C K Ranganathan
Chairman, CavinKare
C K Ranganathan, chairman and managing director of CavinKare, has
shown the world it is possible to beat the multinationals even in the most difficult
market of fast moving consumer goods.
Ranganathan's journey, which started from a small town of Cuddalore in
Tamil Nadu, has been an amazing one. A business which he started with only with
Rs 15,000 is now worth Rs 500 crore (Rs 5 billion).
He learnt the first entrepreneurial lessons from his father, Chinni Krishnan,
who started a small-scale pharmaceutical packaging unit, before moving on to
manufacture pharmaceutical products and cosmetics.
In an interview with rediff.com, the CavinKare chief speaks about his
inspiring journey.
His father, his inspiration
My father, Chinni Krishnan, an agriculturist, was also into pharmaceutical
business. As I was poor in academics, he wanted me to either do agriculture or start
a business.
My siblings were good in studies -- two of them became doctors
and another a lawyer. I was the odd one out. While my siblings studied in English
medium schools, I was put in a Tamil medium school. I used to suffer from an
inferiority complex because of my poor academic record.
Studies did not interest me, but rearing pets did. When I was in the fifth
standard, I had a lot of pets -- more than 500 pigeons, a lot of fish and a large
variety of birds. I used to earn my pocket money out of pet business at that time.
Perhaps, the entrepreneurial spirit in me showed its first streak.
The origin of the concept of sachets
My father died as I entered college. He had come out with the sachet concept
a couple of years prior to his demise. He felt liquid can be packed in sachets as
well. When talcum powder was sold only in tin containers, he was the one who
sold it in 100 gm, 50 gm and 20 gm packs.
When Epsom salt came in 100 gm packets, my father brought out salt
sachets of as low as 5 gm.
'Whatever I make, I want the coolies and the rickshawpullers to use. I want
to make my products affordable to them,' he used to say.
Selling things in sachets was his motto as he said, 'this is going to be the
product of the future.' But my father could not market the concept well. He moved
from one innovation to another but never thought of marketing strategies. He was a
great innovator, but a poor marketer.
Joining the family business
After my father's death, my brothers took charge of the family business. In
1982, when I joined them after my studies, they had launched Velvette Shampoo.
Within eight to nine months, I left the business because my ideas clashed with
theirs.
As I was in the manufacturing unit, I did not know anything about marketing
or finance. But, my inferiority complex notwithstanding, I was somehow
confident of doing business better.
Starting his own business with Rs 15,000
I had left my brothers saying that I did not want any stake in the property or
business. That was a defining moment for me. I had saved Rs 15,000 from my
salary and that was all I had. Yet I was confident of achieving success. I did not
feel anything about riding a bicycle after having got used to cars.
For a week, I could not make up my mind as to what business to do. I knew
only two things; making shampoo and rearing pets. I didn't want to venture into the
shampoo business as it would initate a fight with my brothers. However, I decided
to do the same later as I could only make shampoo.
I rented a house-cum-office for Rs 250 a month against an advance of Rs
1,000. I took another place for the factory for a rent of Rs 300 a month and against
an advance of Rs 1,200. I bought a shampoo-packing machine for Rs 3,000.
How Chik Shampoo was born
I named it Chik Shampoo after my father. The product did not succeed
immediately; we learnt many things during the process. In the first month, we
could sell 20,000 sachets and from the second year, we started making profits.
I moved to Chennai in 1989 but our manufacturing unit continued to be in
Cuddalore. It took me three years to get the first loan because banks asked for
collateral. I did not have any. But one particular bank gave me a loan of Rs
25,000 which we rotated and later upgraded to Rs 400,000, Rs 15 lakh (Rs 1.5
million), etc.
You know what the bank manager wrote in our loan application? 'This
person does not have any collateral to offer but there is something interesting about
this SSI unit. Unlike others, this company pays income tax!'
I must say my business never looked back because I was very
particular about paying income tax.
Strategies that made Chik Shampoo No. 1 in South India
When Chik entered the market, Velvette Shampoo was being marketed
aggressively by Godrej. But a scheme of ours became extremely successful -- we
exchanged five sachets of any shampoo for a Chik Shampoo sachet, free.
Later, we altered the scheme -- we started giving one free Chik Shampoo
sachet in lieu of five Chik Shampoo sachets only. Soon, consumers started asking
for Chik sachets only. The sales went up from Rs 35,000 to Rs 12 lakh (Rs 1.2
million) a month.
When we introduced jasmine and rose fragrances, our sales went up to Rs 30
lakh (Rs 3 million) per month and with actor Amala as our model, our sales rose to
Rs 1 crore (Rs 10 million) a month! Each idea of ours was rewarded by our
customers. There has been no looking back since then.
Our market share increased and in 1992, we became the numero uno in
South India. It took nine years for me to overtake my brothers' business.
How Chik Shampoo conquered the rural market
Multinational companies sold products in big bottles and not in sachets and
they sold only from fancy stores. They did not look at the small kirana stores, nor
did they look at the rural market.
We went to the rural areas of South India where people hardly
used shampoo. We showed them how to use it. We did live demonstration on a
young boy. We asked those assembled to feel and smell his hair.
Next we planned Chik Shampoo-sponsored shows of Rajniknath's films. We
showed our advertisements in between, followed by live demonstrations. We also
distributed free sachets among the audience after these shows. This worked
wonders in rural Tamil Nadu and Andhra Pradesh. After every show, our shampoo
sales went up three to four times.
Today, the Indian rural market is growing at a pace double than that of the
urban market.
Launching Meera Herbal powder
We continued with Chik Shampoo for seven years before venturing into
anything else.
Meera Herbal powder was actually not our idea. Shaw Wallace already had a
herbal product but it was marketed very poorly. We felt there was a demand
for herbal products and we made a good product. I felt we should be the leader if
ours was a good product. And guess what? In the third month itself, we topped the
market. In six months, we had 95 per cent market share, while Shaw Wallace had
only 4-5 per cent.
How Beauty Cosmetics became CavinKare
As we planned to expand to new products, we thought the name Beauty
Cosmetics would be restrictive. In 1998, we ran a contest among our employees for
a name and one of them suggested CavinKare; with C and K spelt in capitals. CK,
my father's initials. Cavin in Tamil means beauty and grace.
Perfumes for the poor
We wanted to cater to those who cannot afford (high priced) perfumes. Good
perfumes came at a huge price -- they were beyond the means of
ordinary people. We decided to come out with a Rs 10 pack Spinz. We were
successful in that too.
