi! I ran in to a copy of Inc. for the first time and could not put it down. The articles are great, tuned to the Indian industry, real-life examples and thought provoking. Your publication gives a platform for young entrepreneurs to share their ideas as well as the success stories. Keep up the good work. I did come across one small error on page 9. The website indicated should read yourstory.in and not your-story.in ashok bathija
Trans-Atlantic inspiration I just received our issue of the Inc. magazine and I am overwhelmingly grateful. I would have never imagined that anyone— let alone writers as far away as India— would be interested in writing, or publishing about the work I do in this world. You have inspired me to continue to
INC.INDIA APRIL 2010 |
share what I have learned with the world of business. If I could pass that inspiration on to even one more entrepreneur to make a difference in how they choose to run their business and take care of their people, I will feel success. If you ever have any questions, please feel free to be in touch.
IMAGING BY SANTOSH KUSHWAHA REPORTED BY SUNAINA SEHGAL
Support and subscription Greetings, Pooja! Nick Sarillo just shared with me your Indian edition of Inc. How exciting to see your magazine enter India! If I can be of support in any way, please be in touch. And, how do I get a subscription to the Indian version? Continued success!
Founder, Nick’s Pizza and Pub, Chicago
FCSI, CMC, Founder, President, Miick & Associates
Expensive story telling Congratulations on the Inc. magazine; high quality feel and good content. Great coverage of varied topics (from HR to sales & marketing to enterpreneurship to technology), wonderful story telling across different sectors. At the core, it seems like it is touching the nerves of entrepreneurs. Price, however, may be a tad bit high. Is Rs100/125 not possible? suresh raju
Executive Director, TVS Capital Funds
CORRECTIONS In the Case Study article published in the issue dated March 2010, Akash Khetan’s age was wrongly mentioned as 27 years. He is 25 years old. The error is regretted.—Editor
To submit a letter, or alert us to an error, write to us at email@example.com Letters may be edited for space and style. Submission constitutes permission to use. MAY 2010
BEHIND THE SCENES
Companies at the heart of everyday lifeÂ
Merchandise When it comes to the IPL, the fanfare and collectibles go hand-in-hand. When a team wins, sales of its t-shirts, bandanas and caps skyrocket. The company that has the exclusive rights to the IPL merchandise is Yog Sports. Founded by Saum Srivastav in January, it has already established 120 points of sale across the country, all for a piece of the Rs 45-crore pie. The company employs 25 people and hires a temporary staff of 600 during the willow wars.
Flags At the IPL, every time a cricketer hits the boundary, the Indian cheer squad wildly wave vibrant team flags. The fanatics have Dalvir Nagi to thank for these. The 27-year-old founded The Flag Company in 2006. The Mumbaibased company has provided flags to the IPL, as well as to teams such as Delhi Daredevils and Mumbai Indians. The firmâ€™s 17-employee team is now looking forward to the upcoming Commonwealth Games to run a riot of colours.
INC.INDIA | MAY 2010
Indian Premier League, Dharamshala
Hospitality Lounge The lounge offers the best view, packs in delicious meals and, at times, even offers your favourite poison— at a price tag of up to Rs 75,000 per ticket. Usually, it’s the big players (read, team franchise owners, sponsors or their reps, guests of honour, IPL and BCCI senior members and your regular mix of Bollywood actors) who are spotted here. The company in-charge of creating this VIP haven is Carving Dreams. It acts as a liaison between IPL and all other parties involved— security, caterers and airline partners. Founded by Afsar Zaidi in October 2005, the company employs 65 people. It claims to have crossed transactions worth Rs 250 crore already for this season.
Security Our demi-God cricketers have to be protected from their fans as much as from terrorists. A small part of this IPL security apparatus is provided by 24-Secure, a 10-year-old Delhi company owned by Sunil Duggal. With 10,000 people in its 24 branches around the country, the firm’s list of clients includes the Delhi Daredevils and Kings XI Punjab. It’s other wellknown clients include Wills Lifestyle India Fashion Week and actors during film shoots.
PHOTOGRAPH BY GETTY IMAGES
REPORTED BY JACOB CHERIAN
News, Ideas & Trends in Brief
It’s raining dollars again! Nearly US$2 billion invested in PE Private Equity Deal Flow in India
Deal Value ($Mn)
65 44 45
99 65 62 73 $675
60 40 20 0
Value ($Mn) Volume
The air of optimism with which we entered
this year is steadily turning into a stream of good news. First, the GDP numbers rose, helping the Sensex climb up ; then, corporate results indicated stability in the business environment; investor confidence returned—narrowing spreads and reducing volatility. Now, it’s the turn of private equity investing to ride the wave. Between January and March this year, a total of US$1,943 million was invested in private equity (PE), a jump of more than 185 per cent from US$675 million in the first quarter of 2009. Even the number of deals has gone up to 88, up 35 per cent from the same period last year. Interestingly, the last quarter of 2009 saw a higher number of deals at 99. In the same period, 17 venture capital deals were announced for a value of US$117 million, as against 23 deals worth US$88 million in Q1-09. “Many funds had raised capital, but had not made any investments due to the uncertainty that came along with the downturn. Improving economic conditions, realistic valuations and the return of the credit markets are bringing these funds back to the table,” believes Rohit Madan, research director, VCCEdge, which put out this data.
Private Equity Sectoral Breakdown
Industrials $131 Information Technology $134
Utilities $484 Consumer Discretionary $440 Financials $403
Top 5 Sectors by Deal Value in 2010 (US $mn) Source: VCCEdge
Some new players have entered the space as well. Summit Partners, a 25-year-old private equity (PE) firm, recently made its first investment in the country. It invested US$30 million in agricultural biotech firm Krishidhan Seeds. Others, such as Apollo Capital, Bain Capital and Quadrangle, have also made their first investments in India in the past six months. While the sharp uptick in private equity deal volume in the first quarter can partly be due to the abysmal performance in the same period last year, it is also due to the increasing investor confidence. It is evident that the appetite for big ticket investments is making a comeback— eight of these PE investments were more than continued on the next page
Flip-flops here, flip-flops everywhere
Thwack, thwack, thwack. The sound of flip-flops slapping city streets and college campuses is getting louder. Hollywood celebrities show up on the red carpet wearing them, and, increasingly, executives wear their favourite flip-flops around the office. But a national chain that sells only flip-flops and sandals? Entrepreneurs Todd Giatrelis and Sarah Towne think it can work. Flip Flop Shops, which they founded in 2004, has been stepping up its competition with the likes of Old Navy and WalMart for a piece of the estimated US$1.5 billion flip-flop industry. Three years after opening their first store in Boston, the founders partnered with Darin Kraetsch and Brian Curin, both former executives at ice cream chain Coldstone Creamery, to franchise the concept. Today, 14 stores, scented with coconut oil and playing beach tunes, sell about 15 brands, ranging in price from US$20 Havaianas to hand-sewn OluKai Akuas, made with Italian leather, for about US$150 a pair. Another 25 stores are scheduled to open this year. Among the most popular brands are Reef, of bottleopener fame, and Rainbow Sandals, which has a cult-like following among college students. This, says Curin, is no mere fashion fad. “Jesus wore flip-flops,” he says. “They aren’t going away anytime soon.” —Cristina Rouvalis MAY 2010
It’s raining dollars...continued
US$50 million in magnitude, as compared to only three in the first quarter of last year. Not only has the number of deals gone up, even the size of the deals is getting bigger. The median deal amount and the average value of private equity deals in Q1-10 rose to US$10 million and US$26 million respectively, up from US$8 million and US$19 million in 2009. It’s also proving to be a good time for exits. After the conspicu-
numbers for the first quarter. This sector attracted US$400 million in the first quarter— accounting for more than 20 per cent of the deals. Energy, a clear favourite of venture capitalists till the year before, is making a comeback. After no investment in energy in the last quarter of 2009, the sector saw two deals attract US$26 million. The industrial sector, however, saw a 63 per cent decline in deal volume in the first quarter. It
Top five states by deal value States
Volume Value ($mn)
ous silence of last year, it is heartening that there were 32 exits worth US$824 million in Q1-10, up from the measly nine exits in the corresponding period in 2009. As long as valuations remain reasonable, expect more deal activity, as well as some large deal announcements. Sectors such as utilities, consumer spending and financial services have attracted the maximum funds. PE firms are attracted to businesses that are betting big on discretionary spending by consumers—the sector attracted 22 per cent of the capital inflow in 17 deals. Financial services is another favourite and has been witnessing a steady rise in capital inflow over the past five quarters. Compared to last year, there has been a three-fold increase in the 10
INC.INDIA | MAY 2010
attracted just over US$130 million, compared to three times as much in the corresponding period last year. Another sector, which is not so popular with investors, is materials, with one deal valued at US$35 million. Healthcare was another surprise. After witnessing a record US$136 million flow in between October and December 2009, it saw a drop in the first quarter of this year with five deals valued at US$82 million. The top five deals, accounting for more than 45 per cent of the total private equity deals in Q1-10, were Star Health & Allied Insurance, Coastal Projects, Tikona Digital Networks, Coffee Day Resorts & Hotels and Asian Genco. —Data provided by VCCircle.com
The Ticker VG Siddhartha of Café Coffee Day seems to be on a roll. He has just raised Rs 960 crore from bluechip investors Kohlberg Kravis Roberts and New Silk Route at a massive valuation of Rs 4,000 siddhartha crore… Siddhartha, who already owns India’s largest coffee chain and Asia’s largest coffee plantation, wants to acquire chains in China, West Asia and Eastern Europe and double his 1,000 outlets in India. He will also create a private label coffee brand and a new line of furniture (sourcing timber from his plantations) for retailer Kishore Biyani’s Future Group…Noticed the Holii branded stores recently? That’s another Future Group partnership, this one with Dilip Kapur’s Hidesign for leather accessories… As we are shocked by the sudden passing away of the Pied Piper of Business at the Bottom of the Pyramid, a bagful of success CK Prahalad, microfinance comes of age with Swayam Krishi Sangam’s (SKS) massive IPO… Founder Vikram Akula continues to create many firsts. Having authored the spectacular growth of his for-profit microfinance venture, Akula and his top team have reportedly sold most of their shares in advance of the IPO, leaving Sequoia Capital as SKS’ promoter… And there’s more microfinance action with PN Vasudevan’s Equitas Micro Finance raising Rs 1,000 crore from CLSA Capital Partners… Also raising Rs 78 crore from an IPO, Fitness chain Talwalkar’s Better captain gopinath Value Fitness plans 27 new healthclubs, and aims to raise membership to over one lakh... Also on a roll is Captain Gopinath. Following his successful sale of Deccan Airways to Vijay Mallya, he is astutely replaying the “start, scale and sell to the big boys” script with Mukesh Ambani’s Reliance investing in his new cargo venture Deccan 360.
Beckoned by the Indian shores VCs and PEs make a comeback
After a ruthless 2009, during which venture investing took a huge hit locally and globally, things have finally begun to look up—if numbers for the first quarter are any indicator. Inc. India caught up with Deepak Kamra, a Menlo Park-based general partner at Canaan Partners, who was in New Delhi recently, for some insights into the world of venture investing. An alumni of Harvard Business School, Kamra has been a venture capitalist since 1991 and has been featured in the Forbes Midas List of 2008 and 2009, a list of the best deal-makers in technology. Here’s what the backer of winning horses such as Match.com has to say. How was 2009 for you?
We funded about 10 to 20 companies in the past year—a usual number for us. Exits, of course, faced a slowdown, but little else changed in the early-stage investing phase. Personally, I spent a lot more time with companies in our portfolio, guiding them through the tough time and helping them to keep burn rates in control. What are VCs in the US investing in these days?
The US entrepreneurs are busy with social networks. I am not sure if you have heard of Zoosk. It is a dating site that uses social networks to find compatible matches. People there are busy trying to figure out applications that will use data on Twitter and other such networking websites. How is the activity different from what you see in India?
The gap between the US and India is narrowing. Internet is still a slow story here. Business models are trying to make money using online ads, but these are slow in taking off. We are still focused on digital media in India. Select areas, such as travel classifieds, have done very well here. You’ve been coming to India for a while now. Do
you see any changes in the community of entrepreneurs?
Change is inevitable. Many VC firms have offices here now. The ecosystem for entrepreneurs, where they can talk to each other and help each other out, is underway. The angel ecosystem isn’t as well-developed and is likely to take some time. As more and more people find success as entrepreneurs, they will go out and help others. Also, people take a lot more risks today. There’s a reasonable amount of wealth with them, so they are willing to give up a couple of years of income and invest that time in starting up a venture. Today, an entrepreneur in India is typically young, is between 23 and 27 years, has never worked before and is unsure about what it takes to build a business, or to hire a team. The level of sophistication is different. How different are entrepreneurs in the US from those in India?
Concerns and outlooks are not that different. Most entrepreneurs, whether in the US or here, can figure out how to run a lean operation. In India, businesses can cut
burn rates much faster than in the US. Also, an entrepreneur’s ability to focus is another area of difference. We see a lot of entrepreneurs who are unable to focus on the main thing they are doing. Many business owners want venture money, but are apprehensive of the investor calling the shots. Do you agree that VCs interfere with businesses?
We only partner with those entrepreneurs who agree with our philosophy. In the early days, or during hard economic times, such as last year, business owners need more help and guidance. Therefore, we engage more with them. Otherwise, once things stabilise, we get involved only from a strategic or financial governance point of view. I am on the board of five companies; half my time is spent on these. The rest is spent on managing the firm and raising money, which, incidentally, is what helps us appreciate what entrepreneurs go through. Just like the way an entrepreneur is answerable to his investor, the VC is accountable to people from whom he has raised capital. VCs have to keep them updated on what’s happening; they are the ones we’ll go back to for raising money in the future. What is your advice to those entering the world of entrepreneurship?
I would ask them to hire the best and not settle for the less optimal. Look for more qualified people—and that’s where venture capitalists like us can add value. Set up your milestones upfront and raise money before you need it. —Pooja Kothari
Great advice Deepak Kamra urges entrepreneurs to hire the best talent and not settle for less. MAY 2010
business for sale
A financial website, for US$1.9 million
Paul Rubillo was a Wall Street money manager for
more than 15 years before he launched Dividend.com in January 2008. The site’s main attraction is its ranking of 1,600 dividend-paying stocks on the basis of relative strength, overall yield attractiveness, dividend reliability, and earnings growth. Rubillo also writes and posts research reports and news updates, some cashing in on dividends available only to subscribPaul Rubillo figures ers and others free to site his website’s domain name alone is worth visitors, on dividend-yieldUS$1 million. The site ing stocks. Some provides analysis and of these also appear on rankings of dividendpaying stocks. TheStreet.com, Forbes.com, and NASDAQ.com. Dividend.com attracts an average of more than 85,000 unique visitors a month and is consistently ranked in the top five Google searches that use dividend or dividend stock. All of the site’s content was free until last year, when Rubillo began charging US$99 annually for premium content. So far, about 1,300 readers have signed up. An additional 8,000 people have signed up to receive free monthly and weekly electronic newsletters. Rubillo believes Dividend.com would be well suited for an individual or company with experience selling stocks and bonds. He says he wants to sell his site to start a new chapter of his life by focusing on his lifelong passion—baseball. In January, Rubillo launched a baseball news site called hotstove.com. “Goodbye, Wall Street; hello, sports,” says Rubillo. —Darren Dahl Inc. has no stake in the sale of the business featured. The magazine does not certify the accuracy of financial or other information provided by the seller.
COMPANY DASHBOARD READER DEMOGRAPHICS
SALES AND PROFIT PROJECTIONS gross sales
male (63% are 50 or older)
household income over
KEY STATS employees...............................................1
number of paid subscribers............1,270 unique visitors per month..............85,000 monthly value of web traffic.....$124,118*
*based on google adwords valuation
PRICE RATIONALE: The asking price is based on the value of the site’s traffic plus the projected growth of revenue from subscriptions, says Anja Bernier, president of Efficient Evolutions, a business valuation firm Rubillo hired to help price his business. Bernier also used the sale of comparable domain names, such as invest.com, which sold for US$1 million in 2007, to help set the price. THE PROS: The site has a strong network of content distribution partners and attracts a following of wealthy individuals willing to pay for content. THE CONS: Any buyer would need to have substantial expertise in financial services and an ability to write on finance. A small independent owner would have difficulty justifying the purchase price, given the projected annual revenue. THE BOTTOM LINE: The price tag could scare off potential individual operators. But Dividend.com has a large number of visitors with high incomes and, perhaps most important, an appealing domain name. That could make it attractive to a well-established financial services firm.
What’s an idea really worth?
Musician, programmer and blogger Derek Sivers writes that no matter how great your idea, it’s hardly worth a dime until you prove you can build a business around it (sivers.org):
“It’s so funny when I hear people being so protective of ideas. (People who want me to sign an NDA to tell me the simplest idea.)…The most brilliant idea, with no execution, is worth US$20. The most brilliant idea takes great execution to be worth US$20,000,000. That’s why I don’t want to hear people’s ideas. I’m not interested until I see their execution.” 12
INC.INDIA | MAY 2010
GET REAL BY JASON FRIED
Driven to Distraction
Are your business problems making you insane? Take a deep breath and repeat after me: It just doesn’t matter I think of myself as wildly ambitious and unapolo-
getically lazy. Though we’ve all heard about the good things that come from ambition, laziness gets a bad rap. That’s unfortunate. I can attribute a healthy chunk of my success to the positive returns of laziness. Laziness has the best ROI in the business. Let’s start at the beginning. I launched my first real company, a web design company called Spinfree, in 1996. It was a solo show: just me, a desk in my apartment, and some self-taught mediocre web design skills. But it was all I needed. The jobs rolled in, and my clients were happy. I could pay the bills, stash away some savings, and work when and where I wanted. But I wasn’t happy. Rather than building confidence, I was accumulating doubt. As my business expanded, I grew nervous and self-conscious. I began to feel as if my accomplishments weren’t enough, that I had to take things to “the next level.” I thought if I didn’t get there fast enough, I’d be bowled over by the competition. When I bid on projects against larger design firms, I started saying “we” instead of “I” in an attempt to sound bigger. The proposals submitted by my rivals were long and shiny, so mine had to be longer and shinier. I even began badmouthing the competition—people I’d never met. That’s ugly. The thing is, I didn’t need to do any of these things. I thought I did, but I didn’t. I was inventing problems. I was making things hard on myself. How did I figure this out? Laziness. I got tired and let down my guard and wound up learning something important about myself: I love work, just not hard work. I think hard work is overrated. My goal is to do less hard work. And what’s hard? Acting like someone else, writing elaborate proposals I don’t believe in, and flinging mud at the competition. That’s hard and horrible work. So I put my laziness to work for me. Instead of long proposals, I wrote short ones. Instead of worrying about competitors, I ignored them. And here’s what happened: My company got more work. I found better clients. I slept better. I woke up better. I was happier. And, most of all, running a business became a lot easier.
