Bringing up a business

Extract | The New Age Entrepreneurs

A collaboration between Mint, Random House India and the Confederation of Indian Industry, The New Age Entrepreneurs, the first in a series of business books, was released recently. It profiles 30 Indian change makers, including N.R. Panicker of Accel Ltd, Ramachandra Galla of Amaron and M. Murali of Sri Krishna Sweets. From information technology, pharmaceuticals and online classifieds to hospitality and renewable energy, these New Age entrepreneurs have innovated and set up successful businesses in a diverse range of industries.

What does it take to leave a secure job and plunge into a risky start-up? What keeps them going when persistent obstacles line the journey? And what lessons do these success stories hold for us? In the following extract, we pick three entrepreneurs and through each, try to highlight one stage of a business—the beginnings, key learnings and challenges. The New Age Entrepreneurs busts many myths and sets standards for others to follow. Edited excerpts:

Beginnings

Dhiraj C. Rajaram

Mu Sigma

With its headquarters in Illinois, US, Mu Sigma is a ‘decision sciences’ company that works with clients to help solve business problems using data analysis. Founder Dhiraj C. Rajaram was working with Booz and Co., with the business analytics units, when he realized the need for the company he went on to found. He realized that neither business consultancies nor information technology firms were bringing applied mathematics to the table in helping companies improve organizational efficiency. In 2004, Rajaram, married and with a child, quit his job, sold his house, and moved into a one-bedroom apartment. He put all his money into Mu Sigma.

But investing in talented mathematicians is going to pay off. A report by McKinsey Global Institude estimates that by 2018 there will be a demand for at least 200,000 data scientists in the US alone.

The accolades have, meanwhile, been pouring in for Mu Sigma. INC magazine has named it one of the fastest growing entrepreneurial businesses in the world, with a three-year growth rate of 1,500%. Mu Sigma was also ranked No. 1 in Datamonitor’s annual KPO, or knowledge process outsourcing, rankings ahead of IBM, Accenture, Capgemini and Infosys.

What prompted you to start a company?

Mu Sigma started in December 2004; the vision for the company was to help organizations institutionalize the use of data-driven decision making. We are a decision sciences company and the company got started when I saw the need for decision sciences to be a big problem that needed to be solved. Data was doubling every 18 months, the cost of memory was getting cheaper, computing power was increasing—all of these things were trends that indicated that companies needed a combination of math, business, and technology to help make better decisions on a consistent basis. I never wanted to be an entrepreneur. I was working at Booz Allen Hamilton—now Booz and Co. I loved my job, was doing well there and I even wanted to be a partner, when we basically saw this opportunity. I talked about this to everyone, and the only thing was to solve this problem—how I was going to do it was not in my mind. Starting a company happened to be a means to that end.

When did you reach the inflection point?

The first few months were very, very lonely. But I think that was the best thing that happened to me because on a consistent basis I was subject to a good amount of failure, which enabled me to think of every reason why the company would fail, every possible objection an employee or customer would raise, and what one needs to do to handle that. And that was a gift. Microsoft eventually gave us a break. They understood we were small and were very magnanimous… And we never looked back after that.

—Interview by Byravee Iyer

•••••

Key learnings

Sanjay Nayak

Tejas Networks Ltd.

This telecommunications networking product maker has converted a “hardware problem into a software problem”. Based out of Bangalore and founded in 2000, Tejas Networks aims to offer software-driven networking hardware that is flexible as networks get upgraded to the next generation and user profiles change and get more data intensive. Nayak is a first-generation entrepreneur. As he puts it, “I was a usual guy, studied in India, then went to the US, etc.” He went on to “do” the Indian operations of two large multinationals. After stints at Cadence Design Systems Inc. and Synopsis Inc, where he served as India head, the ideating began in earnest.

Optical products were chosen because they were “future proof”, heralding the driving theme of Tejas—getting “future ready, today”.

What are the factors in an entrepreneur’s success?

Number one is passion. You have to believe in what you are doing and enjoy doing it, and be committed to that cause. That is the most important thing. If you are an entrepreneur for any other reason—making money, etc—that is transitional, and will not help you stay the course.

The second thing is the team. If you have to do anything of scale and size, on a world-class level, you need a world-class team, across the ranks, functions, with complementary skill sets, with different viewpoints, even passionately disagreeing, with one another.

The third thing is to be well-funded.

Lastly, a lot of people get timed out. The idea is good, execution is fine, but do you have the lasting power? No point if you are not there at the table when the big meal is served, because you left too soon!

—Interview by Sridhar K. Chari.

•••••

Challenges

Tapaas Chakravarti

DQ Entertainment International

Founded in 2001, this Hyderabad-based animation company’s claim to fame are their intellectual properties like ‘The Jungle Book’, ‘Peter Pan’ and ‘Ironman’ (in collaboration with Marvel Comics). The day they won an Emmy for ‘Tutenstein’, a series they co-produced for Discovery Kids, US, was a turning point for DQ Entertainment. Their USP lies in developing global networks with broadcasters, distributors, aggregators, producers and funding agencies, by putting together the best creative talent from the US, France, the UK, India and the Philippines. Their major clients include Walt Disney Television Animation, Nickelodeon Animation Studios Inc., Marvel Animation Inc., NBC-Universal and British Broadcasting Corp. While the company commenced animation production in 2001, the 2D animation studio was set up in 2002. When he ventured into the animation outsourcing business, Chakravarti realized that even though the projects were coming in, quality animators were hard to come by. He overcame this by instituting an in-house animation training centre. The six centres of DG School of Visual Arts have produced 4,000 animators so far, many of whom were absorbed by the parent company.

Chakravarti dreams of being among the top ten studios in the world. “It’s a huge leap and this can only happen with television, feature films and gaming worldwide along with licensing, merchandising and publishing,” he says.

What were the difficulties you overcame?

The day I founded this company I knew we had to bring big brands, produce it as our own properties, our own designs, our own stories, patent them and market them. But before we reached that stage—and that’s a critical stage to reach—we had to develop manpower, train manpower, retain manpower and reach the quality which will be comparable with the best in the world, these were the challenges. It took us four-five years’ time to reach that stage. Once we reached that stage, we started moving faster.

What are the challenges facing the Indian animation industry?

Unfortunately, the Indian animation industry has never received the backing of the cultural, information & broadcasting or the finance ministry the way our counterparts in France, Canada, South Korea, Singapore, Malaysia and Japan have received. The industry did not even get its own status and is considered as (part of the) IT industry.... If some good policies come in, like removal of service tax, removal of excise and import duties, reduced corporate tax for this new and growing industry, and then the regime of providing equity funding for creating intellectual properties for India as well as the global market, will all help this industry to grow into a global giant. The potential has been exploited by the entrepreneurs themselves on their strength without any governmental support. You can imagine that if the government comes forward and gives us support, the way it supported the IT industry and other industries, this industry can also become a multi-billion dollar industry in India.

—Interview by Yogendra Kalavalapalli.

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