Shampoo market share
In the last two to three years, our market share has come down though we
are growing. It is mainly because of the anti-dandruff shampoos in the market. We
do not have an anti-dandruff shampoo yet. From 0 per cent, the anti-dandruff
shampoos have taken over 25 per cent of the market.
Only 75 per cent of the market, therefore, constitutes ordinary shampoos.
We hold 20 per cent of the market share.
But we are the largest brand in rural Uttar Pradesh, Andhra Pradesh, etc.
and we are the number one in many other states as well.
On the decision to launch a fairness cream
We decided to launch Fairever in 1997 as we saw a huge demand fairness
cream. We are the second largest player in the market in this.
Research states that when a product is good, consumers do not shift to a new
brand. Our team told me not to venture into the fairness cream market as the
consumers were quite satisfied with the existing products. But we went to launch
our product containing saffron -- which is traditionally used to get a fair
complexion. In six months, our sales galloped. This was followed by Indica hair
dye.
Two and a half years ago, we launched Ruchi pickles in sachets and
we became number one there too. We sell close to 5,000 tonne of pickles per
annum. We hope to double this in two to three years. Food is a huge market: we
have understood that. Our target is to be a Rs 1,500 crore (Rs 15 billion) company
in another three years.
Reasons behind his success
Teamwork is the main reason for our success. We have good professionals
who work really hard. The second reason of our success is innovation. We have
executed innovative ideas as well.
CavinKare Ability Award
I stayed as a tenant at Jayashree Ravindran's place (the woman who started
the Ability Foundation). Once, she said she wanted to start a magazine for the
disabled. Though she did not ask for sponsorship, I gave her a cheque of Rs
25,000. I also became one of the Foundation's founder members.
Once we came to know about the disabled who have climbed the
ladder of success, we -- Ability Foundation and CavinKare -- decided to institute
an award for them.
I feel each of us has to give something back to the society. I have great
admiration for those who fight against all odds and attain success. When I started
my career, I only faced shortage of funds but these people tide over graver
difficulties. We must applaud their fighting spirit.
Monday, March 29, 2010
Success Story 1
Sanjeev Bikhchandani
CEO, Naukri.com
Sanjeev Bikhchandani is a classic story of spotting an opportunity and
chasing it with guts, determination, lots of hard work and a little bit of luck.
Naukri.com (the company is listed as Info Edge India Ltd on the Bombay Stock
Exchange) is India's number one job portal at a time when there is a serious
scarcity of employable people in just about every sector of business and industry.
It is also an extremely successful dot-com, having weathered the 2000
meltdown. How much better can it get? Naukri's CEO spoke to MoneyLIFE editors
Sucheta Dalal and Debashis Basu about the road he took and its various turning
points.
Shall we start with a little bit about your background and your upbringing?
When and how did you decide to be an entrepreneur?
There are no business people in my family. My father is a doctor and he was
in the government from 1950 to 1983. So we were brought up in government
colonies. I studied at St. Columbus School in Delhi, so did my brother. There was
no business background in the family, no great financial acumen or anything.
My brother went to IIT, Kanpur, then IIM Ahmedabad and then did his PhD
from Stanford. It was forgone in our family that one would do engineering or
become a doctor -- the standard middle class aspirations of parents in government
service. So I dutifully prepared for IIT entrance, took the exams and qualified.
Then two or three things happened. My rank wasn't great. I wouldn't have
got the top three or four departments.
Secondly, I went for a medical test and found out I was colour-blind --
partially. Thirdly, it was a five-year course. So, I decided it was a better option to
go to Delhi University and study economics.
Meanwhile, my brother had passed from IIM and he told me not to do an
MBA right away because it is useless unless you work for a while. Then Lintas
came to college for hiring in 1985. I joined as an Executive Trainee and worked in
advertising for three years.
Lintas was hiring graduates those days?
They were hiring MBAs as Management Trainees who would be given a
one-year training and graduates would be given two years of training and they
would be equalized after three years or so. We were actually the first batch of
graduate hires.
For a year I was in Delhi then I was transferred to Mumbai. I then wrote the
CAT and went off to IIM Ahmedabad. Typically, in an ad agency you have this
thing about meeting clients and then wanting to be on the other side of the table
since an Ad Agency executive is typically at the lower end of the food chain. So I
decided I want to be on the other side and in Marketing. I got a job at HMM, which
is now Glaxo SmithKline.
I was in brand management, handling Horlicks. I was there for a year and a
half. But all along, ever since I was in school, I was pretty clear that I was going to
do my MBA, I was going to work for a few years and then start my company. This
was there since I was 12 or 13.
Were you clear even in those days what was involved in running a
company?
No clue! But I knew that I didn't want to join government service, after my
father's experience, because in government, you are financially very badly off if
you are honest. There was no way I was going to be dishonest, because those were
not the values we were brought up with.
Since I wanted independence, it had to be in a business. This was my dream,
a distant goal till I passed out of college and joined Lintas. By then I had decided
that I would work for 2-3 years and then start out on my own. So I worked at
HMM, came back to Delhi and within a year-and-a-half I quit.
I started a company called Info Edge. That is still the name of my company,
Naukri is the brand. I started it with a partner and we soon set up two companies,
one was for salary surveys and one was a database of trademarks on which we
were doing searches.
In October 1990, we were operating from the servants' quarters above the
garage at home and were paying my father Rs 800 as monthly rent.
What form of searches were you doing?
They were trade mark searches. We launched a salary survey in Info Edge
and with the money we made from that, my partner had another idea.
He said the trade mark registry in Bombay has a library where you can see
pending trade mark applications. The government takes five years to approve or
reject a trade mark application so if you thought of a brand name today, you apply
for it, launch it in six months and five years later if the government rejects your
application you are dead, especially if somebody else is already using it before
you.
People used to hire a law firm which sent out people to do a manual check in
the library and assess whether the trade mark is likely to be accepted or rejected.
This library is opened to public inspection. So we sent in 20 college students to
note down all information filed under pharmaceuticals in all 134 classes.
We dumped this data in a computer and we wrote software to search it. We
then began to call pharma companies -- there were 5,000 of them -- saying if you
are making a trade mark application talk to us. For Rs 350 we give you a printed
search report. This was a massive hit.
How did you deliver this?
We put the information in a computer. There were no online database
searches then. So we said, you tell us what you need, we do a search, prepare a
report and send it to you by courier. In 1993 my partner and I decided to go our
separate ways.
I kept the salary survey company Info Edge and since the trademark thing
was his idea he kept that. I moved back to the servants' quarters and started afresh.
Over the next three years I kept costs low and made some money.
