India Unbound

august 2011

Get

better at

customer service

A Robot That helps you clean

How

Manek Daruvala built T.I.M.E. Page 56

Page 18

Surviving

Entrepreneurship:

A Guide Page 52

India Unbound

The Magazine for Growing Companies

India

The Big Moment Edition: 14 Company Builders Speak Up

Unbound Who needs the bustle of the metros?

Meet these provincial pashas who have struck gold away from the arc lights of India’s usual business hubs.

PAGE 28

page 40

The magazine for growing companies

Plus

The Way

I Work Anil Kumar

Great Sports Infra Page 64 August 2011 | 150 | Volume 02 | Issue 07 A 9.9 Media Publication

Sameer Jain Net Solutions Chandigarh

August 2011

A Balanced View Anil Kumar doesn’t let himself be crazily driven by mails, targets and deadlines.

contents

28 Hometown Heroes

Exciting companies don’t have to be bred in the metros­. These entrepreneurs show us that there is little connection between bright lights and big ideas.

30 S. Susindran Karur, Tamil Nadu

31 Devendra Shah Manchar, Maharashtra

33 Kiron Chopra

Lucknow, Uttar Pradesh

35 Sameer Jain Chandigarh

36 V.P. Nandakumar Thrissur, Kerala

38 Guest column

Alok Mittal, Canaan India

52 A Strap Hanger’s Guide to Business Paradise Chandrashekhar Hariharan knows to survive in business, you have to hold on tight. by shreyasi singh

56 How I Did It Manek N. Daruvala He took up teaching to make ends meet. Today, he runs a 188-crore coaching institute.

photograph by Subhojit Paul

by sunaina sehgal

on the cover

Sameer Jain, founder and CEO of Net Solutions. Photographed by Subhojit Paul in Chandigarh.

Cover design by Binesh Sreedharan.

This edition of Inc. magazine is published under license from Mansueto Ventures LLC, New York, New York. Editorial items appearing on pages 12-13, 16-17, 21-22 and 40-51 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.

40 The Big Moment Edition

Fourteen company founders talk about the emotional roller-coaster ride that is entrepreneurship.

august 2011 | INC. | 3

contents

August 2011

26 14

59 18 22

05 Editor’s Letter

16 Balancing Acts

Companies that help TERI take care of its green campus

By Meg Cadoux Hirshberg When a company fails, it can take down a marriage. Or it can strengthen a couple’s bond.

09 Launch

18 Innovation

06 Behind the Scenes

The 3rd GrowCo: a day well spent The Ticker Heart care makes smart business The Inc. Data Bank A Skimmer’s Guide to Good Strategy/Bad Strategy: The Difference and Why It Matters,

by Richard P. Rumelt

13 Get Real

By Jason Fried How can you become more creative and productive?

First, stop trying so hard.

14 Passions

Face forward: papier mâché masks bring out the best in T.T. Venkatesh

4 | INC. | august 2011

68 I Wish I Knew Then...

Param Parameswaran Waiting for the perfect time is not his thing. Sometimes, it’s best to seize the moment, says the chairman of Sulekha.com.

A toy-sized robot that can snake through air ducts

21 The Goods

Innovative keyboards Web-based cash registers Tangle-free travel speakers Tech Wise: why two is better than one A computer for seniors Things Nikhil Agarwal cannot live without

Strategy 59 Managing Bring good karma your way by encouraging employee volunteering 61 sales & Marketing Can Omerta’s 3D store display transform window dressing?

26 Earn Your Spurs

62 Elevator pitch Will 2 crore help an online watch portal clock faster sales?

Guidebook, No. 7

Connectivity is overrated, says Anil Kumar of Great Sports Infra.

Businesses don’t dry up because of an unread e-mail.

By Jessie Paul Don’t be squeamish about applying for awards. In business, modesty doesn’t pay.

How to improve customer service. Find the Guidebook following page 24.

64 The Way I Work

as told to shreyasi singh

editor’s letter

MANAGING DIRECTOR: Dr Pramath Raj Sinha Printer & Publisher: Anuradha Das Mathur Editorial managing Editor: shreyasi singh consultant features editor: payel mukherjee assistant features editor: rohini banerjee feature writer: sunaina sehgal co-ordinator: akhil bery DEsign Sr Creative Director: Jayan K Narayanan Art Directors: Binesh Sreedharan & Anil VK Associate Art Director: PC Anoop VisualiserS: Prasanth TR & Anil T Sr Designers: Joffy Jose, Anoop Verma NV Baiju, Chander Dange & Sristi Maurya Designers: Suneesh K, Shigil N & Charu Dwivedi Chief Photographer: Subhojit Paul Photographer: Jiten Gandhi community team product manager: mahesh ravi assistant product manager: Rajat gupta associate: deepika sharma Sales & Marketing National Manager (Events and Special Projects): Mahantesh Godi regional manager (south & WEST) Vinodh K (+ 91 97407 14817) national sales manager (inc. india) Pranav Saran (+ 91 98117 77113) manager (Kolkata) Jayanta Bhattacharya (+91 93318 29284) Production & Logistics Sr General manager (Operations) Shivshankar M Hiremath Production Executive Vilas Mhatre Logistics MP Singh, Mohd. Ansari OFFICE ADDRESS nine dot nine mediaworx Pvt Ltd A-262, Defence Colony, New Delhi–110 024 For any queries, please contact us at help@9dot9.in Published, Printed and Owned by Nine Dot Nine Mediaworx Private Limited.

Published and printed on their behalf by Anuradha Das Mathur. Published at A-262, Defence Colony, New Delhi–110 024 printed at Tara Art Printers Pvt ltd.

A-46-47, Sector-5, NOIDA (U.P.) 201301 Editor: Anuradha Das Mathur

That Patriotic Feeling When you live in a capital city like Delhi, it sometimes feels like you’re at the centre of the world.

As a journalist, it certainly gives you access to the best ideas and the newest trends. Despite the media and satellite television boom, I’ve always felt that nothing beats actually living amid this buzz. Yet, as our writers filed stories for this issue, I was forced to think otherwise. S. Susindran, who set up a 200-crore textile firm in his hometown of Karur in Tamil Nadu, counts Walmart and JC Penney as his star clients. His firm, Sabare International, also has multiple offices in the United States and China. Similarly, Kiron Chopra makes suspension hangars for Aston Martin’s most expensive car yet, the One77, from his factory in Lucknow. Clearly, their global ambitions and business savvy didn’t need mega-city conditioning. Read about them in Hometown Heroes, our special cover package, on Page 28.

We certainly couldn’t have timed this issue better. What we value most at Inc. India is the opportunity to discover and celebrate such untold journeys of enterprise and success from across the country. It’s especially refreshing to do so at a time when there is such a din of cynicism about so many things in India. I hope you’ll also find this issue apt reading for August.

On another note, the rough and tumble of building a business doesn’t really have national boundaries. In The Big Moment Edition, a feature we’ve picked from our US edition, 14 company owners share deeply personal moments of success, failure and lessons learnt. I’m pretty sure none of them will sound alien to our hometown heroes.

So, keep the flag flying. I wish you all a wonderful August.

Shreyasi Singh shreyasi.singh@9dot9.in august 2011 | INC.india | 5

BEHIND THE SCENES

Companies at the Heart of Everyday Life

Security TERI University is renowned for its courses on environmental education—sustainable development, natural resource management and climate science.

What keeps TERI and their students safe and sound though is the SLV Group. Established in 1986 by Sham Swara, SLV provides electronic security solutions and facility management. Headed by Swara’s son Vishal now, the company is considered a market leader in the security systems sector. It has 15,000 employees and a pan-India presence.

Canteen TERI’s faculty might quench its students’ thirst for knowledge. But satiating the hunger of its 700 on-campus students is an entirely different ball game. Neena Kumar, however, manages that perfectly. Her firm, Adeez Food Services, takes care of the canteen and dishes out lip-smacking rajma chawal, kadhi chawal and even yummy sprout salads and pizzas. Kumar started out small in 2009 with 2 lakh in seed money. Today, her New Delhi-based company has nine people.

6 | INC. | august 2011

TERI School of Advanced Studies, Delhi

18.07.11 3:30 pM

Housekeeping With its Vasant Kunj campus dotted with ecofriendly buildings and covered by a lush canopy of trees, well-manicured shrubs and bushes, TERI is a campus that’s the deepest shade of green. It’s kept spotless and pretty by SAMS. Established in 2002, the firm’s headed by Pankaj Chilkotia. From providing engineering technical services to catering services, the 3,500-employee company provides holistic integrated facility management. Based in Gurgaon, it has a turnover of 28 crore.

photograph by Subhojit Paul

reported by Sunaina sehgal

News, Ideas & Trends in Brief

launch

Leaders United (From top left) Krishnan Ganesh, Pramath Raj Sinha, V.R. Govindarajan, Ashok Soota, Pradeep Tagare, Mahesh Ravi, Gaurav Sahgal, Sridhar Narayan and Jessie Paul.

Great Talk on Growth Models When Bengaluru’s entrepreneurs speak, useful conversations are a given There’s little to beat Bengaluru’s blessed

weather. Now add to that scintillating conversations and we have a clear winner—the Third Annual GrowCo Summit. The event was a roundtable for leading growthfocused companies. The event was organised by Inc. India in partnership with The Growth Institute, a networking platform for mid-sized businesses.

With its “Embracing the New Decade: New Opportunities, New Horizons, New Growth Models”, the summit couldn’t

have had a better start than the keynote address by Ashok Soota, chairman and MD of Happiest Minds Technologies.

Soota’s the true-blue embodiment of the entrepreneurial spirit. He’s built two of India’s best-known IT services firms— Wipro, as its professional manager, and MindTree, his first entrepreneurial venture—from the ground-up. He’s now busy scripting a robust plan for his latest endeavour. Soota gave the audience, comprising mostly CEOs and business owners, much

to mull over. He went down the memory lane and shared fascinating insights into his days with Wipro’s Azim Premji. “He interviewed me for 16 hours at a stretch.

We began in the morning and the conversation ended post-dinner,” Soota recalled.

Another speaker who had the audience’s rapt attention was Inc. India columnist Jessie Paul. Her session on frugal branding gave listeners a lot to mull about.

Paul, the CEO of Paul Writer, a marketing continued on the next page

august 2011 | INC. | 9

launch

and communications advisory, gave simple and logical ways to brand companies and individuals in this digital era. If you believe Paul, it’s about the power shift. “Think about it. If you have 5,000 connections on LinkedIn, you’re actually a niche publisher.

Many monthly publications have print runs that are as large.

So be smart about using that platform,” advised Paul.

Innovative methods of recruiting great talent—a key obstacle for most mid-sized

chord as questions and heated discussions followed the session.

Corporate coach and tennis instructor Krishna Kumar and Chandrashekhar Hariharan, the executive chairman of BCIL, a builder of eco-friendly homes, tackled questions on leadership and putting second-line of command deftly.

After bites of wisdom, it was time for lunch and networking.

Post-lunch, sessions narrowed down to the core of a business enterprise—capital.

“Choose your investors wisely.

Don’t just go for the valuations.” businesses—was a topic that was repeatedly tossed around especially in the masterclass on strategy. Some of the founder directors present shared useful insights. As Krishnan Ganesh, founder of TutorVista, shared he promises his “star employees” from top-notch schools and companies on board, key differentiators: the opportunity to work directly with the founding team, little HR interface and a commitment to ensure that performance is never judged on a MAFA (Mistaking Action for Achievement) scale.

Staying on this theme, V.R. Govindarajan, co-founder of the product engineering firm Aztecsoft and founder of the personal finance solutions company Perfios, said business owners needed to constantly motivate the workforce. “In our case, we have tried to cultivate a sense of ownership and given all the opportunity to work on emerging technologies and innovative algorithms,” Govindarajan said.

The ideas must have struck a 10 | INC. | august 2011

Pradeep M. Tagare, director of Intel Capital in India, set the ball rolling by throwing light on how entrepreneurs should navigate the funding landscape. “It’s a relationship, not a transaction.

Choose your investor wisely.

Don’t just go for the valuations on offer,” he said. Tagare’s take: understand the investor psychology. “You need to understand at what stage do they invest in, what sectors they’ve focused on, their track record and biases,” he advised. An entrepreneur should match his strongest asset to an investor’s bias to really excite them, added Tagare.

Then Sridhar Narayan, head of corporate sales for global markets, HSBC India widened the focus with a quick primer on the Indian economy as participants poured over recent reports that suggested a cooling-off of investor interest in India.

—Inc. India

MakeMyTrip’s Deep Kalra sure likes moving—the newest member of Zovi.com’s board, Kalra, and private equity firm SAIF Partners have invested $5.5 million in the online Indian clothing kalra brand, founded by Cleartrip’s former VP Satish Mani...Another lucky customer is, Ujjivan. While others in the sector struggle, Bengaluru-based Ujjivan Financial Services is planning to raise $25 million through equity funding...And if Sequoia and Michael & Susan Dell Foundation are backing Ujjivan, Green India Venture Funds, managed by IFCI Venture Capi- stacking up tal Fund, is rooting for Amber Enterprises. Green India has invested $6.75 million in the Dehra Dunbased consumer durables firm...Like Amber, Ferns N Petals is blossoming. The fastgrowing florist company is planning an IPO by 2013. It wants to grow to 500 crore by 2015 and expand operations to Hyderabad, Bengaluru and Mumbai over the next few months...Mumbai-based IT solutions provider Trimax IT, backed by Zephyr Peacock and BanyanTree Growth lakra Capital, is also travelling down the IPO path. It has filed a draft red herring prospectus with SEBI and is looking to sell 25 per cent stake...We’ve saved the best for the last. Skoll scholar and founder of Mirakle Couriers, Dhruv Lakra has won the CNN-IBN Young Indian Leader Award, 2011, for his courier firm that is staffed exclusively by persons with hearing and speech disabilities.

—Inc. India

photograph by jiten gandhi

The Ticker

Great Talk continued...

launch

Great Health, Smart Business Save your heart, and do it in style Granted, the terms heart disease and luxury

hotels usually aren’t uttered in the same beat.

But, Siddharth Rastogi and Dr Jyotsana Changrani insists that the two have a connect—an individual can reduce the possibility of a heart attack by leading a stylishly healthy lifestyle. Meta Wellness, recently launched a unique lifestyle change programme for heart disease reversal and prevention in association with The Leela Happy Hearts Changrani and Rastogi live by the age-old Palace Hotels and Resorts. It fits right in wisdom: prevention is always better than cure.

India as the country accounts for 60 per cent of global cardiac illnesses and is referred to as the “diabetes capital of the world”, informs Dr quantifiable changes in lipids, blood pressure, blood glucose, need for medication Changrani who has a Master’s in public health from Harvard University. Instead of to treat hypertension, diabetes and high focusing on acute solutions (bypass or angioplasty), they wish to bring to India the latest cholesterol. On the other hand, impact on prevention initiatives. Essentially Meta Wellness’s two trademark programmes—re:verse, physical activity is measured through for those who already are patients, and re:tune, for those who may be at risk—pair tests of a participant’s exercise capacity. comprehensive lifestyle modification with optimal medical management. Combining residential components at the The Leela’s two properties at Mumbai and Kovalam, and remote hand-holding, the programmes help patients achieve dramatic results in cholesterol How have you tweaked the model for India?

The international models for heart disreduction, weight loss, increased capacity and reduced need for surgical interventions. We ease reversal are based on intensive residrill into the diagnosis. —Shreyasi Singh dential lifestyle change and goal setting for one or two weeks, after which the parWhy do you think India is a great market How do you quantify the effectiveness of ticipants are expected to sustain the change. We are tweaking the profor Meta Wellness? your programmes?

In India today, one out of every two deaths During our 12-week re:verse programme, grammes to be longer—90 days—with in the metros is due to a heart attack. In a participant is hand-held through liferesidential segments spread over five sesMumbai alone, cases have gone up by 32 style changes. Our medical teams watch sions of one or two nights each. Our proper cent between 2009 and 2010. These out for any potential barriers to achieving grammes will be more personalised. statistics take on a compelling significance this lifestyle change and identify strateAlso, in bringing this concept to India, when viewed in context of what is happen- gies to overcome these. There’s a total of we realise that the medical management ing elsewhere in the world. In the US, six days of residential stay which spans needs to be closely integrated with lifemortality rates fell by 40 per cent between over 12 weeks. These stays act like a style management, as patient compliance 1980 and 2000. Over 90 per cent of this booster-dose to ensure changes are made and even visits to physicians are not relidecline is due to targeted reduction in risk and sustained. All Meta Wellness particiably followed through. factors and medical management. There’s pants get access to re:ach for a year to help There are also creative solutions for an understanding of how heart attacks stay on track with their exercise and integrating health lifestyle strategies fitoccur. Treating the underlying lifestyle is nutrition plan long after the programme ted to urban Indian challenges, such as the key. Making these lifestyle changes is completed. re:ach also enables the Meta long stretches spent in commuting to require an effective plan and close collabo- Wellness team to monitor participants’ work, lack of individual control for dietary modifications in large, shared ration with medical management. Meta progress. The clinical impact of the family kitchens, and others.

Wellness will be offering this expertise. re:verse programme is measured through august 2011 | INC. | 11

Crunching the numbers

inc. data bank

The book: Good Strategy/Bad Strategy: The Difference and Why It Matters, by Richard P. Rumelt; Crown Business.

The big idea: Many CEOs rely on mission statements, lists of goals and resource plans to steer their companies. Those are not strategies. Strategy consists of three steps: figuring out the nature of the business challenge, designing a guiding policy that produces an advantage and creating a set of coordinated actions to carry out that policy. If you are serious about your business, then you must have a serious strategy.

The backstory: Rumelt, a professor at the UCLA Anderson School of Management, has consulted with organisations— vast and tiny. He moves in heady circles, chatting with Steve Jobs about Apple’s turnaround, discussing the relationship between brand and profits with Ford’s Jacques Nasser, and studying scenario planning with Shell’s Pierre Wack.

If you read nothing else: The whole middle section, about sources of power, is valuable— particularly the explication of the limitations and nuances of competitive advantage. Case studies sprinkled throughout are illuminating. Check out the account of Rumelt’s investigation of Nvidia, a 3-D chip designer, and his consulting work for Denton’s, a familyowned garden-supply chain.

finance

work-life balance

Increase in dollar amount of angel investments in 2010:

Portion of small-business owners and managers who frequently work

more than 80 hours per week:

(from $17.6 billion to $20.1 billion)

Increase in the number of companies that received angel investments:

more than 40 hours per week:

13%

43%

during holidays:

while eating dinner:

31%

15%

(from 57,200 to 61,900) University of New Hampshire Centre for Venture Research

Staples Small Business Survey

employment

staffing

Percentage of Americans age 16 to 24 with summer jobs in 2010:

Percentage of small-business owners who plan to hire full-time or part-time staff this year:

35 (up 9% from 2010)

48.9

American Express OPEN Small Business Monitor

(lowest since record keeping began in 1948 and the first time ever below 50%)

Average number of years employees had worked for their current employer in 2010:

Bureau of Labour Statistics

Bureau of Labour Statistics

4.4 (up from 3.5 in 2000)

marketing

the workplace

start-ups

Share of businesses that have a company blog:

Portion of US employees working at

(up from 48% in 2009)

Share of employees who say they learn more about their jobs from co-workers than from bosses:

HubSpot

Leadership IQ

us census bureau

65%

67%

companies that are more than 20 years old:

64%

companies less than six years old:

13%

business costs

lending

Share of US CFOs who cite employee benefits as the business cost about which they are most concerned:

Portion of large banks that have eased approval standards for commercial and industrial loans

Rigour rating: 8 (1=Who Moved My Cheese?; 10=Good to Great).