INC.INDIA | MAY 2010
An important lessons Conventional wisdom is tired, upset, groggy, scared and a pain in the ass to work with.
Fifteen years later, this continues to be the most important lesson I’ve learned as an entrepreneur: Most of the stuff you agonise about just doesn’t matter. Truth is, things are pretty easy and straightforward—until you make them hard and complicated. This is the ethos that drives what we do at 37signals, the company I co-founded in 1999. We make simple web-based collaboration software for small businesses and groups. We have millions of users—and millions in profits—but we’re just 16 people. We don’t act any bigger, or smaller. We don’t put on airs. We just are who we are. We don’t worry much about what the competition is
doing. We don’t worry about growing pains we don’t have yet. We don’t spend time on five-year plans and forecasts, because in my experience, they just don’t matter. We invent software, not problems. Real problems will find you; you don’t need to invite fake ones to dinner. Yet that’s precisely what many business owners do. I spend a lot of my time speaking with entrepreneurs and entrepreneursto-be. They email me, call me at the office, hit me up on Twitter, or introduce themselves at conferences and events. And for the most part, they have one thing in common: They’re scared. Worried. Insecure. Just like I was. It’s easy to see why. Conventional business wisdom breeds paranoia. If you don’t get big fast, you lose. If you don’t obsess about the competition, you will be crushed. If you don’t make long-term plans, you’ll be staggering in the dark. Come on. Conventional wisdom is tired, upset, groggy, scared and a pain in the
Tomorrow. Eventually. Next quarter. Next year. Throw these words away. They don’t matter. ass to work with. It doesn’t have to be like this. Instead of spending your time worrying about what could, might, or may happen, spend your time on what matters now. Are your customers thrilled with your service today? Is your inbox flooded with word-ofmouth referrals today? Do your employees love their jobs today? Can people find what they’re looking for on your website today? Be honest with yourself. If the answers aren’t satisfactory, then I’d suggest that you truly have something to worry about—no matter how beautiful and comprehensive your business plan is. Tomorrow. Eventually. Next quarter.
Next year. Five years from now. Exit strategy. Throw these words away. They don’t matter. Today is all you have in business. Tomorrow is just today again. Next week? Seven todays in a row. A month isn’t 30 days. It’s 30 todays. I’m not suggesting you stop thinking about the future. I’m telling you to stop stressing about it. Go on, get lazy.
Jason Fried is co-founder of 37signals, a Chicagobased software firm, and co-author of the book Rework, which was published in March. This is his first column for Inc.
Life Outside the Office
Sharad Sanghi has many interests in life—cricket, football, tabla and, of course, his decade-old technology company, Net Magic. Although nothing consumes his passion more than the mechanics of his business, the 43-year-old entrepreneur religiously practices his skills on the tabla every Saturday. As his hands strum up rhythmic taals on the wooden drums for about an hour and a half, his mind travels down the memory lane to his childhood, when his mother arranged for him to learn the basics of the instrument. He even remembers some of the taals from those early days of practice. Five years ago, when he watched his children—a daughter and a son—learn classical vocal and instrumental music, Sanghi, too, decided to pick up the rhythm of his childhood. Now, when the “master” comes to the Sanghi household, the practice session becomes a group activity. For a while, the father and his children are happy to let their fingers do the talking.
INC.INDIA | MAY 2010
“When you’re playing the tabla tabla,, you are not thinking about work, or anything else. It takes you away from daily life.”
PHOTOGRAPH BY MEXY XAVIER
REPORTED BY JACOB CHERIAN
ON THE CONTRARY BY MAHESH MURTHY
HR as the ultimate weapon
It is a well-managed team of people—more than technology or intellectual property—that will give you an edge over competition. venture capital fund. And that I have been investing in start-ups in India for more than a decade now— individually, at first, and now, as a part of a larger, more organised and better-capitalised team. I certainly knew a lot less in 1998—when I wrote my first cheque. But, there remains a lot more to learn even after some 25 start-ups, 12 years and two downturns. For me, learning happens after seeing patterns. It is easier to see patterns in markets and products, than in the up-close behaviour of human beings. While these lessons are difficult to glean, in many ways, they are the easiest to implement since they deal with the most important resource of all in any business—people. We have just had an annual get-together of our start-ups at Seedfund. A part of the wonder was realising that each company had unique issues—only to comprehend that the same things cropped up in other firms, too, in a slightly different manner. People matter HR is not about payroll alone. It should include Among the many things we talked about was what is commonly functions, such as recruitment, referred to as “Human Resources”. (As an aside, one of our start-up training, competitive intelligence. CEOs said that he didn’t understand what non-human resources than money—a chance were in his company. So, he renamed the function the talent departto change the world, or a ment. Nice. Of course, I had to ask him what in his company was not about talent. shot at greatness. Maybe, eventually, even some reasonThat, momentarily, stumped him.) Anyway, back to the folks most employees love able-sounding pot of gold. to hate: the HR team. Here’s what I have learnt over time. Now, you can personally communicate this to the A rather obvious point, but in a start-up, you will never be able to pay market first 10, or even 20, hires. But, what about the next 80? If salaries. Get used to it. You won’t—not until you get bought, or go public. (And, you can’t, does your HR person speak of the same things if you are getting paid market salaries from day one, there’s something wrong— you do, the same way you do? Does his, or her, hit rate you will probably fail.) So, salary can never be what attracts people to you. Hence, with recruiting employees match yours? the people you hire will also not be the run-of-the-mill, I-want-20-per-cent-more Prepare for the three stages of start-up life. I undermercenaries. They will come for your vision, your dream and your potential. They stand that various philosophies—from Hinduism to will work with you for a discount, because they stand to gain something more Kierkegaard’s—say that you can divide human life into
INC.INDIA | MAY 2010
ILLUSTRATION BY PHOTOS.COM
Some of you may know that I help run an early-stage
ON THE CONTRARY
three phases. I think you can do the same with life in a start-up. I call it my own Rule of Threes. It is, perhaps, convenient and somewhat over-simplified, but it seems to work. And, it shows the changing role for HR, as your firm grows. It starts with a Stage 0. This is when you’re barely a company. There are two, or three, of you. And all of you are doing everything. Soon, you add one or two people, here or there. Before you know it, you have a true start-up, with six to nine people. You probably don’t have a HR specialist here. Now comes Stage 1. When you go from those nine people (or thereabouts) to 27 folks. (Notice how I’m forcing the factor of three?) This is when each of you in the core team has around five to eight people reporting to you. Some specialisation happens. Energy is high and you begin to taste your first success. Reporting is easy. The top team gels together
once again, your new hires go even further away from you in terms of gaining-vision-byosmosis. This is where the role of HR becomes even more important. And your role changes from Mr Do-It-Yourself to Mr Mentor-AndGuide. It’s not just your company that is growing; you will need to as well—from Hitler to “benign dictator”. Beyond 81 times 3, or 243 people (that’s 35) you are no longer a start-up. Things will probably change again. Perhaps, that’s another column. First, HR is not about payroll. Typically, HR, or whatever you call it, should do at least five widely different functions. The first is operations—making sure leaves are tabulated, appointment letters are given out, payroll advice goes out and t’s are crossed and i’s are dotted. It’s the basic stuff, but important. A lot of employee comfort comes from seeing this department exist and
A good internal recruiter will keep track of the who’s who in rival firms. and everyone is aligned with where you say you want to go. Maybe revenues start coming in. Now you need to start building out the team. You have to start to change the way you think. It isn’t just YOUR company any more. Perhaps, you hire someone to do the payroll. Then you get into Stage 2. This is when you go past the 25 mark. Suddenly, you discover you can’t manage everybody yourself and that you need a layer of management in the middle. Processes begin to be put in place. You actually have the payroll taken care off. Attendance is kept. And, once-freshers are suddenly asked to become managers. This is also about when a dedicated HR is needed— if not earlier. But more on that later. As an entrepreneur, you don’t run everything now and there is another layer. You learn to start delegating more, or need to. And, then you grow into Phase 3. That is past the 81-person mark. Which, for the mathematical-minded among you, is 34. This is when you need the third layer of management. Your managers need managers. And
function. Then again, it’s one of those things that you don’t notice when it functions well, but everybody screams, if there’s even a single screw-up. The second is recruitment. Every start-up will have a hunger for good people. A hunger complicated by the fact that you can’t pay as much as bigger firms. So, you have to be creative not only in finding the right people, but also in getting them to join you for less. A good internal recruiter will keep a track of the who’s who in all your rival firms, know the five questions to ask a candidate in an interview to make sure they’re right for you, have a deep industry database, know outside recruiter strengths and weaknesses, and can tell you who is moving from where and for how much. The third function is training and continuing education. People are coming to you for less because they want to learn. But, are you teaching them? Having a resource here makes sure that you don’t just have another formal training calendar—but that there’s a
system, so that lessons within the company are shared on a regular basis and not just stored in the cerebellums of the founders. The fourth function, for want of a better word, is cultural. Your people spend more than 60 per cent of their waking lives (assuming they’re awake at work) in your office. What kind of a place is it? What’s the mood in the tech department? What’s the latest gossip from the sales team? This is one of the more overlooked functions. A good person here can give you, the founders, not just a taste of what’s happening, or going to happen, but also be the one that spreads the goodwill, cheer, motivation and smile at the end of a hard day. Making the place one they like to come back to every day. Somewhere, above all this, is a strategic umbrella. If you’re going to grow to another city, where will you find people? What’s the current salary-and-commission structure at your competitor? How do you sneak away people from Day Zero at an IIM? Which colleges should you cultivate to find good people before they get expensive? What’s the right sort of written test you should administer to find people who are right for you? A partner-level HR person can arm you with insights here that will be a real competitive advantage. I now pay more heed to this than to some technical edge. Because I know that competition can catch up with, or obsolete, my technological edge. But, if I can have a well-managed team of people, I can live to see another day. All of our investee companies survived the recession. They did so not by dint of more funding, but because they were able to marshal their precious resources—their people— well, and get more productivity for less, at a time when clients weren’t buying, or when they were, they weren’t paying on time. Give another thought to this. How much time do you spend thinking about your people? Whatever your answer is, you probably need to spend even more time doing so.
Mahesh Murthy is the founder of Pinstorm and Managing Partner at Seedfund. He can be reached at firstname.lastname@example.org or @maheshmurthy on Twitter. MAY 2010
Companies on the Cutting edge
Cleaning up the mess
If Pulkit Gaur had his way, the world would be full of robots. They would clean our homes, keep an eye on the house and even feed the pet. It is no wonder that the boy who grew up dreaming about robots and artificial intelligence finally made a vocation out of it. His company, Gridbots, was started in 2007 at the Centre of Innovation and Incubation at IIM, Ahmedabad, and makes robots for use in defence, surveillance, industrial and home automation, and education. And, to clean the walls of a pipe, as the one in the picture does. Called Venom, it can climb into pipes that carry crude oil from the depths of the earth, and clean the wax that gets deposited along their walls. Just as the arteries of a heart get blocked by cholesterol, a pipe in an oil rig can get blocked by this wax; reducing the flow of oil by 60 per cent. Gaur initially designed the robot to clean the insides of water pipes, but found more potential in oil fields. If only the heart could be cleaned with a solution as simple as this one. Finer points Number of robots built: >30 Lowest priced robot: Rs 5,000 Most expensive robot: Rs 20 lakh Sales Turtle robots: >4,000 Industrial robots: >100
INC.INDIA | MAY 2010
“We aim to reduce human intervention in dirty and dangerous working environments.” —Pulkit Gaur, founder, Gridbots
PHOTOGRAPH BY ALPESH DHOLAKIA
REPORTED BY JACOB CHERIAN
BALANCING ACTS BY MEG CADOUX HIRSHBERG
Bed and Boardroom
Employees in the kitchen. Customers in the bathroom. There is nothing like a home-based business for amping up the family stress.
ILLUSTRATION BY ANIL T
From 1986 to 1991, my husband and I lived in the
Drawing lines The moment you create a business, the barrier between what is work and what is not, starts to break down.
dilapidated 19th-century farmhouse at Stonyfield Farm (the land for which our yogurt company is named). The huge, wood-heated building housed the offices and yogurt works, as well as two apartments: one for us and one for our partners, Samuel and Louise Kaymen, and five of their six kids. Newly engaged and fresh from living in my own apartment, I adjusted easily to sharing quarters with Gary. It was shacking up with his business that was hard. We had zero privacy. Trucks groaned up our narrow gravel driveway at all hours. Employees were ever present, glancing at what was for dinner and frequently using our bathroom, if the public one was occupied. When our best yogurt-maker couldn’t find a babysitter for her son, yours truly would rock the boy to sleep while his mom worked the night shift. Our kitchen table overlooked the yogurt works, so we couldn’t get through a meal without distractions from outside (Did that guy really just throw a lit cigarette into the Dumpster?). Hosting guests was a challenge. Arriving for a relaxing weekend in the country, they’d inevitably get caught up in the madness—grabbing a shovel to help dig out a
INC.INDIA | MAY 2010
truck stuck in the mud—before going to bed and nearly freezing to death in our unheated spare bedroom upstairs. One afternoon, I walked into our kitchen cradling bags of groceries and found a young man I didn’t recognise grabbing cutlery and plates from our cupboard. I stopped in the doorway and stared. “We have a lunch meeting in the office,” he said nonchalantly. I was speechless; feeling completely invaded at the most basic level. This was my kitchen. My stuff. Then I chided myself. These were the people keeping the company afloat, and we all believed in using fewer disposables. Why couldn’t I feel good about sharing; why was I so uncool? Still, I thought, there have to be boundaries. Only, where did they lie? That question was answered a few months later. One
Sunday morning, Gary and I were in bed when into our room walked an unfamiliar teenager. He announced he’d been hired to clean the offices, and did we know where to find the broom? By Monday night, our apartment door had a lock on it. But that bit of iron was mostly symbolic, a finger in a leaky dike. Employees, job applicants, investors and suppliers still flowed freely through our home—only, now they knocked first. The moment you create a business, you step into a twilight zone, where the barrier between what is work and what is not, starts to break down. The deterioration accelerates for entrepreneurs who work out of their homes. You may start off with a home-based business but soon find yourself with a business where you and your family also happen to live. I got an earful about this from Anna Breyer, whose husband runs a construction business. She is irked that trucks and trailers are always parked in her yard and feels awkward having employees walk through her house when it’s piled high with dishes and laundry. “Sometimes, I’ll have to sign for an early-morning lumber delivery while I’m still in my PJs and the dog is barking and my kid is screaming,” she told me recently. Anna says things have improved with small changes, such as putting a coffeemaker and microwave in the garage for employees to use, instead of having them in her kitchen. Privacy isn’t the only issue. In homes shared with companies, living space may be drastically reduced by the demands of workspace and inventory storage. Sandy Abrams, an acquaintance in California, described to me how she was once literally imprisoned by her business supplies. Fifteen years ago, when she started Moisture Jamzz, a company that makes skin-conditioning gloves and socks, Sandy filled every room of her LA apartment with fabric rolls and shipping boxes. The dining-room table was piled high with packing tape and stationery. One day, an earthquake caused the fabric and boxes to tumble in front of the door. Sandy and her husband spent 10 terrified minutes clearing a pathway so they could exit. Sandy still runs Moisture Jamzz out of her house (though she doesn’t manufacture or keep much inventory there). But now, she has strategies to contain it. She limits the
When home and company share an address, entrepreneurs and their families need to find ways to create the emotional equivalent of physical distance—a gap that keeps worlds from colliding. company’s impact on her space by storing stationery and press kits behind closed doors in her home office, and limits its impact on her time by letting business calls go to voice mail after 5pm. She also protects her family’s privacy by meeting with vendors at the local Starbucks. Of course, certain hazards of sharing a home with a business apply to anyone with a home office. We’re all familiar with that slippery slope of nipping in after dinner— just to clean up a few emails—and emerging at midnight. (A friend of mine who frequently found herself making middle-ofthe-night visits to her home office eventually put a sign on its door—”Get a life”—to remind her somnambulating self that she was being obsessive, and whatever it was could wait until morning.) But, for home-based entrepreneurs, daylight brings an additional challenge: diplomatic separation of the family’s waking hours from the company’s operating hours. A friend who wrestles with this commented to me that most people, including his wife and kids, have an ingrained belief that work is something you leave home to do. They assume that if he’s home, he ought to be available to the family. Sometimes, his wife pokes her head into his office to see if he’d like to take a break and have lunch together. “She doesn’t understand that I just don’t want to break the work spell,” he said. “I’m in the zone and need to stay there during the workday. But she takes it personally.” This resonated with me as I recalled those times I’d walk into Gary’s home office while he was on a business call, only to watch him wince at my intrusion. And I realised
that I react the same way. When Gary or one of the kids interrupts me on a work call, I brush them off with that frantic wave that is more desperate dismissal than greeting. Such behaviours inflict small hurts, little bits of damage that accumulate. Over the years, Gary and I have learned to deliver messages by silently slipping in and placing sticky notes in each other’s line of sight. We have trained ourselves to distinguish between physical presence and availability. Though my eyes tell me that Gary is in his home office, he is not, for my purposes, at home. He is not available for figuring out where to meet friends for dinner or how to celebrate Danielle’s birthday. I don’t take it personally anymore, nor does he. Cohabitating with a business increases the stress level of entrepreneurship exponentially. When home and company share an address, entrepreneurs and their families need to find ways to create the emotional equivalent of physical distance—a gap that keeps worlds from colliding. Sometimes, the only means available will be closed office doors, or a new location for the microwave, or some sticky notes placed in front of your spouse. It might not hurt to scrawl “Get a life” on one or two of them.