How did the survey work?
We used to do entry level salary surveys -- what companies are offering
MBAs and engineers at the entry level. We would do a report and send it to maybe
a 100 companies. It was not customised. It was a standard survey sold at Rs 5,000
to maybe 100-200 companies. As the price went up we sold at may be Rs 10,000.
We used to speak to students who got offers usually from top ten engineering
colleges. It worked well.
Where did you get the idea?
When I was in HMM we didn't have offices with partitions like we do today.
It was an open hall where you could see, hear and speak to everyone. I noticed that
when an office copy of Business India came in, everybody used to read it from
back to front. It had 35 to 40 pages of appointment ads in every issue.
At that time Business India was the No.1 medium for appointment ads for
managers. And people would openly talk about jobs that were available or slipping
out of their hands. They discussed opportunities. Nobody was applying, nobody
wanted to leave because they were in a comfortable MNC job with good brands,
good pay packages etc., but they used to talk about it.
From these conversations I figured that even if you are not looking for a job,
you look at a job. You are constantly looking for a new benchmark and checking if
you are missing out on anything.
Also, every week 2-3 head-hunters would call offering jobs. There must
have been 100 headhunters out there and each of them probably had four to five
clients. These jobs were never advertised because we never saw them in Business
India or elsewhere. I figured, what is appearing in the newspapers is the tip of the
iceberg. There is a massive market below the surface, highly fragmented and
scattered across HR Departments and placement consultants.
If somebody could aggregate it, it would be a powerful product where you
could somehow make money. I knew this by 1990. When you are trying to become
an entrepreneur there are a thousand ideas -- this was one of them.
Where would your money come from, in a model like this?
I had no clue. This was only an idea and I knew something would come out
of it but I didn't know how. It was just one of a thousand ideas -- file and forget
kind of thing. By then I had quit my job.
The Department of Telecom had put an ad on the front page of a newspaper
saying it was looking for private information providers to launch a video text
service, like the one in Paris. They would put up a server. . . I didn't even know
what a server was those days. . . and there would be terminals in 45 telephone
exchanges and 50 other public places from where information can be accessed for
a fee.
They said, we want people who will own and maintain the databases and
will not charge us anything; but when the user pays we will do a revenue split. I
spoke to my former partner and said let's make a proposal where we get jobs from
the company head hunters free of cost and put them here and charge 50 bucks per
search, so Rs 25 will be DoT's and Rs 25 will be ours. He agreed we put in an
application, were short-listed and they called us.
We found that around 30 to 40 people had turned up, some wanting to put up
tenders, others planning something else. So they said, fine, we have plenty of
proposals so now we can move to the next stage and get into details. We got a plan
ready, produced documentation and end user schemes with classifications for every
industry type.
That was in 1991, before the Internet came to India. They approved our
proposal and said they will get back to us on implementation. But the project was
cancelled. So we had this concept ready in 1991-92 and didn't know what to do
with it.
But by then I was charged up on the idea and wanted to try it out. We tried
franchise models, couriered floppies, etc. We kept getting data but whatever we
tried it didn't look like it would work. It was too cumbersome. Meanwhile, I and
my partner had parted. This idea came along with me while he kept the trademark
thing.
In October 1996 I attended the IT Asia exhibition in Delhi which is held
every year. Usually at IT Asia they have one pavilion with 100 or more tiny stalls
where one always found a lot of interesting things. I saw one stall with www
written on it. So I asked this guy what it meant, he said it was the World Wide
Web. I asked him what that meant and he said it was the Internet and explained it
to me.
At that time there was no TCP/IP access, only black and white monitors on
which he gave me a demo. He was a retailer, reselling VSNL e-mail accounts. I
said I don't want e-mail, show me the Internet. So he took me to a site called
Yahoo!, showed me how to search, browse, check other sites -- there was lot of
information.
I asked him how many users are there in India. He said 14,000. So I said,
'Wow!' I told him I don't want an e-mail account but I want to set up a Web site,
show me how to do it. He said I can't help you there because there you need a
server and all servers are in the US.
My brother is a professor at the UCLA business school, so I rang him up and
told him I wanted to start a Web site. I told him to help me hire a server, but didn't
have the money and said I would pay him later. We were really struggling
financially those days because in 1996, if you recall, there was a recession. He
said, no problem, I will pay for it and you pay me when you can.
You didn't ever regret having moved out of a cushy MNC job and the
long struggle?
I struggled for 10. . . no, 13 years. I had moved out of the MNC job rather
early. My salary was Rs 80,000 per annum. This was decent in 1990 but I was not
giving up a Rs 20 lakh (Rs 2 million) job to come to a zero rupee salary. In those
days you could not buy a car for three to four years even after you passed from IIM
Ahmedabad.
I had a two-wheeler. I had not seen the higher salaries so I didn't miss it.
What happened over the years when I was struggling is that my friends changed
because they were doing different things. They used to go on foreign holidays, visit
hotels and bars, which I simply could not afford. Over time, of course, I have reestablished
contacts.
Were the adjustments easier because of your family background?
Well, for the first three years, my wife was in Nestle and the company
couldn't pay me. The next two years, the company could pay me and my wife was
still in Nestle so we were okay. She quit in 1995 and around 1996 I became the
Consulting Editor of The Pioneer's career supplement called Avenues. That gave
me a monthly cheque; we were not well-off but we got by.
By that time my reference group had changed, so I was not seeing what my
batch mates were getting. In 2000 when we got venture capital from ICICI, I had
been through the second round of not taking salary for three years -- 1997 to 2000.
That was tough.
During that time my wife was not working, so I had to do a second job. I got
up at 6.00 in the morning, dropped her to the bus stop, was in the office by 7.00,
worked till 12.00 then would go to The Pioneer come back and work till midnight
again. This went on for three years.
That was tough, but the thing about doing your own business is that you are
probably very happy even though you are not making money, for the simple reason
that you are in control of your life and priorities and that is important to me.
Was there the fear factor -- wondering how long you would have to keep
struggling?
I got over the fear factor in the first two years. I realised that for an
entrepreneur the real risk is often a lot less than the perceived risk before you
jump. You learn to cope, to manage -- you find your cushions and buffers.
But sure, you have to be willing to say that I won't have a fashionable
lifestyle, I am okay not buying a big car or owning a house. And it is easy if it is
early in your career. So, in 1997 my brother paid for the server and I gave him 5%
in the company. At $25 a month he got a good deal for the server.