Much of the book draws on Rumelt’s consulting gigs or on cases he has taught. The rest is meticulously sourced.

—Leigh Buchanan

Grant Thornton

12 | INC. | august 2011

—Compiled by Andrew Shafer

75%

To small companies*:

10.3%

* Less than $50 million in revenue The Federal Reserve Board

To all other companies:

18.8%

Kelly Kollar

A skimmer’s guide to the latest business books

GET REAL BY JASON FRIED

Ride the Lightning

Creativity can come out of nowhere. The trick is to sense it—and ride it to the end

photos.com

A few weeks ago, I was on fire. I was working on some

designs for a prototype of a new software product, and the ideas were flowing as they hadn’t in months. Every day, I felt as if I were accomplishing two or three days’ worth of work. I was in the zone, and it felt fantastic.

It lasted about three weeks. And then I found myself back at my old pace. Instead of being superproductive, I was sort-of productive. Some days, I felt as if I barely accomplished anything.

So what was wrong? Nothing at all.

I believe it’s perfectly fine to spend some of your time, maybe even a lot of your time, not firing on all cylinders.

Just like full employment isn’t necessarily good for an economy, full capacity isn’t always great for your mind.

This will be anathema to the multitudes who worship at the altars of Motivation and its close relation, Productivity. Indeed, when I meet ambitious young entrepreneurs, I am invariably asked, “How can I get more work done in fewer hours? What can I do to jump-start my creativity? How can I keep my edge?”

Here are the three answers I can offer: 1. You can’t. 2. Stop trying so hard— if it feels like work, something’s wrong. 3. Do less stuff.

Motivation, productivity, efficiency—these things are not constants. In my experience, they come in waves. They ebb and flow, and there’s no sense in fighting it. The key is to recognise a productivity surge when it appears, so you can roll with it.

I think about work the same way I think about the weather. Sometimes it’s snowy or rainy or foggy at work. When that happens, I stay “inside”—and take care of the busy work, the boring stuff, the small things that need to get done.

But when things warm up, it’s time to head “outside,” to get creative, focus on the interesting problems, and ride the wave of creativity as long as it lasts. It may be days, weeks, even months.

This doesn’t apply only to those who are in charge. If you manage people, it’s important to remember that your employees and colleagues are human, too. They won’t always be motivated to do what you’d like them to do when you want them to do it. Their creativity will ebb and flow, just like yours.

This, of course, is a source of frustration for many managers, who continue to believe that if they change this or tinker with that, they’ll be able to squeeze more of the good stuff out of their people. But you can artificially motivate someone for only so long. It’s nearly impossible to fight the natural rhythm of motivation and productivity. You’re better off recognising that than waging war against reality.

Of course, that does not mean you should simply sit back and do nothing. When I detect that an ordinarily creative employee hasn’t been in the flow for a while, I will ask him or her about it, try to get the issue out in the open. It some cases, it turns out that he or she is simply not interested in his or her current project. Other times, there are external issues—such as a personal crisis—that cause motivation to flag.

If it’s something I can help with, I often suggest shifting to another part of the project that’s more in line with his or her motivations. If it’s something beyond my control, I just let it work its way out of the employee’s system. If it becomes a long-term issue, then there’s a problem that needs to be addressed by other means. In fact, we recently instituted 30-day paid sabbaticals for every three years worked. This is in addition to standard vacation time. So far, one person has taken us up on it. No one was particularly surprised when he returned to work more motivated—and productive—than ever.

Jason Fried is co-founder of 37signals, a Chicago-based software firm, and co-author of the book Rework. august 2011 | INC. | 13

PASSIONS

Life Outside the Office

“Making these masks is relaxing. It’s almost like meditation for me.”

14 | INC. | august 2011

T.T. Venkatesh

Papier mâché masks

T.T. Venkatesh, executive director of TTK Services, insists he’s not the “arty” type—he can’t sketch to save his life, for one. But there’s more to this 29-year-old Cornell University alumnus than he reveals. For one, he has a dual degree in dramatics and mathematics, an unlikely combination. His acting bug has also led him to a now not-so-secret fetish: papier mâché masks. “We had to make papier mâché masks for a production in college. I became familiar with the art, and I haven’t let it go.”

Once back home in India, his circumstances changed.

Venkatesh successfully launched GetFriday.com and became so busy that he had to hang his theatre robes.

However, his mask-making days are far from over. “The best thing is that it’s a project that I can come back to when I am free. It’s my way of either shutting the world out or keeping my hands busy while I think.” That’s going to be valuable as he launches HomeShikari.com, a real estate rental portal.

Modus Operandi First, choose a ‘victim’ Then buy strips of plaster of Paris Apply vaseline on the face of the model-cum-victim Lay down strips of plaster of Paris on the face, layer by layer, making a negative mould Let the mould dry for a week

photograph by s. radhakrishna

Pour plaster of Paris mix into the mould to make a positive cast (impression) of the model Use plasticine to add or define features like thicker eyebrows, a longer nose or fuller lips Paste small strips of newspaper layer by layer on the mould Take the mould out once it’s dry.

The mask is ready

reported by rohini banerjee

Balancing Acts BY Meg Cadoux Hirshberg

Picking Up the Pieces

It’s just a fact: more companies fail than succeed. And then what?

ing on the one awful thing that didn’t happen. Still, I can’t help wondering what our lives would have been like if our company had failed.

Though we both knew the poor odds of any small business succeeding, Gary believed we’d be the exception to the rule. I, by contrast, was pretty sure we had rule stamped on our foreheads. Had my prophecy come true, I don’t know if we could have recovered. The loss of Stonyfield Farm would have meant the loss of our home, our lifestyle, our children’s college funds. More profoundly, it could have meant the loss of my confidence in Gary. If his big bet had not worked out, would I have looked at him differently? Trusted his judgment less?

I’ve talked to entrepreneurs about many painful topics, but conversations about business failure have been the most wrenching. “It’s just too raw and emotional for me,” apologised one entrepreneur who backed out of an interview. “I don’t know if I could make it through your questions; I might just cry and cry.” It’s not surprising that a recent loss would be so overpowering. But this woman’s business went under almost a decade ago.

In the wake of a company failure, the founder’s belief in himself falters, even shatters. So do many of his relationships. He feels responsible for everyone—his nowjobless employees, the lenders to whom he owes money, the investors who bet on his idea, sure, but first and foremost on him. Worst of all, he knows he has kicked his family’s fortunes back to Square One, or past that, to Square Zero or Minus Three.

16 | INC. | august 2011

The spouse, meanwhile, is expected to remain strong and encouraging. If the marriage is healthy, she’ll try to channel her panic into pragmatism. If the marriage is shaky, then all those recriminations built up over years of scrimping and postponing and singleparenting gush out.

A failed business consumes a couple’s assets until there is nothing left. It may do the same to their love for each other.

There but for the grace of God...

One reason business failure is so hard on marriage is that the entrepreneur and the spouse experience it differently. The entrepreneur may regret his mistakes, but he chiefly agonises that his vision for the future will never be fulfilled. The spouse dwells more on the past, wondering: Was all that sacrifice really for nothing? The entrepreneur desperately needs his spouse’s reassurance: “It’s OK. You did the best you could.”

But, at least initially, the spouse can only splutter, “How could you?” illustration by shigil N

danielle hirshberg

Gary and I have lived through so many crises, I must be a masochist for dwell-

balancing acts

A woman I’ll call Cynthia experiences a twinge as she recalls what she said to her husband, “Stephen,” when he voluntarily closed down his Manhattan-based social networking company. “You got us into this mess,” she told him. “Now you’ve got to get us out.” The business had begun to gain traction, but not quickly enough to support a family of four. The couple had set benchmarks for the company’s continued existence, benchmarks it failed to meet.

Cynthia held Stephen responsible for the financial and emotional strain that the company’s liquidation placed on their 14-year marriage. “The ordeal sucked a lot of life out of our relationship,” she says. Stephen was left to mourn largely on his own, just as during his company’s short life he had kept Cynthia at arm’s length from it, to shield her from worry. Fortunately, Cynthia came to see Stephen’s willingness to shutter

the entrepreneur on one side, his wife and kids on the other. Neither spouse is sleeping well. Not surprisingly, “couple time is not a priority,” the wife told me.

“I am in free fall. What felt like solid ground has vanished.”

Anyone who has lost a business knows how Gail Horvath felt when she wrote those words. Gail shared with me her diary entries for 2003, the year her company went bankrupt. Just Desserts, the San Francisco bakedgoods business that Gail started with her husband, Elliot Hoffman, cranked out highquality confections for three decades, until a couple of bad decisions proved fatal. The failure was especially devastating for coming after such a long run. “Our business felt solid and bigger than life,” wrote Gail, “as if it would always be there, with its uncanny ability to claw itself out of any difficulty.”

And so, occasionally, love is reborn among the ruins. the business before he was forced to as testament to his commitment to his family.

The time it takes a couple to rebound is largely a function of the entrepreneur’s resilience. Some founders are drawing up new business plans a month after a failure.

Others become so enervated, they can’t lift the page to see the next chapter.

I spoke to one woman whose husband lost his business and now spends most of his day lounging around the house in sweatpants, trying to figure out what to do. Every day the couple lose ground, depleting their retirement money and their children’s college funds. They lose ground psychologically, too. The children give their father a wide berth, sensing his sadness and fearing his emotional volatility. They wonder why he is at home so much, and the wife worries that his apparent aimlessness will, in her words, emasculate him in their eyes. A crack is spreading through the family, with

As Gail attests, entrepreneurial companies occupy vast psychic space. They define how founders and their families live and, to some extent, who they are. With failure, an entrepreneurial family’s identity and position, as well as its security, crumble. Friends and relatives gingerly avoid the subject, treating failure—as one spouse put it—like a serious medical condition that everyone is aware of but too diplomatic to acknowledge.

The loss of a business may have one salubrious effect: It relocates entrepreneurs’ noses toward roses and away from grindstones. And so, occasionally, love is reborn among the ruins.

I spoke with one woman whose husband lost his business after four years and several million dollars had swirled down the drain.

At first, she had been excited about the enterprise, but she quickly grew disenchanted with her husband’s prolonged absences. Meanwhile, his health declined as

he smoked heavily and stopped exercising.

Worse, he grew emotionally unrecognisable. During one argument, the entrepreneur told his wife that the company was more important to him than anything, including her and the kids. “That’s the closest we ever came to divorce,” she told me.

“What saved our marriage was that the business went belly-up.”

In the aftermath, her husband spent three months catching up on his sleep and becoming re-acquainted with his three children. He went back to his legal practice.

“It was like he had survived a war,” the spouse said.

“When it ended, he saw his little world was still intact, and he was so grateful.”

Though the marriage of Gail Horvath and Elliot Hoffman never faltered, the bankruptcy of Just Desserts sent them scrambling for a new direction. Fortunately, they found one.

“Our crisis would have been a terrible thing to waste,” says Gail.

Today, she works with friends in their strategy and branding company. Elliot has launched a venture that advises companies on sustainability. Gail declined to become part of that business; after Just Desserts, she will never put her personal guarantee on anything again. But she is happy to see Elliot back in the game. “It’s what I love about him,” she says. “He thinks big.”

The week after Just Desserts cashed in its chips, Gail and Elliot went camping in the California park where they’d met almost 40 years earlier. They sought solace in nature and each other, and reconnected with their pre-entrepreneurial selves. So much had been lost. But what remained, wrote Gail, were “those things that cannot be destroyed— our love and our experience, our sense of humour and our spirit of adventure.”

Meg Cadoux Hirshberg (mhirshberg@inc.com) writes a regular column about the impact of entrepreneurial businesses on families. She is married to Gary Hirshberg, president and CEO of Stonyfield Farm. august 2011 | INC. | 17

innovation

Companies on the Cutting Edge

“Earlier, children cleaned these ducts.

That was unethical and unhealthy.”

—Fahad Azad, managing partner, Robosoft Systems

18 | INC. | august 2011

DuctBot

Robosoft Systems

Robo Clean

, Fahad Azad loves his gadgets, with their multi-coloured buttons and that certain smell of electronics. But, the 29-year-old’s fetish for gizmos didn’t stop at just owning them. He wanted to be a creator of electronic goodies.

After his degree in automobile engineering, this wish came true. Azad got an incredible opportunity to take part in an international robotics competition. He set up a team and got to work. What came out was a robot that could actually climb ropes. “Not only did we win, we also received a lot of publicity,” says Azad, the co-founder of Robosoft Systems. The hype around the award got them noticed by the MD of EPSCO, a Middle East company. They approached Azad and his business partner and college senior, Farooq Ross Syed, to make a robot that could clean difficult-to-get-to air-conditioning ducts. And DuctBot was born. The toy-sized device could climb right inside centralised air-conditioning ducts and clean them. In 2005, Robosoft patented DuctBot. They’ve also sold about 1,000 units so far.

Worthy conduct Uses a wired or wireless PlayStation joystick Fool-proof and easy-to-use Has a digital video recorder Uses high intensity LED lights Completely enclosed dustproof body

Measuring up Weighs two kilograms Lightweight aluminium Rugged chassis The whole unit with wires, cables and video camera weighs 9 kilograms Compact carry-case price: 1 lakh

Working Hard Place the DuctBot at one end of the air duct that needs cleaning. The robot blows compressed air as it travels along the duct. Debris and dirt are collected from the other end.

photograph by jiten gandhi

reported by sunaina sehgal

“BEST AWARD I HAVE RECEIVED IN PAST THREE DECADES…”

“NEXT 100 Award

is the crown of all the

recognitions I have received in past 3 decades, while serving in IT field.

NEXT100 AWARD RECIPIENT 2010

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RAVEENDRAN NAGARAJAN GM- Enterprisewide Solutions Sakthi Finance Ltd.

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WOULD YOU LIKE YOUR I.T. MANAGER TO BE NEXT? If your answer is “YES!”, then ask him/her to participate in NEXT100, an annual awards programme from IT NEXT. NEXT100 aims to identify India’s top 100 senior IT Managers who have the skills, talent and the spirit to become CIOs. The NEXT100 programme engages with thousands of aspiring CIOs like you, giving them an opportunity to demonstrate their techno-commercial, managerial and leadership skills--and engage with a prestigious committee of CIOs--to support their candidacy.

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The Goods

Typing with a Twist Taking innovative keyboards for a ride The best keyboards tend to be the ones you don’t notice, because they simply work well. But that hasn’t stopped companies from rolling out innovative offerings. We sampled four newfangled models to see if they actually made us more productive. Here are the results. —John Brandon

courtesy company (4), photos.com

Luxeed U7 Dynamic Pixel LED Keyboard

Each key on this 1.75-pound keyboard can be programmed to light up in one of seven colours. Assign colours to commonly used keys—for instance, the Tab or Return buttons—to make them stand out, or colour-code an entire bank of keys. You can create up to four preset colour schemes and toggle among them with the press of a button. During our tests, the colour coding was actually helpful. Unfortunately, the keyboard’s raised, rubbery keys slowed us down. cost: 5,791 (approx)

Smartfish Reflex

Designed to reduce wrist strain, this hefty 6.5 pound split keyboard sits on an elevated stand. After 2,500 clicks, a motor moves the two trays slightly to the right or left, so your hands don’t stay in the same position all day.

We liked the keyboard’s flat, Chiclet-style keys, but it took time to get the hang of typing on the separate trays, which were unwieldy. The Reflex also lacks advanced features, including the ability to programme keys. Still, it may be worth checking out if you suffer from repetitive strain injuries. cost: 6,680 (approx)

WOW-Keys By Omnio

This 1.4 pound keyboard doubles as an iPhone charging dock. You can also use the keyboard to type on your phone— in the Notes app, say, or Contacts folder. The WowKeys also works with a variety of iPhone apps that let you control your desktop with your phone. We tried it with JumiMouse, an app that lets you among other things play and pause songs. We loved the added functionality, but the keyboard, which also works with iPods, does not come with its own apps, and finding compatible apps was a hassle. cost: 4,480 (approx)

Logitech Wireless Solar Keyboard K750

Our top pick, this 1.6 pound wireless keyboard gets a charge from sunlight or indoor lighting, so it never needs batteries.

You can download software to monitor the charge level and measure available room lighting. You can also programme keys for quick access to e-mail and your desktop’s search window and calculator.

We typed faster and more accurately on the keyboard, which has springy Chiclet keys, than on the other models we tested.

Even indoors, the keyboard worked all week without a glitch. cost: 3,563 (approx) august 2011 | INC. | 2 1

Products + Services

On the Fly Pose’s Webbased cash register can be paired with a USB bar-code scanner.

Must-Haves

My favourite tool for organising meetings

parag shah, founder, prodality, minneapolis

My product development agency helps companies bring innovative ideas to the market. I sit on the board of each of the four companies we currently represent and meet weekly with each board. I was having a hard time keeping track of my meeting notes.

So, last year, I started using web-based software called MeetingMix to get organised.

Before each meeting, I sign in to my account on MeetingMix.com and create a meeting page. I fill out the agenda, noting who is responsible for each action item and making comments. Then, I send an e-mail to attendees with a link that takes them to the meeting page online, where they can add their own notes and discussion topics.

During meetings, I log on to the page and type notes next to items as we discuss them.

Other attendees can read the minutes on their laptops and make comments. After each meeting, I look at the notes and add tasks or update action items accordingly. I’ve found that to be really helpful, because I’m very forgetful.

I don’t pay anything for MeetingMix, since I created an account when it first launched, but now the service costs $9.95 a month for each meeting creator. It’s a simple tool, but it’s made a big difference.

—As told to Drew Gannon

2 2 | INC. | august 2011

Cash Registers to Go Mobile point-of-sale systems Still using a clunky cash register? Now you can ring up sales, generate receipts and track inventory wherever you go using web-based point-of-sale software. The systems work on any computer with Internet access, including tablets. —Adam Baer erply

This easy-to-use software lets you perform a variety of tasks, including ringing up sales, managing inventory, and generating real-time sales reports. Like other apps mentioned here, this works with peripherals such as cash drawers, bar-code scanners, credit card terminals, and receipt printers. A subscription to the service includes a fullfeatured iPad or Android app. cost: Starting at $70 a month for two registers, two users and up to 50,000 inventory items.

pose

Like Erply, this cloud-based software lets you ring up sales, manage inventory, and generate sales reports.

It also lets you send receipts with links to your company’s Facebook, Twitter and Foursquare accounts to customers via text message or e-mail.

You can also use Pose, which has an iPad app in the works, to create an online store using a template. cost: $50 a month for one cash register, one user and unlimited inventory.

shopkeep

ShopKeep offers a dedicated iPad register for retail shops with fewer than 270 items, as well as systems for Macs or PCs tailored for larger stores. Users with premium accounts can launch an online store through Shopify.com.

As with the other apps here, the ShopKeep register still works if the internet is down. cost: Starts at $49 a month for an iPad app with one register, unlimited users and fewer than 270 items.

tunes

A little laptop music Laptop speakers can be difficult to take on the road; they are often bulky and get tangled up in a mess of wires when you throw them in a bag. Altec Lansing’s Orbit USB Stereo speakers offer a neater alternative. Before packing the speakers, you can stow the cord and twist them together to form one tube. The 1 Watt speakers, each of which weighs just over half-a-pound and measures 2.75 inches wide and 4.75 inches long, connect to a laptop, netbook or desktop computer with a USB cord (no batteries required). They sit on retractable metal stands that you can adjust to aim the sound. During our test, sound quality was average. Intricate indie rock songs sounded loud and distinct on the speakers, but the bass was almost non-existent. Also, the speakers don’t work with portable MP3 players or smartphones. cost: $50 —J.B.