Meg Cadoux Hirshberg (email@example.com) writes a regular column about the impact of entrepreneurial businesses on families. She is married to Gary Hirshberg, president and CEO of Stonyfield Yogurt. MAY 2010
Your Business Toolbox
THE GOODS DOWNLOADS
An app store just for netbooks
Think the iPad is the Only New Tablet in Town? Meet Apple’s fiercest rivals Apple’s new iPad may be getting all the attention, but it’s not the only noteworthy tablet hitting the market this year. In fact, a slew of other companies are rolling out offerings to catch the tablet wave. Here are four to watch. —Mark Spoonauer
COURTESY COMPANY (4)
1. NOTION INK ADAM
With the press of a button, the 1.7-pound Adam switches from lowpower e-paper to full colour. Unlike the iPad, the Adam, due in June, has a camera, an HDMI port, and a memory card slot. cost: Unavailable at presstime; Notion Ink says it will be competitive with the iPad, which starts at US$499.
2. LENOVO IDEAPAD S10-3T
This 3-pound tablet has a physical keyboard and a 10-inch display that swivels to switch from laptop to tablet. Other features include Quick Start, for going online without booting into Windows 7, and DirectShare, for syncing files. A charge lasts seven hours, compared with 10 on the iPad. cost: US$499
ILLUSTRATIONS BY SANTOSH KUSHWAHA
The JooJoo’s 12.1inch screen is great for streaming highdefinition video. The 2.4-pound tablet, which has shortcuts to Twitter, Hulu and Facebook, is all about the web; it promises to get users online in nine seconds. Unlike the iPad, it has a webcam—but it has only five hours of battery life. cost: US$499
4. ENTOURAGE EDGE
A so-called dualbook, the eDGe has two screens: a 9.7-inch eInk display for reading books and a 10.1-inch LCD for surfing the web. The 3-pound device has a camera and runs on Google Android, giving users access to apps. It lasts 16 hours in eReader mode and six hours in colour. cost: US$499
Apple’s iPhone App Store now logs more than 250 million downloads a month. If Intel has its way, its new AppUp store, which launched in January, will gain a similar following among netbook users. The store, which is still in beta testing, has a long way to go before it builds up a robust library of netbook apps and a stable of third-party developers. At presstime, the store had fewer than 200 apps available. But if you are a netbook user, the store is worth checking out. Most of the store’s apps take up less than 50MB of memory, so they won’t slow down your hard drive, and are designed to fit a netbook’s smaller screen. The AppUp store is easy to navigate and features a decent variety of handy business tools. EZ Virtual Drive, for example, lets you create cloud-based drives on your desktop and costs US$1.99. Free apps include Yoono Desktop, which organises social networking messages in one place, and Blog This for scheduling blog posts. GSecure, which is also free, creates hardto-crack passwords. Downloading the AppUp store onto a desktop is relatively quick and easy. Other than a few blips, the apps themselves were easy to download as well. One drawback: You have to set up an account with credit card information to access even free software. —Renee Oricchio MAY 2010
Products + Services
Xmarks the web Shine a Light The new generation of projectors works in the brightest rooms.
INC.INDIA | MAY 2010
If you’re still fumbling with shades before presentations, it may be time to invest in a new
projector. The latest models are so bright, they produce crisp images even with the shades up. We put four of them to the PowerPoint test. —John Brandon BEST FOR LARGE ROOMS
BEST FOR NARRATING VIDEOS
Our test PowerPoint presentation looked crisp and colourful on this 6,000-lumen projector, which is bright enough for use in a large, well-lit room. Instead of repositioning the hefty 21-pound unit to line it up on a screen, you can use a remote to adjust the lens. The lamp lasts 3,000 hours in eco-mode. cost: US$5,460
This sleek white projector, which boasts 4,500 lumens, projected a clear, vibrant image in a brightly lit room. The lamp lasts 2,000 hours longer than the one on the Sanyo. The 7.9-pound device also has two audio inputs, allowing you to play a video and narrate it with a microphone. cost: US$2,995
BEST FOR TIGHT SPACES
BEST FOR BUSINESS TRAVEL
HP NOTEBOOK PROJECTION COMPANION
Ideal for small conference rooms, this compact, 7.7-pound “short throw” projector sits 3 feet from a screen and projects images upward instead of across the room. At 2,500 lumens, the image was bright during our test, but not as crisp as that of the Sanyo and Mitsubishi models. It’s lamp lasts 4,000 hours in eco-mode. cost: US$1,099
Designed for the road warrior, this palm-size projector weighs less than a pound. The 100-lumen LED lamp was not particularly vivid, but it lasts a whopping 10,000 hours. The projector comes with a tripod for leveling the image on the screen. Unlike the other models, it has no speaker. cost: US$499
An easier way to process payments on the go There are a number of credit card processing apps for mobile phones, but they require you to punch in account numbers by hand. The marketplace, a new iPhone case by mophie, has a built-in magnetic-strip reader that lets you collect credit card information with one swipe, then process the payment using a third-party merchant account. The rubberised 2-ounce case encrypts data on the reader even before it reaches the phone. It also has a USB port for syncing and charging. —John Brandon
COURTESY COMPANY (2)
Our browser bookmarks are dearest to us. There’s nothing more excruciating than losing bookmarks during a system crash. Switching browsers without bookmarks is annoying as hell. Thankfully, a plug-in called Xmarks (previously known as Foxmarks) lets the user synchronise favourites in a seamless manner. It is available for Firefox, Google Chrome, Safari and Internet Explorer. To install, all that a user needs to do is head over to www.xmarks.com using browsers that are normally used and then download plug-ins for them. Once that’s over, a user can create a free account using one of the browsers. Next, login to plug-in (on the browsers) and that should let the user exchange bookmarks and synchronise in no time at all. There is no worry of overwriting existing bookmarks—unless the user forces a bookmark to overwrite a command. The plug-ins can be set to synchronise automatically, or on demand. There is also the option of logging into the Xmarks site using PC or mobile connectivity and then organising bookmarks before synchronising the browsers. The plug-in is a great utility to have; and what’s more, it’s absolutely free! The only bit missing—support for the Opera browser. —Rossi Fernandes
Presenting the Right Image A projector for every purpose, blackout shades optional
Work + Play
Extreme Green Dream Machines Brat toys that are light on the carbon With a certain famous gas-guzzler all set to say bye-bye from the battlefield to make
way for a more petite and green cousin, it’s time to sit up and notice the environment— if you have not done so already. We’ve put together three vehicles-of-desire that not only ooze road oomph, but are environment-friendly as well. If you’re feeling guilty about shelling out extra moolah on these babies, breathe easy and think green.
2010 LEXUS LS 600H
Headphones that are easier on the ears
Does your company sell a new tech tool with an interesting backstory? Or, do you use technology to do your job better? Tell us about it. We feature the best ideas in the magazine every month.
This is the world’s first production electric superbike that can touch 209kph, making it powerful enough to compete at races and rallies. It comes with a Linuxbased on-board computer, has its own IP address and is WiFi enabled with an embedded web server. The embedded computer is meant to make it easier for racing teams to customise the on-board software. The Mavizen targets teams who wish to enter the TTXGP racing circuit—the world’s first zero carbon motorcycle racing series. You can pick up one of these for just under Rs 17 lakh. If you crash it, then you can use it as a server, or something. CALLENDER DESIGNS SOLILOQUY
This super yacht does everything that a regular yacht would—yet, it leaves a smaller carbon footprint, thanks to its solar sails. The sails are, in fact, rigid solar panels called wings, and are enough to move all 58m of the yacht at zero emission. The yacht also taps into wind and hybrid marine power as sources of electricity. There is also a touch button control system that reduces the number of crew on board, providing more space for a party of 12 guests.
Showcase Designers Shantanu & Nikhil have come out with a wine set that houses a wine bottle, fitted with five stainless steel wine tools—including a sturdy cork screw, a cork pump and a thermometer to ensure a perfect serving temperature. These are held in place with buttoned straps in the top arc. Made with a combination of luxurious crocodile-pattern leather in black on the outside and felt on the inside, the wine set has the duo’s trademark insignia on the front. The wine sets will look good in the bar, can be useful while travelling and makes a great gift. Price: Rs 6,500 —Shreyasi Singh
COURTESY COMPANY (5)
One Saturday afternoon in fall 2007, Seth Burgett had an epiphany two-thirds of the way into a six-hour triathlon training regimen: His ears hurt more than the rest of his body because of ill-fitting earbud headphones. Using his background in medical device design, Burgett mapped the ear’s five pain points and started making prototypes of earbud covers using clay, which he baked in his oven and cooled on a pizza pan in the snow until he could try them on. What he came up with are Yurbuds, earbud covers that are contoured to avoid pain points. Unlike most earbuds, they rest on the back and bottom of the ear rather than in the canal, which changes shape with movement. As a result, they stay put better. Burgett founded Yurtopia in 2008. Today, the company sells Yurbuds in six sizes. Online customers are encouraged to take a picture of their ear next to an earbud or quarter, which Yurtopia uses to calculate size using a proprietary algorithm. Yurbuds, which can be used to cover most earbuds and Bluetooth headsets, cost US$20 a pair. They can also be bundled with Yurtopia’s headphones for US$30. —Sarah Kessler
Lexus’ flagship hybrid model is so smart that it doesn’t let you have your way with it. If you push down on the pedal too hard, the car does not leap forward as it should. Instead, it reminds you to drive smoothly and accelerates gently. The air-conditioning also modifies any setting that is keyed in to take into consideration fuel economy and ambient temperature. This car would be on the streets for a little more than Rs 49 lakh—if only there were no duties to be paid to get this beauty into India.
Things I Cannot Live Without Jagjit Singh’s Shabad This is my early morning music. I’ve been listening to it for years now. The melody soothes my soul.
Golf Clubs Nikon D300s
I use Callaway irons and Callaway woods. Just love them!
I’ve shot in Alaska, Maldives, and across Europe. As far as subjects are concerned—anything green or wild makes me go click, click, click.
MANAGING DIRECTOR, LOGIX MICROSYSTEMS
He’s quite a family man. He takes his parents for
Swimming trunks, goggles I take these absolutely everywhere. When I travel for work, I make sure that I religiously use hotel pools.
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a vacation once a year, he works with his brother at the software company they built together, and he loves playing video games with his nephews. An IIM-Bangalore alumnus, Soni takes delight in many a materialistic thing, but yearns only for contentment. An outdoor-type of guy, he loves water and is a certified diver. His favourite toy is the one which helps him connect with nature— his SLR camera. He loves listening to Kishore Kumar songs and Hari Prasad Chaurasia’s santoor rendition. He owns 600 CDs, which he plays on his Bose home theatre system from the Lifestyle series. Soni is an avid golfer who has tried his swing on courses around the world. But, Soni remembers one outside Toronto most fondly. —By Jacob Cherian
...and What I Covet A small chalet in Alps I want to spend some quality time here—being one with nature and appreciating the beauty of God’s creations.
In Business & In Wealth
Wedded to the company —and to each other One’s built a software company in Chandigarh, the other’s demystifying maths for students all over the world from its base in Chennai. Five couples share their compelling tales of building businesses and lives together— and successfully, too. BY SHREYASI SINGH
INC.INDIA | MAY 2010
PHOTOGRAPHS BY MEXY XAVIER
The right recipe Reeta and Dheeraj Gupta have cooked up a range of fusion fare with Jumbo King, the fast food chain they co-founded in 2001.
IN BUSINESS & IN WEALTH
Reeta & Dheeraj Gupta Jumbo King
Cooking up a storm Her marketing acumen and his operations skills have allowed the Guptas to prepare the perfect snack to feed India’s growing appetite for fast food.
hey might have fallen in love over samosas and idli sambhar as students at Pune’s Symbiosis Centre of Management and Human Resources Development, but it is the humble vada pav, Mumbai’s ubiquitous street snack, which most definitely rules Dheeraj and Reeta Gupta’s life as a couple. Adding a different dimension to the street food menu, this ambitious couple has cooked up a whole new range of fusion fare with Jumbo King, the fast food chain they co-founded in August 2001. Built around a single dish, vada pav, Jumbo King is a delectable success story that has taken a quint quintessentially Indian dish and given it a flavourable West Western toss. Think McDonald’s and burgers. That’s what Jumbo King intends to do to the vada pav. While finishing her MBA in 1998, this wasn’t Reeta’s idea of a perfect career recipe. “I was keen to accept the best campus placement and settle down in a career,” she admits. She even worked briefly with Reliance and Cognizant Technology Solutions. But Dheeraj, who studied hotel management before entering B-school, wanted to do something in the food industry. He even started Manali Foods to increase the shelf life of the Indian mithai and make it more accessible to the budget buyer by packaging it in small quantities like chocolates. His family had been sweetmeat traders and somewhere he hoped he could leverage the knowledge that had been gleaned from experience. It was during a visit to London in 2000 to study the market potential for Indian sweets exported from India to the UK that Dheeraj and Reeta stumbled upon the real “jumbo” idea. Staying with a friend, who ran multiple Burger King franchises in the city, Dheeraj had his Eureka moment. The self-confessed samosa freak 32
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hit upon the strong connection between the desi vada pav and the foreign burger—both quick, on-the-go people’s food. The two even looked similar, “a fried patty between two halves of bread”, he realised. Most people would have left it at that, maybe recounting their brilliant idea ad nauseum to friends at dinner parties, but Dheeraj and Reeta followed through. They borrowed two lakh rupees from Dheeraj’s father and started Jumbo King with a single outlet at a local railway station in Malad in 2001. The magic of the vada pav worked and Jumbo King mushroomed into 36 outlets in Mumbai alone. Another nine sprang up in Gujarat, run by franchisees. Together, these outlets dish up more than 35,000 vada pav pavs every day. This robust appetite for growth has ensured healthy turnovers, and Jumbo King ended this financial year with Rs 15 crore in revenue. Dheeraj, how however, feels the potato hasn’t even been peeled yet. “Look at McDonald’s. It took Ray Crock 30 years to make McDon McDonald’s such a giant. And, the brand still continues to grow with a simple product like a burger. We’ll do that to vada pav pav,” says the ambitious owner. Last year, Jumbo King sold equity to raise funds. Dheeraj is unwilling to disclose more, since the company’s “looking at a larger round of funding soon”. He admits that they are cash flow positive and the capital will be used exclusively to fund growth. “We have realised that 35 per cent is a healthy rate to grow annually in this business. Over the past five years, we have averaged 26 per cent growth. So, the challenges remain.” The plan, he adds, is to take Jumbo King to 100 outlets in Mum Mumbai in the next three years.
Dheeraj The wife always wins. Reeta would beat me hands down in debates at college, and she still beats me. Not much has changed that way.
IN BUSINESS & IN WEALTH
More than the numbers though, it is the glamorous new avatar of the vada pav that is more interesting. Dheeraj and Reeta have spiced up the simple Mumbaikar snack into a fare that is now being considered even by the uppity foodie class. A lot of that also has to do with the smart marketing done around the product. Reeta, who handled marketing, public relations and branding for the company, roped in celebrities and organised fun events to give the snack an upmarket buzz. August 23, the day their first outlet went live, is celebrated every year as the Vada Pav Day. Dheeraj credits Reeta with being gifted with such big and brilliant ideas, saying that he is more driven by processes and systems. Reeta agrees she might have helped build the “brand” but she is definitely not the master chef. “The product is the hero. And, the person who works on the business, on creating that product, always has the upper hand. In our case, that’s Dheeraj.” Between ensuring that customers go away licking their fingers, how tough is it to make sure that the marriage does not lose its flavour, sandwiched as it must be between professional compulsions and personal responsibilities? Reeta believes that things aren’t as dramatic. “You need to reason things out. Many a times, I would just give in because he was much more involved in the different phases that the company went through,” she recalls, adding that she took a backseat while having their children, nine-year-old Neha and five-year-old Karan. Now, in fact, she has exited from daily operations of Jumbo King. In 2007, she set up Wow Factor Communications, a firm specialising in PR and brand communications, although she continues to be on the Jumbo King board and is involved in all crucial strategy decisions. She confesses she doesn’t “miss” having Dheeraj at work, but only because his strength doesn’t lie in marketing. Dheeraj says he’s used to having to fall in line. “The wife always wins. Reeta would beat me hands down in debates at college, and she still beats me. Not much has changed that way,” he laughs. More seriously, Reeta says what worked for them was the strict definition of their spaces and responsibilities. “If lines get blurred, you spend too much time deciding on the same thing. Often then, a work argument gets stretched and there is a problem,” agrees Dheeraj, saying while he was “busy buying bread, potatoes and frying oil”, Reeta perfected her marketing flourishes. He credits learning this lesson at his home where his Marwari businessman father encouraged his brother and him to undertake two different entrepreneurial journeys. “As husband and wife, too, there is a certain point in which you need to build those boundaries.” Reeta argues that while terms such as equal ownership, coinvestors and shared goals sound great, it’s better to have a single boss. “You need to be honest within your marriage and at work. At some point, you have to tell each other, your job is to run the company and I will manage the marriage.” “I am the boss at home; I run it,” she adds. Dheeraj’s long work hours anyways do not enable him to be around all the time; although, he is very, very particular about some things like “unsupervised, solitary television viewing for the children”. Altogether, the recipe seems to work perfectly.
