An Entrepreneurial Journey Date:   Tuesday , November 29, 2011 Backdrop: After achieving a “gold standard” school track record, I dreamed of joining the armed forces (being inspired by the then Prime Minister Lal Bahadur Shastri’s slogan ‘Jai Jawan, Jai Kisan’). For various reasons this did not fructify and I ended up joining the IIT Madras only to discontinue the course after a year. Cutting a long story short, against a backdrop of strong family opposition, armed with a National Merit Scholarship , I ended up signing up for a B.Sc. Hons. Course in Physics and Maths in Hyderabad. Logically, I should have gone on to fulfill my father’s dream of seeing me blossom into a research scientist, but this was not to be. With a freshly minted degree, I entered a two year stint dabbling in arm chair student activism, amateur editorial work, and an exposure to rural India through travel to the interiors. Though many thought this to be a waste of time, I consider this to be a very important phase in my life, shaping the formation of my core sensibilities. Subsequently I took up a job as a management trainee with Aeronautical giant HAL and worked there for a couple of years. They had an excellent executive training program and it is here that I got interested in computers, management, finance and allied matters. Inevitably, this led to my resigning the job (I had to borrow a princely sum of Rs 10,000 to pay my employer’s bond) and joining the PGDM program at the IIM at Bangalore. I truly enjoyed this period of my life, especially the interactions with my exuberant and driven batch-mates. Other highlights included my summer project getting the Alumni award for “the best project” and a team of three of us winning the third prize in the 1981 “National Competition for Young Managers”. My first 2 ventures: Computers were few and far between in those days and we had to use an IBM bureau service to get our class assignments done. I was intrigued by the owner (an ex IBM’er) of one such service bureau outfit and decided to start a computer service bureau then and there. So when I graduated in 1981, (one of only 3 persons in my batch who did not take up the campus placement) I set up the shop along with another IIM colleague. We took an expensive bank loan to purchase our first computer, got two more of our batch mates to quit their jobs to come onboard and established a good reputation in the Bangalore data processing bureau scene. The sudden coming of the IBM PC totally decimated the Bureau service business model and brought a fresh wave of software consultants on to the scene. Down to the last rupee in the bank, we had to abandon the uncompetitive business and run for cover. The Indian Institute of Management was then in the process of upgrading its IT infrastructure and I got involved with this effort for about a year. Later on I joined an Indian tech firm set up by Silicon Valley returned Stanford graduates. My entrepreneurial experience paid good dividends as I was able to build a national product support team from scratch under arduous conditions both internal (organizational – politics, budget constraints) and external (market conditions) nature. I worked for a few years and the entrepreneurial bug bit me again. I now tried my hand at the domestic product software space in Bangalore with three products for SMEs only to give it up at the end of three years, due to customers not wanting to pay for after sales support and maintenance, giving rise to a “only pains for your labor" situation . It was one of the low points in my life, having failed at a couple of things and now in my mid thirties, depending on my salary earning better half to support our family. I was at a crossroad. Thinksoft origins : However, resisting a strong temptation to accept job offers from the branded MNC’s, in 1993, I started Thinksoft as a boutique outfit , with a couple of dozen employees , focusing on business oriented IT support projects for the Financial sector , mainly related to functional testing, user documentation among others. It took five years to establish the basic business model and track record and by 1998 we were ready to scale up. I decided to take on board and incorporate some of the key learning from my two earlier ventures into the business plan: a. The domestic market was not ready to invest in IT services, products or consulting. Hence it was wiser to look for clientele outside India in the developed markets of U.S. and UK. b. It was very important for the company not to have debt but to be well funded in terms of its own equity. c. The company needs to invest in good infrastructure and a support team (finance, HR, Admin and more) d. Make a five year business plan and not have a short term outlook and stick to the knitting through thick and thin. e. Diversify away from a single large customer to reduce risk In 1999, along with two new co-promoters on board, we formed Thinksoft Global Services. With 40 employees and one large multinational client, we scouted for venture funding and a UK based venture fund backed our growth plans, took a 30 percent stake, thus significantly increasing our chances of becoming a successful player. Our first year of operation was in 1999-2000 and the very next year 2000-01 we had 300 percent growth and had increased the customer base to three, all of them being Fortune 100 banking firms, which was a considerable achievement for a small niche firm from India . Growth years: The year 2009-10 was a very significant year in the history of the Company for a very special reason. We became a Listed Company, with a successful IPO cum offer for sale to the public in Sep 2009, followed by our shares getting listed on the two major Stock Exchanges of country, viz., National Stock Exchange of India and Bombay Stock Exchange. It made us the first and only Indian company, specializing in delivering Testing Services to global financial sector organizations, to be listed on a stock exchange in India. Our VC’s were also able to exit with a handsome capital gain. The journey from VC funding to IPO took all of 10 years and resulting in a 20 fold rise in revenues , a twenty fold rise in staff strength and the broadening of the customer base from an initial single customer to 50 plus customers, not to mention a unique track record and brand recognition. We had started with a rudimentary business model proven with a single large multinational customer, we obtained VC funding, opened our first international office, got our second major customer, strengthened our sector focus, boot strapped infrastructure at home, created a delivery organization and geared up for the challenges in the decade ahead. • Market crises: the dot com bust and the Sept 9/11 attacks together resulted in clamming shutdown of the market opportunities for three years, for new players on the block. Only incumbents had access. • Positioning crisis: independent software testing was a new concept and had no place on perceived Value Chain and this was reflected in its omission from IT budgets. We had to really go round educating prospects about the benefits of our offering. • Around 2005, there was a wave of vendor consolidation by clients in the U.S. market and we had to change our strategy to focus more on the European and Middle East markets. • Next, we experienced client attrition –we lost a large client, which we had built up over the years due to their being merged into another entity. • For the best part of the decade, midsized IT firms, including our company, suffered heavily from People issues - Availability, Attrition, work culture that was low in productivity and innovation. • To top it all, in 2008 the world economic crisis led to the reduction in Global IT spending , cancellation of non priority projects, pricing pressure, stretched receivable cycles , volatility of currency exchange rates, vendor consolidation and immigration policy changes by developed countries. This led to flat revenue for a couple of years until 2010. However, The Company managed to sustain itself through all of this and remain profitable. What are some of the things I would do differently if I could go back to the year 2000 and start all over again?? 1. Invest more on Sales and marketing. 2. Create Intellectual property. 3. Invest on owned premises rather than leasing. 4. Benchmark industry cost structures and beat them. 5. Install enterprise automation on Day one. Looking back on the last decade, I cannot resist the temptation to quote Buckminster Fuller: “Little does the caterpillar know that it is one day going to become a butterfly.” Looking forward, I want to be able to do some of the things which I missed out on during the hectic last decade - chasing personal dreams, pet projects and interests.