To reach R.K. Caprihan's new office, you have to drive into the narrow bylanes of Neb Sarai village in the suburbs of Delhi and honk your way past some very traffic-rules-challenged cows. Quite a change from the plush rooms he occupied as marketing director of scooter major lml, or deputy managing director at Samsung. Today, when he goes out of town on work, there's no chauffeur-driven limousine waiting to take him to some fancy hotel. He hails a cab and heads for a three-star.
Heard of an ad agency called Ideas Creative Services? It's run out of a small basement office in a middle-class residential colony in Delhi. A team of four owns the agency—started in July 1998—one of whom was a director at Rediffusion, where the other three were creative directors. All four have been more attuned to handling multi-crore accounts and working out of tony offices. Each of them has taken a massive pay cut.
Let's go down to Bangalore and meet Prakash Gurbaxani, ceo, 24/7 Customer.com, an electronic customer relationship management (ecrm) company. Gurbaxani lived in the US for 14 years, last employed by the Clark Construction group and was involved in the making of the Los Angeles Convention Centre and the ibm headquarters in New York. Gurbaxani says he'll certainly earn less money in Bangalore than he would have doing construction work in the US.
Are these people nuts? Why give up all that they've achieved through their working lives and begin from scratch once again? Then, there are others who are changing course early on in life. Take 24-year-old hotel management graduate from Switzerland, Siddharth Kapur, who runs his own organisational behaviour consultancy. He quit his two-year job at Delhi's Imperial Hotel, and thought nothing of lecturing 40-year-old vice-presidents of the corporate world. Wouldn't a career in one of India's leading hotel chains be the expected thing to do?
Put these questions to them and they'll look back at you, equally quizzically, as if you were nuts. And answer: "We're just pursuing our dream. Doing what we wanted to do all along." And that is? Doing your own thing. Running your own show. And getting what you want now. "I don't know what will happen to us 10 years from now or whether I'll burn out by 40. I think of making it now with what we have in hand," says twentysomething K. Nagaraj, who along with two others launched Adnova, an application service provider for the media industry, two years ago. "You don't know if you'll make more money from it than you would in the corporate world, but you do it all the same."
Across India, entrepreneurship is exploding. Men and women, moving to the beat of their own private drummer, are flouting traditions, changing work rules, transforming career goals, and embracing risks with their eyes wide open. They are the most vibrant part of the Indian economy. They are the New India: unafraid, gung-ho, excited, and joyous.
Take 31-year-old Deep Kalra. His father worked for the same company (inalsa) for 30 years and his mother teaches in a Delhi school. His resume is a yuppie wet dream: education at St Columba's, St Stephen's, iim Ahmedabad; jobs at abn-Amro Bank, amf, GE Capital. And that's how it would have stayed in yesterday's world. A fast climb up the corporate ladder, lined with fat annual bonuses. Except, Kalra quit GE within a year to, well...do his own thing. This month, Kalra will launch his travel portal makemytrip.com. Why? "The sense of ownership was the biggest driver. You can achieve a lot in the corporate world, but it's not entirely your success."
One stunning facet of the New Indian Entrepreneur is that in invariably every case, he was on a career fast track anyway; in some cases, he was the brightest young star in his company, on an inevitable trajectory to ceohood and the corner office. He is not the BCom fail who set up an order supply business. The ranks of the nie are filled with the best and the brightest of the country. Former chief of Bharti-BT vsat, K. Ganesh, is now ceo CustomerAsset.com, an ecrm company he has co-founded. "At Bharti-BT, I had the same freedom as I have now," he says. "But this will be my baby and my creation." Adds Calcutta-based Sanjoy Sanyal, who set up a multimedia company after quitting blue chip icici: "There's a time when you don't want others ruling your life."
Why is this happening? What explains the ferocity of this spirit of enterprise that is sweeping across India? "For more than four decades, government regulations discouraged entrepreneurs. Any new business venture of any decent size had to come from the large companies, thanks to the license and permit raj," says economist Sudhir Mulji. Adds Gopal Jain, who manages the $60-million India Internet Industries Fund of the US-based View Group, which has invested in Tracmail and Adnova: "Even till 10 years ago, an entrepreneur needed to know who to treat well and how to over-invoice his project." Then, the only form of funding available was the conventional banking route. "Funding was not possible till you were established, profitable and could provide surety for the entire funds you borrowed. I never understood why financial institutions expected you to borrow at high interest rates if they expected you to have the funds in the first place," says Adi Cooper, founder of Tracmail, which handles the e-mails customers send to corporates. But the pendulum has swung in the opposite direction now. It's never been easier.