From Left: Courtesy subject; courtesy company

the goods

Products + Services

the goods

tech wise soham raninga

Courtesy subject; courtesy company

Does Warranty Matter?

Two is better than one when it comes to keeping promises Nearly most of my recent technology purchases (laptops, phones or accessories) have been eBay buys. I am sold on buying stuff on eBay. It’s helped me save around 20 to 30 per cent of what I would’ve paid in India. Of course, these purchases come with a caveat—of no Indian warranty. They are perfectly legitimate purchases with duties and customs paid up. The warranty can also be claimed by shipping the product back to the foreign vendor.

Am I taking a risk by buying products without a local warranty? Maybe, but it’s certainly a calculated risk. I am betting on products that don’t really go kaput within a year.

Think about it. Is a warranty an important factor today? Most gadgets come with a standard one-year warranty.

Its relevance is debatable. I’d opt for paying the premium for a two-year warranty.

I feel cheated when the product is covered for just a year, especially after spending 50,000 on a laptop or 30,000 on a phone. Given that manufacturing and assembling technology for these gadgets has improved by leaps-andbounds, manufacturers should offer more than a year of a “limited” warranty laced with conditions.

I don’t see why even high-end LCD television sets that cost around 1.5 lakh come with a standard year-long warranty.

Result? People prefer buying them from abroad or from the grey market. It makes more sense to take a chance and save a significant amount.

Brands benefit the most by extending the standard support period to two years because it gives buyers a solid assurance on product quality. It also gives a competitive edge to a particular brand in the crowded gadget market.

Mysteriously, laptop hard drives, screens, and even mobile phone screens

start to go bad right after the warranty period gets over. Consumers have to pay through their nose for even the smallest fix.

The cost for support and warranty coverage is usually minimal especially because a standard warranty today doesn’t cover accidental or physical damage. Only technical failure is covered and this usually occurs after considerable usage.

It makes you wonder, doesn’t it: are vendors aware that their products are unlikely to suffer from any inherent issues in the first year?

Let me share my first-hand experience over a warranty claim for a Nokia phone.

The incident played an important role in my mistrust of warranties. My phone’s screen started to malfunction when it was barely a year old.

Nokia refused to repair the screen because their service centre (usually based on a franchise model with little or no technical expertise or consistency) blamed the user (yours truly) for the damage. Maybe they were right.

Maybe I managed to put just enough pressure on the screen to spoil it even as the top glass and the LCD panel below remained intact and functional!

I was “told off” politely enough. The damage wasn’t covered because I had “kept something heavy on the screen, causing it damage”.

It was futile to argue especially with a junior support person who was merely complying with company policy and had zero authority to impact the final outcome.

Here’s a heartening exception.

Almost all digital cameras, even those priced as low as 5,000, come with a standard two-year warranty. Clearly, the concept is not alien. It’s just rare and confined to a few categories. It’s time for the norms to change as the “standard” is just not good enough.

—Write to Tech Wise at soham.raninga@9dot9.in

A computer for seniors

The “aha” moment: When Fred Allegrezza moved his mother into an assisted-living facility five years ago, he bought her a Mac so she could stay connected with the family. But she couldn’t figure out how to use it. That was when Allegrezza, a serial entrepreneur whose previous companies designed computer systems for cable companies, started thinking about creating a computer just for seniors.

R&D: In 2008, Allegrezza, along with long-time business partner Clifford Lewis and four designers, began to develop easy-to-use software for checking e-mail, holding video chats, managing photos and browsing the web.

They tapped MSI Global to make the hardware for the computer, including an 18-inch touchscreen and built-in webcam. Last summer, they tested the prototype on 100 middle-aged adults with elderly parents. They gave it a thumbs-up.

Hitting the market: Since November, Chalfont, Pennsylvania–based Telikin has sold roughly 1,000 computers on Telikin.com, Newegg.com and Amazon.com and through catalogues, including SkyMall, for $695.

Now, it is developing a full-line of computers, including desktops, laptops and a tablet designed for both middle-aged and elderly users. —D.G. august 2011 | INC. | 2 3

the goods

Beyond Business

Things I Cannot Live Without...

Mont Blanc It was my dad’s present to me on my 30th birthday.

Wedding ring, watch These are from my wife so they are very precious.

My precious wallet It holds all my cash and cards. More importantly, it’s a gift from my better-half.

Director, All Things Nice

Nikhil Agarwal

BlackBerry addict I have to reply to an e-mail the moment I receive it. Addictive yes, but that’s the way I am.

2 4 | INC. | august 2011

Even when he was a boy, Nikhil Agarwal was wise enough to recognise his quirks. He was a foodie and he wanted to be his own boss. He knew he could do both—eat and be his own boss—if he had enough money and contacts.

Agarwal strategised till he had a concrete plan, worked in several industries till he knew people and all along, saved up like mad.

Today, he’s living his childhood dream through All Things Nice—a platform for discerning customers like him who enjoy good food and good wine. “It’s the satisfaction of getting to do what I want to do that keeps me going. It gives meaning to my life. All Things Nice is my dream. People should live their dreams, because they only get to live once.”

—Rohini Banerjee

...and What I Covet A ticket to the world’s vineyards... ...and the chance to eat, mingle and make friends. Basically, live the “all things nice” dream.

Everything you need to know to run your business in today’s economy

: : : : : : : : : : : A monthly guide to policies, procedures and practices

Remove booklet along dotted Line

07

Improve Customer Service What do customers want? This million-dollar question has launched several business quests—after all, customer service is the key to higher sales. There are two key points to customer service: promptness and price. Excellent service is also about constantly and consistently exceeding expectations. But, such excellence can’t be scaled in a day. It’s an outcome of an ongoing process— understanding what customers want, then bridging the gap between what you offer and what they expect. We know a happy customer is a boon. According to the American Express Global Customer Service Barometer, a survey conducted in 10 countries, consumers felt that, more often than not, businesses weren’t measuring up. Significantly, a whopping 22 per cent of Indian customers—the highest among the countries surveyed—said they were willing to spend more on companies that provided excellent service.

Improving customer service is your best chance to survive during the slow times and expand business when it picks up. “Today’s customers are fencesitters. They shop around to check who’s offering them product plus service,” says Nishith Bhandarkar, Business Director, Media Nexxt, an ad firm, and consultant with Bare International, a customer research company. Inspired?

Read on to learn more about how to stand out from the crowd.—Charu Bahri

Vol. 02 No. 07 | inc. guidebook

07

improve customer Service : : : : : : : : : : : : :

Set service standards and measures Establish set service standards: With intense competition among service providers, customers are becoming more demanding. They want it all and they want it now. But it’s unrealistic to ask employees to deliver services “right now” every time. So, business heads should establish standards that lay out the time frame and manner in which services are rendered and create a code. Customer service should never be left to assumptions, as everyone may have their own take. Standards should compare to the industry best. The process of setting them up compels one to review and identify gaps in the firm’s present offerings. Rachna Nath, Executive Director, PwC India, says: “Reviewing business support systems which cover all customer touch points helps achieve a level of customer centricity. This is necessary to improve customers’ experiences and revenue.”

Identify measurable yardsticks: Customer service is about keeping clients happy and enticing them back. But happiness is not easily measured. So, besides setting up standards, define measurable yardsticks to monitor service levels. “You could measure the time spent on each customer, the time taken to respond to a customer’s first contact, a client’s repeat visits, number and value of successive orders, efficacy of advertising mailers or telephonic interactions, customer feedback received directly and on social media, to prevent complaints,” suggests Soeb Fatehi, Principal Consultant, Encode, an engineering consultancy. Technology helps meainc. guidebook | Vol. 02 No. 07

sure certain aspects of staff-client interactions. Take CCTV footage for instance. It helps determine the time taken by attendants to close sales. Setting quantifiable goals is the best way to motivate employees, as they can measure these goals.

Improving customer service is not a quick fix, but a process.

Train staff: Motivated service personnel make the effort to build a personal connect with clients, which helps retain customers. However, this is unlikely to happen if you don’t have a well-trained and compensated cadre.

According to Sanjay Choudhary, India Operations Leader, GE Intelligent Platforms: “Training starts by understanding the concept of the internal and external customer chain.” That means being able to service a customer situated miles away as efficiently as the one next door. Choudhary believes that consumer psyche remains the same in different verticals. “Employees must learn how to go beyond defining quality as an attribute of the product and instead define quality as how well they satisfy the customer’s needs,” says Fatehi. They must be able to excite customers to place successive orders. Listening and resolution skills are vital to avoiding poor experiences—a big putoff. Also, for the best outcome, staff should be trained to begin every client interaction with a quick assessment of

their mood and level of satisfaction.

“When staff see the customer as their real employer, paying their wages, things work out fine. Call it orienting their basic values to a truism—a business exists only as long as the customers exist,” Fatehi adds.

Where you stand

Tune in to customers: “Aggrieved citizens in ancient India could ring a bell hung outside the city walls to call the king’s attention. Today, a popular fast food chain has adopted this ‘bell technology’ too.

Satisfied customers ring the bell to express their ‘happiness’,” says Nath.

Modern technology can help firms to stay in touch with changing customer preferences, essential to offering better service. Nath suggests using tollfree service lines, website feedback channels, SMS surveys and online monitoring systems comprising tools such as Google Alerts, BackType and TweetBeep, to gather feedback and analyse satisfaction levels. Directly engaging with the target audience on online social platforms also helps, as people tend to chat about recent purchases and experiences. Personal engagement done promptly is a useful means to show that you are listening.

Hire secret shoppers: Bhandarkar suggests hiring secret shoppers, people paid to shop at a store, for the sake of evaluating customer experience and to assess employee abilities such as integrity, etiquette, product knowledge and sales skills. Secret shopping can also show you where you stand vis-à-vis

your competitors, in terms of speed and quality of your retail services, compliance with service standards and customer-friendly business practices.

Listen to your staff: Customers are often comfortable sharing their opinion about products and services with the sales and service personnel. Knowing, understanding and acting upon these pointers can help a firm serve clients’ needs better. So, take out time to listen to your sales and service staff.

Apart from having a clearer understanding of customer preferences, they may also see untapped business opportunities as well as obstacles discouraging potential consumers from using your products and services.

Choudhary provides an example: “A customer needed equipment and service but was unable to commercially close the deal. The concerned employee, who was aware of the urgency of the demand, organised extended credit terms with the finance cost being built-in, thus creating a winwin situation for both the customer and the company.”

Fatehi also suggests that sharing information with an aggrieved customer—for example on a review of staff-initiated corrective and preventive action to plug service loopholes—can help re-establish confidence. He says it also helps ascertain whether the issue has been understood and addressed to the customer’s satisfaction.

Incorporate feedback

Improving customer service is never a quick fix. It’s an ongoing process of setting standards, gearing up staff and feedback—and execution is the key.

Your actions need to demonstrate that you’ve really plugged the loopholes.

“This is done by converting feedback into actionable business intelligence in real-time to improve the firm-customer dynamics.” A leading direct-tohome television service provider analysed complaints and found that its call centre operations had caused significant revenue loss. The firm has since then strengthened its call centre infrastructure, which has reduced call drop-outs and enhanced customer satisfaction levels.

07

improve customer service : : : : : : : : : : : : :

common mistakes to avoid

Proper analysis of customer feedback isn’t going to happen till you pick the right strategy. Here are some pointers: Keep at it: Surveys and contact programmes are a good way to find out how your customers feel. Surveys shouldn’t be reduced to an annual remedial exercise, but should be regular making it easy for customers to share viewpoints.

Be specific: Some companies flood mailing list recipients with too much information. Don’t. Use surveys and customer purchasing history results to narrow down what you wish to send to each consumer.

They are more likely to act upon information about products and services they have expressed an interest in.

Personalise contact: We live in an age of interactive voice response or “IVR” systems. Automated systems, however, fail to build a personal connect with consumers, especially in service-oriented industries such as healthcare and finance, where customer problems and requests require detailed explanations. So, facilitate access to live representatives. Including staff bios on your website also helps personalise service.

Facilitate sales: Make it easy for potential consumers to access your products and services. Provide as many methods as possible to purchase a product—stores, websites, e-mails, SMSes and phone orders.

Then, work on improving the retail experience across all these channels.

Notes:

Tech tips to collate feedback Setting up enterprise feedback management systems (EFMS) helps manage market surveys and interpret feedback. Some web-based EFMS solutions are ePeoplePulse from Centre for Excellence in Organisation, Nihilent’s Customer Feedback System and an application from CDC Software based on Microsoft Azure’s Cloud computing platform. Integrating EFMS with an organisation’s CRM programme, like those offered by Salesforce, helps collate data better. Setting up web-based feedback systems also helps centralise customer service.

Feedback analytics built into such services uses performance indicators and feedback metrics to measure experience from a generated feedback. Installing OnState CallCenter for Skype, a paid service from the VOIP, allows SMBs to create a low-cost contact management solution.

Resources

(Read) 10 Ways To Improve Your Customer Service, http://www. customerservicemanager.com/10ways-to-improve-your-customerservice.htm

(Design your own survey) Sample customer satisfaction survey,

http://www.questionpro.com/akira/ showSurveyLibrary.do?surveyID=230

(Read) American Express’ 2011 Global Customer Service Barometer, http://about.americanexpress. com/news/pr/2011/csbar.aspx

inc. guidebook | Vol. 02 No. 07

Earn Your Spurs by Jessie Paul

Everyone Loves A Winner Each time I speak about frugal marketing or personal branding at a conference, I begin with a series of questions. Usually, all hands go up when I ask, “How many of you won awards in school?” When the same question is extended to how many people have won awards in college, roughly three quarters of the audience raises its hands again.

Soon, things begin slowing down when I ask, “How many of you or your businesses have won an award in the past two years?”

Only a handful (pun intended) remain. My last question gets the least response. An even smaller number raise their hands to “How many of you applied for an award last year?”

I wonder why. When you won an award in school, not only did you feel great about yourself, your parents basked in the reflected glory. The positive reinforcement from the award probably pushed you to go out and win more, and more often. Schools understand that awards and recognition are powerful motivators. It’s why they tend to give them out pretty generously.

Now let’s look at awards in the corporate context. When a company wins an award, the employees are thrilled. When they hear about it, your clients feel reassured that they made the right choice. Heck, even your families are happy

2 6 | INC. | august 2011

especially if they get to come and see you receive it at a glittering ceremony. Your entire ecosystem—personal and professional—gets that warm, fuzzy feeling. Post the initial enthusiasm of the trophy, certificate or web listing, a tangible benefit remains. Of course, the euphoria varies a little depending on the reputation of the

photos.com

Winning awards isn’t simply about an ego boost: it also gives your business a glow of victory

earn Your Spurs

award and the quantum benefits attached, but not much. Just as in school when you were happy winning even a small reading or swimming contest, most companies are quite happy getting any award.

Still culturally not everyone is comfortable about formally applying for awards.

Somehow, there’s a sense that it’s immodest.

One should be conferred an award and not apply for it, many people have told me. This modesty debate is rooted in our culture, and it would be fine to live with it if we were dealing with a homogenous business culture.

Unfortunately, we are not. Even in India, there is no uniform code of what is modest, what’s not, and if we look globally, perceptions vary widely. Think about this. If you happen to bid for business against an awardwinning competitor, other things being fairly equal, the award-touting fellow is likely to get that business too. So, of course, wait expectantly for honours that are conferred to you. But there is really no harm in asking for a few too.

If you’re convinced, this is how you can get started. Tell your marketing team or PR agency to compile a list of relevant awards, and systematically apply for them. I know I said earlier that any award is a good award.

But, there are some exceptions. Stay clear of the seemingly dubious ones—the sort where you have to credits $250,000 into an unknown foreign bank before you can win a $25 acrylic trophy.

Modesty comes into play most when we speak about individual awards. As a company owner though, it doesn’t pay to be modest. If you were an employee of a large firm, being shy and reticent about beating your own drum may not have a commercial drawback for your company. Indeed, many large firms shortsightedly make it rather difficult for their employees to build their own brands (but that’s a whole different column). Entrepreneurs have to say goodbye to their shy, retiring days. In a first generation company, or a start-up, often the CEO’s brand is equal to or possibly even greater than the company’s.

There are tangible benefits attached to fame. When you send out an e-mail, I’m willing to take a bet that the digital signature which says “Winner of 2011 All-Star Award”

will get you more attention and respect. It will make setting up meetings easier. It could possibly also lead to better prices and higher conversions. Most importantly, an armful of awards gives you great confidence.

Always remember success breeds success. The first award is the most difficult.

After this, you’ll become an established winner and attract further recognition. So, start small, with a simple, easy-to-win award and then broaden your horizons.

Till now I have talked only about winning an award. Why not think about giving some away? Each time I suggest this, companies ask me why anybody would be interested in getting an award from them. Here’s the thing. If you are in a line of business, and

vator. Yes, sometimes people who don’t win it might get upset. But, a lot depends on the structure and how you market your award.

Now, let’s get down to the brass tacks.

Awards are one of the lowest-cost marketing tools around. If you’re applying for them there is usually no fee, and the organiser takes care of publicising your win too.

Your only cost is to actually show up to collect the award. If you are handing them out, then your costs are usually limited to the trophies and a dinner to recognise the winners, and one press release.

While an award more than once a year would test credibility, it is possible to add bells and whistles that keep interest going throughout the year. For example, you could

The potential is endless.

An award is truly a gift that keeps giving. making profits, you are presumably good at something. Why not recognise others in this space? Besides, the beauty of instituting awards is that you are recognising excellence, not necessarily making a claim to be excellent yourself.

Not sure about doing this? Give your awards a credit boost by associating with experts in your field. Most awards have a jury of leaders in that field. For example, if I wanted to launch a Hall of Fame to recognise modern marketing successes, I would have a panel of leading CMOs to help me select the best. Recently, Ashok Soota’s Happiest Minds Technologies, which launched India’s first crowdsourcing programme to create its logo, roped in a panel of experts to help them choose from over 1,400 applications.

Of course, the simplest award is to recognise your best clients. This can be a valuable tool to reinforce positive client behaviour.

As long as you are careful to keep it inclusive, simple and transparent it can be a big moti-

select winners at various levels and then have a grand winner. You could compile all the winners into a book and send that out to a larger distribution list. You can interview all the winners and build content for a website. The potential is endless. An award is truly a gift that keeps giving.

As I write this piece I realise that I haven’t won an award in the past 18 months. I haven’t applied for any either—a case of the shoemaker’s children lacking shoes. So, if you’re starting an award programme and wondering who to give it to, remember me.

Jessie Paul is the CEO of Paul Writer, a firm that hosts India’s largest community of B2B marketers at paulwriter.com. She is also the author of No Money Marketing, a bestseller. august 2011 | INC. | 2 7

Sameer Jain Net Solutions Chandigarh Page 35

Hometo

Hero

Devendra Shah parag milk foods Manchar, Maharashtra Page 31

V.P. Nandakumar Manappuram Group Thrissur, KERALA Page 36

2 8 | INC. | august 2011

Kiron Chopra Chopra Retec Rubber Products Lucknow

wn Page 33

es S. Susindran Sabare International Karur, Tamil Nadu page 30

Myth No. 1: Multinationals are based out of megapolises.

Truth: Away from the bright lights and choked roads of our big cities, entrepreneurship is being polished to a shine by many who are working their home locations into a formidable business advantage.

Meet 45-year-old S. Susindran from Karur in Tamil Nadu. The town’s size didn’t deter Susindran’s tall ambitions to make his company, Sabare International, a true-blue global firm. His home town is dotted with spinning mills. So Susindran set up a textile mill, but steered away from set standards. Soon, he had managed to woo big retailers like Walmart and JC Penney. His next stitch—turning Sabare into a 1,000 crore company.