I went to another friend who is a very good programmer and I told him about
my idea to start a Web site. I gave him the old file and I asked him to do the
programming. Since I didn't have the money I gave him a 7% share in the
company. He was a freelancer working from home.
Then there was another friend, a year junior to me, called Saroja. She was
also doing an independent consulting project. I told her that I am doing a second
job in the afternoons and will she be interested in coming in for six hours a day. I
offered 9% in the company and she agreed. Then we had some data entry guys and
support staff from our other regular business.
We went to the Central News Agency and brought back some 29
newspapers with appointment ads. We built the structure of the database and told
them to input the jobs. We got a thousand jobs, then I took a floppy to my techie
friend and told him here is the menu and the navigation we want and he built the
Web site -- Naukri -- in one week.
We launched on April 2, 1997. It was a very rudimentary site. If you look at
it today it was really embarrassing. For the first six months I did not have an
Internet connection.
But a good thing happened to us then. We were the first site that was
targeting Indians in India. All others like rediff.com, Khoj and Samachar were all
targeting Indians in the US. At around that time, journalists in India had begun to
write about Internet and were looking for Indian examples to talk about.
So we began to get massive coverage. In the first year itself we had two fat
files of press coverage and that really helped us. Because we got coverage without
trying, we also got traffic. Our contact strategy was very good -- we would always
allow you to log on free. Because we were sure that with 14000 people accessing
the Net, we had a small base of users and we had to get people to keep coming
back.
So where did your revenue come from?
We were doing salary surveys still remember? In year one in Naukri we did
Rs 2.35 lakh (Rs 235,000) of business and 80% of the jobs were free. In year two
our figures jumped to Rs 18 lakh (Rs 1.8 million) and that is when I realised that
we had a serious business possibility here, although I was not able to pay myself a
salary.
The company was, quite frankly very very stretched even though we broke
even. What I did was to shut other parts of the business and all workstations and
people were working on Naukri.
The next year, turnover jumped to Rs 36 lakh (Rs 3.6 million) and we made
Rs 1.8 lakh profit, but that was because I did not take a salary. I was now clear that
I would grow to make Rs 50 to 60 lakh (Rs 5-6 million) and then the profit could
be around Rs 10 lakh (Rs 1 million) and I could even take home Rs 5 lakh (Rs
500,000). In 1999-2000 we did Rs 36 lakh, but by October we were sure we would
go to Rs 40-50 lakh.
So we were very optimistic and thought we will do well after 10 years of
struggle.
Then, around May-June 1999, we began to get phone calls from people
saying 'we want to invest in your company, why not take money from us'? We
found it surprising, but I said we don't need your money, we are going to break
even and are concentrating on profits next year, so please go away.
Then we learnt that funded competition was coming in and the game was
going to change. Suddenly, I realised, you cannot be a Rs 50 lakh Web site and
make a 10 lakh net profit; you will have to be a Rs 5 crore (Rs 50 million) Web site
and make a Rs 1 crore (Rs 10 million) net profit -- that is the only way you will
survive or else you will die, because the game is going to change.
Sure enough, Jobs Ahead was launched on the India-Pakistan Sharjah
Cricket tournament. We didn't know what the budget was but somebody told us it
'it is twice your turnover.'
That is when we called back the venture capitalists and said look we have
changed our minds. So they said, sure thing, write your business plan. So we went
back to them, the terms sheets were signed and due diligence done and April 8,
2000 we signed the agreement and they cut their first cheque.
We got lucky. If we had taken the money six months earlier we would have
spent it foolishly. The market melted down around that time. We were the last or
second last dot-com in India to get funded. By March the meltdown had started but
people did not officially acknowledge it till September-October. They kept saying
it is a technical correction. We got the money on April 8th and we just put it in
fixed deposit.
We had done business for three years and we knew how tough it was
surviving on the Net so when the market crashed we knew it was a real crash. We
knew of it six months back because we were in the business so I told ICICI that
this is a real crash, we have to build the business slowly.
ICICI, to their credit, never ever asked us for revised valuation and did not
hold back subsequent tranches.
Was this only for you or for everybody else?
For us. For whatever reason -- I don't know what their thinking was and why
us, but the fact is they gave us the final cheque at the same valuation a year and a
half after April 8th.
We began to invest in servers, technology, people, products, sales offices
and we began to focus on growing the business -- not just by spending but through
better products and a feet-on-the-street approach. Around this time the IT
meltdown began. This was in November 2000.
Then 9/11 happened and although we continued to grow, we were very
scared. There was a time when we had only two years of money left. And then
slowly the revenues caught up. We made two years of losses and then we broke
even and made a one crore profit.
Going forward, we see there has to be solid emphasis on product and
technology so in the last two years we have invested a lot in these and will
continue to do so. We need a lot of innovations and scaleable technologies because
funny things happen when traffic suddenly goes up. It is easy to run a Web site
when there is low traffic but you are really tested when traffic goes up.
Does your application still perform and your service still deliver? You don't
realise that until you face the problem. We have invested a lot in scaleable
technologies, in new products and features and in bringing mobile and Internet
together as well as voice and SMS.
In our scheme of things, the first priority is the product, the next is the brand
-- we spend a lot of money on advertising both online and offline. The third is the
sales force and sales network in order to sell. We have 400 sales people all over the
country so we can reach many more companies and service them better.
Where are you vis-?-vis your competition?
There are two publicly available sources of checking who is bigger. One is
Alexa.com where you can check out the traffic of various sites. The other is a paid
site called Matrix. As per Alexa we got over 75% to 80% share of job traffic in
India and according to Matrix we got between 60% to 65%.
In terms of revenue share -- we roughly estimate that we have around 55%
of the market. But the metrics we really look at is how many CVs we are adding
everyday, how many applications are going daily from our Web site? On all these
metrics we have no competitive data but we estimate we are ahead by 30% to 40%.
How are you advantaged or disadvantaged vis- vis well known brands
such as Times which is also in this business now?
Times of India obviously is a big company with a huge print presence and
they are able to support their online presence through print. However, so far we
have not been challenged in our market share or traffic share.
I think with online media a lot depends on your product instincts and
qualities. How fast is the site? How many CVs do I get? How many finds do I get?
We are in a situation where it is very easy for the customer to evaluate competitive
offerings because you can measure how many responses you get and how many
you hire.
But what about your original insight that people look at Business India
from the end, even though they are not really looking for a job. Are you able
to give that window shopping experience?
Yes, some people are looking for jobs, some people are just looking around.
While you can browse through the site we do have an issue about the window
shopping experience for passive job seekers. We recognise that.