Anupama Arya & Puneet Vatsayan Mobera Systems
Walking hand-inhand on the IT highway They missed the intellectual drive of the Silicon Valley. So these co-preneurs decided to create their own culture of innovation in Chandigarh. Mobera Systems has been shining since then.
hen “serial entrepreneurs” Puneet Vatsayan and Anupama Arya moved back from the United States to Chandigarh in 2003 to take care of his ailing mother, they started missing the intellectual, almost nerdy, charm of Silicon Valley, where they had lived for nearly a decade. “Chandigarh is a great place, but it is just not the Valley,” Puneet tries to explain. To ensure they were not missing out on the dynamic climate, the partners decided to create their own island of innovation, right in the backyard of their Indian home. “And that’s how Mobera struck root,” says 42-year-old Puneet, who by then had already co-founded two venture-backed IT services companies in the Bay Area with Anupama. For a venture born as an afterthought, Mobera Systems has had a phenomenal ride. In addition to its unlikely home base in Chandigarh, this high-end “contract R&D” company also has offices in the United States MAY 2010
IN BUSINESS & IN WEALTH
Puneet Each one of us now puts in longer hours than we ever did. We are both far happier—if not for anything else than that office politics does not bother us. That is the biggest advantage. Anupama It’s easy to be considered a successful woman in India because the bar is very low. But, it’s also tough because you have to demonstrate in every interaction, at every moment, that you are performing.
and France. It counts several global marquee companies, mainly in the US, Europe and Japan, as its clients and develops cutting-edge products in mobile gaming, embedded technologies and bio-informatics for them. Before becoming entrepreneurs in California, Puneet and Anupama, both graduates of the Thapar College of Engineering, had worked at bluechip high-technology firms, such as Lucent, Honeywell and Synoptics. Mobera, their third venture together, was started with just Rs 1 lakh. And true to the spirit of a Silicon Valley start-up, it began operations out of a garage. It’s come a long way since then, growing organically at 100 per cent year-on-year. Says Anupama: “Our customers have funded and seeded the company.” With their network of former colleagues and contacts in the field of high-technology, the couple were able to lay their hands on challenging product design work and deliver it out of a town that many of their clients had never even heard of! Now, Mobera has an equity base of Rs 10 crore. It is one of the few companies of its kind in the region, and was one of the first companies north of Delhi to be a member of Nasscom, a national association of software companies. Although, says Anupama, it has been “one heck of a journey”, it is establishing this culture 34
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PHOTOGRAPH BY SUBHOJIT PAUL
IN BUSINESS & IN WEALTH
of innovation that has been challenging, more than managing funds, or getting clients. In a company that needed the ingenuity of its people to thrive, spotting talent was really the game-changer. “We initially got people with a US background because we were committed to bringing in the product development culture. We knew that for the kind of work we wanted to do, we needed the right flow, the right atmosphere,” recalls Anupama. For example, one of their first projects was to build a central system for a Fortune 500 medical equipment company that wanted make the hospital bed, drug delivery system, endoscopic equipment and other systems in the operating room “intelligent”. This technology, claims Mobera, has been used to upgrade several hospitals in the US. Over the past seven years, the company has worked with more than 25 clients developing products such as this. These include an intelligent home design for IBM Research Labs and a hacker-proof secure transactions system for an innovative French firm. “People told us we would need to move to Bangalore to get the engineers we wanted because its pub culture and entertainment options had them hooked,” says Anupama.
While Anupama is driven by generating new IP and monetising ideas, Puneet, as a charter member of the Chandigarh chapter of The Indus Entrepreneurs (TiE), and a part of the Indian Angel Network, immensely enjoys nurturing entrepreneurs. “Being your own boss, creating your own world is very exhilarating,” says Puneet. In fact, it was Puneet’s itch that set the ball rolling for them. While quitting his job at Centigram Communications in 1999, Puneet had requested his boss, who knew the venture capital world well, to put him in touch with the right network. Roughly, a month later, Puneet got a call from Bob Kagle, a veteran of the venture industry, and an early investor in e-Bay. “I was overwhelmed. This guy was prime time. I told Anu I couldn’t go alone to somebody like him. So, she came along. As luck would have it, he liked what we offered,” Puneet recalls. In less than a week, they received a term sheet and set up VivExchange.com, a B2B company in the healthcare space. Although doing business together has meant “an almost perfect alignment of interests” for the couple, Anupama confesses how challenging it has been to make it work, especially in Chandigarh. “Puneet
says. Between their distinct, but complementary, skill sets, they have structured the company in such a way that they each take final calls on what they are responsible for. Anupama is in charge of product development, product engineering, quality control and human resource issues, while Puneet handles all sales, marketing and business development concerns. “These areas don’t really work together, so we lead fairly separate lives at work.” According to Puneet, understanding the skills each partner brings to the table as individuals, and making sure each one pulls his or her own weight are critical ingredients for the success of any partnership. Being happily married doesn’t really help here, he adds. “You could have a happy married life. But, to succeed in business, you need to respect the skill set of the other person. It’s not about being cosy with each other.” It’s this understanding that has kept their relationship afloat—and Mobera successful. Buoyed by increasing mobile and internet penetration, the firm’s confident of growing rapidly over the next few years. “We have always had the people. Now we are at the point that we have a growing market, even in India for our products,” claims Anupama,
“Our investors asked us clearly what would happen, if we split. We were not ready with an answer.” So, the husband-wife duo trawled through the pubs of Bangalore to find engineers and understand what was important to them. Interestingly, they found not one typical engineer in the pubs. This disconnect in perceptions was an interesting insight. It also helped them develop the perfect bait to get a star employee hooked. “The biggest draw, we realised, was the type of work you get to do, the importance of the job to your career. So we give them high-skill projects, which enables them to get out of the maintenance, coding cycle,” explains Anupama.
and I ran companies together in the US as well, but things are conducted in a different way here,” she adds. They found the personal and professional spaces decidedly separate in the US, but that did not happen in India. “As a couple running a business, you are expected to do things together. The relationships between husband-wife entrepreneurs are more fused here. And that was a big challenge,” she points out. Puneet seconds her opinion. “It’s been tougher for Anu in India because people outside, like our CA or lawyers, would assume she would sign on documents I had already signed on,” he
who has been conferred the Athena India Leadership Award in 2007, as well as the All India Outstanding Woman Entrepreneur Award in the same year. Despite their ambitious plans, they have no plans to seek funds to shore up their services. “VC money comes with lots of pulls and pushes. We have taken it before. But at this point, it will probably be a path we come down to last.” It would make sense to believe them. If they could engineer an afterthought the way they have, a determined path is more likely to route them to a perfect sunny valley. MAY 2010
IN BUSINESS & IN WEALTH
Yogesh & Suchna Shah The Backpacker Co
A tale of two travellers Bitten by the travel bug, the Shahs decided to marry their love for unique experiences with their fondness for each other. Their company takes people around the world.
or Mumbai-based Yogesh “Yogi” Shah and his wife, Suchna, life is almost the fairytale that many just dream of. They backpack through quaint European towns, quirky international festivals, and wander off the beaten track to varied lands and cultures. And they do this more than half a dozen times a year. What’s more—this is all in a day’s work for this enthusiastic couple. The Shahs run The Backpacker Company, a unique do-it-yourself travel consultancy that wants to convert sightseeing tourists into explorers, and Away & Beyond, their new venture in the same space. It’s a smart mix of business and pleasure. Over the nearly six years they have been running the company together, Yogi and Suchna have advised more than a thousand people on customised—often backpacking—holidays that go beyond must-see tourist spots across Europe, the Far East, Africa, Egypt and Turkey. They also work the international festival circuit, organising trips around the famous Oktoberfest in Germany, and the Cologne Carnival and the Tomato Fight in Spain. The couple’s friends and family aren’t surprised that the Shahs run a travel company. “The travel bug bit me when I was very young. My parents would pack me off on these packaged holidays during school vacations,” says 36-year-old Yogi. But it was a two-month backpacking holiday around Europe, post college, which exposed him to the real charm of travel. This one was nothing like his earlier 36
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IN BUSINESS & IN WEALTH
trips—for one, there were no time boundaries around his itinerary. “No one told me how long I could stare at a monument, or how much time I could spend on a meal,” he recalls. The feeling stayed on at the back of his mind until 2004, when the husband-and-wife duo glimpsed a business opportunity in trying to make the experience work for others, too. “We wanted our travellers to experience what we had—to explore, not just sightsee,” says Yogi, who worked in his family’s logistics business before venturing out on his own. As a flight attendant with Singapore Airlines, Suchna, too, had explored the new cities she’d constantly find herself in. Before they founded the company, Suchna and Yogi had, between them, extensively holidayed across the world. “Even when we weren’t married, friends, or friends of friends, would ask us to help them plan their trips. We loved doing it. One day, we thought we might as well make money from doing this,” laughs 33-year-old Suchna, who moved back to Mumbai after five years of working with the airline in Singapore. Armed with a seed fund of Rs 10 lakh (rustled up with help from friends and family), and many, many happy travel memories—the “real know-how and capital” for the business—they set up shop in their Bandra home, and would hop across to the nearest coffee shop for client meetings. In the first year, they sent 60 people to Europe and New Zealand, and have steadily grown by more than 100 per cent every year since. Now, they handle around 400 itineraries every year and have a turnover upwards of Rs 1.5 crore. Though work space has shifted to a decent-sized office in Andheri, accommodating 12 fulltime employees, the couple still do much of the research themselves. Yogi and Suchna say they have never advertised, and their name has travelled to their target
Suchna We can’t fight on Fridays because the weekend gets spoiled. Nor, on Monday, because then the week goes badly. With a small window to fight, I guess, we are safe.
audience, mainly the 20-40 age group, through word of mouth, and media write-ups “now and then”. Of course, there have been low days. “It still feels terrible when we get calls and people ask us about backpacks. They think we sell bags,” exclaims Suchna. But, the high of seeing people discover themselves on trips makes it all worth it, she adds. Even as they navigate through these experiences—and through country maps, road networks and bus schedules—the easy camaraderie between the couple, now parents to six-year-old Ariyana and two-year-old Agastya, is more than evident. There are plenty of laughs, jokes and good-natured ribbing. But, has taking the home to office, and making the office a part of the home decor really been such an effortless expedition? According to Yogi, the trick is to make the differences count. “Suchna is very meticulous. So, she handles the back end, number crunching, and administration. I handle marketing and branding. We do, however, sometimes step on each other’s toes,” he admits. “There are times when we want to strangle each other,” Suchna pitches in. “Our staff knows by now that when one of us has an arched eyebrow, it’s a good idea to steer clear of our cabins.” Keeping the bedroom and boardroom from intruding into each other was tough at the beginning, and even now it’s something they work on consciously. For example, there is no decision-making talk done at home. “When you are home, you are home,” says Yogi. “You are together so often that you tend to take each other for granted. If I’ve had a rough day with the kids, I sometimes take it out at him at work too. All our responsibilities need to be split half way and when that doesn’t happen, you do get hassled,” says Suchna. She, however, concedes that her husband is far more “chilled out” and is the one to lead the making-up process. “He has a fabulous sense of humour. At the end of every fight, he comes to me and says ‘I forgive you’ even when he’s been at fault!” Yogi confesses there are disadvantages to working together, but says you have simply got to weigh what you have. “Wouldn’t you rather travel with your wife and spend this much time with her than anybody else?” he asks, pointing out that a trip to Finland they took earlier was also “their best holiday together”. The constant travel hasn’t yet worn down the wanderlust, with the duo looking forward to someday backpacking across South America, a long-time dream destination. For now, the partners in life and business are getting ready to enter another marriage of sorts. “We want to be India’s number one experiential travel company in the next five years,” says Yogi. For that, the company needs a capital infusion of Rs 3 crore to Rs 5 crore. “When we started, we didn’t think we Yogi would need money from outside. But, we Suchna is the one who looks up are talking to angel investors now. We need the recipes from places we have been to, and I like to go out and financial backing to grow. But, that’s also buy the ingredients. like a marriage. Your thoughts need to be aligned,” he adds. MAY 2010
IN BUSINESS & IN WEALTH
Nivedita Singh Therapist
Words of caution on the ultimate merger For couples, becoming an entrepreneurial team offers the best of both worlds: pursuing a professional dream with someone you trust, and getting a chance to spend more time together. However, given how challenging marriage as an institution is, things are bound to become even tougher when you are also working together. Nivedita Singh, a Delhi-based therapist, explains how couples can maintain both a strong business partnership and a healthy marriage.
What concerns must a couple keep in mind before working together as an entrepreneurial team? Work together only if you are bringing different and complementary skills to your venture. Secondly, a couple should respect one another, and know how to handle disagreements and compromise. Either both should have good conflict resolution skills, or put in place strategies for resolving the same. Thirdly, responsibilities have to be shared, not merely at work, but at home, too. This is a challenge in India, where the onus of expectations comes on to the woman.
Couples who build a company together have a shared purpose and goal. Does that not, in fact, help in bringing them closer? How a business performs isn’t always helpful in evaluating what’s happening to your marriage. You have to constantly ask yourself some hard questions, like what is the business doing to the marriage. I have seen that if the business is doing well, nobody wants to mess with it. Children come next in the list of priorities, so both partners spend time away from work in parenting. It’s the marriage that is, in most cases, put on the backburner. I have to remind my clients that even things on the backburner simmer and come to a boil. You have to stir them, or they lose their flavour.
Do you think couples who work together need to take on different personas at work and home? Defining boundaries is critical when you work together. Be thorough professionals when you are at work. We treat our colleagues with respect and restraint—even when there are heated discussions. It has to be the same with your spouse. You also need to be careful of over-personalising each other’s behaviour at work. Yes, emotions will come into play when you work this closely, and need to be sorted out. But, an office isn’t the best place for this.
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Should children be kept away from shop talk? Children should definitely not be burdened by shop talk. Do it only if it involves an area, where a child’s input stimulates and enriches his or her creativity, while enhancing the business, like with Nirmala of HeyMath. Then, there’s no harm in bouncing things off the child.
What tips would you like to give couples who work together? All marriages need to be nurtured. And, there are many dimensions that get added to the relationship when you work together. Many aspects of your spouse’s personality that you didn’t know about reveal themselves at work. Plus, spending so much time together means you don’t get a break from either the marriage, or work. It’s likely that you take each other for granted. So, make an additional effort to nurture your relationship. Buy that flower; do the small things that brings happiness to your partner. Don’t undermine fun and spontaneity.
Is there a danger of over-communicating when couples work together? No, trust is built on communication. Invest in smooth, easy lines of communication, whether in business, or marriage. Be honest in your discussions. Don’t brush things under the carpet. Eventually, the discord will have to be dealt with. Formalise your new relationship in business. Put things down on paper so that roles and responsibilities do not overlap, or get blurred.
IN BUSINESS & IN WEALTH
Amarjit & Gunita Singh Intec Group
Building a dream factory They started out making fans in a rented shed, battling a cash crisis, some 20 years ago. Today, they own a Rs 170-crore business. Here’s the extraordinary tale of a resilient couple.
s an assistant in his brother’s shop inside the bustling Karol Bagh market in Delhi, Amarjit Singh sold electrical appliances. But whipping up conversations with customers was just not enough for him. There was a simmering aggression inside him that Amarjit knew had to be set free. That was the eighties. A few years later, he walked out of the family business after differences with his elder brother. With little to call their own, Amarjit and his wife, Gunita, borrowed Rs 1 lakh from an uncle of his to set up Intec Electricals. The couple rented out a small shed in Faridabad for Rs 2,500 a month, and started churning out exhaust fans for another company. PHOTOGRAPH BY SUBHOJIT PAUL
Amarjit I sold a TV to Gunita’s father, which kept breaking down. So, one day, she came to the shop to give us a yelling. I was very impressed with her convent English.
Gunita As a wife, of course, you have to work to make your own space. But, fortunately there was no ego between us. And, he has always treated me as an equal, at home, at work, and in front of people.