Myth No. 2: Exciting Indian businesses are limited to the big smokes (read: Bengaluru, Mumbai, etc). Sameer Jain would probably laugh at the idea. If he had to do it all over again, he’d still base Net Solutions out of Chandigarh.

There’s little to complain about, he says, about a place where business is good, traffic isn’t a mess and the chaos is manageable.

There’s Kiron Chopra in Lucknow who knows his Aston Martin better than Bond. After all, his firm, Chopra Retec Rubber Products, recently supplied 300 pieces of a specialised suspension hangar for Aston Martin’s limited edition One77.

Clearly, towns across India are buzzing bazaars of innovative products, canny business ideas and companies redefining desi entrepreneurship.

Here's our pick of the companies that are doing better than good even as they are based beyond the obvious hubs. Let’s salute them—may their thirst for business and innovation never die.

BY inc. India august 2011 | INC. | 2 9

s. Susindran | Sabare International

Tex Savvy in Karur

S. Susindran has woven a multinational success story with his textile business in a small town in Tamil Nadu. And, he’s not stopping till he reaches the 1000 crore milestone

By Meenakshi Kumar

A Special Weave Susindran has built his mini-MNC stitch by stitch.

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nishing shop on your trip abroad, take a closer look. Chances are that the beautiful rug you are eyeing was woven at a textile mill in the small south Indian town of Karur. What’s more, it’s likely that it has been spun at the looms of Sabare International, a leading home textiles export unit that has emerged from this quiet town in Tamil Nadu.

Karur houses a multi-billion dollar textile industry. Here, the clacking noise of looms almost serves as a background score. So far just another export unit, it’s easy for Sabare to get lost in the crowd. But S. Susindran, the man behind this 200-crore company, has woven a beautiful fabric of success, patterned richly with technology, quality and smart thinking. Sabare counts international retail biggies like Walmart, JC Penney and Target, among its clients today.

Susindran says thinking out-of-the-box wasn't a luxury. It was the only way to succeed.

So, after quitting his job as a chartered accountant in the early 1990s, the young man set out to do things differently. Growing up in Karur, he knew nothing hummed better than a textile mill. He got to work and set up the basics of a working mill in 1994. Once that was done, he began tweaking his business proposition.

Susindran didn’t want to be just another supplier; he wanted to stand out. “I didn’t want to just export. I wanted to be a small multinational company even then,” recalls the 45-yearold. Plus, there was no better way to catch the attention of the international brands than by being close to them. “I started by setting up a small office in the US. It was a big risk but I knew I had to do it”. The gamble paid off.

Susindran managed to convince Walmart to give him a small order to start with.

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The next time you stop by a posh home fur-

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Usually manufacturers limit themselves to simply taking orders from retailers and supplying the goods. Susindran proved to Walmart that he could increase their margins by his total retail solution. In this model, Sabare would take orders from retailers but instead of just delivering stock, he would help them out with management of inventory and supply directly to individual outlets. Walmart was impressed with his confidence and his ability to deliver what he promised. He soon landed bigger orders from the global giant.

This value-add he gave his clients continuously helped him pull away from the competition. In the past few years, Sabare has expanded its international presence with sales offices in Arkansas, Minnesota and Arizona in the US, and Shanghai in China.

It also does considerable business with retailers in Canada, Germany, Italy, France and Mexico. To cope with rising demand, operations have spread to Panipat, Noida and Alleppey. His initial dream of running a multinational clearly isn’t wishful thinking anymore. But there’s no time for celebration till he reaches the 1,000 crore milestone, Susindran says confidently.

He might have started out at home but this ambitious entrepreneur knows that to be in the big league, he needs to have a toe in the mega cities. “I’ve always looked out. The biggest hurdle in a small town is lack of talent. To be successful in business, you need great people. That’s more easily available in the cities.”

You have to think globally and think big if you want to offer good products, he adds.

Of course, like any entrepreneurial journey, his had several scary days too. Soon after he started out, Susindran faced his biggest setback when a US client went bankrupt. In the red, he knew he had to borrow to keep his business afloat. Also, he had to quickly shift focus to other clients. Did he ever think of giving up? “It was a terrible phase but fortunately I never got to the point when I thought of going back to a job,” he laughs.

More recently, the recession tested him again. Sabare’s revenues tumbled from 378 to 250 crore within months, but Susindran hunkered down through the worst times.

Today, that storm has passed and his ship is at full sail again. “My passion has kept me going.

I don’t believe in giving up.”

Devendra Shah | Parag Milk Foods

Say Cheese!

From plain milk to high-quality cheese, Parag is churning out a smooth success story in the quiet village of Manchar

By Meenakshi Kumar

The rustic setting of Manchar, a charming village that sits on a pristine stretch of the Western Ghats, has all the trappings of a weekend getaway. With the hills beautifying the landscape and green fields dotted with cows, it’s a surefire tourist destination. Yet, that’s not why India is talking about Manchar. A dairy-rich belt, Manchar is also the birthplace of Parag Milk Foods, a 19-year-old dairy company that has audaciously put Indian-made cheese on the world map.

For those of you who still prefer Swiss-made cheese, bite into these facts.

Parag Milk Foods is no new player in the game. The 628-crore company has been exporting its Gowardhan brand of butter, milk powder and oil to nearly 47 countries since 2000. And now with its range of cheese products, sold under the brand “Go”, the dairy exports cheese to 15 countries.

The company’s chairman, Devendra Shah, who has single-handedly steered his dream project into a global brand, says big-hitting global recognition was always his aim.

The fire in his belly, as they say, was ignited after watching a victorious Ravi Shastri drive around in his new Audi after India won the Benson & Hedges World Cricket Championship. Since that day in 1985, Shah knew he too wanted to be a Set Well: Manchar “champion of champions”.

He traces his interest in dairy and farming to his family which had been working with farmers for almost three decades. Back in the eighties and early nineties, the government was the sole agency collecting milk from farmers. Sales would be limited and the government often restricted collection drives on what was then called “milk holidays”. Not only did large quantities of milk go to waste, farmers lost significant income too.

Shah was drawn to figure out a solution to help the farmers. “As I started doing the business, I began to understand the unlimited potential of a dairy business in this country. I knew my decision had been 100 per cent correct,” Shah recalls. He set up Parag Milk Foods in 1992 with an initial milk collection of 20,000 litres per day and an investment of 1 crore. But setting the business into a mould wasn’t easy. august 2011 | INC. | 3 1

Homemade Goodness Till it was time to build his brand, Shah preferred to stay put in Manchar.

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brand. Today, his dairy farm boasts of over 3,000 cows and nearly 10,000 farmers from whom it sources the milk. In fact, Parag proudly claims it is India’s only all-cow dairy. Even his bold decision to manufacture cheese came from his characteristic derring-do.

“We took this step at a time when the total cheese demand in the country was around 25 metric tonnes per day. We went ahead with plans to build cheese manufacturing capacity of 40 metric tonnes per day, which could be scaled up to 100 metric tonnes,” he says, adding that he dreams of becoming the largest cheese player in the country.

Over the last couple of years, he has invested close to 200 crore in setting up a new cheese plant and processing facility at Palamner, a small town in Andhra Pradesh. This is in addition to the existing facility at Manchar.

Till four years ago, despite the success of the brand, Shah chose to stay put at Manchar.

He has believed all along that by being close to farmers, he can ensure that the best quality of milk is procured. “That’s the most important aspect of the dairy business. You have to be close to farmers to instill trust in them,” says Shah, who loves spending time with his cows. But a fast-growing business and the need to focus on brand building made opening a Mumbai office inevitable. The move has yielded bumper results. In addition to the west India markets where they reign, Gowardhan products are now available across the country. With this spread, Shah is confident of breaching 1,000 crore within a year. By 2020, he’ll multiply 10 times over, he claims, with a targeted 10,000 crore turnover. Still, what he most wants is for hardcore Swiss-cheese loyalists to give his brand a “Go”.

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First off, farmers had to be convinced to sell their milk to him. Also, he had to scope out reliable markets and in the absence of proper storage facilities, litres of milk had to be thrown away.

“We also found it tough to get investment for building the plant. I had to sell some personal valuables to get the plant running.” Still, the rough-and-tumble of the dairy business only added to his determination. Even though most dairies those days were run by co-operatives, Shah struck out solo. He opted for private ownership and has never regretted it.

In 1998, he forayed into milk products under the Gowardhan

Kiron Chopra | Chopra Retec Rubber Products

Small Town, Big Heart

Kiron Chopra’s business and heart are both in Lucknow. Initially, working from home did make international partnerships challenging.

But those troubles have been overcome. Chopra’s rubber products company today supplies to iconic manufacturers like Aston Martin

Driving Ahead Chopra is stepping on the gas with the new orders.

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By Sunaina Sehgal

As the summer heat was settling down in the dusty lanes of Lucknow last September, Kiron Chopra, chairman and managing director of Chopra Retec Rubber Products Limited (CRRPL), got an unusual call. On the other side was the UK head office of luxury carmaker Aston Martin and they got straight to the point. The company wanted to know whether Chopra, whose firm supplies exhaust suspension parts, could manufacture 300 pieces of a particular suspension hangar for one of its most ambitious models—the One-77, a limited edition super-car.

Aston Martin, Chopra learnt, was in a sticky spot. The One-77 had to be launched and they hadn’t been able to find any marquee suppliers who could deliver the parts they needed in such a small quantity. Also, they needed the parts as of yesterday. If Chopra was keen to get the order, he would have to send Aston Martin a prototype within a week.

Chopra knew this tiny order could accelerate him into another league. He worked with his 100-member team and despatched the first prototype in four days flat. Aston

Martin was impressed with the speed and quality and CRRPL finalised the order.

Since then, not only has the deal made a global car giant take notice of the manufacturing prowess of an Indian company in a Tier II city, it’s also vindicated Chopra’s belief that he could reach for the stars right from home. “All my employees are locals. I want to be loyal to Lucknow. Many of my people have been with us since the company began. That belonging cannot be replaced. I want to see them grow and prosper,” says Chopra. august 2011 | INC. | 3 3

CRRPL, earlier known as AutoHe took the blow but didn’t flex, was established as a trading busisuccumb to it. In fact, he continness in the seventies by Chopra’s ued his relationship with EEP. Chopra’s company helped Aston father, J.C. Chopra. Growing up, Cho“Our relationship became Martin launch the One77 on time. pra knew he could engineer his ambistronger over these years,” says Priced at $2 million, this advanced tious dreams from rubber. So, he Chopra. That’s the small town super-sports model is the company’s most expensive car yet opted for a course in Rubber Technolthinking at work, he adds, of valuogy from the UK-based National ing relationships beyond their College of Rubber Technology. business utility. These values In 1975, at the age of 21, Chopra clearly worked for them. When the joined his family business. Autoflex rupee devalued in the nineties, all Chopra supplied 77 was then supplying moulded rubhis clients came back. suspension ber automotive parts such as In 1996, Chopra signed a joint hangers at around rings, bushes, bellows and seals venture agreement with Retec 3,500 a piece to Ashok Leyland, XLO India, and renamed his firm. Business API, Mico, Simpsons and later grew exponentially. Retec was a Scooters India. But the firm market leader in Europe and was seemed to be landlocked by its also rapidly expanding in other small town reach, and a nascent global markets.

Indian automobile industry.

On his part, Chopra worked “In those days, there were only two his limitations into an advantage to The small brands of passenger cars available in speed up his business. When the order is helping India—Fiat and the Ambassador— big car companies started going to them add to and that too in small numbers. We China en masse, Chopra quickly their list of 25 global clients had to look at international markets to figured out that his quality add volumes,” recalls Chopra, who matched those of Chinese manubegan a foray into exporting parts. facturers. Plus, he could also offer In 1978, Chopra participated in his clients the advantages of being the Automechanika, an internasmall and nimble. tional trade fair for the automobile “The Chinese had zero flexibilsector, organised in Frankfurt, Gerity with regard to product lines, many. It was here that their small delivery and minimum orders. retail outlet caught the attention of They won’t take orders for less than EEP (now Retec), a leading German 5,000-10,000 pieces. I knew I could distribution firm. make small quantities work," he The company, which had a joint says wisely.

CRRPL manufactures 6 venture with a Sri Lankan firm, had The strategy helped him wean million parts a year. Their next bolt—20 million parts been scouting for a more adept, creaway many global brands from the ative and versatile company to manuChinese market. facture and export better-quality “Nobody cares where you’re exhaust rubber hangers. Autoflex seemed from, as long as you can cater to their to be a right-fit. needs in the best possible way,” Chopra Sourcing them from Delhi added to the But, they asked for a massive technolasserts confidently. input cost. Getting the products out was ogy ramp up. “Ours was an ancient, handClearly, that’s what got Aston Martin another hassle. “Since there were no dry dominated process. EEP forced us to dialling a Lucknow number in September ports, we had to send off the goods to improvise and add technology. They were of 2009.

Mumbai first. This would take two weeks willing to add volumes if we could keep Ever since, his company’s been on a and then another month for the shipment pace,” says Chopra. But, this wasn’t easy. song. Another windfall deal followed soon to reach the client.”

The lack of industrial infrastructure—and after—a 4.5 crore contract for exhaust susThings got especially difficult as the pension parts with the US-based Tenneco limited modes of communication—in Luc- rupee gathered strength. When the dollar Corporation. He is now looking ahead to know posed several difficulties. became worth 13, EEP and other firms began pulling out of India. Overnight, trebling his annual turnover of 10 crore in “We couldn’t even get the kind of nuts Chopra’s fortunes plummeted. the next two years. and bolts we needed,” recalls Chopra.

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Raring To Go

Toast of the Town Sameer Jain loves feeling right at home.

Sameer Jain | Net Solutions

Net Guru

Sameer Jain doesn’t need big-city glitz to code cutting-edge apps. Even if he had to set up shop once more, this homebody would always pick Chandigarh

By Rohini Banerjee

“Who says people in so-called small places can’t think big,” ques-

tions Sameer Jain, the founder and CEO of Net Solutions, an IT services and mobile apps company. Jain is certainly well-located to make that claim. Net Solutions, his billion dollar firm, is based out of Chandigarh. But, he isn’t a big fish in a small pond. His clients are biggies from across the globe including award-winning and cutting-edge firms like BlueLithium and Mobclix.

Photograph by Subhojit Paul

Add another dozen blue-chip companies from the UK, Australia, Canada and India to his client roster and you know his smalltown tirade isn’t a defence mechanism.

In 2000, Jain quit his family manufacturing business, disheartened by the peripheral drama and the less-than-ideal practices that had to be deployed to work with government regulations. But, not before he coded into his business DNA some critical insights he august 2011 | INC. | 3 5

had picked up. First, he figured that more than anything else, he longed Over the last couple of years, he’s also built a stronger local presto be in the IT business. It was an exciting, honest way of doing business. ence in the UK and Australia with some exciting partnerships. Even And he could do it in a city that allowed him to breathe. Staying at as he schedules back-to-back international calls and spends more home also made perfect business sense, he insists. “You’re not always than two months abroad, Jain laughs off suggestions that things jostling with a crowd. Work actually gets done faster. There are no long could be easier if he had been in buzzing tech centres in Bengaluru commutes. I’m 15 minutes from everything. There is less confusion, or Hyderabad. “My clients couldn’t care less. Had I been a San Franchaos and red tape, and government administrators actually have time cisco firm working with NYC clients, location could have been an for businesses like mine,” he rattles off happily. issue. But when they are outsourcing to India, which is thousands The last decade has vindicated his of miles away anyway, it doesn’t matter to logic. By 2009, Jain had established Net them whether you are in Chandigarh or Solutions as a well-known developer of Delhi. The only people who wish we were flash games, e-commerce portals, iPhone closer are our Indian clients,” he says laughand Facebook apps. ing. Yet, he knows that to scale up fast he Keeping pace with the times, Net Soluneeds to keep this constituency happy. tions, which now works out of a swanky “When we make an app for a foreign clioffice building right next to the Infosys ent, we also try to figure out whether the office, has continuously evolved from proIndian market is ready for it. India is throw—Sameer Jain, Net Solutions viding generic IT services to innovative ing up a lot of opportunities," he explains. niche areas that push the envelope—services Admittedly in an economy where even on the cloud—and greater collaborations with the Silicon Valley. players like IBM and Infosys fight for talent, getting the right peoMuch to Jain's delight, Net Solutions is increasingly making prodple to execute his plans is a challenge, Jain says. But, this entrepreucts. It’s creating that gets this 41-year-old entrepreneur truly excited. neur has taught himself to look at the bright side. He confesses His reputation as an honest businessperson (Jain is known building his team, which has now grown to 175 people, was frusto tell clients up front what can or cannot be done even at the trating in the beginning. “But I would’ve have faced that with a risk of losing a big project) and the string of international start-up everywhere. At least here I didn’t have to pay through my accolades, including the incredibly prestigious Webby Awards nose for them.” Clearly, Jain is somebody who is convinced he’s has added to the fun. found his business paradise, right in the backyard of his home.

“You're not always jostling with a crowd.

Work actually gets done faster.”

V.P. Nandakumar | MAGFIL

A Gold Rush

V.P. Nandakumar has crafted a glittering business from the age-old practice of loans against gold. He now wants to take his Kerala-based company overseas

By Kavitha Srinivasa V.P. Nandakumar, chairman of the

Manappuram Group, has a lofty vision. He wants the entire country to see a gold loan for what it truly is—a socially relevant product that has tremendous potential to promote inclusion and, in the process, make the lives of ordinary Indians easier.

This simple and neat logic, along with his uncanny ability to convince people and bring the masses into his fold, has been the cornerstone of his business success. At least

3 6 | INC. | august 2011

that is what he did in Kerala, his home turf, when he took over the reins from his father VC Padmanabhan in 1986 after his death.

Ever since, he has transformed Manappuram General Finance and Leasing Ltd (MAGFIL) from a single branch institution in Thrissur to India’s first listed, highest credit rated and most admired gold loan company.

He really hit the nail on the head. With millions of Indians still outside the purview of formal, institutional banking,

Manappuram facilitated low-cost working capital against gold ornaments. It is the one collateral most Indians have. So, they’ve reached customers who aren’t necessarily poor and given them secure loans against gold. In just five years since 2006, the company has grown from 50 branches to the 1,800 it now has.

The company’s origins hadn’t forecast these strides. Manappuram began as a money lending and gold loan outfit in

“Integrity is paramount in a financial services business. You have to earn the trust of people.”

— V.P. Nandakumar, MAGFIL

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Glitzy Success His golden dreams helped Thrissur gain a spot on the loan map.

1949, working out of a lone office in the coastal village of Valapad for decades.

“My father was not ambitious in the sense that we would use the term today but he had very high standards of integrity,” says Nandakumar.

Thrust into the business after the death of his father, that's a lesson he carries for life.

“When you are in the financial services business, you have to earn the trust of the people around you. Integrity is paramount.”

An enormous base of goodwill has definitely been the company’s great treasure, helping it sail through many a rocky patch.

Nandakumar, in fact, says if it wasn’t for this good-as-gold reputation they wouldn’t have been able to go for an IPO in 1995.

Frustrated at failed attempts to raise funds from commercial banks, Nandakumar went down an unconventional route to go public.

He launched a drive to collect small retail investments from customers belong-

ing to the Valapad area. The painstaking efforts worked and MAGFIL mobilised funds without a hitch. The public issue gave the company its glossy shine.

From then on, MAGFIL has been riding on a new wave of growth. Even immediately after the IPO, MAGFIL’s focus was massively dependent on the home crowd.

In the late 1990s, there was a greater acceptability for gold loans in Kerala, Nandakumar says.

“Given the higher literacy and education levels here, people were quick to grasp the advantage of dealing with a transparent and professionally run organisation,” adds the 56-year-old.