The seeds of change were sown in the first half of the '90s, with the initiation of economic reforms and the dismantling of the license permit raj. But it's only now, nearly a decade later, that the fruits of liberalisation are becoming clearly visible. Yes, controls needed to be dismantled, but several other socio-economic factors also needed to come into play, and they have taken their own time. It is a combination of all these factors that is powering today's entrepreneurs.
This Is The Knowledge Economy: It's about what you have in your head and not how much money you have in your pocket that will make or break your venture. Take Indus League Clothing, for instance. Eight former Madura Garments employees, who had built the Louis Philippe, Van Heusen, Allen Solly and Peter England brands, founded it in April 1999. If you can do it for someone else, you can surely do it for yourself. Today, the company's two brands, Indigo Nation and Scullers, are available in India and across 12 countries in Asia, with a turnover of Rs 26 crore in six months since launch. Or take the team at Ideas. Between them, Ashish Chakravarty, Madhu Sarkar, Urmimala Dutt and Ajit Kuriakose have 25 advertising awards. It's no wonder that clients like Microsoft, Ernst & Young, Maruti and Star TV flock to them. For that matter, Caprihan's window2shop.com offers unbiased opinion and a multi-brand choice of all consumer electronic items, leveraging the 30-plus years he has spent in the consumer goods business.
The knowledge economy isn't an exclusive zone: it has filtered down to small towns as well. Shivpuri
in Madhya Pradesh has a population of about 1.5 lakh. After completing a computer course from niit, twentysomething Sanober Khan used to run the niit centre there till the middle of last year. Then, when she felt she'd learnt enough about teaching and computers, she branched out on her own, and installed some computers and created some teaching manuals. Today, she claims that thanks to lower prices, she has three times the amount of students that niit has.
Rich Is Good: In today's India, you don't apologise for making money. Earlier this year, when a sensex rally briefly made Wipro's Azim Premji the third richest man in the world, he was feted and toasted. As are India's other software billionaires, whose rise has been extensively chronicled by the press in glowing terms. The pink papers now bring out India's own version of the rich list. "There are many success stories that are an example and spur people on," says Ganesh. According to one survey, eight of the 10 richest men in India are first-generation entrepreneurs.
Far from being the exploiting capitalist, businessmen today are admired in society. Recalls Caprihan: "When I went to the sales tax office, I was surprised by the respect I got. I wouldn't have got that 20 years ago." That's primarily because being an entrepreneur no longer means spending your time managing the political environment, procuring licences and phone connections. Instead, entrepreneurs can focus on growing the business and doing the work they really enjoy. And this fact is now recognised and appreciated.
Venture Cap Magic: "The driving force without question is the amount of funding which is available to Indian companies from FIs, private Indian individuals and foreign funds," says Sriram Srinivasan, managing director, Indus League Clothing, in which three VC funds have invested. Unlike traditional banking, where each investment is supposed to make a return, VCs expect most of their investments to eventually be dead losses. They believe that two out of 10 investments will make sufficient money to more than cover for the others. That gives a lot more entrepreneurs an opportunity. The corollary is that failure is not necessarily a stigma.
VC funds look for two main ingredients: an idea that they believe makes commercial sense, and more importantly, a management team with a good track record. Kalra of makemytrip.com, for instance, initially approached e-Ventures with three ideas scrawled on a sheet of paper. And soon after fine-tuning the ideas, got an immediate commitment—no family lineage, no collateral needed. All that mattered was his track record as a manager. Or take Tracmail's Adi Cooper, who was one of the first few employees at tcs in 1968, later founded Tata Infotech, and then started Digitron Computers. A track record more than sufficient to impress any VC.
VC funds provide more than just money. "Beyond money, VCs also put in whatever else is required, as they also stand to gain from the venture," says Jain. In fact, for the first few months, Indus League even functioned out of the offices of one of its VCs. Shobha Ponnappa worked for 17 years in advertising before she set up Avigna Technologies, a multimedia outfit. Though she founded and ran the company without any external funding, she finally took on Intel, icici Ventures and Chrysalis Capital, "more for the value of their names and knowledge and contacts than for the money". VCs also ensure that you are given a comfort cushion and that your standard of living is maintained. That's what e-Ventures is doing for Kalra, who draws a regular salary. Quite unlike yesterday's entrepreneur who put his house up as collateral or who made money only when the company finally showed a profit.