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They billed their first consignment in January 1990, but Gunita never forgets those early days of trying to keep their heads above water. Sometimes, they would even run short of basic household items. On most accounts, Amarjit, now the 45-yearold chairman and managing director of Intec Group, knows it would not have been possible without his wife. “I have always wanted to start something of my own, but without her support and her belief, this wouldn’t have happened,” says he, of Gunita. The Rs 170-crore company the two have built now occupies a dominant position as an original equipment manufacturer (OEM) of consumer durables, such as air conditioners, colour televisions and water heaters for top brands—think, Samsung, Bajaj, Kenstar and Onida. The story, however, got worse before it got better. Just as the fan business began rolling to a slow, but stable rhythm, the 1992 Mandal Commission riots happened. The truck containing their shipment of fans was set afire in Mumbai. Moreover, the accountant had forgotten to renew the company’s insurance. “Our entire capital was eroded. Whatever we had managed to build by then, just vanished,” says Gunita. “I stayed in Bombay for 15 days, repairing each fan myself to minimise the damage. To save money, my engineer and I stayed with his daughter,” says Amarjit. “There were days I would reverse my car after reaching office because the vendors had flocked there for payments. Thankfully, there were no mobiles then, so it wasn’t so easy to be tracked,” laughs Amarjit, adding that his deep faith in God kept him going. Along with divine intervention, Amarjit and Gunita needed cash to keep the business afloat, but no bank was willing to lend money to start grounds up. A relative’s introduction to a senior officer at GEC, Rajasthan, turned things around. The senior manager asked them to make pumps for cooler units, and also agreed to pay in cash, in the first year, to bail out Intec. Over the next three years, Intec did a business of nearly Rs 3 crore with GEC. “I would sit with engineers on the shop 40
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floor and test each pump,” says Gunita, who as a student of English literature at the upmarket Jesus & Mary College in Delhi, could not have envisaged such a career move. They finally turned the corner in 1996 when they began manufacturing the small, one-litre Bajaj geyser, making more than 50,000 pieces from their rented factory in Naraina in Delhi. It’s a partnership founded on complementary strengths. Amarjit works on areas related to products, infrastructure and relationships, while Gunita handles ISO certifications for Intec. “She is a natural leader and has an uncanny ability to get what she wants. Nobody refuses her. She can just walk into a chairman’s office,” says a rather proud husband. Although she does not involve herself with the daily running of the business, Gunita says she is still on top of every issue. She holds fort at office, whenever Amarjit is out travelling for business. While the business is doing well, and they have seven factories running across the country, Amarjit and Gunita are confident that an even brighter future beckons Intec—a turnover of Rs 500 crore in the next few years. The couple’s banking on their new 15-acre factory in Chennai’s Sriperumbudur industrial zone to deliver this growth. Partially operational, it has been set up at an estimated cost of Rs 35 crore to manufacture colour TVs, monitors, air conditioners and white goods appliances for several leading brands. There’s similar action at the corporate headquarters in Delhi’s Naraina Industrial area, where Amarjit’s busy hiring professionals and management trainees from well-known business schools. He’s also gearing up to meet the demands of the new generation. His 21-year-old daughter is keen to join the Intec Group. But, she wants to major in finance and work for a couple of years in larger companies before joining her own. “She has told me that she will join the company when it has enough liquidity to pay off its debts,” says her father, deeply aware of how different his journey might have been had financing been available in the early days of his struggle.
IN BUSINESS & IN WEALTH
Nirmala Sankaran & Harsh Rajan HeyMath
When one+one equals eleven Their e-learning programme makes maths easy for students. But, it’s their chemistry, which fetches this couple the full marks.
Double lessons For the first five years, none of the schools that this couple worked with knew that they were related in any way.
PHOTOGRAPHS BY AAHANA MAHTANI
irmala Sankaran and Harsh Rajan knew they were essentially jumping off a cliff when they first started talking about quitting their high-paying corporate jobs with Citibank and Credit Suisse First Boston in London to turn entrepreneurs. So, they decided to test whether they really “had it in them” to take big risks. Harsh went first, bungee-jumping 110 metres off a bridge in Zimbabwe. “It was amazing, but mad,” he laughs. But it made sense, since starting a business was essentially similar—thrilling, terrifying and sometimes, even addictively unsafe. “We skydived over Victoria Falls in tandem the next day to test our resolve. It seems to have worked.” It indeed did. Back from their holiday, Nirmala, an IIM-Bangalore alumnus, and Harsh, a chartered accountant, made a plunge of another sorts—giving in MAY 2010
IN BUSINESS & IN WEALTH
their resignations and co-founding an online maths tutoring company. The simple aim of the new venture, HeyMath, was to dispel the fear of numbers. Using animations and graphics, HeyMath helps students learn mathematical concepts visually. “We want to explain not just why, but also show how a maths concept works,” says 45-year-old Nirmala, who had earlier developed new products for Citigroup’s Global Cash Management and Trade Services. Today, HeyMath is used by more than 100,000 students in 50-plus countries. An annual subscription to the HeyMath enrichment e-learning programme Nirmala typically costs US$100. Students in India I don’t believe in the concept of work-life can buy them online for around Rs 1,200 balance. I have three children—HeyMath per grade. is the first—and my moral radar swings between all of them. Lessons devised by the company have nities for growth. Of course, they made it into the curricula of more than 150 both admit, the equation wasn’t schools in India, Singapore, South Africa and the United States. always perfect. “In the first three years, there was a tremendous “These numbers are expected to double this year,” says Harsh, con- overlap,” begins Harsh. “We did many things by trial and error, fident that both India and South Africa promise exponential and by driving the other person up the wall,” he confesses. growth. In Singapore, a leading hub for e-learning, HeyMath has According to them, a common ideology to both work and conhad a significant impact—a study last year showed that more than flict is a must. “You need to have a mechanism to resolve conflict. It 60 per cent of its best performing students were clued into Heyworks, if you are true to it. If Harsh’s decision on something is an X Math while preparing for their O Levels. and mine is a Y, we actually sit and write down the pros and cons. In what its founders describe as a “big, big high”, HeyMath has You have to over communicate,” says Nirmala. even been likened to Google by Thomas Friedman in his book The Though the couple worked out of London for over a year iniWorld Is Flat. And it has won accolades for being one of the most tially and travelled constantly to India to set up the back-end in innovative software companies in India, earning an invitation by Chennai, it made logical sense to move back for good. HeyMath is Intel Corporation to join its “Classmate PC” programme. now based out of a 12,000-square-foot office in Chennai. SeventyWhen they started out in 2000, Nirmala and Harsh signed up five people, mainly content developers and graphics designers, for an academic collaboration with the University of Cambridge as work from what Harsh calls a “collegiate, Google-esque” office part of its Millennium Mathematics Project to devise lessons and with a “no politics” work culture and a free snack bar. learn the art of effectively leveraging technology. The duo had It hasn’t all been a wonder ride, though. There have been times about £200,000 in seed fund, cobbled together from their personal when the maths didn’t add up. “We went through a really rough savings, months of hectic research under the belt, and a fully-pow- patch in 2004. We closed the year with US$175. That’s not a situaered team between them—though friends and colleagues did warn tion to be in for any entrepreneur,” says Harsh. It’s not a memory against diving in together. that seems relevant today. In 2009-10, HeyMath totalled up Rs 25 “Your spouse is someone you can trust unconditionally. It just crore in revenue. “We should double that this year,” claims Harsh. made sense to jump in together, and have both our very different So, has it been hard to separate the professional and the perskills at hand to set up shop,” says Harsh. sonal lives into mutually exclusive sets? Nirmala says that’s not “I love developing products. And that’s what I did straightaway something she even attempts to do. “I don’t believe in the concept at HeyMath. The idea of conceiving a curriculum and finding out of work-life balance. I have three children—HeyMath is the first— how we would use technology really excited me,” says Nirmala, and my moral radar swings between all of them,” she adds. who had worked with numbers as a commerce student at SRCC, “I involve both my children in the company. I often use them as Delhi, an IIM graduate and a PhD student at New York University. first customers; and, that has helped them become stakeholders in “Even now, I obsess about the product. It’s become second nature.” the company,” she says of her daughters, Mandira, 13 and While she develops the product line, Harsh looks at the busiAnoushka, 7. They both share a birth date, December 17. “Now, do ness side of things like making sure they are funded, liquid, and the math on that one, if you can,” challenges Harsh. Come to think that they are constantly exploring different markets and opportuof it, the couple have always had their numbers right. 42
INC.INDIA | MAY 2010
NOTHING MATTERS MORE THAN SALES Management fads, technology trends, product innovation—they all mean nothing without a strong and growing top line.
Yet, salespeople are often misunderstood. That’s a shame. The best of them possess a potent combination of brains, intuition, empathy, and, of course, good, old-fashioned tenacity— all the qualities needed to close a deal. Here are a few lessons on how to sell to some of the world’s toughest customers; and a look at what makes salespeople tick.
Tips—and constructive criticism—from the world’s toughest customers PAGE 44
A psychoanalyst explains what really makes salespeople tick PAGE 48
SALES TIPS FROM THE WORLD’S TOUGHEST CUSTOMERS
Entrepreneurs are beating down the doors to sell stuff to Corporate America. Here’s how to move to the front of the line—and close the deal
Be different. And then make sure you prove it to us. Tips from the inside: “We already have a set of good suppliers in place, so if you come in for the first time and don’t offer anything different in terms of bringing us value, it is going to be very difficult to get the job,” says Ken Carty, vice president and chief procurement officer for CocaCola. “That said, Coca-Cola has one of the largest supply chains in the world, so we typically need more than one supplier to do any given thing. For example, I may work with one company that is really on the cutting edge when it comes to innovation, but it may not be the most cost effective. But a supplier doing the same thing might be focussed entirely on keeping costs down. Our goal is to build a portfolio of suppliers that will enable us to get the best of all worlds. “Small businesses also need to get with us earlier; the first time we hear from you should not be at bid time. In the past, our vendors complained that because we are such a massive organisation, it was very easy to get lost. So about four years ago, we began to put in place a very formalised process. We’re very open about what we’re trying to accomplish. Come in, spend the time, do your homework, and you should have a pretty good understanding of what we need.” What not to do: “Some suppliers try to bypass the process a bit. They think that because they know someone here, or they have a friend of a friend, they should get special treatment. That attitude won’t get you anywhere at our company—and it’s a hot-button issue with me.” What Coca-Cola is looking for: Packaging materials, ingredients, vending machines and coolers, warehousing services
ost business owners have a dream client in mind. And in many cases, the hero of that dream is a blue-chip, deeppocketed, major corporation. As it happens, executives at big companies are forever on the lookout for new suppliers that can help their businesses run more smoothly, faster, and more efficiently. Procurement professionals spend trillions of dollars a year purchasing products and services—many of them from small, entrepreneurial companies. Intuit alone depends on some 3,800 suppliers in an average year. A win-win, right? First, of course, you have to get a foot in the door. And therein lies a great mystery. Procurement executives are inundated with cold calls and buried by stacks of proposals. How do you make sure your call gets returned, or that your response to an RFP actually gets read? To help demystify the procurement process, Inc. went directly to the source. We spoke to supply managers at seven big-name corporations—who buy packaging, marketing expertise, IT services, and more—and asked them what life looks like from their side of the desk. —Kasey Wehrum
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Go above and beyond. You would be surprised at how few of your rivals even bother to try.
We can spot a fake from a mile away. (In other words, don’t oversell yourself) Tips from the inside: “A big problem we see is that companies are not realistic with their RFPs (request for proposal). And that ends up being the reason why they don’t get the business,” says Kathy Homeyer, director of supplier diversity for UPS. “Let’s say the cost they quoted was too low. Our managers are experts; they know when a price is too good to be true. We also avoid businesses that say that their only goal is to land the one big contract from UPS. What if our business strategy changes? The last thing we want is for a company to fail because it was our biggest supplier. Your job is not to sit there and be happy that you got a deal with UPS. Your job is to continue to build your business. “Companies also need to build relationships; it’s a huge competitive edge. A lot of large corporations offer mentoring programmes, which many entrepreneurs don’t realise are available. At UPS, we do outreach programmes and external mentoring. We go to a lot of workshops, expos, and networking events. When a manager here comes to me and says certain commodities are going to be put up for bid in the coming months, I go through my files of people I have run across over the course of the past couple of years. We’ll also reach out to the other large corporations, like Time Warner, and ask, ‘Who are you guys using? Do you have someone that we don’t know?’ It’s almost a small family.” What not to do: “The biggest no-no is not knowing our competition. People will say, ‘I’ve got this really exciting proposal I want you to look at.’ I’ll say, ‘Go ahead; send it to me.’ Then they send it to me by FedEx. It happens every day. Just be smart. Know the company you are pitching to and know their likes and dislikes. You get such brownie points with me when you come in with a UPS envelope and have an account all set up. It’s just the little things like that, the icing on the cake.”
Tips from the inside: “In my experience, there are two ways that a small company can differentiate itself,” says Larry Wood, Intuit’s director of sourcing. “The first is having deep expertise that can give us knowledge about a particular customer segment or a technology. The other thing is flexibility. Several years ago, I did an RFP (request for proposal) for a hardware bundle comprising five components. We were interviewing suppliers for each of the components when one of them took a chance and said, ‘You don’t know anything about this market. Let me step up. I know all these other providers. I can buy these other components and bundle it for you.’ That was amazing. They addressed a lot of our needs and took a lot of things that we weren’t familiar with off the table. I have to admit that I see very few companies do that. People should think about responding creatively, not only to the requirements in an RFP, but also providing other ideas. “Suppliers should also know that we take a hard look at financial-risk assessments and make sure that the companies that we align with have the wherewithal to weather a financial crisis. At Intuit, we expect even privately held vendors to provide audited copies of their books for us to review. Not everybody does that, but we have a real challenge trusting people who choose not to. If you can be transparent with us, that gives us more confidence and evidence that you will be able to do what we are asking you to do.” What not to do: “It comes down to having a sense of sales professionalism. It bothers me when a supplier comes in and tells us what they want to tell us instead of showing that they understand what our needs are, what our pain points are, and then trying to address them. That is just Sales 101.” What Intuit is looking for: Marketing services, facilities maintenance, product development, call-center services and IT services
What UPS is looking for: Cardboard boxes, printing services, facilities maintenance, security services and promotional-item suppliers ILLUSTRATIONS BY SANTOSH KUSHWAHA
THE BAMA COMPANIES
Companies are buying your reputation, not just your products.
Tips from the inside: “Our company dates back to the pie company my grandmother started in 1927. Today, we have over 1,000 employees in six manufacturing facilities and are one of the largest suppliers of pies and baked goods to quick service restaurant chains and large retailers,” says Paula Marshall, CEO of The Bama Companies. “In a sense, when I pick one supplier over another, it’s like I’m buying its entire facility. It’s not just about your ability to supply a product and ensure the supply; it’s also about the facility the product is made in. Is it clean? Does it have a good maintenance programme and good food-safety programmes in place? In order for me to serve my customers, I have to be confident that I’m buying a safe and reliable product from you. “We also look at the company cultures of businesses we’re considering working with. We talk to their management people, look at their environmental programmes, and talk to a lot of employees. A company that has a high employee turnover would be a real red flag to us. If it doesn’t have a stable work environment, that’s indicative of a lot of problems that we might be buying.” What not to do: “Don’t underestimate the power of your company’s website. Having a great site doesn’t cost a lot, and it helps give us a good first impression of someone we might not have worked with before. The internet is an awesome tool, and we use it quite extensively.” What The Bama Companies is looking for: Ingredients, baking machinery and equipment, engineering services
Do more research than you think you need to. Tips from the inside: “We operate in 22 different market areas, so we have to be aligned with, and attuned to, regional offerings that may not be coming from large manufacturers,” observes Hal Adams, vice president for retail merchandising at Valero Energy, a petroleum supplier that operates about 1,000 service-station convenience stores. “A lot of times, we are dealing with a mom-and-pop operator that is only selling in, say, San Antonio. But smaller suppliers should know that we have to hold them to the same minimum standards as we do the large corporations. “For example, we have a minimum amount of liability insurance that any product has to carry, in case something goes wrong. In order to do business with us, you need to be aware of our minimum requirements and preliminaries, and you need to be able to do those things. All that information is available on our website. When you come face-to-face with one of our buyers, it’s usually a one-chance deal, so it adds some credibility when you’ve invested some time in researching Valero and learning what role you might play in it. “However, it’s unlikely that a local supplier would make it into our locations first. Usually, a regional manufacturer will have to have done some footwork in smaller stores where it has been able to create some sort of a test level. If you believe in your product, get it into some smaller retailers and get some real-life market data. Sometimes that might even mean giving a retailer your product for free to see if it moves. In turn, you can then ask that retailer to give you the sales data—and use it as part of your sales pitch.” What not to do: “Don’t be overly aggressive with your sales budget. Entrepreneurs are very passionate. That’s wonderful, but that passion sometimes leads them to be unrealistic. A potential supplier should be reasonable in its sales projections in terms of what will sell in our stores. Be aware of how many customers an average store sees per day. If you’re coming in and saying that you are going to sell 500 units a day and I have an average of 900 customers, that’s probably not very realistic.” What Valero Energy is looking for: Convenience-store items, such as beverages and snacks, transportation services, maintenance professionals, consulting, legal services and office supplies
INC.INDIA | MAY 2010
Be as specific as possible when describing what you can do for us. Tips from the inside: “In 2009, we subcontracted US$4.5 billion worth of goods and services to small businesses,” says Gloria Pualani, director of socioeconomic business programmes at the aerospace giant, Northrop Grumman. “Because we’re such a large company and we have so many commodity lines, we ask that our suppliers really target their outreach. If there is something specific that we are looking for, then we are going to see it almost instantly rather than having to read through a lot of extraneous information. If you have a specialty, let it be the prime thing you talk about when you list your capabilities. We appreciate all the other things you can do, but if there is one thing you know you can do better than anyone else, that should be highlighted immediately. “Also, the advantage to us of working with a small business is the flexibility and agility they offer. Many times we have orders that require very quick turnaround. So it helps when it is the decision makers that we are talking to, and we don’t have to go through three or four layers of people to get a decision made. We like to have access to the CEO or CFO of a company, the person who is actually making the decisions.” What not to do: “Don’t be shy. Building relationships with suppliers is one of the things we want to do. And if you have a capability, highlight that capability. That’s what we want to know about. We want to know what your innovation is, what your technology is. Let us know what you can do to make your product the very best. Let me know if it’s priced accurately and if you can give me on-time delivery. The fact that you may reside in a certain congressional district is really not that important to us. Those are the kinds of things I need. I don’t really need to know about your congressional district.” What Northrop Grumman is looking for: Machine components, homeland security services, IT services, accounting, military technology applications
“Don’t be shy. Let us know what you can do to make your product the very best.”
