Change is the only Constant
Date: Thursday , December 02, 2010
After my MBA I?started my career with Wipro Infotech selling computers for a princely salary of Rs 2350 per month. I was always a creative person and saw an interesting advertisement to join a start team to set up a computer retail chain called Computer Point in 1985. From there I was fortunate to be part of the team thatís set up Sonata Software for the same owners of Computer Point. I was in my late 20ís and did not want to get constrained in a job besides I always felt that I had potential to do more as well as earn more. And I had always believed in the saying, ĎNothing ventured, nothing gainedí. So in 1989 I started Microland, as a network Integration Company.
Microland pioneered networking in India in the early Ď90s and had introduced several global technology brands like Compaq, Cisco, SynOptics, and Netscape amongst several others into India.
A lot has changed since we started our business in 1989. For one, custom duty on hardware then was 255 percent, and today it is in the 10 percent range. Today the opportunity is huge; there is an existing ecosystem of venture capital/private equity, mentorship, talent and consultants/advisors available. But back then when we started, the market itself was limited, and venture capital had yet not emerged. We were very fortunate to have got equity infusion from the State Bank of India Capital Markets which helped us build the business. two years later, ICICI Ventures (then called TDICI) bought out SBI Capital Markets and became investors of Microland. In 1996 Microland had planned to make a public offering then the MS Shoes scam broke out and we decided to do a private placement with some leading institutions at the same valuation. Hence, stayed as a private company, which we still are.
We grew our business very rapidly and crossed the Rs 150+ crore mark in revenues under eight years. We were a fairly successful company in the networking hardware business and had received several awards and had national recognition for our success. We build networks for banks (as many as 18 of them at a point of time), stock exchanges, leading hotels and several corporations.
In the later part of the Ď90s, the industry was going through a structural shift. Hardware warranties became three years from one year. International technology companies opened offices in India and started the policy of multi distribution. The internet economy started opening up.
It was the early days of the internet economy. Clearly the net was dis-intermediating the middle man. The middle man had an arbitrage of information that was inaccessible to the customers, and when this would change, the buyer would have more control over the buying process.
Looking ahead, I clearly saw that this business would become a commodity business. Simultaneously, we saw the huge potential of the internet economy. Because of our partnership with Netscape in late 1995, we had the early experiences of the immense opportunity of the internet economy.
Based on these we took a very bold decision to get out of the hardware business and change the companyís course to exploit the opportunities in internet economy. It was not an easy decision. We had to convince our employees, our investors, our customers and any change, however small they were, would disrupt the company. Those were things that most entrepreneurs feared and would normally stay away from. But I was not afraid to set a new course for our company as I had a strong intuitive feel that this was the right decision to take. Several well-known companies were also in the same business as we were, but they never saw the imminent market shift and did not change, as a result they do not exist today.
Our new vision was being an incubator of internet businesses. In November 1997, we launched our first internet company called Planetasia.com. This was followed in rapid succession by the launch of a technology portal called ITSpace.com, followed by the mainstream broad based portal called Indya.com, and then an Internet Media company called Media2india.net followed by a networking technology products company called Net Brahma Technologies.
Each of these businesses were successful in their respective areas. We raised over $75 million of venture money in this period to invest in these businesses. In the second half of 2001 market started to shift again. We foresaw this coming and moved very rapidly and quickly sold four of our companies. Indya.com was bought by Rupert Murdoch of News Corporation, Planetasia.com was sold to a US consulting company and the new company is called Collabera, Net Brahma was sold to a Silicon Valley based company called MetroOptics and Media2India was merged with a company invested by Euro RSCG, an European advertisement company; which is now a leading online advertisement company called Ignitee where we still own equity in.
Then we looked around to see what has changed in between 1998 and 2002. Till 1998, the Indian story was largely around hardware. The software story emerged with the arrival of the Y2K opportunity, Indian companies had very successful public offerings on US stock markets, the internet economy arrived with every third founder being of Indian origin and most importantly the telecom infrastructure got built leading to the arrival of the Indian BPO companies.
It was clearly only a matter of time when offshoring infrastructure management would be the future, and so we once again took a bold decision to rebuild Microland (aka Microland V3.0) as a provider of Infrastructure Management Services. We are a specialist provider employing close to 2600 professionals of Infrastructure Management Services with offices all over the world, growing rapidly in an area, which, I believe, is the best space to be in the IT outsourcing market today.
I believe staying a privately held company helped us a lot in terms of making the transition from hardware to internet economy and then to IMS space, as it is easier to convince five investors than 50,000 shareholders. We never changed just for the sake of changing but because of the realization that due to the shift in the market if we continue down this path we will be an irrelevant marginal company.
There are few things I have learnt in my entrepreneurial journey which could be useful for aspiring entrepreneurs. First, not trying is a bigger risk than trying and failing. Second, raising capital is the responsibility of the entrepreneur and not the finance manager; this is something a lot of entrepreneurs donít focus on. Thirdly and most importantly, hiring exceptional talent is the entrepreneurís most important job and entrepreneurs should spend lot of time doing that. And also while you are building a business always think of the larger picture and end game, think of the brand image of your company early enough or else your company will start being associated with something different than what you would have liked it to be. Lastly have fun in your journey and donít take yourself too seriously.