Shantanu Prakash Founder of Educomp,

Today we will be putting some light or rather should I say grab some light from a man called Shantanu Prakash, founder of Educomp, who is responsible for bringing the much-awaited change in the Indian education system.

Shantanu was from a regular middle class upbringing. He went into business while doing his BCom. The entrepreneurial streak continued after the MBA from IIM Ahmedabad. His company Educomp is today the leading provider of digital content for schools across India.

Early Days

Shantanu Prakash was born in Rourkela, a small town with only one notable feature - the steel plant. Dad in SAIL, mom a school teacher, an upbringing no different from thousands of steel town kids in the 1970s. After class 10, the family shifted to Delhi and he enrolled in DPS, a "shiny, big city school." A reasonably good student, Shantanu joined Shri Ram College of Commerce. And that's when it first became evident, 'this guy is different.'

Shantanu recalls "Whenever my dad used to travel, he used to buy me books. In fact, I don't remember getting any presents except books. I used to read voraciously. And probably that unlocked something in the mind. "Big thinking, big horizon and so on"

When his dad retired and wanted to come and settle down in Delhi, he found that he didn't have enough money to buy even a DDA flat. So somewhere at the back of his mind he thought that if "I need to make money, then working in a job is probably not going to do it for me."

Shantanu Prakash grew up in an 'absolutely typical middle class background'. But he knew entrepreneurship was his calling, early in life. He founded a company while still in college and started another one right after graduating from IIM Ahmedabad.

The business was organizing rock music concerts. Not that he had any particular fascination for rock music but it was a good opportunity.

Shantanu got into IIM Ahmedabad although he was actually keener on FMS Delhi. Shantanu joined IIMA, even as the event management business back in Delhi continued to flourish. A contract had been signed with Thumps Up to do a series of concerts all over India. A concert in Bombay was yet to be staged.

Shantanu recalls the time spent at Ahmedabad "Every weekend, in the first year of IIM Ahmedabad, I used to go down to Bombay and work with my friend organizing this concert. It was a great hit. We got Remo to perform, it was held in a hotel in Bombay and one time when I came back, I had this board outside my dorm room in D-14, saying 'Visiting Student'. So I had a complete ball during the two years in IIM Ahmedabad."

"Honestly, I didn't take it very seriously in the first year. Then in the second year, I said okay, let's see the curriculum, what it's all about. Why are these kids studying so hard, what is there to take so seriously here?"

And at the time salaries from campus weren't exactly stratospheric. Shantanu recalls that 17 of his batch mates joined Citibank at salaries of Rs 7-8,000 a month in 1988.

He with his friend and partner from the event management business launched a company focused on education. The idea was to set up computer labs for schools. The business model was innovative - the schools did not invest. They only paid a monthly fee for every student who used the lab and signed a multi-year contract.

That was the time when IT was coming into schools. So there was this whole mystery around IT. They actually got off to a great start. Lots of schools in two years, the company did 50-60 schools and boasted a couple of hundred employees. The turnover was Rs 4-5 crores.

But, there were ideological differences among the partners. Shantanu wanted to go on one direction, which was not quite acceptable to the other partner. But after all they are thick friends.

Shantanu decided to do something on his own. The partner kept the company and pretty much all the money, while he made a fresh start. The year was 1992.

And this is when, he thought of doing something innovative and worthful to the education system on the whole. As he has seen and worked closely with the schools his ideas were revolving round the education only.

Finally the spark - Educomp

Educomp has started very small. And with a different focus. Instead of hardware, Educomp went into software. The first product it launched was a 'School Management System', an ERP of sorts for schools which took two years to build.

Shantanu says, "On paper it seemed like a phenomenal market to automate schools - there is a real pain that you are trying to address. But it wasn't a very successful product". After getting the product into 10 schools Shantanu realized that every school wants customization. And they don't want to pay for the customization.

He quotes "Not understanding what running a business means, you later relearn all those lessons the hard way."