The World Is Your Oyster: Your marketspace is no longer just confined by any geographical restrictions. "For business in India, your core resource should be people and the customer outside India. That's the best model," says Gurbaxani. Indeed, with the Net as a delivery model, India is in a position to leverage its people strengths. And that's what most entrepreneurs, in tandem with their VCs, are trying to exploit.
Take Cooper's Tracmail, for instance. It operates out of Navi Mumbai, employing 550 people. But its marketing office is based in Boston, where its VC, The View Group, is based. Most of its clients are US-based, and Tracmail is now looking to strengthen its presence in Europe. Or take 30-year-old Bikram Chaudhary, who owns Kentropy Solutions along with three others. Kentropy designs software applications for financial derivatives, exactly what Chaudhary dealt with at Bankers' Trust, where he last worked. While the software is developed in India, one of the partners is posted in Hong Kong to do the marketing. Adds Kalra: "The VCs realise India's strengths in the international market and are willing to increase funding so that companies can target markets abroad."
Barriers Are Down: Business today isn't about setting up a steel mill or an oil refinery. In the service economy, people are your main cost. For instance, Caprihan's capital investment is a mere Rs 50 lakh, with which he already has 15 employees. He estimates that to provide a job in the services sector, it costs roughly about Rs 4-5 lakh per employee, whereas in the old economy, thanks to investments needed in plant and machinery, it would cost at least double that figure.
The easing of fdi (foreign direct investment) regulations has also helped immensely. Recalls Caprihan: "My son works at Chase Manhattan in the US. He sent me some money to help me in my venture and the whole process took about 20 minutes. This would have been unthinkable a few years ago." Indeed, if fdi regulations hadn't been eased, there would be no VC funds in India today. Be it makemy-
trip.com, Indus League, Avigna Technologies, Tracmail or Adnova, they have all relied on foreign VC funding. "This has reduced dependence on traditional banking channels and instead there is plenty of private equity floating around. The government needs to liberalise fdi further," says Mulji.
Laurels Come Early: Today, achievements at a young age, whether monetary or professional, make people feel secure in life a lot earlier. Then they can pursue their own dreams. When a forty-something mnc banker quit to start his own dotcom, his colleagues totted up just how much the man must have accumulated through his career as salary and bonuses. The number, they say, should be between Rs 6 and 7 crore. Says Gurbaxani: "By earning in the US, I had already given my kids some sort of security. So the risk was entirely my own."
With degrees from the iits and iims commanding a bigger premium by the day, many feel they can afford to take the risk. "A professional degree arms you with a lot of self-confidence. Even if your venture fails, you feel you can always get a job," says iim-a alumnus Kalra. A businessman is no longer someone who didn't have the qualifications to get himself a job in a blue-chip company. Not surprisingly, Ponnappa, when she quit advertising after 17 years, didn't feel that she was taking any risk at all. Beyond the confidence of never considering failure as an option, advertising was something she could always fall back on. This also gives an entrepreneur the support of the family. "Ten years back, I wouldn't have thought of branching out as an entrepreneur," says M. Suku 38, one of the owners and ceo of Adnova, whose last assignment was at Colgate-Palmolive, "but today's environment is very helpful and my family supports me totally. It may have been different a few years back." Also, the world is a far smaller place today. Foreign travel and study is more the order of the day than a unique happening. "It's an advantage that people can travel and see how businesses in developed countries work. That helps them spot market opportunities," says Mulji. No wonder firms like Tracmail, 24/7 Customer.com and CustomerAsset.com are primarily targeting US and European markets.
All around us, these gutsy people are creating a New India. It is only change, they believe, that can be the basic building block of the future. "Change," says Mulji, "is the essence of growth." As technological progress and a bold new spirit unbound by the past combine and coalesce, we could be on the threshold of a glorious revolution. A revolution powered not by ideology but by individuals pursuing their own personal dreams. That's the best kind of revolution you can have.
With Charubala Annuncio and B.R. Srikanth