By then, the IT revolution had also started touching the lives of small town businesses like MAGFIL. With the technology gap plugged, there wasn’t a reason to shift out anywhere. Today, MAGFIL has 1,800 branches across 19 states, a workforce of 14,000 and a live customer base of 10 lakh.

Now, Nandakumar has glittering global dreams. Spanning the breadth and length of India isn’t enough for this ardent devotee of Dhirubhai Ambani. He has hugely diversified his portfolio, sowing the seeds for 10 companies that now handle gold loans, asset financing, insurance, foreign exchange, money changing, gold jewellery and healthcare among others.

The long-term vision of the company is to unlock the value of the large privatelyheld stock of gold in the country, estimated at about 18,000 tonnes. It might be a big dream for a company that still anchors itself to a small town in Kerala, but as they say, size is just a state of mind. august 2011 | INC. | 3 7

The visibility and acceptance of entrepreneurship has multiplied several fold in the past two decades. From a point where an entrepreneur was perceived as a “promoter with a scheme” to a point where most students in colleges outline entrepreneurship as their ultimate pit stop, India has come a long way in making entrepreneurship respectable and aspirational.

The emergence of successful role models, who came without much family backing and yet managed to create leading global enterprises, has contributed immensely to this change in perception. At the same time, the inflow of institutional capital in the form of venture capital and private equity has provided the required ammunition.

However, the bulk of these success stories are still confined largely to the top 10 cities. Sixty per cent or more of private equity investments continue to be focused in the top five cities (Q1 2011: VC Circle). By the time one adds up numbers from the top 10 cities, precious little is left for even Tier II cities, let alone smaller towns. To understand this concentration, and how entrepreneurship may be fueled in smaller cities, we need to analyse the entrepreneurship phenomenon in smaller cities.

Column | alok mittal

Consumer demand and diversity It is a well-recognised fact that India is going through a secular developmental path which is creating considerable disposable income. This is leading to the demand for new products and services, as well as raising the standards of quality that an Indian consumer expects. This is a fundamental opportunity that Indian markets will offer over the next 50 years, if not more. This explosion in demand is happening not just across the top 10 cities, but deep into the hinterlands. Thus, there are white spaces that need to be filled in addressing consumer sectors directly. There is also huge derived demand in industrial and other business sectors.

Also, sheer diversity is India’s most unique characteristic. There is a new flavour to India every few 100 kms—be it in terms of regions, languages or cultures. Unlike the large developed countries, India remains a largely “non-standardised” market.

Thus, there is an opportunity for entrepreneurs to spring up in every part of the country, solving the same problems, but with unique socio-cultural flavours. Thus, unlike a top-down model of entrepreneurship, where one model is created and then replicated across a country, India will probably see a more organic bottom-up approach over the next several years. Specialised businesses will come up to tackle the unique needs across geographies and economic

India’s sheer diversity allows bottom-up entrepreneurship.

But governments and institutions must pave the way for mainstream capital to reach smaller cities

3 8 | INC. | august 2011

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Organic Entrepreneurship

reach. Businesses in retail, vocational training and healthcare are classic examples where local tastes and preferences drive success.

Supply constraint in capital Against the backdrop of exploding demand, the flow of venture capital and private equity remains supply-constrained. This is on two distinct counts. First, the absolute amount of dollars flowing into the market in the form of institutionalised private equity is too small—last year the $8 billion in private equity investments corresponds to about 0.5 per cent of GDP. In markets such as the US and UK, this number hovers in the 3 per cent zone. The second key supply constraint has been the accessibility of these funds to Tier II markets. Private equity as a form of capital tends to target companies that can be national and global leaders in future—in a diverse and fragmented market like India, this leaves many viable businesses at a regional scale out of the ambit of private equity.

The fact that most private equity managers are thinly staffed in line with their business model compounds the problem. These managers tend to evaluate the “return on time”, which is optimal in larger high-concentration cities, rather than in smaller ones.

In a classic Indian paradox, while penetration of private equity remains low, and there are “too few deals and valuation pressure” in the top 10 cities, in the smaller towns, deserving entrepreneurs continue to be strapped for capital. This actually represents a market failure in organising capital where it might be most productive.

Making capital accessible I believe that governments, especially at state and city level, need to play an important role in bridging the capital divide outlined above. There are several measures, some short term and others long term, which need to be taken. One of the earliest sources of venture capital in the country have been state sponsored funds.

Many of them have been successful in supporting businesses at state level—the few that come to mind include those from Gujarat, Rajasthan and Punjab. While some of these have been partially privatised over time, they continue to have a strong regional presence. These initiatives need to be strengthened across states. While such funds may not necessarily employ the best talent or produce the best financial performance, the social return they generate must be factored into their contribution.

Several other government agencies are also taking steps to encourage entrepreneurship. For example, DST has a programme to put 1000 incubators across the country. There are technology funds available from TDB. The list goes on. Such initiatives must be focused to support entrepreneurship in Tier II cities—in fact, the quantum of funds themselves can be multiplied by extending such support.

Finally, the government should pave the way for mainstream capital to reach their cities and states over time. The incentives that state governments are willing to provide for large industries are well known. States which believe in the power of entrepreneurship, not just to create businesses but to solve the key problems of their people must develop programmes and incentives, be it setting up

Big Fish, Small Ponds Our hometown heroes are in good company. Some of the world’s largest companies were born beyond the usual hubs

Airbus Toulouse, France

Nestlé Vevey, Switzerland

Wipro Amalner, Maharashtra

Syndicate Bank Manipal, Karnataka

Nokia Tammerkoski Rapids, South Western Finland

of entrepreneurship development boards, incentives for developing local angel investors, public-private partnerships around key start-up clusters, or facilitating expert resource groups. Over a longer period, building entrepreneurial ecosystems in Tier II cities will have multifold returns.

It's not an accident that organised entrepreneurship is first showing its impact in larger metros. For decades, organised commercial activity has been concentrated around large cities in India and entrepreneurship is following the same path. However, one can now see entrepreneurial ambitions bubble up from various other parts of the country. Like organic farming, organic entrepreneurship is harder, takes more investment and time, and involves short term trade-offs. And like organic farming, organic entrepreneurship is more healthy and sustainable over a longer span of time. Not unlike other pieces of infrastructure, it is time to start building the entrepreneurial infrastructure in every corner of India.

Alok Mittal is the managing director of Canaan Partners, India. He is also a co-founder of Indian Angel Network, and is on the board of TiE (The Indus Entrepreneurs), Delhi. august 2011 | INC. | 3 9

HOW I To be so hot, so briefly

Fired?

But it’s my company!

Man, that’s a lot of money

My IPO nightmare

Life at the center of a craze

My Murphy’s Law year

This one is for the haters

14 Company builders on success,

4 0 | INC. | august 2011

The Big Moment Edition

did it I woke from my coma. I got back to work

We had a problem.

We were the problem

A tornado does tend to shift your priorities

Why I put everything at risk

Am I really an ex-entrepreneur?

I sold the company.

I bought it back

How do I top Angry Birds?

failure & lessons learnt As told to Leigh Buchanan, Max Chafkin, Burt Helm, April Joyner, Issie Lapowsky, J.J. McCorvey, Lindsay Silberman, and Kasey wehrum

august 2011 | INC. | 41

how i did it

Drew Houston

Dropbox

Rob McGovern

Jobfox

Out of the coma. Back to the office

Rob McGovern took his first business, CareerBuilder, public, then was a part of a group that took it private at a cost of $250 million in 2000. Four years later, he founded the online job-search site Jobfox, which earned a revenue between $15 million and $20 million last year.

On June 26, 2009, I was on a business trip in Indianapolis, driving down a country road to get back to my plane. I had a head-on with a 17-year-old who was passing somebody illegally. We met at the top of the hill. I never saw him. I was on the cell phone with my VP of sales at the time. He heard the crash, and then the phone fell to the floor of the car and stayed live. So he heard the ambulance arrive, and he heard them using the Jaws of Life, and he heard the paramedics say there were no vital signs.

I suffered a severe brain injury and was in a coma for a few weeks. I had crushed both my hips and most of my ribs. The diagnostic tests predicted I would be vegetative. The doctors told my mother, “The best hope, realistically, is that he’ll be able to feed himself someday.” I had to learn how to think again, remix the pathways in my brain. It was the hardest thing I’ve ever done. About six months after the accident, I asked my neurologist if I was ever going to be 100 per cent. He said, “Yes, you will. But a different 100 per cent.” That will ring in my ears forever.

I went back to work in March 2010. At the time, I wasn’t sure the business would survive. Before the accident, our revenue had fallen 90 per cent because of the recession. My team had tried to keep the extent of my injuries secret from the venture capitalists, who had invested $40 million in us. Thank goodness, Peter Barris, managing partner of New Enterprise Associates, our largest investor, said he had faith I would recover and stuck with us.

I was worried about coming back. I knew my brain was working at about three-quarters speed, and as a pilot, I know you don’t want to fly an airplane when you’re at three-quarters of your potential. I had this dynamic young company and I was moving around with a cane. At the time, my brain needed 18 hours of sleep a day, so I would go in at 10am and leave at 2pm. But I had to give the employees reassurance. They had stuck with the company when they could have gone off and found better jobs. I was not going to scare them by walking into a meeting and slobbering. Because my brain got rewired, I am now able to focus on things more obsessively. In June 2010, I came up with a big idea for our next-generation product. It’s very complex. When I did that, I thought, OK, I’m fine with the new 100 per cent. I am completely back now, though I can no longer go to a cocktail party and later recall the names of all 30 people I met there. I rode my bike 4,000 miles in the last year. I exercise an hour-and-a-half a day. Our revenues have doubled. My VP of sales still tears up sometimes. I just say, “Stop crying, and go sell something.” Life is either a hell of a ride or a ride to hell. I’m done with the ride to hell.

—As told to Leigh Buchanan

4 2 | INC. | august 2011

So. Much.

Money.

Drew Houston is the co-founder of the cloud-based file storage service Dropbox, which recently signed up its 25 millionth user.

In September 2007, my partner, Arash Ferdowsi, and I learnt that we had gotten a meeting with Sequoia Capital. We were reluctant. We were only looking for a few hundred thousand dollars. And we were intimidated—it was like applying to Harvard.

On a Friday afternoon, we walked into the Sequoia offices and on the walls were the original stock certificates of Apple and Cisco. It was daunting. I was thinking, Holy shit, I’m just some kid. What the hell am I doing here?

We walked through the pitch, shook hands and went home. The next day, legendary investor Michael Moritz came to our apartment and we pitched to him. My only regret is that I didn’t get to see whatever kind of hovercraft he arrived in.

On Monday, we were invited to dinner with another investor, Sameer Gandhi, and it was time to talk numbers. We came to terms that made sense, and that was the green light. It was surreal.

We got an e-mail a few days later from Sequoia, requesting instructions for the wire transfer. Arash and I just looked at each other. We thought, It’d be really embarrassing if we started—or quickended—this relationship by not even knowing how to get the million dollars into our bank account.

We went to Bank of America, and when we walked in, there were the tellers, and there were the people in the leather seats.

We looked at each other and said, “Yeah, this is probably a leather-seat problem.”

We went over to this woman and sat down.

She asked, “How can I help you?”

“Well, is there a limit to how much money a bank account can hold?” I asked.

She asked, “What do you mean?”

“Can it hold a million dollars?” I asked.

“Um, yeah,” she said.

It’s hard to describe the feeling of looking at your checking account online and continuously hitting Refresh, watching the balance increase from $60 to $1.2 million.

You really have $1.2 million. And now it’s up to you to figure out how to use it.

—As told to J.J. McCorvey

Niklas Hed

Rovio Mobile

It’s a little intimidating Niklas Hed is co-founder of Rovio Mobile, the Finnish company behind the hit smartphone app Angry Birds. The game released in December 2009 has been downloaded more than 200 million times.

In May of last year Angry Birds finally became the best-selling app in the United States. Slash from Guns N’ Roses later tweeted, “Angry Birds is like a drug, only cheaper.” I listened to their music a lot as a kid, so I thought, If he says that, now I actually believe it.

I was very positive that the game was able to do what it did, but I was nervous and felt we needed to keep this going and not lose the pace. I’ve become paranoid in a way. How do we keep it fresh? What is the next move? How do we stay No. 1?

I feel like we are walking and we should be running. Every day I’m thinking, where are our weaknesses? One by illustration by Shigil N

one, we are taking steps to tackle those.

And those steps I would like to take faster. The appetite is growing as we are moving forward.

When we released Angry Birds, we started getting fan mail saying, “I love the game, but please, please, please, make more levels.” So one of the first objectives was to make more levels.

And they started complaining again to make more levels. We kept getting the same message. We had about 60 levels when we first released it.

Now we have, like, 300.

If you like something, and it’s all the same all the time, you will get bored.

We try to keep coming up with fresh new content in different forms. It might be a different game or it might be a movie.

If there is an update coming out, we think about what kind of toys we should have to include with that. We have loads of ideas for other characters, but the existing ones want to be in the spotlight.

Angry Birds is going to be on every platform out there.

I’m not getting comfortable. I know how fragile the gaming business is. On one day you can be No. 1 and the second day, you’re gone. There were a few times that we lost the No. 1 position, and I have to admit, I don’t like that. At all. —J.J.M. august 2011 | INC. | 4 3

Garrett Camp

StumbleUpon

So I bought the company back Robert Croak

I just about lost my mind. Those were the days

Brainchild Products

Robert Croak founded Brainchild Products in 2003. In 2006, the Toledo, Ohio–based company started a national fashion phenomenon with the introduction of colorful, shaped rubber-band bracelets called Silly Bandz.

It’s funny. Everyone wants to take people like me and say, “That guy got lucky.”

In reality, it took 20 years to get where I am today.

It all started when I was 23 and took over my grandparents’ restaurant.

During the ’90s, I opened two more. I also started a concert promotion company and a custom apparel company and had some minor success selling custom silicone bracelets online. I always believed I’d have that one big hit, because I had so much going on. But nothing ever really took off. I remember my mom saying once, “I don’t understand why you don’t just go get a job.” I said, “Mom, people like me don’t just get jobs.” I’d been working for myself for so many years, it’d be odd to punch a clock.

Then the lid blew off. I went to a trade show in China around 2006 and saw shaped rubber bands created by a Japanese designer. Months later, the idea came to me to make them bigger, thicker, and more detailed. So Silly Bandz was born.

It was an insane few years. At our peak in 2008 we were selling more than a million packs of Silly Bandz a week. We had people driving to our offices from Alabama, Indiana or Kentucky, you name it, because they couldn’t get through on the phone and they needed Silly Bandz for their stores. One day, we were so overwhelmed with shipments and phone calls, we ran an ad on Facebook saying if anyone was looking for work, we’d hire them on the spot.

We had a line down the sidewalk. Our warehouse was full, so we set up tables outside the building and had people packing orders right there.

Every day presented a new challenge, but every challenge was a great one. Out of necessity, I moved into a loft above my office and at one point three of my managers were living there with me. But it’s nothing you can complain about. When your company goes from obscurity to national news, it’s a good problem to have.

Silly Bandz put me in a category of wealth that most people have never imagined. But I’ve been cautious. You hear stories of people who hit the lottery and go broke a year later. I want to take this wealth and create more success.

Our US sales started to slow during the summer of 2010 and we expected it. The craze in the United States is over and that doesn’t offend me at all.

That’s why we’re so vigorous about adding new products to go with the brand.

Once you’ve had a big hit, it seems people are willing to give you more chances, because they think maybe, just maybe, your luck will strike twice.

—As told to Issie Lapowsky

4 4 | INC. | august 2011

For years Garrett Camp ran StumbleUpon, a service for discovering and sharing webpages, part time, while finishing his Master’s thesis at the University of Calgary. In 2007, within a year of moving the company to San Francisco, he sold it to eBay. In 2009, he organised an investor group to buy the company back.

At eBay I had a boss, but I still managed all the product engineering. The day-today flow really wasn’t that different. But we weren’t getting the same people to apply to join. We were seeing people who were looking for a conservative, stable job rather than something with a little more risk and a lot of upside.

The lack of flexibility was the biggest issue. At one point, we had to hire a database administrator, and they said, “Oh, there’s a hiring freeze.” And I was like, “Sure, eBay has a hiring freeze, but how can you stop us from hiring the one critical position we need to keep the site running?”

I started thinking about a spinout in the summer of 2008. I talked to my boss and he talked to other executives at eBay. I also contacted one of my old investors, Ram Shriram, who talked to people he knew on eBay’s board. Because we were part of a public company, we had to be discreet.

The spinout was a complicated negotiation. It took six months of discussions and then several months to find investors. I’d never really made the rounds of Sand Hill Road before. I’d had a lot of casual meetings with investors but with the spinout, I actually had to give presentations and say why StumbleUpon was a good investment.

Once we became independent again, in April 2009, there was just a sense of energy and excitement. The spinout basically reset us to a start-up. We had years of experience and a lot of scale, yet we were a brand-new company. All of a sudden, we were able to attract great candidates. Within nine months, we were on full throttle. When we left eBay, we had 300 million stumbles (page recommendations) per month. Now we have over 1 billion. We’ve released new mobile applications and relaunched our ad system. Our agility and nimbleness are a lot higher, because we have a lot more people who really want to make something cool and have a big impact. —A.J.

how i did it

Corey Russ

Combat Medical Systems

It was like a war zone— in my hometown Corey Russ is a former combat medic for the US Army Special Forces.

In 2008, he founded Combat Medical Systems, which sells and develops medical supplies for the military.

On the afternoon of April 16, I was at the Verizon store about six miles from my company’s office in Fayetteville, North Carolina. When the customer rep put the battery in my new Droid, I got a call from ADT Security Systems informing me that our store windows had been broken. It was a Saturday and we were closed, so I was worried it was some kind of break-in.

I hopped in my truck and drove toward the office. As I got closer, I could see trees ripped from the ground, business signs knocked down and fallen telephone poles in the street. That’s when I realised it wasn’t a burglary that had occurred. It was a tornado. illustration by Shigil N

I parked on the side of the street and started running toward the office, a few hundred yards away. All I could see was mayhem. Every other building was missing its roof. There was a large apartment complex right behind us, so there were hundreds of people running around the area, digging through the rubble, checking for others.

There were cars in the parking lot with all the windows smashed and debris was everywhere. I’ve been in all kinds of combat situations in Iraq and Afghanistan. This had the same feel of when a truck bomb goes off and you’re left dealing with a crisis site. The difference here was that no one’s actively trying to kill you at the same time.

I ran into our office and saw that all the windows were shattered and the medical products in our showroom were knocked over and blown around. Glass and tree limbs were strewn all over the floor. The wall we shared with the framing store next door had fallen down. In the restaurant on our other side, I could see some Army medics from the nearby military base, Fort Bragg, helping an older woman. I went over and saw her lying on the floor speaking incoherently. We checked her for injuries and it seemed as if she had a broken back and pelvis. The medics were about to put her on this improvised stretcher made of two plywood planks and a bed sheet, and I yelled to them, “Wait a second. I have a medical store right next door!”

The roof of the building was ripped off, so it was raining on us inside the building while we were trying to treat her.

A few of the soldiers ran over to the office with me and I started handing them things they could use. I found myself distributing medical kits and supplies to more and more people as they realised the store was there.

There were people running around with lacerations from all the glass, so I handed out these bandages we make with a hemostatic agent to help stop the bleeding. We ended up with six stretcher patients in our parking lot, some with broken limbs. We put them on some old pickup trucks and the medics drove them to where the ambulances were.

There was a bizarre feeling, because every guy there had experienced all kinds of craziness in combat and handled the situation well. So on one hand it was very dramatic, and on the other it was kind of calm.