Educomp started its life with zero capital base. He had just two employees in the very beginning. "A few school computer lab contracts kept some cash coming in" he says.

"But the focus was on building this piece of intellectual property. Even before it was fully developed, he started going to the market and selling the product. Shantanu is quite a good salesperson. So he managed to convince a number of schools to buy it and business started growing.

Eventually the product was abandoned and Educomp expanded into digital content for schools, and subsequently into e-learning.

Today if you look at the product portfolio, the company has footprints in almost every space from KG to class 12.

When asked what was the process that you went through? From 1992 to 2006 (when Educomp got publicly listed) Shantanu replies, "Honestly speaking, for me it wasn't a difficult process at all. And I think it's more a mindset issue than anything else."

"I remember, the first office didn't even have a fan. But I didn't seem to mind at all at that point in time. I was so completely obsessed with what I was doing and what I was building. So every single year of my life when I look back, I thought, that was the coolest year of my life. That I was doing the most significant things that I could ever hope to do."

"And that basically translates into being happy. So one way to describe myself would be, you know, an eternal optimist. When you are an optimist some of the external environment stuff doesn't really bother you. It never bothered me."

Getting into the details of how the company grew, initially it was slow. Very slow In 1998, six years after starting, Educomp's revenues stood at Rs 3.5 crores. Then the company started growing. In the year 2000, the top line was around Rs 12 crores. Then it really took off and in FY '07-08, Educomp clocked revenues of Rs 276 crores, with net profits of Rs 70 crores.

Shantanu believes there are two questions which need to be asked:
a) Is the business inherently scalable?
b) Is the market opportunity large enough?

Shantanu answers "In our case, the solutions that we were offering were technology based, so they could easily be scaled up. Secondly, the universe of opportunity in India is phenomenal. There are 220 million kids going to school. There are one million schools, five million teachers, all of that stuff. So even today, the market penetration levels are less than two per cent."

"And Educomp can keep growing 100 per cent over the next 10 years. Without reaching a saturation point" Additionally, the market started responding favorably to digital content.

Shantanu says "It could have happened 3-4 four years earlier, it could have happened 3-4 years later. As far as we were concerned, we were passionate about it and believed this was the way to improve the quality of education." 75% of Educomp's revenues today come from licensing content to schools - helping teachers do their job better.

He always wanted to work with high quality, smart people. But the problem was, the high quality smart people didn't want to work with him. So it was a lot of struggle.

One of the many reasons Educomp was eventually able to attract talent was because people easily become passionate about education. There are 4,000 employees at Educomp but the attrition rate is amazingly low, at less than three per cent.

When asked why?

Shantanu replies "People are happy, I would like to believe that. And the company is growing 100 percent a year; we are now five times larger than our nearest competitor in India in this space. So where do you want to go!"

With the company going public, Educomp today has at least 25 employees who are dollar millionaires. Like all new generation entrepreneurs, the secret sauce of stickiness lies in sharing the wealth. And the heat of growth is fuelled by a timely dose of venture capital.

Educomp received $2.5 million of venture capital in June 2000. It wasn't much of a struggle given the IT and dotcom boom at the time. The funding was wrapped up in two months.

The canvas was always large. With more money you can just buy more paint and do a better painting. Six years later when more funds were needed for expansion, Educomp decided to raise the money through an IPO.

The company had reached a critical size, and thought that capital markets are ready. They are very happy that they took the company public rather than take private equity money.

The important thing is that Educomp went IPO at the right time in its growth curve. Since then the company has been growing 100% a year.

Shantanu changed his role all the time to avoid the risk of getting fatigue, the company was changing too, and they had a phenomenal growth opportunity in front of them.

Educomp is valued at about one and a half billion dollars (as of May 2008). They can be a ten billion dollar company in the next three years. So he is certainly there, in charge, driving growth for the company.