A newspaper goes into the house for some other reason and you see jobs
there. You don't have to make a separate effort. What we are able to do with
technology is that if you register your resume with Naukri, the headhunters will
call you.
But newspapers have a massive reach within the city on a given day. So if
you are doing a walk-in interview, thousands will be walking in, after reading a
newspaper ad. But then the Net is not expensive and will deliver results over a
week, ten days or two weeks and it will deliver the results from all over the
country.
So, it is not as if the Net will replace print, it's just some of the stuff which is
going into print will rather be on the web. Besides, employees can themselves
search nearly 2 lakh (200,000) job listings -- they can search, they can browse, they
can set job alerts -- there are a lot of things the Net can do that print cannot.
Do you expect Jeevan Sathi and 99 acres to be successful as well?
As of now, Naukri accounts for over 80% of my turnover. Jeevan Saathi and
99 acres are plays for the future. If you look at our strategy there is a pattern. We
started with Naukri -- a classified listings kind of business, a database search kind
of business.
The market structures of the other two are very similar. There is big market
in print, there is a segment which is run by consultants, there is an intermediary in
the market -- a placement consultant, there is a job seeker, there is a final
employer. We are creating a platform. Our job is to enable a handshake and we are
charging for the prospect of enabling a handshake. Jeevansathi.com is similar.
There is a large print market, there are two parties who frequently use the services
of marriage brokers.
So again there are similar players. It is the same in real estate. So we have
actually gone after markets which are very similar in structure and are financially
viable in print and hence not risky. So we expect to do well, but don't know how
well.
Jeevansathi is the No. 3 matrimonial site in the country; when we bought it
in September 2004 it was distant No. 3 and now we have narrowed the gap
substantially and I think we should be No. 2 in the not too distant future. For 99
acres, there was nobody else of any significance so we launched in August 2005
and we are No. 1 already.
What is your special input in 99 acres? Why have other property sites
not done well?
I don't know. May be they were too early in 1999-2000, may be their
strategy was different from ours, maybe they were not neutral platforms, may be
they did not aggregate enough content. We have 55,000 listings on our site right
now and have a whole tele-calling team which calls up brokers asking for listings
on the phone and give them free trials. So it is a question of intuition also.
The basic funda is the Naukri funda -- we have got the most jobs so we get
the most traffic, we get the most traffic so we get the most response, we get the
most response so we get the most clients, we get the most clients so we get the
most jobs -- it is a virtuous circle like in any other media market. It is the same in
newspapers and the same in Jeevan Sathi or 99 acres.
Looking back, what advise would you have for young entrepreneurs
with your mindset?
I would say that frequently the perceived risk is lower than the real risk but
nevertheless you should understand the risk and try to reduce it.
It is a myth that entrepreneurs are not risk averse. I must be the most risk
averse person I have met in my life. I am really scared of risks. The point is to keep
de-risking at every opportunity. So first, I did not quit my job until after I got
married knowing there is income in the house. I began to teach on weekends.
If I had been single, or my wife was not working -- in fact she was the fist
angel investor -- it would have been a lot more difficult. I may not have done it.
These were all de-risking strategies. When you start out you don't know where you
are going to end up.
When we launched Naukri and you had asked me what is your vision I
would say there was no vision. All I thought was, if I get a thousand companies to
pay me Rs 500 a month to list a job and this would be every month I can do a Rs
60 lakh (Rs 6 million) turnover in three years time I will multiply the turnover of
the company five times, that was the opportunity I felt.
Somewhere down the way this dot-com thing happened, then venture capital
happened, the meltdown happened and if somebody had told me that I would do a
Rs 84 crore (Rs 840 million) turnover five years from now I would say he was
joking. Our projection to ICICI in our business plan was Rs 25 crore (Rs 250
million) for this year. So a lot of things are also unpredictable.
What do you see happening in the business in future?
I think there is lot of growth left in the company, there is more business that
I don't see us diversifying significantly outside the Internet, at least as of
now. We are not evaluating a fourth portal. The reason is we want to at least make
sure that Jeevan Saathi breaks even and makes a profit. If we were only in Naukri
and Quadrangle -- the recruitment part of business -- our pre-tax profit would be
about Rs 28 crore (Rs 280 million) just last year.
So we don't want to spread ourselves too thin, particularly from the
management point of view. In our business, the constraint to growth is not money
but execution and leadership.
CEO, Naukri.com
Sanjeev Bikhchandani is a classic story of spotting an opportunity and
chasing it with guts, determination, lots of hard work and a little bit of luck.
Naukri.com (the company is listed as Info Edge India Ltd on the Bombay Stock
Exchange) is India's number one job portal at a time when there is a serious
scarcity of employable people in just about every sector of business and industry.
It is also an extremely successful dot-com, having weathered the 2000
meltdown. How much better can it get? Naukri's CEO spoke to MoneyLIFE editors
Sucheta Dalal and Debashis Basu about the road he took and its various turning
points.
Shall we start with a little bit about your background and your upbringing?
When and how did you decide to be an entrepreneur?
There are no business people in my family. My father is a doctor and he was
in the government from 1950 to 1983. So we were brought up in government
colonies. I studied at St. Columbus School in Delhi, so did my brother. There was
no business background in the family, no great financial acumen or anything.
My brother went to IIT, Kanpur, then IIM Ahmedabad and then did his PhD
from Stanford. It was forgone in our family that one would do engineering or
become a doctor -- the standard middle class aspirations of parents in government
service. So I dutifully prepared for IIT entrance, took the exams and qualified.
Then two or three things happened. My rank wasn't great. I wouldn't have
got the top three or four departments.
Secondly, I went for a medical test and found out I was colour-blind --
partially. Thirdly, it was a five-year course. So, I decided it was a better option to
go to Delhi University and study economics.
Meanwhile, my brother had passed from IIM and he told me not to do an
MBA right away because it is useless unless you work for a while. Then Lintas
came to college for hiring in 1985. I joined as an Executive Trainee and worked in
advertising for three years.
Lintas was hiring graduates those days?
They were hiring MBAs as Management Trainees who would be given a
one-year training and graduates would be given two years of training and they
would be equalized after three years or so. We were actually the first batch of
graduate hires.
For a year I was in Delhi then I was transferred to Mumbai. I then wrote the
CAT and went off to IIM Ahmedabad. Typically, in an ad agency you have this
thing about meeting clients and then wanting to be on the other side of the table
since an Ad Agency executive is typically at the lower end of the food chain. So I
decided I want to be on the other side and in Marketing. I got a job at HMM, which
is now Glaxo SmithKline.