Just the day before, as I was leaving work, I said to my office manager, “I feel like things are really shaping up for us.”

Then this tornado comes along. It wasn’t a decapitating deal, but it was a pretty good kick in the jimmies. We moved operations into our warehouse a few miles away and worked on plastic card tables for about three weeks. Since we were renting our office, there weren’t a lot of business losses, but we spent about $150,000 getting moved quickly and getting new IT equipment set up. It was a fairly smooth process, because there was a small fire at the restaurant about a year before, which caused us to think about disaster scenarios.

I’m embarrassed to say I haven’t followed up with the people I helped, but I’m thankful and amazed that we didn’t have any fatalities in our area. I mean, some of these houses were literally lifted from their foundations. The whole ordeal made me realise that as a businessowner, you need to be prepared for anything on any given day. —J.J.M. august 2011 | INC. | 4 5

Jeffrey Hollender

Seventh Generation

Really? Fired from the company I started?

In 1988, Jeffrey Hollender co-founded Seventh Generation, a Burlington, Vermont–based manufacturer of eco-friendly household products. He stepped down as CEO of the $150 million company in 2009 but remained on the board of directors and became the company’s so-called chief inspired protagonist. In October of last year, he was fired.

It was a Saturday. I was at home with my wife and I got a phone call from Seventh Generation’s board of directors. They put me on an indefinite leave of absence and removed me from the board. It wasn’t drawn out. It was short and sweet. Well, it was short.

I was shocked. I wasn’t even allowed to go back to the office to say goodbye.

Seventh Generation was my identity and getting fired was like having my identity stolen away from me.

As quickly as we could, my wife and I went to Italy for a week, first to Rome and then to the coast just west of Rome. My plan was to collect seashells for a year, but I’m not good at just hanging out. When I got home, I didn’t spend a single day in bed. I probably read more, exercised more, and meditated more than I ever have.

I was getting hundreds of e-mails from people wanting to know what happened and if I was OK. Most people couldn’t understand how I got thrown out of my own company. They didn’t know that as we raised more equity, I became a minority owner. After that, there were always tensions between social mission and making money, and there’s no question the decision to fire me meant the board was choosing the direction the new CEO was headed in over what I was recommending.

I said nothing publicly for four months. I needed time to think about what I wanted to say. I was shocked. I was bitter. I was angry and I didn’t want to speak out of anger.

At first, I could see no good in the situation, but mourning is an interesting process. Every day is a little different. Within a couple weeks, my oldest daughter, Meika, started talking about how this might open up new possibilities for me. I couldn’t see it, but I might spend 15 minutes a day thinking about something positive. After a month, it might be an hour. By the time four months had passed, I was spending more time thinking about exciting opportunities than feeling bad for myself.

This situation forced me to ask myself important questions that I never had to ask in the comfort of a job I had for 23 years. I realised that as excited as I was about Seventh Generation, it didn’t go to the heart of the issues I really cared about. I didn’t co-found Seventh Generation because I was an environmentalist. I was interested in issues of justice and equity; I just couldn’t figure out how to turn those interests into a business. Now, I think I’ve found a way to do that. I’m working on a new company that will invest in and support worker-owned businesses. It’s something I’m as passionate about as I was about Seventh Generation 23 years ago. As painful as it’s been, this whole mess has helped me figure out what I really want to do with the rest of my life.

I never wanted to be a toilet paper salesman, anyway. —I.L.

4 6 | INC. | august 2011

Bethenny Frankel

Skinnygirl Cocktails

Who’s just a housewife now?

Bethenny Frankel rose to stardom as a cast member of Bravo’s Real Housewives of New York.

She then wrote two New York Times bestsellers and launched the Skinnygirl liquor brand, which she recently sold to Beam Global Spirits & Wine for a reported $120 million.

People have always somewhat respected me but kind of brushed off what I wanted to do. To them, I was just a “housewife”. And I wasn’t thrilled with that.

On the show I was on my own and I was broke. I wasn’t buying diamonds and getting facials. The decision to go on reality television was single-handedly a business decision. It was frustrating to constantly be referred to as a “reality star”. I didn’t want to be in magazines about what shoes I was wearing and I didn’t want to just be in the gossip pages. I wanted to be known as an entrepreneur and a business person. It was a strategy from Day One. Everyone told me not to do Real Housewives. Every agent, every lawyer. But I took a gamble. You can’t listen to anyone else. I go with my gut every time.

I came up with the idea for the Skinnygirl Margarita, a low-calorie cocktail, in my kitchen.

I thought everybody wants to have a margarita and nobody wants to feel guilty about it. All the big liquor companies turned me down. Publicists wouldn’t even come with me to the meetings because they didn’t take it seriously. So I would go alone and sit in boardrooms with people who probably just thought I had a silly little idea. They didn’t see what I saw.

There was only one person who did get it, David Kanbar, a liquor industry veteran. He ended up being my partner. We manufactured the product, the bottle, the cap and the design, and got it to the market in less than six months. It exploded. We couldn’t keep up with the demand.

I didn’t want to sell, but Beam was willing to let me be involved. My partner said it would be financially irresponsible not to do it. It was a business decision, not a monetary decision. Once in a while, you see a person who used to treat you like a dog, because you were nobody and they were somebody. You get a little giggle, and you really love it. But it’s more about looking to women and saying, “Look at what you can do.” I took one little acorn of an idea, and when people said, “No, no, no,” I said, “Yes, yes, yes.” I worked hard and I busted my ass the whole way. It’s been a long time coming. —As told to Lindsay Silberman

how i did it

Cal McAllister

Wexley School for Girls

Learning to play it straight. Or, straighter

Cal McAllister is founder and creative director, with Ian Cohen (also founder, also creative director), of Wexley School for Girls, a very non-traditional advertising agency based in Seattle.

Ian is one of my best friends and 85 per cent of the time I know what he’s thinking, and he knows what I’m thinking. But there’s that weird 15 per cent where it’s like, how can this person I know so well think something like that? Those are times we need to talk and in the past we didn’t.

We’re both conflict avoiders. We don’t want to hurt each other’s feelings.

It came to a head in the middle of the recession, when I went down to Atlanta after some new business. The job was an event, like a trade show. It wasn’t the kind of thing most of our people wanted to work on. It wasn’t the kind of thing we started Wexley to do. But at that point, we needed jobs.

Some employees didn’t see that. They asked Ian about it, and because we hadn’t been communicating, he told them, “I don’t know where Cal is or what he’s doing.” What they took from that was, “Cal is down there money grubbing and Ian is up here with us fighting the good fight.” If Ian and I had talked about it, we would have been on the same page, because we both wanted to keep the company going. As it was, I came back all bent out of shape because of these rumblings. I had a oneyear-old at home and I’m trying to keep 22 people employed. It made me want to say, “You know what? Maybe I won’t go get the business. I’ll just go and have picnics every day with my kid, like I want. Let’s see how that goes.”

We thought we were giving the employees clear direction. But one too

many times we heard someone say, “I can’t do my job because Cal wants one thing and Ian wants another.” Like we were this twoheaded monster. We knew we had to stop avoiding conversations. But we were afraid if we tried to talk on our own, we wouldn’t say anything. We would end up talking about Ohio State football. The only way we were going to talk about difficult things was if someone made us. So we contacted a

results were disturbing. People were picking sides. They would say Cal knows what we need to do to keep this place in business, but Ian is less in touch. Or Ian understands what people are feeling, and Cal is this guy who works with the door closed and is so focused on the business that he doesn’t know what is happening right under his nose with the staff.

We had a ton of Millennials—people for whom this was their first job— paired with what could be perceived as erratic bosses. It was not a good mix. The employees were bitching, and the consultants told us, “They have no right to bitch. But they don’t know that, because you’ve never set boundaries or expectations.” We were like the cool parents who let the kids drink beer in the basement.

The consultants helped us define the roles for our senior leadership team. Everything’s not on me and Ian anymore. We also have a system for choosing new business, so there are no more gray areas.

Now when we have something to say to the agency, it always comes from both of us together. And we set expectations for employees, many of whom are new and more seasoned.

We’ve turned over about 40 per cent of the staff.

Our friendship never suffered. Even at the worst of it, we were like, let’s dump this agency and freelance for $10,000 a day, because we work well together when it’s just us. It’s managing everybody else that causes the problems. —L.B.

“The consultants told us, ‘They have no right to bitch, but they don’t know that, because you’ve never set boundaries’.” business consulting firm. Their first question for us was, “Do you guys really want to make this work?” We did, very much. So they put together a package for us. It was expensive: half the cost of a junior employee.

Over the course of a month, the consultants interviewed 20 of our 22 staff people and did one-on-ones with the senior leadership and a triple-blind survey of the whole agency. They were very good at getting generally quiet, happy people to talk about the things that bothered them in the slightest. They did 360 reviews of Ian and me and our managing director. Some of the

august 2011 | INC. | 47

Sam Yagan

OkCupid

Confessions of a former entrepreneur.

(Who, me?)

Sam Yagan started his first company, SparkNotes, as a Harvard senior in 1999 and sold it the next year for $30 million.

In January, he sold his third company, dating website OkCupid, to IAC for $50 million.

We got our first serious offer in September 2010. I never asked for it. Someone said, “Are you interested in selling?” I said, “We’re not for sale, but I’d take a look.” It was in the ballpark, so I called three other potential bidders. Four months later, we agreed to sell to Match.com (a subsidiary of IAC) for $50 million in cash. We felt like it was a chance to give our investors, our employees and us a great return and do right by our customers, since Match agreed not to change anything.

For the other 17 people here at Ok-Cupid, nothing has changed. That’s part of my job. I have a lot more meetings.

I go to Dallas (where Match is based) once a month for two days. I also get to take things off my plate, like finance, HR and legal that were less interesting to me. I like being part of a big company’s executive team. It’s fun to stretch other parts of my brain, considering questions like, how should we think of acquisitions? I get to be privy to things that would never come up at a small company.

Plus, I think this year my wife and I will actually get to go on vacation. But on the other hand—all I know how to do is start companies. What do I say when people ask me what I do? “I work for a big company.”

I mean, a lot of people do. It’s great. But it’s almost like having a sex-change operation. Part of me is like, what’s my identity, if it’s not the company I’m building.

4 8 | INC. | august 2011

My OkCupid co-founders are my best friends. We were in each other’s weddings. The other night, we went out to dinner. We spent half our time bullshitting around and then we started discussing our future. Whether it’s now or in a year or five years, do we want to start another company together? What are people’s goals in life? I can imagine a life where a big paycheck and the cool perks and being part of the executive team of a big company would be great. I’d love to summer in the Hamptons. But I’m still in a building phase. I’m 34 years old. In most jobs your early 30s to early 40s are your power years. So if this is my power

decade, should I be saying this is the time for my big entrepreneurial move? Should I try to build a billion-dollar company?

If I start again, I can now fundraise better, but I still start at Square One. It’s still going to be four guys in a small office with Ikea desks. Part of me is like, is that still appealing? And it is. Life is just a set of experiences. As long as there are new experiences for me in a corporate job, I don’t think I have to be an entrepreneur.

The cool thing about being an entrepreneur is I can guarantee to myself that it’s going to be new, because I’m going to make it so.

—As told to Burt Helm illustration by PC Anoop

how i did it

Pleased to Meet you. Maybe You never know whom you might be paired with on Chatroulette.

Andrey Ternovskiy

Chatroulette

Very hot, very briefly In November 2009, an anonymous solitary entrepreneur hacked together a service that randomly paired up strangers in video chats. The phenomenon, known as Chatroulette, was bizarre, often sexually explicit and always fascinating. Within a matter of months, Chatroulette had tens of thousands of daily users and was a media sensation in the US. What no one knew was that its founder was a 17-year-old video game aficionado named Andrey Ternovskiy, who lived with his parents in Moscow.

A week after we launched, I started getting e-mails from media and investors, but I felt like I couldn’t reply to them. How could I say that Chatroulette was not a company, just somebody in Russia? I thought that if professional businessmen saw what I was, they would just crush me. So I ignored their e-mails. It was like a mouse being chased by a cat. I felt like the mouse.

I didn’t have anybody to talk to. I still don’t. Maybe it’s because I don’t trust people enough. But I don’t think you can ask a businessman his opinion and expect unbiased advice. Everybody wants something from you. That’s the way it works.

In February, I decided to stop being afraid and tell people who I was. It was fun: I just drank a lot of coffee and started replying to e-mails. I gave an interview to The New York Times, and I wrote back to Fred Wilson of Union Square Ventures, who invited me to come to New York. He talked to somebody in the United States embassy, so I didn’t have to wait in line for a visa. It was awesome. I felt like a VIP. I flew to New York and then to Silicon Valley. I met with Fred Wilson, Sean Parker and Accel Partners. I don’t know how much money they would have given me if I’d said yes. Millions, maybe. But I was afraid to take their money. I felt like I was writing a novel. You can’t bring in other authors into a novel. It’s too personal. The only money I’ve taken was $1,000 from my father for servers.

The site is supported by ad revenue.

In the summer our traffic fell in half and the offers from investors decreased by the same proportion. I went back to Russia to get a new visa. Reporters said Chatroulette was dead—that there was too much nudity. That’s cool, I guess. It’s part of the story. If it had all been success, it would have just been boring.

I moved to Palo Alto, California, in December. Chatroulette now has one employee and some contractors. We’re still privately owned by me. I don’t want to tell you how much money we’re making, but it’s enough to cover our costs. I will probably do Chatroulette for the next five years, but I don’t want to limit myself to a chat site. My dream is to have a big company that does lots of interesting stuff.

Sometimes it feels like it wasn’t me who experienced these things. That year was crazy and awesome. It was too good to be true. But I’ve been trying to see how politicians react—they look so cool, as if they don’t care— so I’m trying to be like this. —As told to Max Chafkin

Greg Nemeth

WakeMate

The year of “this can’t be happening” In 2009, Greg Nemeth along with co-founder Arun Gupta dropped out of college to work full-time on a start-up, WakeMate. The company’s eponymous product, a mobile-­connected wristband that would track users’ sleep patterns and wake them up at an optimal time, had already generated buzz on tech blogs, and Nemeth presold thousands of units. He was confident they would be ready for shipping soon. But a series of technical issues delayed the WakeMate’s release for nearly a year.

Right from the beginning, everything that could go wrong, went wrong. We were testing samples from a few overseas manufacturers, to see whose quality was best and we got back things that were just absolutely wrong. One company soldered some of the chips on the circuit boards backward and upside down.

Missing our release date was pretty disheartening. We knew that we were going to have a lot of upset customers on our hands. We thought we’d be able to work through all of our issues pretty quickly, so we could just say that there were some delays and we were working on them. We also promised some new features. That didn’t keep people happy.

They wanted more transparency. When we finally said, “Look, this is what happened.

We bought some parts, and they turned out to be defective. We’re going to need to come up with a workaround,” people were much more understanding. By the end of the process, we were giving them as much information as the employees had.

One day, you feel like you’re going to take over the world; the next day, you feel like you’re going to fail miserably. That is definitely compounded when you have a bunch of customers constantly saying, “Where is this thing?

Does it even exist?” august 2011 | INC. | 49

Demetrius Walker

dN|Be

I think the debacle with the chargers was the worst part. We had finally gotten over the hump of actually getting the product out into people’s hands. Then we received an e-mail from one of our customers: he’d seen his WakeMate spark.

Our first reaction was to alert all customers as quickly as possible that their chargers might be hazardous. We sent out an e-mail to everyone with a link that they had to click to confirm that they had read it and were disposing of their chargers properly. For people who didn’t respond to that e-mail, we text-messaged them and then called them, to let them know what was going on. Within three days, we had reached everybody. Customers obviously weren’t too happy about the possibility of their units catching on fire, but they appreciated the effort that we made to let them know.

Afterward, we did an autopsy on that customer’s device and on a few chargers and saw that there was a faulty soldering

joint. The chargers were putting out a lot more voltage than they were supposed to be. The actual units we got were a lot different from the samples we had tested. It was a lesson: once you buy, you really have to make sure the quality of everything you’re getting is what the manufacturer says it is. The best way to do that is to manufacture everything locally, which is what we’re doing now.

Some people said, “This thing isn’t quite ready for prime time,” which was true. But we’ve been constantly improving it and people have been extremely helpful and responsive. Most of the reviews and the Twitter buzz now are really positive.

We’re happy to be at the point where things are stable and the actual functionality of our product can shine through. — As told to April Joyner

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Not at all what we planned. Which is cool Demetrius Walker founded dN|Be Apparel with six friends from college in 2005. The company’s shirts, featuring messages of black empowerment, became popular with hip-hop fans and have been worn by musicians such as Common and Wyclef Jean. They also drew the attention of Rhymefest, who won a Grammy for co-writing Kanye West’s hit “Jesus Walks”. After leaving his record label in 2009, the rapper approached Walker and his co-founders about starting their own music venture.

One of my business partners, Gary Mavindidze, met Rhymefest in late 2007.

He was performing at a club in Indianapolis. Rhymefest noticed Gary wearing one of our T-shirts. At the time, he was on tour and Gary let him know that we could get him some of our shirts to wear. After that, we built a rapport with him. We knew he was unhappy with his label situation. One day, he said, “Man, it would be great if we just did this all on our own.” We raised $80,000 from our personal accounts and our friends and family and in June 2009 we officially launched dN|Be Entertainment.

All of us are avid hip-hop fans, so it was a natural progression. My dad ran in the same circles as DJ Kool Herc and spun records with him. My uncle’s best friend used to cut hair out of his house and when I got my hair cut, EPMD or Slick Rick might be there. Hip-hop has been infused in me since birth.

It was a major learning curve. There’s a lot that goes into producing a record, mastering it, engineering it, and mixing it, so that it’s ready to be put on an album. Plus, major record labels have million-dollar budgets, while we were on a shoestring budget. But Rhymefest has been in the industry for a while, so he has a lot of contacts. We did a lot of grass-roots marketing and viral video. We were able to get distribution through EMI, which works with all the major labels, so that was a big plus.

I was surprised at how challenging it is to get on the radio. I thought it was just a matter of a DJ liking a song, coming to the station and playing it.

It’s not an organic process at all. Being a new player in the industry is difficult, though we have an established artist. We were able to get satellite radio airplay, but it was very limited, even within Chicago, Rhymefest’s hometown.

But we’re not too disappointed, because many of our followers rarely turn on the radio. They hit YouTube and the hip-hop blogs, where we got a lot of love.

The great thing was that we had figured out how to be really efficient.

Three partners and I handled the entertainment venture, and our other partners focused on the apparel venture. We didn’t skip a beat. If anything, the apparel business became stronger. People who knew about Rhymefest, but didn’t know about dN|Be Apparel, are getting both now.

We know how difficult it is for independent albums to sell, so we just wanted to make our money back and we have. We’ve sold 15,000 records.

There were fans who weren’t able to get their hands on a physical copy, because our shipment was limited, so we probably missed out on some sales. If we put out another record, I’m sure we would do three to four times better, based on everything that we’ve learned.

Rhymefest recently ran for alderman in Chicago and lost by just a few hundred votes, so we haven’t started work on another project yet. There are other hip-hop artists we know well who’ve voiced some interest in working with us. We’re also considering doing a film project. There are so many perspectives that haven’t been taken into account in the world of black film.

To work with somebody we looked up to so much was a dream of ours.

Never in a million years would I have thought that we were going to put out a Rhymefest album. But when you stay dedicated to your mission, the right opportunities will come to you. —A.J.

how i did it

dale Ball

Ball Fabrics

My IPO nightmare Dale Ball started Ball Products in 1984. It became one of the largest manufacturers and sellers of tennis-court products in the U.S., and Ball took the company public in 2003. Less than two years later, the man whose name was on the door was out.