Start locally, think globally. Tips from the inside: “Changing vendors can be very expensive, so we’re always looking for long-term partners,” says Ying McGuire, senior manager of global supplier diversity at the computer maker Dell. “When companies first come to present to us, they may be starting off very small, but if they have a long-term global strategy and vision, that typically attracts our attention. We want all of our suppliers to have global capabilities. If a small business comes in and demonstrates that it has thought about marrying Dell’s global sourcing strategies with its own plan to realise the greater growth, that’s very attractive. We know that small suppliers have limited resources and may not understand the different regulations and culture. But we always tell people that if they want to compete, they need to support customers regardless of geographic location. “We worked with a small business based in San Diego that opened its first overseas market in China as a Dell IT services partner. The company specialises in data centres, infrastructure, and networking. Today, it is training workers in China and expanding its business in an emerging market. And Dell was able to use a US small business to help our customers in China. It was a win for everybody.” What not to do: “Most small businesses are willing to learn from us. However, when people don’t want to change, when they want to stick to their own practices and philosophies, that’s kind of a warning sign for us.” What Dell is looking for: IT services, staffing services, office equipment and supplies, facilities maintenance MAY 2010
THE SECRET OF THEIR SUCCESS
What really drives salespeople to chase deal after deal? The answer is more complicated (and darker) than you might think Great salespeople are masters of psychology: The best of them can suss out pain points and imminent objections just a few minutes into a call. Their own psyches, however, are more mysterious. Are they motivated by greed and competition? Or, masochism and the prospect of rejection? Perhaps both, suggests G Clotaire Rapaille, a psychoanalyst and ethnographer, who has been working with major corporations for two decades. The founder of Archetype Discoveries Worldwide in Palm Beach, Florida, Rapaille has built a career helping corporations discover the mental models that animate their customers, employees, and organisations. Much of that research has focussed on salespeople, whom Rapaille characterises with a surprising archetype: happy losers. Understanding what that means, he told editor-at-large Leigh Buchanan, can go a long way toward helping managers get the most out of their often inscrutable sales forces.
Explain the term happy loser.
Salespeople sometimes say to me, “I don’t like that you call me a loser.” But that’s not what I mean. Happy losers are people who see rejection as a challenge. If 95 per cent of the time you are rejected, you have to ask yourself, “Why did I choose this kind of life?” The happy loser likes it because five per cent of the time, he wins. And all those times he loses, he sees as getting to the win. How did you arrive at the happy-loser archetype?
We always go back to the first imprint: to the first experience in a person’s life when he or she creates a mental reference. So we asked sales people about their first experiences selling—as children with a lemonade stand or trying to persuade their parents that they don’t want to go to school. With the first experience, they feel strong emotion, and emotion is absolutely key to producing the neurotransmitters in the brain that create mental connections. The first time they are rejected is very powerful. 48
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What we find with good salespeople is that that first ‘no’ stimulated them. It didn’t make them want to give up. It made them want to find another way. Are people born happy losers, or can they be trained?
Both. In some corporations I’ve consulted with, we’ve had regular meetings with salespeople and asked them, “How many nos did you get this week?” The ones that got nos got points. Then, after a month, we made the correlation: The more nos they had, the more sales they had made. Because they were trying more things, taking more chances. The response was almost Pavlovian. The more mistakes, the greater the reward. So, salespeople should be trained to embrace rejection?
Absolutely. If the manager keeps saying, “You’re going to win; you’re going to win; you’re going to win,” and then the guy goes to see the potential client and is rejected,
it’s a disaster. A sad loser goes down and never comes back. A happy loser comes back. Another reason to embrace the no is that the sale isn’t done until you hear it. Say a customer walks into a store to look at a dress, and the salesperson says, “It’s inexpensive; it fits you; you look so beautiful.” So the customer buys the dress and leaves. The boss of the salesperson says to her, “How did it go?” She says, “Well, I’m very happy. I sold the dress.” The boss asks, “How many nos did you get?” “I didn’t get any nos.” “Then that’s wrong,” says the boss. “Because the sale doesn’t end when the customer says, ‘Thank you.’ You say to her, ‘You have that nice dress. You should have these shoes that go with it. This purse, this belt, this sweater, this scarf.’ At some point, the customer will say, ‘No. This is enough.’ That is when the sale ends. The sale ends when you lose.” How do you ensure people actually learn from their mistakes?
I really believe in support groups. Companies should have a kind of Happy Losers Anonymous. Salespeople get together and go around the room and say, “I’m a happy loser”—they know that part is a joke, so it’s OK—and then confess all the
is only one element of the profile. They don’t understand the importance of rejection. So, they eliminate some very good people. Instead, I would ask: How many things did you try in your life that you failed at? And not only in business.
“A sad loser goes down and never comes back. A happy loser comes back.” mistakes they made. And the group says, “What can we learn from these mistakes?” You end up with so much more learning; it’s fantastic. And we know it works, because people don’t make the same mistakes again.
Did you try skiing? Did you try snowboarding? Did you try fencing? How about during your education?
Do managers look for the right things when hiring salespeople?
Rewards are good, but the symbolism of the reward is very important. I once did some work on the merger of two large banks. One question for the merged entity was, ‘How do we reward the people
Many managers just look for results. They look for people who can prove that they did sell. They don’t understand that this
What do you think of in-house sales contests and similar motivational programmes with big rewards?
who sell?’ One of the banks was very sales oriented, and it offered its top salesperson a cruise. The other had a slower sales culture; it spent more time building relationships and gave out small diamonds, which salespeople wore on their jackets, like stripes on a uniform. Its salespeople were very proud of those diamonds. The message of the cruise was, ‘Sell, sell, sell, and for one year you will be on top’. But when the cruise is over, it is over. And the next year someone else wins, and you are the ex–world champion. At the other company, salespeople would always have the diamonds. What do they say, ‘Diamonds are forever’? And so it is more like having a gold medal that no one can ever take away from you. The emphasis was on longer-term relationships built over time.
DIARIES Tracking radical ideas from different cities
May 01-2010 Mumbai. Need more corporate clients and better prices for our service... Bengaluru. Deliveries have gone off schedule; introduced consultation price... Hyderabad. Difficult times— personally and at work; new software ready. Will the corporates bite?
Dhruv Lakra had it all. A plum position at an investment bank in Mumbai, a salary that would put every neighbour to envy, and a life that his parents had always planned for him. He gave it all up to create jobs for the hearing impaired. Will his sales pitch for Mirakle Couriers fall on deaf ears?
Mumbai: Delivering the right package As somebody running a business in the brutally-competitive world of courier services, 29-year-old Dhruv Lakra knows that the value lies in delivering a superior service. But every day, as his wheeled fleets pick up packages and route them to various locations, this young entrepreneur also dispatches a different kind of service—a delivery of values. Lakra is the founder-CEO of Mirakle Couriers, a unique services company, which only employs adults with hearing impairment. The collective voice of this “invisible” community, feels Lakra, has not been heard for far too long, despite India having one of the highest deaf populations in the world. Four out of every 1,000 children in India are born deaf, and approximately 6 per cent of the population suffers some kind of hearing loss. His mission is simple—to help low-income-earning adults break into the economic mainstream with a corporate courier service. “We want to radically change the way people with disability are looked at. Because they don’t get noticed, nothing has been done for the deaf. Parents of most hearing-impaired people we employ do not know the sign language, and insist that we speak to their children normally. Even within the boundary of their own homes, these people live on the sidelines,” rues Lakra. So, after a two-year stint as an investment banker in Merrill Lynch’s Mumbai office, Lakra set about to craft a career option that would suit those blindsided by fate. He joined Dasra, a nonprofit organisation, where he spent six months helping fishermen pick up the pieces of their lives in post-tsunami Tamil Nadu. As he worked hard to build hope and survival options for the victims, Lakra felt consumed by a passion for developing social enterprise models. 50
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The drive was enough to lead him to the Said Business School at Oxford University for a management degree. While there, Lakra bagged the Skoll scholarship for 2007-08, awarded to students interested in social entrepreneurship. The money came in handy, as Lakra bootstrapped his company with the £200 that had been saved from the scholarship. And a tiny Mirakle Couriers sallied into the fray. “I don’t want Mirakle to be an NGO. It is a service-driven business with a social cause. This is a vocation that can take advantage of the community. Low-income deaf people have staggeringly low levels of education and have been relegated to candle- and craftmaking jobs. That doesn’t help them. For social stigma to change, they need to be among us,” says Lakra of his company. From two small cell-like offices at Andheri and Churchgate (lent to them by a corporate), Mirakle provides pick-up and delivery services all over Mumbai. Its team of 53 people handles more than 500 packages a day—a long journey from November 2008 when Lakra started out with a single boy and a single client, who gave him 10 packages to deliver. He personally trained the first 10 boys—learning the sign language on the go—on how to handle customers, receive payments or put in shipment numbers. Besides him, there is just one other employee, the operations manager, who does not suffer from hearing loss. Since then, Lakra has done some spectacular rainmaking. The result is an impressive list of corporate clients like Mahindra & Mahindra, the Aditya Birla Group, Indian Hotels Company, JSW Group, Godrej & Boyce and Essel Propack. Like most start-up founders, Lakra points out that coming even this far has not been easy, with his marketing pitch falling on
Off the beaten path Dhruv Lakra does not want Mirakle to be an NGO. He thinks of it as a service-driven business with a social cause.
deaf ears more often than not. “That remains our biggest challenge, convincing corporate clients to give us business. They need to understand we are not a Blue Dart or a Fed Ex. We can’t meet their price offerings.” Defending his pricing policy, he says, “All our boys get minimum wages, something the organised sector does not do. We pay more, so our costs are higher. But, we need to position this differentiation into our branding. There has to be a cool quotient attached to being a fair-and-just employer. Right now, though, only two out of every 50 clients we meet for business gives us the price we want.” He says he’s still not broken even, although he’s been able to further seed the company after being named an Echoing Green fellow in 2009. The grant, given to start-up social entrepreneurs, gives Lakra access to US$60,000 over two years to nurture his idea. It was about time too, feels Lakra, after all those gut-wrenching months of building the start-up, when you know success isn’t going to come easy. Mirakle had him write off five years of his life as an opportunity cost, much to the disapproval of his parents who were not exactly thrilled with his decision of “giving it all up”. PHOTOGRAPH BY JITEN GANDHI
All of it, however, makes sense when he views the change that has slowly and steadily crept into the lives of his employees. “All these guys have acquired a new identity and that is the real payback. Even at minimum wages, some of our boys get Rs 4,200. A couple of them have become the primary bread-winners for their families. They are keen to invest in their future, to start savings, begin provident fund accounts. All of them have ATM cards and bank accounts,” says the youngster, his voice exuding passion as he lays out his case. Mirakle’s immediate goals are geared towards becoming more professional. First up is the development of a tracking system, for which the team is being trained to use bar codes and stamp each shipment. The company has also tied up with Aramax, a leading player in the international and domestic logistics space, to expand operations beyond Mumbai. Like all start-ups, gaining customer confidence and expanding the client base continue to be tough for Mirakle. And, when this involves changing mindsets and perceptions, there are not many customers’ ears that perk up. But, if there’s anybody who is within the earshot of delivering these miracles, it has to be Dhruv Lakra. MAY 2010
On how the earlier ventures are faring on start-up land, as they build their dream companies
Bengaluru: My Sunny Balcony The last two months proved to be lessons in the shade, after the team’s stint in sunshine. They faced a mixed bag of logistical problems. In February, they were geared to plan and plant around 10 gardens. But, only five blossomed, despite approximately nine first evaluations. “Factors we had not counted—schools vacations and holidays—slowed us,” admits Shailesh Deshpande, one of the founders. To discourage client visits that might not convert into collaborations later, the team put a value to the primary evaluation phase, charging for the initial consultation. But, that hasn’t pushed the price up, since the amount gets deducted from the final implementation cost. “The lesson is that if clients are not willing to pay the token amount, then they probably will not fork out the money needed for implementation anyway,” says the team in unison. Though they are a “little behind the curve”, slack isn’t something they are too worried about, given the stream of new requests. But, they are fighting the conventional wisdom to increase prices, as demand grows. “We don’t want to make a quick buck. We want people to get value.” The team is also eager to incorporate the revelation that conversions don’t always flow in into their system. “When we started, the conversion rate was better. Now, there are lots of Phase I, but less conversions,” explains Deshpande. Even as they tweak expectations, the 52
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team is excited about their new online store, scheduled to go live in May. The store will enable people to buy ready-made plants, pots and a line of signature products. They are hoping that the online store will lend itself to being used as a gift store with sameday delivery options. “People would love to go beyond the flower routine.” For now, deliveries will be limited to Bengaluru. Though digital viral marketing strategy, propped by word-of-mouth, has worked wonders for the company, now they are checking if the same tricks can deliver results for the online store. Before launching a different marketing campaign, the team has started to examine their web traffic. This data will be used to design marketing plans. My Sunny Balcony might have started as a response to renew Bengaluru’s losing
In the shade The team at My Sunny Balcony is excited about the launch of their online store in May, which will sell readymade plants and pots, and will serve as a gift store.
greens, but the team is now determined to make a business out of it. “We are keen on being an economically-viable environmental company. To make an impact, you need to ensure that the business is profitable. Of course, that’s never going to happen at an adverse cost.” Their learning on garden implementation, and the desire to grow, has fuelled an eagerness to “not get boxed into one vertical”. On the heels of the online store, is a vertical focused on annual maintenance contracts for gardens. But, they are committed to not “push” a market agenda. Says Deshpande: “We hope that each of our verticals is a need that is out there.” Sustainable growth is the buzzword for them. Though in the past two months they have received franchisee enquiries, it’s not something they have seriously considered. “It’s not a McDonald’s,” says an amused member. They have taken steps to expand beyond Bengaluru with some site evaluations, mostly looking at photographs. Implementing a garden outside, though, is not on their to-do list for now. Staffing issues have been a concern area as well. Their first hire, a former airline ground staff who was enthusiastic about being an “eco warrior”, quit within days. My Sunny Balcony calls it a “fit” issue. “People tend to see the glamorous part of the green movement. But, you have to get your hands dirty,” says Deshpande. They have ensured that their latest recruit, a 23-year-old, understands that a regular day can get mundane. Over the next month or so, they are looking to hire again.
Hyderabad: RideInSync In these two months, Deepesh Agar“I think the product has a good value propwal faced tough weeks, as his four-monthosition and is great for companies with triold daughter underwent a critical surgery. ple bottom line,” says an excited Agarwal. Thankfully, she’s fine now. He believes that “Selling was tough, because we are trying not just his family, but his company, too, to push technology in areas which were emerged stronger from the experience. done manually.” They are waiting for the “Start-ups are like families. You stick initial sales before fixing the pricing model. together when things go bad. I really appreciate my team for giving me 100 per cent support. We had a delivery scheduled in the week of the surgery, which we managed.” The young entrepreneur emphasises that it’s this zeal “to create something new, together” that he loves. “Not even in the past month did I think of A bumpy ride Deepesh Agarwal had to struggle with giving up. If that had his daughter’s illness, even as a delivery deadline been my aim, I would loomed large. He managed both—thanks to the support extended by his team. not have started in the first place.” RideInSync’s integrated cab pooling solution kept them There is also a road map for scaling up “really busy” over March and April. They through external funding, but only after are confident that their new software prod- sales start coming in. uct, aimed at helping companies optimise With their energies geared to make this transportation, will find buyers soon. solution run, expansion of routes and subAgarwal says it’s a full solution now, caterscription seems to have taken a backseat. ing to employees and personal carpool and He admits there has been only a five per cab pool needs. It will also help a company cent rise in the number of subscribers on reduce transport costs by at least 10 per http://www.rideinsync.com/, a web and cent, save fuel and cut down pollution. mobile-based service. Though route Called SyncToWork, this solution will expansion to include railway stations was a roughly cost Rs 1,000 per employee. priority, it has not happened. “Personal Typically, an IT or ITeS company spends travel has been less in these two months, around Rs 50,000 (per employee per year) because of school exams,” feels Agarwal. on transportation. This solution is These are the lessons that RideInSync expected to save Rs 5,000 to Rs 10,000 has learnt quickly. Because they know as a per employee and reduce travel time. The fledgling start-up “we do not have the luxplan should start paying for itself within ury of repeating mistakes”. “Start-ups are three to four months of implementation. considered sexy, but that’s an outsider’s Since the software (Software as a Service) point of view. It is pure hard work and pasis hosted, the setup cost for the company sion,” says he. is zero. MAY 2010
HOW I DID IT
MANISH SABHARWAL TEAMLEASE
I was born and brought up in Kashmir. My dad was in the police force and worked for the Jammu and Kashmir cadre. We barely moved out of Srinagar, except when he served at the Indian embassy in the US for a few years. I guess I get my interest in public policymaking from my dad’s vocation. I was schooled at Mayo College in Ajmer. That’s where I met Mohit, my co-founder and director at TeamLease. From there, I moved to Shriram College of Commerce in Delhi, where I met my roomie Ashok Reddy, also co-founder of Teamlease, and now its managing director. I joined the Nagarjuna Group in Hyderabad in 1990, and moved on with Nrupender Rao a year later, when he left to start the Pennar Group. I was his executive assistant and that proved to be the turning point in my life. I got a close view of what an entrepreneur was capable of doing, the change he was capable of triggering. Rao made me come to an important realisation—entrepreneurs are not born. They are made.I think role-model entrepreneurs do
much more to spark off entrepreneurship than any education. People like NR Narayana Murthy and Nandan Nilekani can change the limits of your thoughts and show what’s possible.
I knew then that I was going to be an entrepreneur. Soon after, I incorporated my company, India Life, and went off to Wharton to study management. I got professors from there involved in my business. Most people want to make it to a business school to get a lucrative job. They have the math all wrong. A business school is like intellectual wine-tasting. These places are the best incubators in the world; the alumni, the professors and the resources for developing a
INC.INDIA | MAY 2010
He started out to build a business, only to wade into a raging public policy debate. He has locked horns with the government on labour laws and has defied everyone who predicted that his company, TeamLease, would be put out of business. That’s Manish Sabharwal, the 39-year-old chairman of India’s largest temporary-employment company, in a nutshell. The man fancies himself more as a crusader for labour reforms than as a business owner. And there are reasons to believe that. The company he has built has hired one person every five minutes for the past five years. His recent acquisition of the Indian Institute of Job-Oriented Training, a vocational training provider, is aimed at making India employable. Sabharwal won’t stop till he becomes India’s largest private employer with a million people on his rolls.