I was in brand management, handling Horlicks. I was there for a year and a
half. But all along, ever since I was in school, I was pretty clear that I was going to
do my MBA, I was going to work for a few years and then start my company. This
was there since I was 12 or 13.
Were you clear even in those days what was involved in running a
company?
No clue! But I knew that I didn't want to join government service, after my
father's experience, because in government, you are financially very badly off if
you are honest. There was no way I was going to be dishonest, because those were
not the values we were brought up with.
Since I wanted independence, it had to be in a business. This was my dream,
a distant goal till I passed out of college and joined Lintas. By then I had decided
that I would work for 2-3 years and then start out on my own. So I worked at
HMM, came back to Delhi and within a year-and-a-half I quit.
I started a company called Info Edge. That is still the name of my company,
Naukri is the brand. I started it with a partner and we soon set up two companies,
one was for salary surveys and one was a database of trademarks on which we
were doing searches.
In October 1990, we were operating from the servants' quarters above the
garage at home and were paying my father Rs 800 as monthly rent.
What form of searches were you doing?
They were trade mark searches. We launched a salary survey in Info Edge
and with the money we made from that, my partner had another idea.
He said the trade mark registry in Bombay has a library where you can see
pending trade mark applications. The government takes five years to approve or
reject a trade mark application so if you thought of a brand name today, you apply
for it, launch it in six months and five years later if the government rejects your
application you are dead, especially if somebody else is already using it before
you.
People used to hire a law firm which sent out people to do a manual check in
the library and assess whether the trade mark is likely to be accepted or rejected.
This library is opened to public inspection. So we sent in 20 college students to
note down all information filed under pharmaceuticals in all 134 classes.
We dumped this data in a computer and we wrote software to search it. We
then began to call pharma companies -- there were 5,000 of them -- saying if you
are making a trade mark application talk to us. For Rs 350 we give you a printed
search report. This was a massive hit.
How did you deliver this?
We put the information in a computer. There were no online database
searches then. So we said, you tell us what you need, we do a search, prepare a
report and send it to you by courier. In 1993 my partner and I decided to go our
separate ways.
I kept the salary survey company Info Edge and since the trademark thing
was his idea he kept that. I moved back to the servants' quarters and started afresh.
Over the next three years I kept costs low and made some money.
How did the survey work?
We used to do entry level salary surveys -- what companies are offering
MBAs and engineers at the entry level. We would do a report and send it to maybe
a 100 companies. It was not customised. It was a standard survey sold at Rs 5,000
to maybe 100-200 companies. As the price went up we sold at may be Rs 10,000.
We used to speak to students who got offers usually from top ten engineering
colleges. It worked well.
Where did you get the idea?
When I was in HMM we didn't have offices with partitions like we do today.
It was an open hall where you could see, hear and speak to everyone. I noticed that
when an office copy of Business India came in, everybody used to read it from
back to front. It had 35 to 40 pages of appointment ads in every issue.
At that time Business India was the No.1 medium for appointment ads for
managers. And people would openly talk about jobs that were available or slipping
out of their hands. They discussed opportunities. Nobody was applying, nobody
wanted to leave because they were in a comfortable MNC job with good brands,
good pay packages etc., but they used to talk about it.
From these conversations I figured that even if you are not looking for a job,
you look at a job. You are constantly looking for a new benchmark and checking if
you are missing out on anything.
Also, every week 2-3 head-hunters would call offering jobs. There must
have been 100 headhunters out there and each of them probably had four to five
clients. These jobs were never advertised because we never saw them in Business
India or elsewhere. I figured, what is appearing in the newspapers is the tip of the
iceberg. There is a massive market below the surface, highly fragmented and
scattered across HR Departments and placement consultants.
If somebody could aggregate it, it would be a powerful product where you
could somehow make money. I knew this by 1990. When you are trying to become
an entrepreneur there are a thousand ideas -- this was one of them.
Where would your money come from, in a model like this?
I had no clue. This was only an idea and I knew something would come out
of it but I didn't know how. It was just one of a thousand ideas -- file and forget
kind of thing. By then I had quit my job.
The Department of Telecom had put an ad on the front page of a newspaper
saying it was looking for private information providers to launch a video text
service, like the one in Paris. They would put up a server. . . I didn't even know
what a server was those days. . . and there would be terminals in 45 telephone
exchanges and 50 other public places from where information can be accessed for
a fee.
They said, we want people who will own and maintain the databases and
will not charge us anything; but when the user pays we will do a revenue split. I
spoke to my former partner and said let's make a proposal where we get jobs from
the company head hunters free of cost and put them here and charge 50 bucks per
search, so Rs 25 will be DoT's and Rs 25 will be ours. He agreed we put in an
application, were short-listed and they called us.
We found that around 30 to 40 people had turned up, some wanting to put up
tenders, others planning something else. So they said, fine, we have plenty of
proposals so now we can move to the next stage and get into details. We got a plan
ready, produced documentation and end user schemes with classifications for every
industry type.
That was in 1991, before the Internet came to India. They approved our
proposal and said they will get back to us on implementation. But the project was
cancelled. So we had this concept ready in 1991-92 and didn't know what to do
with it.
But by then I was charged up on the idea and wanted to try it out. We tried
franchise models, couriered floppies, etc. We kept getting data but whatever we
tried it didn't look like it would work. It was too cumbersome. Meanwhile, I and
my partner had parted. This idea came along with me while he kept the trademark
thing.
In October 1996 I attended the IT Asia exhibition in Delhi which is held
every year. Usually at IT Asia they have one pavilion with 100 or more tiny stalls
where one always found a lot of interesting things. I saw one stall with www
written on it. So I asked this guy what it meant, he said it was the World Wide
Web. I asked him what that meant and he said it was the Internet and explained it
to me.
At that time there was no TCP/IP access, only black and white monitors on
which he gave me a demo. He was a retailer, reselling VSNL e-mail accounts. I
said I don't want e-mail, show me the Internet. So he took me to a site called
Yahoo!, showed me how to search, browse, check other sites -- there was lot of
information.
I asked him how many users are there in India. He said 14,000. So I said,
'Wow!' I told him I don't want an e-mail account but I want to set up a Web site,
show me how to do it. He said I can't help you there because there you need a
server and all servers are in the US.
My brother is a professor at the UCLA business school, so I rang him up and
told him I wanted to start a Web site. I told him to help me hire a server, but didn't
have the money and said I would pay him later. We were really struggling
financially those days because in 1996, if you recall, there was a recession. He
said, no problem, I will pay for it and you pay me when you can.
