The Man Who Left Infosys to Found a Public Product Company
Date: Tuesday , October 31, 2006
As a child, Deepak Raghavan loved to get away from the city lights, and gaze at the sea of stars overhead. The patterns would fascinate him, and create an eerie camaraderie with his mind. He wondered what and who might be out there. As he grew, responsibilities dawned, and the nocturnal trips ceased.
At 40, Raghavan today is trying to savor the thrills of the erstwhile journey, having enrolled himself in an integrated Masters and PhD program in astronomy at the Georgia State University. It’s not that easy to plunge back into the world of stars though. As founder member of Manhattan Associates, he steered the company’s product roadmap for twelve years.
Presently, Raghavan—the only one among the five founders still continuing with the company—sits on the board of directors, and oversees its broad functioning. The supply chain solutions firm went public in 1998 and raked up revenues of $246.4 million last year.
“We wanted to build a software company,” says Raghavan of the discussions he had with co-founders Alan Dabbiere, Prahalad Suresh, Deepak Rao, and Ponnambalam Mutaiah in 1989.
Alan was working for Kurt Salmon Associates then, and the other four were at Infosys. Raghavan was working on implementing the ERP system for Jockey International in the U.S., as part of the Infosys team. By the end of three years, and all of 23, he had gone on to assume the lead position for Infosys in the project. There was another side to his progress though: he had keenlyatched, and interacted with the customers to find out where their problems lay, and what exactly needed to be done to give them the winning edge. The germs of a new venture, as a result, were already there in his mind.
Despite that, when the talks started of launching a company among the five, he did not plunge into it. “We first wanted to make sure that we liked working with each other,” he says. Only then would the venture last. “End Goals are secondary, especially at the starting point of a company; you need to enjoy building it.”
While fine-tuning the plans to start a company were on, Raghavan, along with his colleagues started identifying gaps in the customer’s requirements, to decide which area to operate in. Warehouse management it would be, and Jockey, for whom they were working as part of the Infosys team, became their first customer.
“They were then looking for a new partner, and we expressed our interest,” he says.
Since Manhattan Associates was still a fledgling company at that point of time, they offered to deliver the product to Jockey without charging the licence fee. “We needed access to a modern system, and did not have a facility of our own. So we used Jockey’s facility to build them a product,” says Raghavan. The arrangement worked well, especially since the IP stayed with Manhattan.
“Jockey was like our incubator for nine months,” he jokes.
During those initial days, he did not have a designation, nor did the others. “We all dirtied our hands and focused on building the company. We were enjoying it,” he notes.
When it came to getting new customers, Raghavan states he was always very clear about the goal: Multiple customers and not a single customer with many projects. There was a great demand for serving small suppliers who catered to the retailers. The need for a software to manage dispatching of not entire cartons of shirts, but one piece each of a shirt, a trouser and a pair of socks from among the huge stock was great, and Raghavan set about his energies on that. The ‘laser focus’ helped the customers as well. One of them witnessed a rise in orders—from six big orders per month to over 17,000 orders per week. “Knowing whom you want to serve helps you know the industry better,” he notes.
With more clients in the fray, Manhattan was moving higher. It soon required capital. Going public would give the company a higher profile, apart from the necessary money to enable accelerated scaling of the organization to meet the ever-growing demand. In 1998, Manhattan Associates was listed on the
NASDAQ and Raghavan became the Chief Technology Officer, a designation finally parked beside his name. The sheer volume of business that was now being handled meant that the company had to go on a hiring spree. Raghavan preferred fresh graduates. “Experience is often another word for age,” he says. “What’s the use of years if there’s no accompanying knowledge?” He focused on aptitude and attitude, and avoided getting on board what he calls passengers of the former category.
In 2001, Raghavan took charge as the Chief Strategy Officer. “Unlike technology which is black and white, strategy is gray,” he notes. He took quite a few months making the transition, and suddenly, at the end of two years found himself far removed from the actual work. “Gradually, I realized I was managing people who were managing people who were managing people.”
Always wanting to be in the thick of things, he decided to withdraw his full time commitment to the company. The hands-on enjoyment was no longer there. Moreover, the other founders too had started drifting owing to quite the same reasons. Raghavan contemplated starting another company, or turning an investor, and finally chucked both plans to plunge into astronomy, and is busy researching on the existence of other solar systems.
Two years on, he will complete his PhD. Will he then consider starting another company, one that leverages the use of technology in the space sciences? That possibility is ruled out, as there is no viable business model. “Instead, I want to teach,” he says with a glint in his eye.