Everybody thinks it’s great when you grow, and it is. But we never slowed down enough to ever get solid. We had really good vendors who were willing to work with us, but still we never really did have enough cash on hand. That is why my son Larry and I decided to go public. We were trying to bring money into the company so that we illustration by PC Anoop

could get solid and then continue to grow. It doesn’t do any good to have a giant company and not make any money. Admittedly, we didn’t know what we were doing. Unfortunately, we had the wrong people take us public. The team of investors that put the money in to take us public didn’t know what they were doing, either.

Shortly after going public, we got in a total disagreement on how to run the company. We just didn’t see eye to eye.

We still had, by a large percentage, voting control of the company. They wanted the stock to go up more, but they didn’t set aside any funds of their own to promote the stock. They wanted us to promote the stock. I told them we run a manufacturing company and that our job was to build the company. I’m not a stock promoter.

Eventually we just became at odds over everything. They didn’t get the results they wanted, we didn’t get the results we wanted, and everyone was terribly unhappy. They threatened to sue, so we gave up voting control strictly to keep the peace, never thinking we would have to let them run the company. It never entered either of our minds that they would come in and fire us and take over the whole company— which they did.

I’d never been fired from anything in my whole life. For someone over 65 to get fired for the first time, from his own company no less, it was quite a shock. They really didn’t know anything about running the company. A year and three days later, they closed their doors. It was bittersweet. We still owned 31 million shares of stock between the two of us, so when it all went under, it was a tremendous financial loss and a big loss emotionally as well.

Two months after getting fired, we started our new company, Ball Fabrics. My other son, Jon, founded it with us. After all those losses, the following year was one of the most rewarding I’ve ever had. The day we opened, 10 of my best employees showed up here instead of over there. We had great support from our customers that allowed us to get the new business going and actually make a profit the first year. It was amazing.

I can tell you one thing, we won’t be taking in any partners this time around. They say you pay for your education regardless of how old you are when you get it. We certainly did there. —As told to Kasey Wehrum august 2011 | INC. | 51

A Strap Hanger’s GuideTo Business Paradise

By Shreyasi Singh

Chandrashekhar Hariharan defies neat introductions. Describing him as the executive chairman of BCIL, a Bengaluru-based builder of eco-friendly homes would be factually correct. But, it would, in no way, capture the sheer range of this gritty entrepreneur’s fascinating life. A chartered accountant by qualification, Hariharan was at one point a financial journalist. He also has a postdoctorate in econometrics, and worked on water and energy conservation in Andhra Pradesh, Gujarat and Uttarakhand for several years. Plus, he’s taken a shot at no less than half-a-dozen business ventures— most of which bombed—including starting a library, a magazine and a photocopier unit.

Today, his 120-crore BCIL, which was founded in 1994, is a leading developer of ecologically sustainable homes. Over seven projects, Hariharan has shown how enterprise and sustainability needn’t be locked into a can’t-be-won battle. BCIL’s homes have pioneered green solutions, using forgotten tradition, knowledge and sophisticated building technology, and survived doing it. That didn’t seem even remotely likely when Hariharan first sketched out a rough business plan on the back of a calendar, in the middle of a night in 1994. But entrepreneurship, he says, is about sticking it out.

“Like a commuter who hangs on to the bus or metro strap, you can’t let go. Just stay there and in an economy like India’s, even if you don’t win big, you’ll certainly move.” He breaks down his often turbulent business journey to give us a unique take on survival.

5 2 | INC. | august 2011

Gutter Credit here

PhotographS by S. Radhakrishna

Brick by Brick Chandrashekhar Hariharan didn’t just want to make a living. He really wanted to live.

august 2011 | INC. | 5 3

A strap Hanger’s guide

3 Make madness

1 Do you have what it takes?

T

hrough the eighties, I did a variety of things. I may have been trained as a chartered accountant but I could never limit myself to doing one thing all my life. In 1985, I was a turf correspondent for the Times of India. One day, I was told by a punter that if I invested 5,000 in the game, he could triple it for me by the end of the day. I needed the money to fund my plans of launching a new magazine on horse racing, Turf Talk. I borrowed some money to give the punter. But, I lost the entire amount. Despite the setback, I was determined to make a go at business. I was clear that I didn’t want to work for a living. Merely making a living wastes too much time. I wanted to blur the lines between “living” and “making a living”. Sadly, my ventures would never take off like the photocopier unit I set up with another chartered accountant in 1982, or the lending library. Around that time, I remember reading something that has clung on to me ever since. In an article on entrepreneurs, a little box item emphasised the question, “Do you have what it takes?” I’ve always felt the line was mocking me. For decades, I’ve worked to prove it wrong.

2 You can’t change the world.

Reset your expectations and have realisable dreams

B

y the mid-nineties, after working for several years in Uttaranchal on forestation of watershed areas and ecological preservation, I realised I can’t change the world. The need was to make a demonstrable model that could, in turn, inspire change. We were dreamers definitely. But we were pragmatic enough to know that dreams must be realisable. Ecologically, there were two areas screaming for attention—one was the core ecosystem of biodiversity in our hills and rural areas, and the other was our growing cities that consumed nearly everything from timber to minerals. In rural areas, projects were driven by donor funds and government schemes. I wanted BCIL to exist in the real market. When you are accountable to the consumer and they benefit from your product, that’s sustainability. This could only be done in the cities where people had money. We wanted to offer solutions to city folks who shared our need for reducing the abuse of natural resources even as they stayed in comfortable, lovely homes.

5 4 | INC. | august 2011

and sheer obstinacy your best friends

W

hen we started out in 1994, people wondered why we named the company Biodiversity Conservation India. Many warned me that it would be difficult to connect with home-buyers. But, we were not your regular builders. We wanted to create a community of families who would inspire a new lifestyle that would focus on conserving.

So we stuck to our name. We were confident that the deeper value of conservation will be served effectively over a long period with a name that focused on this core mission. Still sales calls for our first project, Trans Indus, located on the outskirts of Bengaluru would often draw a blank. We would wonder why the world couldn’t see what was obvious— that we couldn’t continue to consume resources like this. But this was early 1995, way before global warming was a concern.

We told our customers our homes will reduce, if not totally eliminate, dependence on the city grid for water and electricity. We had master-planned an elaborate system for

“In the early years, I used to delegate tasks, not ideas. I micro-managed.

Today I can see how foolish I was.”

—Chandrashekhar Hariharan

A strap Hanger’s guide

enhancing groundwater retention, installed a biogas digester that supplied 20KW of power.

Our waste water was to be treated, and our swimming pool would be chlorine-free, and not use ceramic tiles. But nobody looked or cared for those things then.

In 1998, we very nearly shut down. In three years, we had managed to sell only five homes. Things were at a crawl. In fact, there was one day where we asked all our 21 employees to leave. Salaries were not paid for many months. We told them honestly we would help them find jobs but we couldn’t afford them anymore. Two of these people came back a month later and said they wanted to continue working despite these issues. We rode on this optimism and slowly overcame the bad patch. Actually, in those days, we didn’t have anything much except this bravado. My team and I had a few years of experience in alternate energy systems, watershed management practices and sustainable architecture because of the work I did in Uttaranchal. But our people were mostly from the development sector. There was little experience of the demands of an enterprise. All that I’d learnt from my earlier ventures was not how to successfully run businesses, but how to successfully close them! It took us five years, or till 2000, to sell all the 60-plus homes in the Trans Indus project. In fact, till 2002 we were essentially an NGO-turned-enterprise. We did only three projects during that time.

4 You can’t do it alone. you’ll

T

often be lonely

he first three years were full of pain. Everything was a challenge—customers, finances, sales. I especially didn’t know how to on-board professionals. There was a lot of people movement in the initial years. None of us are our best when chips are down. As an entrepreneur, I was essentially the backroom boy who was just taking care of the market. In my anxiety, I didn’t outline our objectives. I would delegate tasks, not ideas. I micro-managed. Today, I can see how foolish I was.

The middle layer was not professionalised even as late as the mid-2000s. If you are the visionary, you have to have professionals who know how to convert that vision into a process and execute it. But this isn’t easy. There are so many variables in a small business—how can you pay well if you are down, how can you get revenue till you complete projects, how do you complete projects till you sell? It’s a vicious cycle. An outsider doesn’t understand this. Unlike an entrepreneur, a professional doesn’t want to battle uncertainties. Sometimes an entrepreneur is forced not to be transparent. In 2004, we took on a project seven times larger than anything we had done before. I knew by then that without scale, we would never attract professional talent. Today, our team is 230-people strong and we have some incredible architects, designers and conservationists.

5 Don’t get stuck being

W

you. Evolve

hen the organisation moves into a rhythm, an entrepreneur must let go. All he should ask for the vision to get nurtured and protected. The trouble with many of us is that we either grow too fond of the organisation we have created, or we don’t seek an identity outside of the company we’ve built. It’s like you dreading the moment when your daughter will move away from home. You know it is time, but you refuse to relent.

After 16 years of running the organisation, I am slowly coming to terms with this. I am learning to step back. All I do is urge my senior colleagues to internalise the core environmental values of the company. But I let them bring process maturity and delivery effectiveness. I don’t want to stand in the way of our ambitions to scale up. Today, that finally looks possible.

With a project value base that is close to 250 crore, BCIL is ready to enter the big league. We want to build 20 million sq feet of homes by 2020. We want to lead the industry with our model of energy efficiency, that is far beyond what is seen even globally. We’ve built an enviable track record in the last decade. BCIL has got awards from the most distinguished jury panels in the world. The mainstream building industry will take about eight years to catch up with us. I’m being conservative, my colleagues say. They think the competition will easily take over a decade. august 2011 | INC. | 5 5

The Success Way Manek Daruvala often tells his students—what doesn’t kill you makes you stronger.

HOW I DID IT

Manek N. Daruvala Self-Taught Manek N. Daruvala never saw himself as a businessman.

When he took up tutoring as a part-time job though, he was forced to think otherwise. Not only did he instinctively take to teaching, he quickly realised that the coaching business was a lucrative idea.

Today, Triumphant Institute of Management (T.I.M.E), his Hyderabad-based coaching institute has grown into a 188 crore company. Still, Daruvala makes sure he has time for his real business— teaching students.

as told to sunaina sehgal IMAGING BY Binesh Sreedharan

I don’t come from a family of entrepreneurs though my dad did manage a medical store. But, I didn’t spend time in the shop learning the ropes, as they say.

As a boy, I never imagined I’d run a company one day. I studied in a small school in Devlali near Nasik. I was a good student. My future was well mapped out. After school, I pursued my BSc in chemistry from Bombay University. I topped there. I also got admission into IIM, Ahmedabad. I knew I’d finish my studies and start working.

I wasn’t passionate about business management. I did an MBA because by then there was quite a buzz around it. Everyone was talking about it. So, I decided to join the bandwagon. Even during the course, I never even once thought of running a business.

Right after IIM, I worked for Godrej and then Boyce. I was part of the firm’s marketing and sales division for five years. It was in my job that I first started thinking about doing something of my own.

Godrej was paying me 8,000. It was a decent salary but I was struggling. I had to repay my student loan and support my parents financially. I ended up having to look for part-time jobs. I saw teaching as a viable option. Soon, I was tutoring college students. Over time I realised that the effort and energy spent on my regular job could be synergised into something more meaningful like a coaching centre.

It might not have been apparent to even me at first. But, I am ambi-

tious. Extra money has always been welcome. The yeh dil maange

AUGUST 2011 | INC. | 5 7

how i did it

more feeling was always there. Since I was dabbling with education already, I figured it’d be the right sector for me to begin in.

I didn’t have a plan to start with nor did I

extensively research the market. I did some basic study on the courses and curriculum I should make available. There were no concrete, fancy business plans.

I roped in a former colleague of mine from Godrej, P. Viswanath, and together we decided to start Triumphant Institute of Management Education (T.I.M.E.) in 1992 in Hyderabad.

With a plan in place, I quit Godrej. But I

didn’t stop working altogether. I joined VJ Info Systems, Hyderabad as its head of education and training division. I thought it was important to understand the education sector. This was in 1991. During the interview, I was frank with them. I told my bosses at VJ that I’d like to start my own outfit sometime and couldn’t commit to a long tenure with them. They welcomed my honesty and let me come on board.

We realised that a steady input of resource was a must for a start-up. So while Viswanath quit Godrej, I continued to work for another year. Together we pooled in 16,000, borrowed 8,000 and rented out a 150 sq ft office.

We pegged our firm as a training institution for the all-India Common Admission Test (CAT), conducted by the IIMs. Since we both had jobs, we would take

classes in the morning before work— 6.30am to 8.30am—and in the evenings after work—6pm to 8pm. It wasn’t easy to get that first student. There were several similar local outfits mushrooming everywhere. Although there were some big brands nationally like Brilliant Tutorials in Bengaluru and IMS in Mumbai through the 1980s, Hyderabad didn’t have a brand in coaching.

I still vividly remember our first student

inquiry. He was happy with the course, structure, the teaching method. But he wanted to know how many students we

5 8 | INC. | AUGUST 2011

“Sooner or later, people get to know when you bluff. To succeed, one should under-commit and over-deliver.” had signed up already. I didn’t have a figure, so I spoke the truth—zero. He looked a little worried but he still enrolled.

Throughout my life, I maintained we’ll speak the truth. Sooner or later, people get to know when you bluff. To succeed, one should under-commit and over-deliver. That has worked well for us. When we started, we promised to devote six hours to the classes but ended up giving eight. It built great wordof-mouth for us.

However, not everything went smoothly. The

first year we had 62 students. The next CAT season we had 180. The numbers looked bleak but by the end of our third year, we suddenly grew to 500 students.

Soon Viswanath and I were heading the com-

pany full-time as well as teaching. We didn’t have any employees and used to sort out the study material ourselves. It didn’t matter that we were overworked. I loved teaching young people. I strongly recommend it to everybody. It also helped that we were young ourselves. I was 29 and most of our students were in their early 20s. We had a great rapport. I was more like a confidant, less like a teacher.

Over the years I’ve become a bit obsessive about teaching. I can’t completely give it up though I’ve reconciled myself to the fact that I can’t be as involved as before. I still teach at the Hyderabad and Delhi centres. Why shouldn’t I? It’s now a part of me.

As T.I.M.E. grew, we began focusing on qual-

ity faculty. We hired an IIM graduate. Unfortunately, our students didn’t enjoy his method and we had to let him go. This was one lesson learnt the hard way. The students almost

ousted him. We realised that no matter how educated our faculty is teaching remains an art. It needed to be learnt. This is when we decided to train our faculty.

We consciously aim at building and develop-

ing every resource we hire. Each faculty member is especially trained in all the subjects they are expected to teach. It’s a continuous process. We also give a post-orientation demo where a faculty member has to take inhouse classes on a topic of their choice. Our training has helped us stay ahead of the rest.

Today we have 205 centres in 108 towns.

To be honest, numbers, however attractive, are never indicators of quality. Once we had to close down a centre in Indore. It was a heart-wrenching experience. But it had to be done. It wasn’t that our business model wasn’t working and we wouldn’t make money. We just weren’t getting the right quality of students and faculty.

As they say, what does not kill you makes you stronger. I’m a person who likes to challenge himself. I believe that if one office is shut, I’ll start five more that are better than before. I never give up.

Today, we have a pan-India presence. Over 50 IIT and IIM graduates in our core team.

We’ve grown significantly in revenue. We’ve introduced new programmes like the “foundation programme” which tutors young students from Classes VII to X on basic mathematics, physics and chemistry. We’ve also forayed into the preparatory school space with T.I.M.E. Kids. We have 50 such centres.

Yet, I don’t feel that I’ve “made it”. I wish I

never do. I want to enjoy my journey.

Managing Pick a cause, rope in your employees and be a conscious corporate citizen. Employee volunteering definitely leads to multiple bottomlines page 59 Elevator Pitch Nitin Bhat wants to raise 2 crore for his online watch store. Will investors agree he’s in the right business, and at the right time? page 62 The Way I Work Anil Kumar likes leaving business plans behind. Being tied to a vision can be limiting, says this Hyderabad-based entrepreneur. page 64

Sales & Marketing How Holo Cube can make itself a great buy? page 61

strategy

Managing Employee volunteering A heady cocktail that’s good for you illustration by Shigil N

Many people find it a mere window dressing and say it’s an easy gimmick to up your brand image. There are several arguments around corporate social responsibility (CSR). But companies are well-advised to really make an effort.

CSR doesn’t have to be an eyewash.

A good CSR initiative is a smart way for a company to show off its ethics and establish its value system.

AUGUST 2011 | INC. | 5 9

strategy

Bring employees into this mix and it skill set to really benefit the not-profit becomes a potent tool for a company to or community organisation they are get forces together. Which is why, more working with. and more employers are devising smart “A company’s board members can be programmes to do this. Several compavaluable in mentoring an NGO. Other nies have extended CSR to include employees can participate in group activi“employer supported volunteering” (ESV) ties,” says Shalabh Sahai, co-founder and or “employee volunteering”. director, of iVolunteer, an organisation It’s an upgraded, smarter version of that helps facilitate partnerships between CSR. In ESV, a company integrates its corporates and non-profits. employees and the community through Kakkar roots for such initiatives. “Nonin-house initiatives. It’s a three-way partgovernment organisations don’t just need nership where everybody benefits— the money. Often, they don’t have enough employer, the employees and the commu- hands. They need people who can do field nity (schools, NGOs, individuals, etc). work, who are involved and who can conThe volunteering can come in many tribute by using their professional skills.” hues—sometimes as simple as collectHarish Bijoor, a well-known brand ing financial aid from employees and strategist says companies shouldn’t stop donating it to an NGO. But, it leads to at merely facilitating employee involvemultiple benefits including a more ment. Smart bosses should actively bonded work environment when encourage it, in fact. employees actually get their hands on “Doing so leads to an energetic, fulboard by becoming volunteers. filled work environment. That is a huge “A volunteer is somebody who uses his plus for any organisation,” says Bijoor. time, skill and knowledge to enhance a Pune-based Persistent System, a leadcause; benefiting another human life ing information technology services without expecting a return,” says Renu company, certainly benefited from doing Kakkar, vice president, technology and this. Its in-house initiative, Semi-Colon, corporate communications, Apeejay Sur- not only encouraged software programrendra Group. Anything to do with the mers to bond as a community, it also community becomes a helped the company part of the CSR procontribute positively to gramme for a comthe society around it.

It works like this: pany, explains Kakkar.

Programmers were 1 When the internal practices She pinpoints a key split into teams. Each and policies in a firm are difference. “Anybody team drafted a software conducive to the employee and can be a volunteer on programme or solution the environment his own. He can idento tackle a variety of 2 When an organisation decides tify a cause that speaks issues—such as an emerto support a charity or a trust to him and use his gency response systems by giving them donations skills to make a differin case of a calamity that ence. But, real could be used by munic3 Employee volunteering: where employee volunteering ipal authorities. people are engaged to make a difference happens when his The software develemployer steps in to oped was auctioned for Overcome the create those avenues for hitches: charity and the comhim,” she adds. pany raised about 3.3 1 Employees will not get lakh, which it donated.

While devising distracted from being goaloriented achievers. A fulfilled The event was a huge their volunteering team is likely to work harder, success. It was the comprogrammes, comapin fact pany’s way to show it nies should try and cared about its promake sure they use an 2 Yes, it takes some money and grammers—the compaemployee’s specialised effort. But, it’s worth a try 6 0 | INC. | AUGUST 2011

ny’s life force—and also show itself to be a conscious corporate citizen. “Programmers aren’t considered to be at a par with IT managers. We know that isn’t true.

Programmers are the heart and soul of this industry,” says Dr Anand Deshpande, founder CEO and MD of Persistent Systems.

