In the 60th year of the Indian Institute of Technology (IIT), Kharagpur, two students, Yuvnesh Modi and Rahul Kumar, and an alumnus, Alok Kothari, have brought out a collection of 20 stories of entrepreneurs from IIT Kharagpur in their book The Game Changers.
The book tells individual tales of success, a broader tale of what studying at an institute like the IIT can achieve, and the change that these people brought about in India and abroad—in the technological, social, agricultural and industrial sectors. From stories of Suhas Patil and how he founded Cirrus Logic, one of the first Indian success stories of Silicon Valley, to the story of Vijay Kumar who co-founded Bharati Shipyard, the first private shipyard in India to go public in 2004—some are rags-to-riches stories, others of sheer genius, and yet others about the vision to bring much-needed social change in India.
A chapter titled “Tech Visionary” tells the story of Arjun Malhotra, a graduate of the 1970 batch who went on to become a pioneer of the Indian information technology (IT) industry. Malhotra was one of the founders of Hindustan Computers Limited (HCL) in the licence raj era, at a time when start-ups were a rarity, yet succeeded. Edited excerpts from the chapter:
The fledgling company tried to cut down on as many expenses in the beginning as it could. They found an office space on Arjun’s grandmother’s barsati in the leafy lanes of Golf Links, Delhi, and the office chai-pani was taken care of by Arjun’s grandmother. Golf Links was one of the upmarket localities and they believed that an address like that on their business cards might give them some credibility. Within a year, the company had expanded into the bedrooms. Very soon, other than the drawing room which served as a waiting area and reception, the office took over the entire house! The company got so big that it finally had to move out of there.
A pioneer: IIT Kharagpur alumnus Arjun Malhotra went on to become one of the founders of HCL. Photo: Hindustan Times
Arjun’s grandmother was very involved in the company, engaged in making something to eat, meeting people, receiving guests all through the day.
The next challenge was to get a computer-manufacturing licence. The Uttar Pradesh government’s UP Electronics Corporation Ltd had a licence to manufacture electronics products, but it was not manufacturing computers. UP Electronics was approached by Microcomp, and a joint venture named Hindustan Computers Limited (HCL) was established in August 1976, with its manufacturing facility in a new industrial township near Delhi called Noida. The UP Electronics Corporation held 26% stake and the six co-founders pooled in Rs 175,000 from their personal savings and loans from kith and kin.
In March 1978, HCL released its first 8-bit commercial computer in India around the same time as Apple in the US and three years ahead of IBM’s PC. However, there was no classification for a microprocessor-based minicomputer or microcomputer for paying excise. The company asked the Department of Electronics (DoE) to put out an official notification so that HCL could pay excise duty and take its computers out of the factory. The DoE said that its microprocessor policy was still not finalized and would take four years. The founders were disheartened by the response.
However, after going through the import substitution policy, they found a solution. The company used to import electromechanical machines called accounting and invoicing machines from East Germany. They decided to tell the excise guys, “Look! We have a keyboard, a display, a printer, so it’s basically an accounting and invoicing machine!” They did this for four years until the policy came out!
The Game Changers: By Yuvnesh Modi, Rahul Kumar and Alok Kothari, Random House India, 262 pages, Rs 150.
In 1980, HCL forayed into international markets by setting up Far East Computers in Singapore. This was a very bold move for an Indian company in those days. The venture was a hit and the revenue was Rs 10,00,000 in the very first year. The company got the software developed in India and provided both software and hardware solutions to clients in Singapore air. Chennai, then called Madras, was chosen as the location for the Software Export Division because the Madras- Singapore air route had short flights and the software could be sent on floppies. The problem was that software was treated as trade and not an industry and was put under the Shops and Establishments Act and not the Companies Act. This meant facing the powerful shop inspectors and a lot of bureaucratic red tape. After numerous consultations with the Tamil Nadu government, software finally got industry status.
Despite the bureaucratic hurdles, HCL had many firsts and emerged as a trendsetter in its field. It was the only company in India to use 5¼-inch floppy drives when 8-inch ones used to be the standard—at that time all the twelve different manufacturers used only the 8-inch floppy drives. Three years later, when 5¼ inch became the standard, all of a sudden HCL was seen as a company which could understand and predict technology. “In a small company, one wrong decision can kill the company. That’s how you play your cards if you really feel that a particular technology can really change the future of the market.”
Creating India-specific products was the hallmark of HCL. HCL 8C was custom-made for the erratic power conditions in the country. It had a Power Shut Auto Restart (PSAR) unit which ran with a big battery and would hold all the memory and computations of counters exactly where they were when the power went off. The computer would restart exactly from the point where it had stopped, so no data was lost.
For Arjun, HCL was everything. “It [HCL] was a nasha.”
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