You didn't ever regret having moved out of a cushy MNC job and the
long struggle?
I struggled for 10. . . no, 13 years. I had moved out of the MNC job rather
early. My salary was Rs 80,000 per annum. This was decent in 1990 but I was not
giving up a Rs 20 lakh (Rs 2 million) job to come to a zero rupee salary. In those
days you could not buy a car for three to four years even after you passed from IIM
Ahmedabad.
I had a two-wheeler. I had not seen the higher salaries so I didn't miss it.
What happened over the years when I was struggling is that my friends changed
because they were doing different things. They used to go on foreign holidays, visit
hotels and bars, which I simply could not afford. Over time, of course, I have reestablished
contacts.
Were the adjustments easier because of your family background?
Well, for the first three years, my wife was in Nestle and the company
couldn't pay me. The next two years, the company could pay me and my wife was
still in Nestle so we were okay. She quit in 1995 and around 1996 I became the
Consulting Editor of The Pioneer's career supplement called Avenues. That gave
me a monthly cheque; we were not well-off but we got by.
By that time my reference group had changed, so I was not seeing what my
batch mates were getting. In 2000 when we got venture capital from ICICI, I had
been through the second round of not taking salary for three years -- 1997 to 2000.
That was tough.
During that time my wife was not working, so I had to do a second job. I got
up at 6.00 in the morning, dropped her to the bus stop, was in the office by 7.00,
worked till 12.00 then would go to The Pioneer come back and work till midnight
again. This went on for three years.
That was tough, but the thing about doing your own business is that you are
probably very happy even though you are not making money, for the simple reason
that you are in control of your life and priorities and that is important to me.
Was there the fear factor -- wondering how long you would have to keep
struggling?
I got over the fear factor in the first two years. I realised that for an
entrepreneur the real risk is often a lot less than the perceived risk before you
jump. You learn to cope, to manage -- you find your cushions and buffers.
But sure, you have to be willing to say that I won't have a fashionable
lifestyle, I am okay not buying a big car or owning a house. And it is easy if it is
early in your career. So, in 1997 my brother paid for the server and I gave him 5%
in the company. At $25 a month he got a good deal for the server.
I went to another friend who is a very good programmer and I told him about
my idea to start a Web site. I gave him the old file and I asked him to do the
programming. Since I didn't have the money I gave him a 7% share in the
company. He was a freelancer working from home.
Then there was another friend, a year junior to me, called Saroja. She was
also doing an independent consulting project. I told her that I am doing a second
job in the afternoons and will she be interested in coming in for six hours a day. I
offered 9% in the company and she agreed. Then we had some data entry guys and
support staff from our other regular business.
We went to the Central News Agency and brought back some 29
newspapers with appointment ads. We built the structure of the database and told
them to input the jobs. We got a thousand jobs, then I took a floppy to my techie
friend and told him here is the menu and the navigation we want and he built the
Web site -- Naukri -- in one week.
We launched on April 2, 1997. It was a very rudimentary site. If you look at
it today it was really embarrassing. For the first six months I did not have an
Internet connection.
But a good thing happened to us then. We were the first site that was
targeting Indians in India. All others like rediff.com, Khoj and Samachar were all
targeting Indians in the US. At around that time, journalists in India had begun to
write about Internet and were looking for Indian examples to talk about.
So we began to get massive coverage. In the first year itself we had two fat
files of press coverage and that really helped us. Because we got coverage without
trying, we also got traffic. Our contact strategy was very good -- we would always
allow you to log on free. Because we were sure that with 14000 people accessing
the Net, we had a small base of users and we had to get people to keep coming
back.
So where did your revenue come from?
We were doing salary surveys still remember? In year one in Naukri we did
Rs 2.35 lakh (Rs 235,000) of business and 80% of the jobs were free. In year two
our figures jumped to Rs 18 lakh (Rs 1.8 million) and that is when I realised that
we had a serious business possibility here, although I was not able to pay myself a
salary.
The company was, quite frankly very very stretched even though we broke
even. What I did was to shut other parts of the business and all workstations and
people were working on Naukri.
The next year, turnover jumped to Rs 36 lakh (Rs 3.6 million) and we made
Rs 1.8 lakh profit, but that was because I did not take a salary. I was now clear that
I would grow to make Rs 50 to 60 lakh (Rs 5-6 million) and then the profit could
be around Rs 10 lakh (Rs 1 million) and I could even take home Rs 5 lakh (Rs
500,000). In 1999-2000 we did Rs 36 lakh, but by October we were sure we would
go to Rs 40-50 lakh.
So we were very optimistic and thought we will do well after 10 years of
struggle.
Then, around May-June 1999, we began to get phone calls from people
saying 'we want to invest in your company, why not take money from us'? We
found it surprising, but I said we don't need your money, we are going to break
even and are concentrating on profits next year, so please go away.
Then we learnt that funded competition was coming in and the game was
going to change. Suddenly, I realised, you cannot be a Rs 50 lakh Web site and
make a 10 lakh net profit; you will have to be a Rs 5 crore (Rs 50 million) Web site
and make a Rs 1 crore (Rs 10 million) net profit -- that is the only way you will
survive or else you will die, because the game is going to change.
Sure enough, Jobs Ahead was launched on the India-Pakistan Sharjah
Cricket tournament. We didn't know what the budget was but somebody told us it
'it is twice your turnover.'
That is when we called back the venture capitalists and said look we have
changed our minds. So they said, sure thing, write your business plan. So we went
back to them, the terms sheets were signed and due diligence done and April 8,
2000 we signed the agreement and they cut their first cheque.
We got lucky. If we had taken the money six months earlier we would have
spent it foolishly. The market melted down around that time. We were the last or
second last dot-com in India to get funded. By March the meltdown had started but
people did not officially acknowledge it till September-October. They kept saying
it is a technical correction. We got the money on April 8th and we just put it in
fixed deposit.
We had done business for three years and we knew how tough it was
surviving on the Net so when the market crashed we knew it was a real crash. We
knew of it six months back because we were in the business so I told ICICI that
this is a real crash, we have to build the business slowly.
ICICI, to their credit, never ever asked us for revised valuation and did not
hold back subsequent tranches.
Was this only for you or for everybody else?
For us. For whatever reason -- I don't know what their thinking was and why
us, but the fact is they gave us the final cheque at the same valuation a year and a
half after April 8th.
We began to invest in servers, technology, people, products, sales offices
and we began to focus on growing the business -- not just by spending but through
better products and a feet-on-the-street approach. Around this time the IT
meltdown began. This was in November 2000.