AS TOLD TO POOJA KOTHARI PHOTOGRAPH BY GIREESH GV
GUTTER CREDIT HERE
PUTTING INDIANS TO WORK
To the business born Sabharwal wanted to build a company that was profitable, fun and good for Indiaâ€”and heâ€™s done that with TeamLease.
HOW I DID IT
business plan are just amazing. I think people should go to a business school, write their business plan, find an investor and come out ready to execute. That’s what I did. I found the View Group at Wharton, and got USD$2 million to start a health insurance company. That morphed to pension fund management, and then, finally to pension fund administration, before becoming an outsourcing company that was bought out by Hewitt in 2002. As the clauses with Hewitt would have it, I
spent the next two years in Singapore managing their Asia outsourcing business. Every Monday, we would be locked in a conference where everybody could say no and nobody could say yes. As soon as the lock-in period ended, I called it quits and relocated to Bangalore. After all, the king of a small kingdom is still a king.
We had built and sold a company. That gave us enough credibility to start the next one. We knew what we wanted our next company to be—profitable, fun and good for India. Thus, was born TeamLease, India’s first temporary-employment company. We have hired someone every five minutes for the past five years. So we consider ourselves good for India. We are profitable. And we have had fun. As a company, we bring rigour and pro-
cess to the employment business. I believe in the adage—don’t do charity; give people a chance. We do that—by finding jobs for short durations, where youngsters get an opportunity to work hard and get noticed. Many of our temporary placements become permanent employees of the companies within a year.
In India, our primary and vocational edu-
cation systems are messed up. People in the Northeast can speak English and are, therefore, hired at a higher salary compared to the migrants from UP and Bihar, who have been taught in Hindi. The children in these areas didn’t do anything different. These are implications of policy decisions, which allowed English to be taught in one state, but not in another.
INC.INDIA | MAY 2010
“If the public policy angle of TeamLease wasn’t there, I wouldn’t have been able to sustain myself.” What drives me crazy is that out of the
one lakh kids who call us up every month, we manage to hire only three per cent. There’s nothing wrong with the rest 97,000 of them. They are willing, but not able. We had a job mela in Jaipur with the Rajasthan government, where 35,000 people turned up in one day. If 800 of them had been born in a metro, they would have had a job. It’s the ovarian lottery. Where you are born in India can have such an overwhelming impact on where you land up in life. I probably didn’t realise I had won this
lottery till I started TeamLease. Given my background, I find no contradiction between doing well and doing good. That’s why I am enjoying my second venture much more than my first, India Life. For me, it’s more than a company. It’s a cause.
As we become older, we look for blended returns. And TeamLease offers more returns than HR outsourcing. If the public policy angle of TeamLease wasn’t there, I wouldn’t have been able to sustain myself. In many ways, TeamLease was a child of India Life. In hindsight, we probably sold our first venture a few years earlier than we should have. But then, with external money, the meter was always ticking on us. That’s why we did things a bit differently the second time. For TeamLease, we didn’t take any external money till last month. We wanted the runway and space to craft this venture differently. We got senior peo-
ple in much earlier. We decided to focus on public policy, which has been great for the company. People recognise us as someone who has the backbone to stand up. We also scaled up much faster since we were working with a good team of people. Most of them, we knew from the India Life days. The difference between a cult and a reli-
gion is that one outlives its founder. Even if a truck were to hit me, TeamLease would run for itself. We are very proud of that. At every point in a company’s life, if you aren’t moving forward, you are moving backward. We could have waited for the labour laws to change. But it’s better to at least try and influence the outcome like we have been able to in case of the labour laws. Yes, we haven’t managed to change them, but no one’s shut us down.
As a company, we have to shift from
quantity to quality. So far, hiring in India was about getting on board a pair of hands. No one cared if a brain came attached with it. The economic downturn has turned that upside down. Suddenly, people are realising they can achieve more with less.
I have no doubt that we will fix India’s
people supply chain, as well as problems of matching and matchmaking. We’ll either succeed, or we’ll die trying. TeamLease will have a million employees and become India’s largest private sector employer. Till then, we will continue our efforts to sabotage the ovarian lottery.
Managing How to offer lower-cost items without cheapening your brand this page Sales & Marketing Using Groupon to attract new customers page 58 Elevator Pitch Condor Advertising is looking for Rs 90 lakh to put ads in your wardrobe page 60 Branding If you are planning to sell your goods abroad, take a quick look at the basics of certification page 62 Sales & Marketing A company that wants to shelter rural India with bamboo gets new ideas to market its service page 63
The Way I Work
Vivek Madappa plays an enabler’s role at HummingBird Suites page 64
PHOTO BY PHOTOS.COM
Managing Hey, do you have anything cheaper? How to go downmarket Consumers and businesses have tighter budgets these days, and coaxing them to shell out for high-end products has become a challenge for entrepreneurs. Some, like John Demskie, CEO of RTI, are going downmarket. Demskie’s company, a Minnesota– based business with 50 employees, sells remote controls for about US$700 to US$900 apiece to companies that instal high-end home theatres. Revenue increased about 50 per cent a year during the housing boom, but after sales fell 15 per cent in 2009, Demskie decided to launch a line of moderately-priced home theatre remotes for do-it-yourselfers and installers of lower-priced home theatre equipment. “It wasn’t much of a decision,” he says. “It was a necessity.” But a move like Demskie’s is not without risk. For starters, lower-priced products often come with lower margins. And, if you
Lower, not cheaper Don’t cut the cost of existing products. Offer other cheaper products instead.
aren’t careful, the cheaper product could cannibalise sales of your high-end items. Plus, if the low-end product becomes too popular—or, if there are quality issues with the cheaper product—you could tarnish your brand. Here are four smart ways to go downmarket.
Simplify Your Product There may be costly features that some customers would rather do without. Survey customers and observe how they use your products. Last year, ClearCount
Medical Solutions, a Pittsburgh-based company, launched a high-tech system that tracks surgical sponges in operating rooms—and makes sure the sponges don’t wind up inside patients. After some hospitals said the US$17,000 device was too pricey to instal in every operating room, CEO David Palmer decided to develop a stripped-down version. Palmer invited several hospitals to test the US$17,000 system, while he and some of his 21 employees observed. After watching more than 100 surgeries, MAY 2010
Palmer and his team figured out that, though some complex procedures required the full system—which includes a high-tech trash bin that automatically counts every sponge—many minor surgeries merely needed a wand that scanned a patient for sponges. Since ClearCount began offering a US$4,000 scanning wand, the company has landed deals to outfit four hospitals with 80 devices, a mix of higher- and lower-priced products. “Now we can custom design a solution for hospitals that is tailored to their needs and budgets,” Palmer says. He expects sales to reach US$4 million this year, up from US$1 million in 2009.
Make Distinctions If cheaper products aren’t substantially different from higher-end versions, customers may stop ponying up for pricey models altogether. The team at PF Digital, a McLean, Virginia–based company that sells digital picture frames, learned that the hard way. Joe Espejo, PF Digital’s president, says that in 2008, his company rolled out several new digital frames, including a 7-inch model for US$99.99 and an 8-inch one for US$170. The two frames had nearly identical features,
except that the higher-priced model, in addition to being slightly larger, had a sharper picture. Guess which one most shoppers decided to buy? The popularity of the cheaper frame lowered margins and hurt profits, Espejo says. Last year, he scrapped both frames and rolled out a high-end, US$200 model with a 10-inch touchscreen and video playback. Espejo says the company plans to launch another cheaper digital frame, but this time it will be clearly lower end, with some of the better features stripped out.
Think Small Instead of creating lower-end versions of an existing product, some companies maintain a high-end brand image by selling affordable mini luxuries. JB Schneider and Antonio Turco-Rivas, founders of P’kolino, a maker of children’s furniture in Dania Beach, Florida, decided to take that approach in 2008. The company, which sells play tables that can go for as much as US$1,400, rolled out a line of small toys and crafts. Most sell for less than US$40. Schneider says the new products have the same design aesthetic and are made of high-quality materials that set them apart
from mass-market toys. “These are still premium items,” he says, “but they are more consumable products that have broader appeal.” The new items helped P’kolino keep sales steady at US$1.5 million last year.
Choose a New Name When companies decide to create lower-end products, one of the biggest decisions is whether to create a new brand. Using an existing brand name can help a new product gain instant identification, but creating a new brand can keep cheap products from tarnishing a company’s image—or angering its existing customers. That was Demskie’s concern for RTI. He worried that the cheaper remotes would drive away the high-end home theatre installers who currently buy RTI’s products. When the company launches the new remotes in June, they will carry another name: Pro Control. Though gross margins will be a bit lower, Demskie expects higher volumes, which has allowed him to negotiate better manufacturing prices. “I suspect this could double the size of the business,” he says. —Amy Barrett
Sales & Marketing The Groupon avalanche A new service drives a flood of customers It was a Wednesday morning in October, and Matt Lincecum’s phone wouldn’t stop ringing. Each time Lincecum, the founder of Fremont Brewing in Seattle, answered another call, the request was the same: “Can I schedule a tour of the brewery?” For hours, Lincecum tried juggling the nonstop calls himself, but it was too much for him to handle alone. He eventually switched on the answering machine, which greeted callers with a recording that went something like this: “We love you very much, but we are overwhelmed at the moment. Please check our website on Monday to make reservations there.”
INC.INDIA | MAY 2010
ILLUSTRATION BY BINESH SREEDHARAN
Drowning in Discounts
The reason for the phone calls was Groupon, a popular Offering coupons through Groupon can help you reach thousands of new customers, but if you are not careful, new website that sends subscribers daily emails containthe experience may become costly, or overwhelming. ing one heavily-discounted deal from a local business. Here are four tips for using the service successfully. Since Groupon, based in Chicago, launched in 2008, more Do the math. It’s typical for companies to offer discounts of than 3,000 business owners have signed on to offer deals 50 per cent, or more, to Groupon customers. Then Groupon to the company’s fast-growing list of subscribers, which takes about half of what you make from the offer. Can you now exceeds three million in more than 40 cities. Fremont afford to sell a product or service at such a large discount? Brewing had partnered with Groupon to offer a tour of If so, it may be worth it to get new customers in the door. the brewery, a pint of beer, and a pint glass for US$7—a Set a cutoff. Your Groupon offer may lead to more customers discount of more than 50 per cent. If Groupon subscribers than you can handle. When working with Groupon, be sure to want an offer, they must pay for it in advance on Grouspecify the maximum number of coupons you want to sell. pon’s website. The offer isn’t valid unless a predetermined number of coupons are sold in a 24-hour period. In one Be careful with your contact information. If you give a phone number in your Groupon offer, you may be inundated with day, more than 1,300 Groupon users took Lincecum up calls. An online reservation system can help. on his offer. Lincecum scrambled to order new glassware and Use discounts sparingly. Offering coupons too often may instructed his web developer to whip up an online resprompt customers to shop only when they have one. ervation system over the weekend. He also hired a new employee to help him with the tours. He figures he spent an extra US$6,000, but it wasn’t all bad. “Anytime you have 1,300 people who are interested in what you’re doing, that’s great,” says Lincecum. “I was thrilled.” “In terms of a way to spend marketing dollars, there is prompted Henderson to begin directing customers to her online nothing more effective in getting a customer in the door than reservation system and to decrease her Google AdWords budget for Groupon,” says Andrew Mason, Groupon’s founder and CEO. fear of drumming up more business than the studio could handle. Many entrepreneurs who have used the service agree, but they Like Pfahler, she expects to break even on the deal itself, but she says also say business owners should carefully calculate the costs many of the new customers have since signed up for more classes. involved in offering the discounts. For starters, Groupon typically “It was great for awareness,” Henderson says, noting that she would takes a 50 per cent cut of sales. “I think every business needs to probably partner with Groupon again. understand what they’re getting into,” says Florian Pfahler, Still, Henderson was disappointed that she couldn’t reach founder and CEO of Hannah’s Bretzel, an organic sandwichout to the new customers by mass email, because Groupon maker with two locations in Chicago. wouldn’t share their addresses. She also wasn’t thrilled with the In October, Pfahler partnered with Groupon to offer two way she was paid. Groupon typically sends payments in three sandwiches for the price of one at one of his stores. Within hours, instalments: one the week the deal is offered, one 30 days later, 3,487 Groupon customers had paid US$9 each for the coupon, and one after 60 days. Mason says Groupon uses an instalment prompting Pfahler to end the offer early. After Groupon’s 50 per plan at the request of the credit card companies it works with. cent cut, Pfahler grossed more than US$15,000 in one day. But he As for the email addresses, Groupon must protect its subscribknew the added revenue would come with additional costs, ers’ privacy, says Mason. “If we started sharing our customers’ including food and labour. Pfahler figures he only broke even on email addresses, they would draw and quarter us,” he says. the deal, though he says it was a worthwhile promotion. In the Others grouse about Groupon’s fee. “It’s a bold thing first four months after the deal, 56 per cent of the Groupon buyers for a company to make 50 per cent for essentially hawking redeemed their coupons. Close to 40 per cent of those customers an email list,” says Lincecum. Mason makes no apologies. “We bought an additional beverage or snack. Many of them were first- have a waiting list of hundreds of businesses in our larger cities,” time customers. “Business has been up 20 per cent since we did he says. “Demand is much higher than supply. If I remember the promotion,” says Pfahler, “which was refreshing because of the high school economics correctly, that means our margin is too economic downturn.” low.” Lincecum admits that his Groupon offer has been a great Lani Henderson was shocked by how many customers help in getting the word out about his start-up. “Groupon has responded to her Groupon deal. Henderson, owner of Evolve been good for us as a marketing tool,” he says. —Jason Del Rey Dance, which offers pole dancing and “sexy cardio” classes at its studio in Los Angeles, contacted Groupon after seeing one of its ads on Facebook. She decided to offer a package of four classes for US$35, down from the normal price of US$90. Groupon ended up selling 617 of the packages. The response MAY 2010
Hanging on hope Peter Freislederer has drawn up an aggressive growth plan for his novel advertising tool.
INC.INDIA | MAY 2010
PHOTOGRAPH BY JITEN GANDHI
YEAR OF FOUNDING:
February 2009 BASED IN:
NAME OF FOUNDER:
Peter Freislederer NUMBER OF EMPLOYEES:
Undergoing trials with select brands CUSTOMERS (TRIAL BASIS):
Reid & Taylor, Stephens Brothers, Zee News, JBL India 2010 PROJECTED REVENUE:
Rs 1.7 crore
2011 PROJECTED REVENUE:
Rs 8.7 crore
2012 PROJECTED REVENUE:
Rs 24 crore
Revenue is generated from selling specific numbers of Hangvertisers to an advertiser SERVICE CHARGE:
Campaigns start at Rs 1.4 lakh OPTIMAL CUSTOMER:
Consumer goods brands that target upper-middle and higher class consumers FUNDING SOUGHT:
Rs 90 lakh
Elevator Pitch “Condor wants to take ads right into the customer’s closet. Can Rs 90 lakh help it hang on to its idea? The Pitch “Our service—Hangvertiser—is an eco-friendly clothes hanger,
which allows brands to display their communication messages. Through this in-home media tool, companies not only reach out to their target audience, but also get their ads stored inside people’s closets. Since dry cleaners act as a distribution channel, this becomes a premium advertising tool targetting the upper-middle and higher classes. Hangvertiser scores over other modes of advertising since it ensures a 100 per cent viewing rate from an accurate audience. This business is highly scalable, given the growth opportunities in all major Indian cities. There is also the opportunity for starting a franchise model with partners in different countries, such as Asia and Africa.”—As told to Jacob Cherian
The Experts Weigh In WORK WITH AN AD CAMPAIGN
Pros first. It’s a pretty innovative format. Its target audience is attractive. And it has the firstmover advantage. To top it off, the hangers are eco-friendly. The downside is that the barriers to entry are pretty low and almost anyone can jump in. They have the laundry guys with them, but what if they start asking for a share of the profits from advertising. Also, they might claim to pick a neighbourhood, but that’s about it. From there on, they’re still spraying and praying. It may not serve as a sales medium, but could work as a reminder. Perhaps, it could be a part of a larger campaign, along with a big advertising agency. RAHUL KHANNA, Director, Clearstone Venture Advisors
DESIGN THE HANGERS BETTER
This is a nice, new touch point. Dry cleaners have access to value consumers, who are getting increasingly difficult to reach. The model is scalable since the organised laundry services is almost a sunrise industry; so they can easily scale up to 10 to 15 cities in a year. The only question is: “Is it effective?” Most dry cleaning is handled by domestic help, who transfer the clothes from plastic hangers to metal ones. The hangers will have to be chiclooking and well-made for the customers to want to retain them. This will be a critical differentiating point—will the hangers be used just for transport, or will people use them in their cupboards? ISHAN RAINA, Founder, OOH Media
TOO MANY IFS AND BUTS
The chances are that the driver or household help will pick up and drop off the drycleaning. Moreover, the hangar just might be disposed off. Even if the suit is on the hangar, the ad is likely to be hidden. If at all the hangar makes it to the closet, the ad will be seen about once a week. At best, you have a guaranteed audience of one. I’m not sure if a client would want to pay for this. There are just too many gaps. This model may have worked in the West, but in India, we do not have such a do-ityourself culture. To make this work, they will have to be creative to make the hangar a talking point, or be clever enough to make someone smile. GOVIND PANDEY, President, McCann-Erickson India MAY 2010
Branding The importance of quality checks Thinking of going global? Get certified If you are looking to sell your wares on foreign shores, first run a quick check on the regulatory system of the country of interest. The quality norms of most countries now demand that the manufacturer meets certain quality standards related to the product, and even the work environment in which the product is being made. This is where the need for quality certification comes in. Mark Loughead, COO of Intertek, which has more than 100 years of experience in certification and a presence in almost as many countries, gives a quick rundown on why the process is necessary for medium-sized enterprises looking to sell in international markets. How hands on do you get with a clientâ€™s processes?
