Hari K. Ravichandran: Unconstrained Endurance
Date: Thursday , September 01, 2016
On March 10th, 2000, the NASDAQ peaked at 5,132.52 before closing at 5,048.62; afterwards it fell as much as 78 percent (the dot-com crash). Many organizations were forced to file for bankruptcy. Caught in the storm was Hari K. Ravichandran, former CEO and Founder of BizLand and now CEO and Founder of Endurance International Group (NASDAQ:EIGI), trying to stabilize his sinking vessel. \"The dot-com crash made advertisers back off, and our revenue fell dramatically,\" explains Ravichandran.
At that point, Endurance was subsidized by advertising. And to enable its growth, the firm had been spending a lot of money that flowed in from their ad-based model on payroll. Ravichandran adds, \"When things go bad, the venture-guys start running for the hills.\"
The dot-com crash was all set to engulf Ravichandran\'s conception. He had two options; one was to hit the reset button, and the second to exit. Reluctant to take the latter, he decided to steer on and made some obligatory amends. \"We had learned a hard lesson: If you don\'t focus on profitability, things can go bad. We stripped down to a staff of 14, and told customers to pay a subscription charge for their services. We ended up converting about two percent of our customers to the subscription model,\" elaborates Ravichandran. Many organizations crumbled under the pressure, but Ravichandran, the never-say-never captain kept his ship pointing forward.
By 2003, Ravichandran had persevered through the dot-com bust with a renewed and renamed Endurance International Group. However, a predicament still lingered.
Ravichandran explains, \"Our technology platform could support millions of customers but post reset, there were only a few thousand left.\" There was an urgent need of capacity utilization. The operations of Endurance spanned across three main offerings, a web hosting service, a plug-in ecommerce tool, and a well-developed shopping cart.
Ravichandran began acquiring small companies. \"A traditional business would\'ve gone out and spent money on marketing, but we looked at the landscape and noticed all these small companies with about 2,000-5,000 customers, that we could acquire,\" says Ravichandran. The main aim as Ravichandran underlines was to expand Endurance\'s customer base. Endurance made their first deal worth $30,000 for an organization with 300 customers. \"For us, this deal was important as it would set a consistent strategy in motion aimed at increasing our operation scope,\" adds Ravichandran.
By the mid-2000s, the hard part was over and the firm was experiencing a rapid growth occurrence. Private equity firm Accel-KKR bought a majority stake in EIG in 2008 but this stake had to be sold later as their investors wanted to exit. Accel-KKR was sold to Goldman Sachs and Warburg Pincus for $975 million.
Growth and Expansion
The Accel-KKR acquisition was followed by a period of organic growth for Endurance. Under Ravichandran\'s leadership, acquired identities kept on contributing a large part to Endurance\'s relative anonymity. \"Companies under our fold continued to retail their individual brand identities,\" recalls Ravichandran.
Soon Ravichandran started looking to expand Endurance\'s operations beyond North America. In late 2012, Ravichandran met Bhavin Turakhia, founder of Directi. \"We had much in common with Directi. They were having a tough time in entering the U.S. market and we had the same problems with entering the Asia-Pacific,\" elaborates Ravichandran. What interested Ravichandran the most was their non-U.S. market tailored business solutions. Directi was acquired by Endurance for a sum of $100-110 million and its operations have since expanded to Asia-Pacific and beyond.
Conquering the Present
Ravichandran and Endurance have seen many ups and downs: the dot-com crash, loss of customers, growth and expansion. Tides and currents have been high and strong, but still Ravichandran has steered his enterprise to deliver cloud-based solutions to small-and medium-sized businesses (SMBs) through the Endurance platform. \"As founder and CEO of Endurance, my goal is to help small business owner harness the promise and the power of the web to increase their revenue and outperform the competition,\" adds Ravichandran. Passionate about SMBs and an entrepreneur by nature, Ravichandran applies the principles of \"big data\"-- the combined power of data, analytics, and technology --to empower the Endurance platform.
With homegrown digital solutions and Ravichandran\'s focused vision, Endurance delivers technology solutions that help SMBs transform the way they do business. Endurance is now a provider of cloud-based platform solutions built to help SMBs start, monitor, and grow their online presence. Leveraging their technology platform, the firm delivers an integrated suite of over 150 products and services. These include: domains, website-builders, web hosting, email, security, storage, site backup, search engine optimization and search engine marketing, social media services, analytics, mobile device tools, productivity and e-commerce solutions. \"We provide a very simple and basic bundle of digital services initially which can get organizations started on the web. Once they start engaging with us, the firms can buy more services and solutions that will assist them in business growth,\" elaborates Ravichandran.
Over the past 17 years, Ravichandran has built Endurance into a trusted partner for the SMB market, one that supports small business owners throughout their business journey. Ravichandran oversees all aspects of the business, but focuses most of his time on strategy and growth initiatives within Endurance. With a subscriber base of about 5.4 million customers, the firm is expected to rake in one billion dollars in revenue this year. \"I thought it was going to be a two-year in and out, dot-com success story. We\'re now coming up on 20 years, and it\'s still going,\" adds Ravichandran.
Sailing into the Horizon
Having expanded their operations in Asia-Pacific with the Directi acquisition, and conquered the present landscape, Ravichandran is interested in targeting new geographies in the future. \"We\'re looking at targeting and supporting Russian markets through Directi,\" says Ravichandran.
Although 60-70 percent of its business still comes from North America, Ravichandran informs us that Endurance is planning to spend $50-70 million on capital expenditure, payroll, and employee count in the next five years. This will indeed cause a mighty stir in the acquisition and expansion plans of the firm.
The journey of Ravichandran from BizLand to Endurance International Group has indeed been exceptional. While BizLand could have easily crumbled like many other organizations during the dot-combust, Ravichandran persevered and continues to manage a successful business. From spearheading ever-growing business solutions and managing an abundance of thriving brands, Hari K. Ravichandran is truly nothing short of unconstrained endurance.