Then 9/11 happened and although we continued to grow, we were very
scared. There was a time when we had only two years of money left. And then
slowly the revenues caught up. We made two years of losses and then we broke
even and made a one crore profit.
Going forward, we see there has to be solid emphasis on product and
technology so in the last two years we have invested a lot in these and will
continue to do so. We need a lot of innovations and scaleable technologies because
funny things happen when traffic suddenly goes up. It is easy to run a Web site
when there is low traffic but you are really tested when traffic goes up.
Does your application still perform and your service still deliver? You don't
realise that until you face the problem. We have invested a lot in scaleable
technologies, in new products and features and in bringing mobile and Internet
together as well as voice and SMS.
In our scheme of things, the first priority is the product, the next is the brand
-- we spend a lot of money on advertising both online and offline. The third is the
sales force and sales network in order to sell. We have 400 sales people all over the
country so we can reach many more companies and service them better.
Where are you vis-?-vis your competition?
There are two publicly available sources of checking who is bigger. One is
Alexa.com where you can check out the traffic of various sites. The other is a paid
site called Matrix. As per Alexa we got over 75% to 80% share of job traffic in
India and according to Matrix we got between 60% to 65%.
In terms of revenue share -- we roughly estimate that we have around 55%
of the market. But the metrics we really look at is how many CVs we are adding
everyday, how many applications are going daily from our Web site? On all these
metrics we have no competitive data but we estimate we are ahead by 30% to 40%.
How are you advantaged or disadvantaged vis- vis well known brands
such as Times which is also in this business now?
Times of India obviously is a big company with a huge print presence and
they are able to support their online presence through print. However, so far we
have not been challenged in our market share or traffic share.
I think with online media a lot depends on your product instincts and
qualities. How fast is the site? How many CVs do I get? How many finds do I get?
We are in a situation where it is very easy for the customer to evaluate competitive
offerings because you can measure how many responses you get and how many
you hire.
But what about your original insight that people look at Business India
from the end, even though they are not really looking for a job. Are you able
to give that window shopping experience?
Yes, some people are looking for jobs, some people are just looking around.
While you can browse through the site we do have an issue about the window
shopping experience for passive job seekers. We recognise that.
A newspaper goes into the house for some other reason and you see jobs
there. You don't have to make a separate effort. What we are able to do with
technology is that if you register your resume with Naukri, the headhunters will
call you.
But newspapers have a massive reach within the city on a given day. So if
you are doing a walk-in interview, thousands will be walking in, after reading a
newspaper ad. But then the Net is not expensive and will deliver results over a
week, ten days or two weeks and it will deliver the results from all over the
country.
So, it is not as if the Net will replace print, it's just some of the stuff which is
going into print will rather be on the web. Besides, employees can themselves
search nearly 2 lakh (200,000) job listings -- they can search, they can browse, they
can set job alerts -- there are a lot of things the Net can do that print cannot.
Do you expect Jeevan Sathi and 99 acres to be successful as well?
As of now, Naukri accounts for over 80% of my turnover. Jeevan Saathi and
99 acres are plays for the future. If you look at our strategy there is a pattern. We
started with Naukri -- a classified listings kind of business, a database search kind
of business.
The market structures of the other two are very similar. There is big market
in print, there is a segment which is run by consultants, there is an intermediary in
the market -- a placement consultant, there is a job seeker, there is a final
employer. We are creating a platform. Our job is to enable a handshake and we are
charging for the prospect of enabling a handshake. Jeevansathi.com is similar.
There is a large print market, there are two parties who frequently use the services
of marriage brokers.
So again there are similar players. It is the same in real estate. So we have
actually gone after markets which are very similar in structure and are financially
viable in print and hence not risky. So we expect to do well, but don't know how
well.
Jeevansathi is the No. 3 matrimonial site in the country; when we bought it
in September 2004 it was distant No. 3 and now we have narrowed the gap
substantially and I think we should be No. 2 in the not too distant future. For 99
acres, there was nobody else of any significance so we launched in August 2005
and we are No. 1 already.
What is your special input in 99 acres? Why have other property sites
not done well?
I don't know. May be they were too early in 1999-2000, may be their
strategy was different from ours, maybe they were not neutral platforms, may be
they did not aggregate enough content. We have 55,000 listings on our site right
now and have a whole tele-calling team which calls up brokers asking for listings
on the phone and give them free trials. So it is a question of intuition also.
The basic funda is the Naukri funda -- we have got the most jobs so we get
the most traffic, we get the most traffic so we get the most response, we get the
most response so we get the most clients, we get the most clients so we get the
most jobs -- it is a virtuous circle like in any other media market. It is the same in
newspapers and the same in Jeevan Sathi or 99 acres.
Looking back, what advise would you have for young entrepreneurs
with your mindset?
I would say that frequently the perceived risk is lower than the real risk but
nevertheless you should understand the risk and try to reduce it.
It is a myth that entrepreneurs are not risk averse. I must be the most risk
averse person I have met in my life. I am really scared of risks. The point is to keep
de-risking at every opportunity. So first, I did not quit my job until after I got
married knowing there is income in the house. I began to teach on weekends.
If I had been single, or my wife was not working -- in fact she was the fist
angel investor -- it would have been a lot more difficult. I may not have done it.
These were all de-risking strategies. When you start out you don't know where you
are going to end up.
When we launched Naukri and you had asked me what is your vision I
would say there was no vision. All I thought was, if I get a thousand companies to
pay me Rs 500 a month to list a job and this would be every month I can do a Rs
60 lakh (Rs 6 million) turnover in three years time I will multiply the turnover of
the company five times, that was the opportunity I felt.
Somewhere down the way this dot-com thing happened, then venture capital
happened, the meltdown happened and if somebody had told me that I would do a
Rs 84 crore (Rs 840 million) turnover five years from now I would say he was
joking. Our projection to ICICI in our business plan was Rs 25 crore (Rs 250
million) for this year. So a lot of things are also unpredictable.
What do you see happening in the business in future?
I think there is lot of growth left in the company, there is more business that
we can do. I think that there is a lot of improvement to do in product and
technology to make it a world class company.I don't see us diversifying significantly outside the Internet, at least as of
now. We are not evaluating a fourth portal. The reason is we want to at least make
sure that Jeevan Saathi breaks even and makes a profit. If we were only in Naukri
and Quadrangle -- the recruitment part of business -- our pre-tax profit would be
about Rs 28 crore (Rs 280 million) just last year.
So we don't want to spread ourselves too thin, particularly from the
management point of view. In our business, the constraint to growth is not money
but execution and leadership.
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