We try to go as upstream as possible. Sometimes, we test samples at the preshipment stage. In other instances, such as in the case of a client who exports to Marks & Spencer in the UK, we use a machine that tests whether these goods will survive a truck journey. The goods are dropped from a height, repeatedly, to test the strength of the packaging. We test for things such as the dye content or tensile strength for the garment itself. For McDonaldâ€™s, which is one of our biggest clients, we test the quality of toys given out with their Happy Meals. Apart from obvious checks, like the lead content and small toy parts that pose choking hazards, we also invite children to come and play with the toys to observe their interaction with these products. How much of the turnover should a business keep aside for certifications?
While this may vary from company to company, it is typically between 0.5 per cent and 1 per cent of turnover. 62
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Which kind of small and medium enterprises (SMEs) are you working with currently?
There are several Indian SMEs that require expertise and global knowledge to guide them through the regulatory environment of the countries they are exporting to. For example, a garment exporter shipping to Gap or Marks & Spencer would need to undergo a preshipment laboratory test that would certify that his consignment meets buyer specifications, and that there is no risk of rejection in Europe. Honey exporters need stringent tests done on pesticide residues and heavy metals to ensure that their consignments are not rejected Quality Corps Mark Loughead, COO of Intertek, was in India recently to on arrival in Europe. launch a test lab. Quality certification also lends a competitive edge to with the manufacturer of any product. We players within an industry. Take the BEE standard, for instance, which measures the always recommend our clients to get a complete testing and certification done for energy efficiency of appliances such as the entire supply chain. This helps identify refrigerators and air conditioners. the problem at the root and allows for recDepending on technical specifications, it tification of errors at that stage. labels products on their consumption of energy, which in turn, can be a deciding factor for the consumer while buying a Which are the sectors that aggressively product. seek certification in India? These would be textiles, food, electrical Is certification necessary when products, auto and chemical. India as a market is highly unorganised, but manucompanies are supplying to other facturers, who want to export their goods industries? Yes, testing and certification is a must, to other countries, have realised the need even in a B2B model. An end product is for inculcating sound processes in line. an amalgamation of the efforts of several Quality testing and certification is a part ancillaries working in close co-ordination of the same. â€”Jacob Cherian
Sales & Marketing A bamboo-based housing solution Can Bollywood help it grow? Bamboo could help address the housing shortfall in India. Its distinctly lower construction costs will make housing more affordable for villagers. That’s the logic that brothers Vaibhav and Nachiket Kaley started off with when they founded Wonder Grass in mid2007. So far, they have been working on projects like staff-facilities buildings, gazebos and outhouses on some big farms. Meanwhile, they are perfecting a prefabricated-modular approach to rural housing—with solar lighting and waterless toilets. They have not finalised the cost of their 300-square-foot rural house, but know that it has to cost less than a kuccha house, which costs about Rs 1.5 lakh. The Nagpur-based company plans to market its services by tying up with NGOs. Four entrepreneurs weigh in on how they would market Wonder Grass. —Jacob Cherian
How would you sell that?
PITCH NO. 4: Nano, downsides, celebrities, events Vivek Pahwa, CEO of Accentium, a consumer internet company Pitch it as the Nano of housing— fully loaded, yet affordable. Possible downsides, such as stability and structure, should be addressed head-on. Their company would need the buy-in of local development authorities to provide a big push. Marketing this to the government is critical—it could provide subsidies, funding and additional marketing push. They could also hold live events where people can come and see the project. Get a celebrity to stay in one such house for a day to get some good buzz.
PITCH NO. 1: Spread the word through movies and cricket Neetu Bhatia, CEO of Kyazoonga, an online ticketing platform Bamboo allows you to build temporary structures and so the company should leverage that. I suggest it should look at Bollywood and cricket—a product placement in a movie, where the protagonist visits a rural setting that has houses built by this company. Film marketing is becoming common these days and allows the message to be spread to a much wider audience. The other idea is to build on all this hype around IPL. There are a lot of stadiums that don’t have proper box offices for ticketing. They could build temporary structures outside these stadiums, which can serve as ticketing booths.
PITCH NO. 2: Set a world record Sasikanth Chemalamudi, founder of Ludus Entertainment, a recreational and educational destination They should try and bring in a sponsor, and create a record that would get into the Guinness Book or Limca Book of Records. Depending on how long it takes to build each structure, they could try to set a record like the highest number of 300-square-foot houses built in a day, or in a week. Or maybe, take a shot at the largest bamboo structure ever built. A world record for building 200 or 300 houses in a single day would definitely draw attention.
Modern treatments for bamboo can extend its life span to more than two decades.
PITCH NO. 3: Raise awareness through social media Harish Jain, CEO of GreenRootz, a placement firm specialising in media and entertainment sector This requires experiential marketing to highlight the benefits. They should spread awareness using online applications that allow users to design their own structures, and award the most popular design online. To get corporates to take notice, build a caravan out of bamboo and park it outside office buildings to serve natural drinks during lunch hours and evening.
FEEDBACK ON THE FEEDBACK: A bamboo house as a prop in a film might work. With the IPL idea, we notice that no one is talking about even the basic amenities at stadiums. Therefore, this might be ignored as well. We are already talking to software developers for an application for our site, which lets people design a structure. Building a caravan and parking it outside corporate buildings would take us away from our core competency. Bamboo is already associated with temporary structures and we want to move away from that. Getting local development authorities involved is a good idea, but it would be difficult to get them to experiment. They might opt for it only if there is market pressure. MAY 2010
THE WAY I WORK | Vivek Madappa, HummingBird Suites
“People spend their time on meetings, presentations, discussions. That’s such a waste.” Vivek Madappa has a thing against lengthy meetings and smart phones—for one, they are both time-stealers. The CEO of HummingBird Suites, which runs apartment-hotels for corporates, would rather spend his time empowering people and playing an enabler’s role. A master of product re-launches, Madappa generated quite a buzz in Bangalore when he launched his corporate stay solutions company, along with his twin brother, five years ago. Started with a measly Rs 3 lakh in capital, the Coorgi brothers have grown it into a Rs 22-crore business. A firm believer in “collaborative entrepreneurship”, Madappa also invests his time into two other businesses—a restaurant called Orange Peel Food and a learning solutions company called 10on10 Education that hopes to demystify mathematics for students all over the world. Once every month, you can find him at one of his properties in Bangalore, having breakfast with guests and picking up valuable feedback.
AS TOLD TO POOJA KOTHARI | PHOTOGRAPH BY GIREESH GV
I am an early riser and wake up around 5:30 every morning. I usually meditate for a few minutes. That acts like an energiser. Then I get some exercise. I practice yoga with a teacher thrice a week. On other days, I simply do some stretching on my own. I have a quick breakfast—mostly cereal and fresh fruit juice—and then get my 11-year-old daughter ready for school. I am a pretty hands-on father. I even know how to comb her hair—and do a good job of it, according to her teacher. I drop her off at 7am and reach office 15 minutes later.
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Early bird: Vivek Madappa ensures that he reaches office before anyone else, so he can use the time to plan his day and get organised.
THE WAY I WORK
I’m usually the first to arrive at work. It is almost a thumb rule I follow. The team starts getting in only around 8:30am. This one hour is my golden hour. It helps me get organised for the rest of the day. I usually keep my schedule flexible, so that I can accommodate the needs of all my businesses. Earlier, we started work at 9am, but then everyone was inevitably late. In Bangalore, roads are clear at 8:15am. Get late by five minutes and you’re stuck in the rush. There’s no point staying blocked on the road and getting stressed. So I asked everyone to come in early and leave whenever they wanted to. Initially, they resisted the idea but now they have grown to love it.
“I am painfully regard to my time.
not wish to do
y time with my daughter
is sacrosanct. If I have to take her for a swim, I won’t give that up. I make up for that by working late nights. There’s no gun on my head to do things. I just schedule things smartly. To me, family’s very important; work is incidental. I carry a simple, Rs 2,000-phone. I don’t own a Blackberry, since I believe that a phone’s job is to let you speak, not to show you mails. My friends have been trying to upgrade me to an iPhone for some time, but that’s not happening. I feel a laptop’s enough to serve my purpose. A Blackberry always beeps into your peace. And the reply game is never-ending. I don’t check my emails till I reach office. I usually put in eight hours at HummingBird Suites—the corporate stay solutions business I have built with my brother in the past five years. We started out with a capital of Rs 3 lakh in 2005. It is a business drawing Rs 22 crore in revenue a year today. Every Friday, I have what is called a leadership alignment meeting. For two hours, I meet with the heads of departments to review the week that went by and get an update on previous issues. We plan for the week ahead and check if any areas need intervention. My other meetings are with people outside the company—basically board members, customers and potential strategic partners—meetings that can result in generation of more business. I meet at least two sets of people a day, each for about half-an-hour to an hour. As a company, we don’t spend too much time on internal problem-solving meetings. At most companies, people spend too much time on meetings, presentations and discussions. That’s such a waste of time. If you look closely, these meetings are usually called to collect, discuss and debate data. Someone proposes a number—the others argue over it. We don’t do that. We spend a lot of money on IT infrastructure, so that all key decision-makers have access to the critical information instantly on their dashboards. When we have
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meetings, we are armed with information. A meeting typically lasts just for 15 minutes to 30 minutes, and looks into issues that have been identified. This helps us run an efficient operation. Once a month, I land up at one of our properties in Bangalore at a random time and meet the end customer—the person staying in the apartment—to get feedback. Sometimes, I might have breakfast with them. I do this to validate the feedback that is gathered by our structured process. These surprise checks substantiate the information in the reports sent to me and show up any filtration that might have occurred while the report moved up the hierarchy. It keeps everyone in the organisation agile and nimble. Whenever I travel, I stay at one of our properties and try and meet the end customer. I believe in old-fashioned stuff, such as profit after tax (PAT). I don’t believe in scale and growth alone. Usually, start-ups replicate a large company, and acquire a CEO, COO, CTO—all possible heads, who in turn need two juniors each to make themselves feel powerful. But I believe a business should scale up based on its growth. My brother, Vinod Thimmaya, and I ran HummingBird all by ourselves through collaborative entrepreneurship. I don’t understand IT. So we got Inflexion Technologies to help us out. I don’t know food. So Orange Peel helps us there. They survive because of us; we survive because of them. The symbiosis works perfectly. We work on a simple philosophy: give more and get back more. If you are trying to act clever with your partners or vendors, and want to maximise profits at the other person’s cost, the relationship is gone. We get more than good service—we get loyalty and people who are willing to go the extra mile. We have people working with us at ridiculous costs because they enjoy the trust we put on them and the challenging work profile we create for them. If we start policing people, or watching over their backs, that commitment is gone. People are really important to us. So every recruit has to go through a final interview with either Vinod or me. It takes up half an hour of my time, but then, we don’t have to worry about him for years. It’s worth the time since one wrong hire could upset everyone and kill a lot of productive time. When I interview someone, I go beyond what the resume tells; I test their attitude, ability to take risks, pre-disposition to life, etc. Usually, I like to question a candidate on how they spend their time.
THE WAY I WORK
disciplined with I say no, if I do
It’s surprising how much the answer can reveal about a person. I also ask them the one challenging thing they did and how they dealt with it. His answer tells me his ability to articulate; if he makes it interesting, it shows his ability to sell. If the person can tackle a tricky question well, you get a sense of his ability to think on the feet. In a small company, you need people who can multi-task. You need a person who is comfortable being himself and can think through a crisis, even without rules and references. Our HR department exists to transform people, not to be a shoulder to cry on. People can decide their growth and salaries within a logical construct that’s being offered to them. We have a system under which everyone, including Vinod and I, has to acquire the knowledge of a new field every year and achieve one extra skill for doing something. This is our way of empowering people to choose their career paths as they go forward. Like in a consulting outfit, our people have to be ‘x’ level in five years, or they vacate. I personally try to acquire one skill every quarter. I can’t question others, if I don’t do it myself.
he reason I can build three busi-
nesses in parallel is not because I am maniacal about work. I just don’t lead my life through schedules. There’s a lot of impulsiveness, but I am painfully disciplined—discipline with regard to my time, discipline to say no when I don’t wish to do something. Very often, these are all time-stealers. When time-sucking elements, such as meetings, are removed, spending six hours to eight hours in a start-up is actually too much. It’s not as difficult as people think it is. If you have a good team, you can trust them and empower them. I have the advantage of being the oldest guy on the team, so they listen to me. Then again, they just require someone to hold them together. By virtue of my experience, I know some of the things that can be avoided. So, I simply have to be an enabler.
One of the things that is very important for a start-up is to have a strong sales team. Most entrepreneurs struggle because they don’t have a strong sales team. Vinod drives sales like crazy. I take care of back-end support. When the company’s doing well, you are not stressed. Thrice a week, I leave office at 3:45pm to pick up my daughter from school. My wife, who works in a multinational company, does that the other days. I try to wrap up everything before that. I hate sitting in a traffic jam, so it suits me to leave early. Once I reach home, I work on my other businesses. I put in two hours on Orange Peel, a restaurant I run with a friend of mine. Then, post dinner, I work on the other business, 10on10, which is a learning solutions company. It serves as a break because it is of a different nature. Sometimes, after both wife and daughter have gone to bed, I get some work done, or read something. I like reading books that are introspective. I’ve read all possible management gyan in the past 10 years to 15 years. At this stage, I want to read stuff that encourages me to look at life differently, and look at issues in new ways. While I encourage team members to read about the Toyota way to total quality management, I prefer reading books such as Gurcharan Das’ The Difficulty of Being Good: On the Subtle Art of Dharma, which dissects each character of the Mahabharata and views how they handles dilemmas in life. Every two-to-three days, my body gets tired, and I need to make up by sleeping early around 10.30pm or 11pm. The next day, I can work late night again. I usually don’t work on weekends, unless there are deadlines to meet—and even then, I work only because I don’t want to hold up someone else’s work. I don’t call up anyone on the weekend over office matters. I try to finish most of my work by Friday night, so that my weekend is free for pursuing things that give me happiness and joy. Even on a Sunday, I wake up early, if only to bathe the dog. Going out for parties or movies isn’t important any more. I have reached a stage when I can be alone with myself; I can be comfortable even without the presence of others. I once watched a movie called Bucket List. It’s about two people— one filthy rich and the other a normal, hardworking guy who has slogged most of his life—both dying of cancer. They make a list of things they have to do before they die. After watching that movie, I sat down and wrote out my “bucket list” with 100 things to do and see before I die. And then, I started acting upon that list. I have gone to Agumbe and trekked through a 5-km leech-infested rainforest to see a King Cobra. I have taken my daughter to swim with the dolphins. I have visited Israel to see the Dead Sea. And I went to the Nilgiris to see the Kurinji flower that blossoms once every 14 years. There are still a few things I need to do like take a helicopter ride and a hot air balloon ride. In May, I plan to visit Borneo with a bunch of scientists and a BBC photographer to see an orangutan in the wild. Today, I don’t have to work as hard as I did in the initial years of building my businesses. The first three years were really bad for us. I would stay up till three in the morning, working, worrying, problem-solving. But now that is gone. I’m not compelled to work hard anymore. The good part is that I have surrounded myself with people who love what they do. I just ride the wave. MAY 2010
SL Minda, 1930-2010
A Heart of Gold
In the fifties, India was not exactly an easy place to start up a business. But that did not deter Shadi Lal Minda, or SLM, as he was fondly called, from walking through the minefield of entrepreneurship with a small auto parts business. Over the years, that business has grown into the Rs 3,000-crore success story that the Minda Group is today. Split across the sons, NK Minda and Ashok Minda, it is a leading player in the auto components industry with a global footprint. SL Minda died of heart failure on April 17 at 80. Born in a village called Bagla in Haryana, Minda spent his early years in Darjeeling, where he attended St Joseph’s College. In 1957, he came to Delhi to try his hand at business. A year later, he, along with three cousins, started manufacturing auto parts, such as a meter for the Royal Enfield motor cycles. Soon, auto giants such as Bajaj Auto and Hindustan Motors came on board as customers, and he opened a manufacturing unit at Wazirpur. In 1974, SLM broke off from his cousins. Thereafter, his sons followed him into business. In 1980, when younger son Ashok joined straight out of college, he was given a small operation to run. But that had to be shut down. So, SLM put down on paper all the wastage that had occurred and pointed those out to his son. “It made me feel so disappointed in myself that I changed completely. He taught me a lesson in responsibility without saying a word,” says Ashok. The visionary that he was, Minda followed techniques on the shop floor that were similar to the best practices followed by giants such as Toyota. “He would use Dalda canisters to practise what is now called the empty bin system,” says Hitesh Sharma, who had worked with him for many years.
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HK Lal, who joined the group in 1983, recalls: “He had the art of winning over people. I am still here after 27 years.” SLM would attend every function in his employees’ household, a practice that even senior professionals in the group are expected to follow. In the mid-nineties, he handed over the reins of the business to his sons. “Normally, people don’t do that in family-run businesses,” says Ashok. He gave his sons the freedom to learn from their own mistakes, and started spending more on social work instead. He ran a bal gram in Bagla, where he paid for the Quiet achiever SL Minda never compromised on upbringing and education quality and treated his employees like family. of a hundred orphans. He was also associated with a SLM also followed a golden rule: “When number of charities and social initiatives. money is lost, nothing is lost. When characIn 2005, when it came to documenting ter is lost, everything is lost.” He equated the Minda culture, employees fell back on character with the quality of his products. In the values of fairness and openness that SLM 1984, when one of the export consignments had followed during his lifetime at the busiof switches was turned down for rework, he ness he had built.—Pooja Kothari asked employees to identify pieces that could be reworked. And then, he destroyed them all—instead of reworking them.