Many of those who participated are still basking in the glow. Laveena Bhora, the company’s training manager, and captain of the winning Gurukul Team, pitches in enthusiastically. “Of course, winning felt great. But what truly excited us was that we were participating and contributing to a noble cause.”

It’s this “feel good” factor that Apeejay Surrendra Group has used to create a new HR policy called Individual Social Responsibility (ISR). Employees can volunteer during office hours. At the end of the year, these efforts are included in the overall performance appraisal.

“It’s a great way to stand out, to demonstrate leadership skills, team work and problem solving ability. Merely being cooped up in an office doesn’t always bring those qualities out,” says Kakkar. iVolunteer’s Sahai agrees. “Working for a cause with new people in unique environments brings on new skills. It’s a great platform to learn human resource management,” adds Sahai.

Apeejay Surendra Group has also introduced an annual award to honour individuals, companies and not-for-profit organisations that are leading best practices in employee engagement programmes.

To many business owners, some of these ideas might seem tough to implement or difficult to design. Still, Bijoor asserts that every smart company must give employee volunteering a serious shot.

“It creates a positive brand image, strengthens trust and loyalty among consumers; enhances corporate image and reputation; increases employee productivity and loyalty, and provides an effective vehicle to reach strategic goals.

These happy positive strokes are not immediately quantifiable on a balance sheet but they are there,” he asserts.

—Sunaina Sehgal

strategy

Sales & Marketing The 3D store-display hero Can visibility bring in more takers?

How would you sell that?

Two decades of working as a film branding and product launch specialist for Hindustan

Lever and Maruti Suzuki, and Anan Chanakyan finally felt the seven-year itch. The former “brand-master” turned entrepreneur with his firm Omerta, which dealt with Holo Cubes. For those uninitiated Holo Cube is a Portugese projection technique-cum-visual merchandising system and a myth-buster—it breaks the notion that you need special glasses for 3D vision. This display system allows 3D images and videos to be projected through a transparent medium and gives an observer a 360-degree view of any item. It can be customised to work with audio units and to facilitate interactive displays. Despite being one-of-akind hero, especially in India, Holo Cube’s been slow to gain fans. Its biggest admirer though, is not losing faith.

After selling off 26 pieces at an impressive price tag of 2.8 lakh each, Chanakyan feels confident that the showroom owners working in the niche markets of jewellery and watches will queue up for Holo Cube’s help. We roped in four experts to show us a clearer picture.—Charu Bahri pitch no. 3: Explore other uses Balaji Natarajan, head, visual merchandising, Tanishq Before displaying an interactive tool to a conservative set of audience, pitch the product as a useful tool which creates customer experience zones and retail space movement.

Via the HoloCube, a retailer can show an exploded view of an assembled or layered product!

Jewellery stores can use it to educate younger audiences about stones, light reflection and refraction, etc. It can be extended to other establishments—hospitals, colleges and cinnema—that can use it is an educational tool.

pitch no. 1: Helps in sale Saloni Nangia, senior vice president, retail and consumer products, Technopak Holo Cube is certainly a very interesting concept and product.

One way to promote it could be to add an ability to individualise the image projection. By doing this, Holo Cube could become a way for consumers to try on new clothes, accessories or footwear, and then check out their 3D image. The interactive display could be a way to sell high-end labels, and help in increasing sales.

pitch no. 2: Pay-per-use Anaggh A. Desai, CEO, The Bombay Store This is a classic chicken and egg situation. What Chanakyan needs to do, is widen the niche segment and include lifestyle stores, besides jewellery and watch showrooms. Another alternative is to initiate “pay-per-use” or a rental system. Retailers would be willing to test Holo Cube out at 10 to 15 per cent of the cost to see how it works. It will lead to greater awareness of the product. Holo Cube’s got potential—it just needs a little innovative push.

The 360-degree Wonder Can Holo Cube hold customers’ attention?

Feedback on the Feedback From our entire team, a hearty thank you. So many great ideas coming at the right time. Six months into the launch, we’ve acquired a basic understanding of the market. We’re now ready to go the whole hog. So far, the challenge has been in trying to reach the right people. But we’ve heard you all and will be applying your ideas. Hopefully, we will be able to overcome the challenge and connect with more visual merchandise specialists.

pitch no. 4: Take retail route Paul Ancheta, vice president, head, visual merchandising, Globus Stores Chanakyan should use events organised by Retail Association of India to spread the word. Either go in as a speaker or exhibit Holo Cube. He should target the entire retail segment. After all, mall and shop owners in Gurgaon and Saket are making significant investments to attract a higher footfall.

And these aren’t even your so-called high-end retailers.

Chanakyan could also look at the possibility of introducing a lowerend version of the product to target a wider audience.

AUGUST 2011 | INC. | 61

The Right Time

6 2 | INC. | august 2011

Gutter Credit here

Will 2 crore help Nitin Bhat take his company to a fresh start?

Photograph by Subhojit paul

strategy

Founder:

Nitin Bhat Company:

Elevator Pitch TheWatchShop.in e-tails branded wristwatches.

Will 2 crore help in its timely growth?

TheWatchShop Launched:

August 2008 Location:

Delhi

Employees:

3

Registered users:

20,000

Revenue in 2009-10:

70 lakh

Revenue estimated in 2011-12:

The Pitch “Everyone needs a good wristwatch—from a trendy college stu-

dent to a corporate honcho. We bring to our customers the luxury of buying coveted time-pieces from the comfort of their homes. It’s a one-stop store for people’s favourite watch brands. What’s more you can buy luxury watches in EMIs at zero per cent interest with Citibank and HDFC cards. Because we don’t have retail overheads like store staff and rentals, we can pass on great discounts to our buyers. I’m sure growth will be manifold once we can fund a marketing strategy. The e-commerce industry is currently pegged at 46,000 crore and is growing at a rate of 47 per cent. In particular, the e-tailing space is worth 2,700 crore. Those are very positive numbers for TheWatchShop.in to play with, and bank on for growth.”—As told to Sunaina Sehgal

1.5 crore

Funding sought:

2 crore

Funds will be used for: Building a team,

branding, setting up the supply chain and warehousing infrastructure

Clients: Hamilton, Kenneth Cole, Guess, Casio, Esprit, Pierre Cardin

Gutter Credit here

Plans for the future: Increase

portfolio of watch brands, and add complementary product categories like eyewear, handbags and perfumes

Investors Weigh In Avoid legal hassles

Target frequent needs

Stick to known brands

It needs to be clearer how the 2 crore will be used. The sales progression must be projected.

Gross and net margins are crucial in this business. As the business scales up, issues relating to warranties and watch conditions will crop up. It’s well known that other than the fashion brands, most global names expressly forbid online watch sales. So he should ensure he’s got brand permission to sell online. The plan to have a shop (a physical presence) may be considered.

It’s also important to invest in robust IT systems.

As a category, watches and accessories have worked in e-commerce in other parts of the world. It is a category that could do well in India too. But, it’s an occasional purchase.

Hence, it’s important to consider how to expand the category set to cater to more frequent needs of the same customers. The brand name could become a constraint in category expansion.

The website design is pleasing and the team should expand the customer experience emphasis to cover all elements of the business, such as choice, trust and service.

Nitin begins with an advantage because he’s selling branded goods at a value price. This helps overcome customer resistance of buying an unknown brand from an unknown retailer. With watches and jewellery though, it becomes difficult for a buyer to get the look and feel of the product. It makes sense to sell a brands that are readily available in brick and mortar retail shops.

Customers can go check these out and come back to his site to avail the discounts on offer. It’ll also be good to include user reviews from other mature sites such as Amazon to help buyers.

Yasho Saboo, founder-CEO KDDL Limited, Chandigarh

Alok Mittal, managing director Canaan Partners, New Delhi

Arvin Babu, partner Greylock Advisors, Bengaluru august 2011 | INC. | 6 3

strategy

The Way I Work | Anil Kumar, Great Sports Infra

“I hate this e-mail culture of always being connected.”

His family business might be medicine—his parents, brother and sister-in-law are all doctors—but Anil Kumar, founder of Great Sports Infra, an artificial turf grass and sports infrastructure company figured early on that real “business” was more his thing. As a 17-year-old, he wanted to become a franchisee for a large garments brand and even a tyre company. But, his entrepreneurial innings had to wait for several years after. He first got himself some “good to have” attributes—an engineering degree, an MBA and a decade-long corporate career with Ramco Systems. The product that finally lifted his entrepreneurial spirits was not something available in India then. But Kumar sensed in the soothing greens a viable business model. Today, his 15-crore, Hyderabad-based firm greens spaces across India—from home installations of 400 sq ft to 80,000 sq ft football fields in Goa, Sikkim, Mizoram and West Bengal. Even as he spreads across the country, Kumar has managed for himself a work-life split that’s clearly evergreen.

As told to Shreyasi Singh | Photograph by Subhojit Paul

I am not your 20-hour workday kind of guy. I am a sound sleeper and it isn’t unusual for

me to manage seven to eight hours of sleep. My day, typically, starts at 6:30am. I use an alarm. But, I don’t think I would sleep much beyond that time even if the beep didn’t go off.

Early morning is definitely “me” time. That’s the only time I spend on myself. I take the time to read the newspaper and exercise, which I do about four times a week. Usually, it’s the treadmill and some weight exercises for around 40 minutes. When I exercise, I like to

6 4 | INC. | AUGUST 2011

strategy

On His Own Turf Anil Kumar doesn’t believe in targets because they are limiting and don’t let him think freely.

strategy

O

keep it to just that. My mind is solely on the exercises, not strategising or mulling over business problems.

My wife would like to cook up a nice breakfast for me but I stick to eggs and muesli. Over the last three years, I’ve changed my lifestyle. I’m more conscious of what I eat now. Before that, I’d happily dig into a plate of fried vadas or a sixegg omelette for breakfast. I was a sportsperson throughout my school and college days. Then came a corporate career and the work of building Great Sports Infra, and fitness rules fell by the wayside. But now, with my exercise and breakfast, I’m more on track.

My office begins at 9:30am, but I tend to get down to work by 10:30am. Most of my interactions are with US-based companies so I have a lot of calls to attend at night.

Coming in an hour later is a liberty I take. I mostly use my driving time from home to work, a ride of 20 minutes, to make calls.

Once at work, I go straight to my e-mail. I have a BlackBerry but my e-mail alert is off when I’m not in office. My philosophy is if something was urgent, somebody would call me. My phone is on 24X7 and I make sure I check my text messages. I hate this “e-mail culture” of always being “connected”. I know for sure that nobody died because I didn’t check my e-mail. Once you begin to respond to e-mails at odd hours, people expect you to see the not-urgent ones too. It becomes a way of working. People who work with me know that if an e-mail comes around 7pm or 8pm, I’ll get to it the next day. If it’s important, they are free to call. You can’t be married to your phone. I can’t stand people checking e-mails while watching movies or when they are out in the evening. This is a balance I’ve worked hard to strike. In the first couple of years of building this company, I’d even check e-mails at 4:30am—desperate to see if an inquiry had come in. Once I got more people on board, I made some rules for myself.

I easily tackle over a 100 e-mails a day. At the beginning of the day, it usually takes me a couple of hours responding to queries and setting the direction. The first half of the day is very busy because most decisions get taken then. After that, the day can pan out anyhow. I can’t plan meticulously. I’ve tried to use the calendar many times—on my phone or Microsoft Outlook—but it’s never worked out. Also, a lot of my work isn’t what I initiate. Nearly 70 per cent of my time goes in tackling problems that trickle down to me.

To be honest, nothing stops because of me anymore. I’m only involved in the exceptions, not the routine. A large part of the business just runs on the routine. I wouldn’t know about so many 6 6 | INC. | AUGUST 2011

transactions—the shipment, the installation. I only come into the picture during special circumstances, when it’s a particularly large deal or an exceptionally low price. ver the last two to three years, my

focus has been on adding to the product line. We’ve added a wooden sports flooring line and also have a modular sports flooring line. One of the things we’re getting better at is seeing which technologies can be used in the Indian context even if they aren’t intended for that purpose. Our latest launch is such a product. In golf courses in the US, an aerator machine is installed under the grass surface on the course to ensure oxygen is being passed, and the grass grows to a beautiful lushness. We’ve reversed that for India.

I’d always wonder why we couldn’t have a technology to dry wet cricket outfields, the cause of so many matches being cancelled. So, on the cricket field this aerator has been tweaked to, in fact, suction water out.

The thrill of putting two and two together and making the first deal for the new product is the high I live for. I am not inventing anything maybe, but it’s a smart adaptation. It’s creating a new product, a new market. Like in this, the manufacturer of the aerators had never thought about a cricket field.

Most of my travel now will go into this product. Otherwise, we have a very good distributor network in place. I am happy those days are gone when I’d have to go meet a client or the architect for even a small landscape deal. We’ve done over 2,000 installations across India. I was travelling almost all the time. Now, it’s been cut down to six days a month. I’m thrilled about crunching my travel time. I get much more done sitting in office.

Other than for lunch, which is around 2:30pm for about half an hour, I take no breaks at work. I get a meal packed from home. I hate having to go out and get food. It’s such a waste of time. Lunch is the only time my office door is shut. I eat alone, go online, check Facebook or read newspapers.

Apart from that time alone, I enjoy being with my staff. I think it’s not entirely wrong to say that people management is one of my better skills. I encourage people to take a chance, to make mistakes. I think I’ve a greater tolerance for mistakes than most managers are expected to have. I can confidently say that most people who’ve worked here have added substantially to their ability. Each one of my employees would be absolute assets wherever they go from here. That gives me a lot of pride, to have people here who can stand out in the best companies. We’ve rarely ever sacked a person on a performance issue.

We may be a small company but we’re not ignorant of how large

strategy

“Between talent and diligence, I’d go for diligence.

Talent can be overrated. ”

A

and professional companies work. Our people are thorough professionals, just like team members in the best multinationals. We have a big-company mindset. You can say, it’s part of our DNA— not because we have thousand crore ambitions but because that’s how we want to function. I remember our very first installation. It was a garden for a new house in Bengaluru. It was our first import, and I was unprepared for the hassles in customs and transportation. Nothing came on time. We finally got our delivery at 11pm the night before our clients had organised a huge housewarming party. We went to work at 2am and worked right through till 3pm the next afternoon to instal the garden. I was there throughout because this was the first time we were doing this. All we had were some biscuits and tea to keep us going. And, at 5pm, there were 300 guests on the site. Our clients couldn’t believe a vendor would deliver like that in India. Construction and building vendors are notoriously behind schedule. Looking back today, we couldn’t have had a better start. We set a standard. Those who worked with us knew what was expected of them. Each of my employees works like that even now. They wouldn’t have survived here if they didn’t.

We take our time to give a finish date. But, once we’ve made a commitment, it’s non-negotiable. Some of our distributors have told us they’ve picked up this sense of commitment from us. Nothing is more heartening than hearing that.

What I dislike most is writing out reports. I have to motivate myself to do this when Field Turf, US, asks for it. I’m pretty poor when it comes to ratings, metrics and appraisals. I don’t have a system for that. I’m not saying these are necessarily merits. They’re my limitations. To be honest, I love that I’m not data driven. It helps me to think far more freely, more laterally. I don’t think results are the only gauge to judge performance. A star salesman isn’t the one who got the highest sales last month. That could be luck or a seasonal big order. You cannot do with flashes of brilliance. Everyday business doesn’t survive on that. Between talent and diligence, I give higher marks to diligence. Talent can be overrated. It keeps

some people in a fairy tale world. My approach is to make the process as professional, compact and thoughtful as possible. This will ensure the results take care of themselves.

lso, I’ve realised a good sale isn’t one where you are always pushing. The best sale is when a customer gets in touch with you.

That’s why we never do cold calling. We exhibit at 35 trade shows annually. As the numbers grow, of course, it’s a challenge for me to meet and engage with every customer. So, I’ve put my cell phone number as the contact number on the website and all company brochures. I’ll pass on these inquiries to my team to follow up on but being the first point of contact gives me a good sense of the inquiries coming in.

I also don’t really believe in targets. We had a big event when we reached the 1,000-installation milestone in September 2008. It took us 49 months to get to our first 1,000. We thought we’ll do the next 1,000 in 35 months. But, we actually did it in 21 months.

So, I don’t write out mission statements or vision where the company will be. I have little faith in such stuff honestly. In 2008, there’s no way I would’ve known that I’d be selling tools for cricket outfields.

On most weekdays, I head straight back home between 7:30 and 8pm. Once home, I spend time with my two daughters. Cricket is the only thing I watch on TV. I’m a huge cricket buff. Usually, I’ll watch a game of cricket and read a newspaper from my “collection”.

I have this odd habit of collecting newspapers that I haven’t read.

There are strict instructions at home that no newspaper can be thrown away till I’ve read it. So, if I’m travelling, newspapers from those days will be stacked up. Even now, there are six-month-old newspapers stacked in my house. At some point, I’ll find a way to read them. I don’t care if it’s more than a year-old.

My wife and I also love watching movies—Telugu, Hindi and English films. We prefer that to watching whatever is coming on TV. We usually play something out of our own collection or we rent out DVDs. On some weekends, we manage to go through three or four movies.

AUGUST 2011 | INC. | 67

I wish I knew then...

Param Parameswaran, chairman, Sulekha.com His 20-year long corporate career began with McKinsey. After a pit stop of sorts at Wall Street, Param Parameswaran co-founded Integra Technology, a software and application products venture which he later sold to a Fortune 500 company.

Today, Param Parameswaran is chairman of Sulekha.com, a mobile and internet platform for connecting Indians worldwide through classifieds and yellow pages.

It has more than 6.2 million members. Parameswaran says a canny combination of gut, smarts and a focus on always “looking out” has shaped his journey.

A passage from Julius Caesar, “There is a tide in the affairs of men, when taken at its flood, leads on to fortune”, constantly inspires me. Essentially, it means you shouldn’t wait for the right time to come along. In fact, there really is no perfect time to fling yourself into something you have a gut for. It’s a tide you need to jump and take.

That has been a guiding principle of sorts in my life and it has served me well so far, including in my association with Sulekha.

Practice makes perfect, they say. I’ve realised that very few people win with the absolute first version of anything. Success lies in gathering customer feedback, integrating it properly and then making it possible for the consumer to experience this new product. What business people need to do is to close this loop as quickly as possible. Effective, successful organisations do this promptly to make sure they always gain.

It’s certainly how Sulekha grew. As a new media company, we worked with the internet and mobile medium. We had millions of users on one side and tens of thousands of small-to-medium sized to, in fact, very large companies on the other side. We put the two together. We offered our services and space for advertising. But we quickly learnt,

6 8 | INC. | august 2011

week goes by when I don’t interact directly with our customers.

When you grow to a certain size, there is a tendency to look inwards, to say let me clean up my organisation charts and restructure work flow and departments, and that will lead to further growth. I think many companies make that mistake.

But, I feel the reverse is what you need to do. You can hire a good person to come and clean up the internal stuff but it’s critical that the management continues to be the eyes and ears of the organisation, always looking outwards. Keep a track of your competition, understand your Stay Impulsive It’s futile to wait for the ‘perfect’ industry and speak to your custime. Jump the tide and learn along the way. tomers. That’s the big thing you need to focus on. Ten years ago, thanks to the customer feedback loop, that I myself was possibly more technology-orithe small-to-medium sized businesses ented and internally-oriented as opposed to weren’t with us to build a brand. Their first looking outwards. priority was to build their businesses. Put ­—As told to Aniha Brar simply, they wanted leads. So we innovated and came up with a “guaranteed response model” for small-to-medium companies.

With this, they didn’t have to spend their money in advance to do “branding”. They paid us for every lead they got. That helped us grow tremendously. Even today, not a