There are new thrust areas. For example, Educomp is now building schools. The company will invest Rs.3,000 crores in the next 2-3 years to set up 150 odd schools in India. The company is planning to get into higher education as well as making acquisitions outside of India.

There's the whole romantic aspect of taking the company, the creation to new heights. The desire is to see your company doing better and better and better. And there is always a 'next milestone' is what Shantanu believes in.

Here are a few of his learnings from his life journey in the corporate field.

"Milestones certainly keep one active and moving. But I think for me personally, understanding how value is created is a very fascinating subject. Studying consumer behavior, getting new products out into the market, working with really smart people, it's a rush."

"Every single day of my life, I experience that and I go out of my way to create those experiences that give me the challenge of being alive, driving something, doing something meaningful. Especially in the business that I run, which is education, it's so easy to feel that you are contributing to society."

"I think my family said this guy is crazy. So let him do whatever he wants. When I got married, certainly I was an entrepreneur at that time, my wife was understanding. But business every year has become more and more demanding of my personal time. More than the monetary sacrifice, it is really the sacrifice of time when you are an entrepreneur. And that is a much more expensive sacrifice than money."

"My life is completely unidimensional. Had I been working in a job, I would have been very conscious of leisure time, very conscious of how much I am working. Here I am working for myself. I had decided a long time ago that the next 10 years of my life I am completely going to devote to building up my company. The family has learnt to be okay with it. But you don't see it as a sacrifice as such?" he persists.

"It is a sacrifice, no doubt about that. Maybe I am not intelligent enough to balance or do this right, I am not proud of the fact. I think the ideal situation is to be successful professionally and take out enough time for your family and for other vocations, hobbies."

"I have this nice little picture, it has not happened to me. That's something that I guess I will have to learn." We all have to, actually.

Recently, Educomp invested in an online tutoring company. This company, Three Bricks E-Services, was started by three very young IIMA entrepreneurs- Chandan Agarwal, Riju and Mohit. They were in business for a year and a half and then Educomp acquired a 76% stake in their company.

In a short period of two years, each of these people, if you value their 24% stake in the company, would be worth at least Rs.15-20 crores each.

Shantanu on Young entrepreneurs

"Two years you may struggle. If the average salary is Rs.15-18 lakhs p.a. (gross) how much do you make in five years? 18 x 5, right? After tax, you make some 50 lakhs. In 5 years, I can guarantee you, any business you do, will earn you that. Assuming that you are at least a little bit intelligent, within a year, the valuation of your business itself will exceed fifty lakhs. No matter what you do.

So if a 24 year old entrepreneur comes to me, I would say choose anything that you want, that interests you, the internal passion you have.

How to choose what to do? I came from a background where I did my Bachelors in Commerce from SRCC and then my MBA - no 'skills', So I could have chosen any domain, but you have to keep some of those key principles in mind - 'Is the opportunity big enough, are you able to make a contribution and fundamentally change something that generates value?'"

Certainly inspirational words from the man himself!!!

More About Shantanu Prakash

Country of Citizenship              :     India
Alma                                          :     MBA from Indian Institute of Management, Ahmedabad
Occupation                                :     Founder of Educomp
Marital status                           :     Married

Awards and Honors

  • Educomp was chosen as 'FUTURE TITAN', one of the 10 hottest companies in India by Outlook Business Magazine, in November 2006
  • Educomp was ranked first in 'Education & Training' in India's Best Companies to Work for in 2009
  • In December 2010, Shantanu Prakash was chosen as the 'Pathbreaker of the year' by Dataquest
  • Franchise India presented "Entrepreneur of the Year" award to Educomp CEO, Mr. Shantanu Prakash in April 2011
  • Educomp featured in Asia's 'Best under a Billion' list released by Forbes Asia in September 2011
  • Shantanu Prakash was conferred with the prestigious Wisitex International Shiksha Ratna of the Decade Award in 2011
  • Best Public Choice Award for Innovation in Teaching Pedagogy
  • Educomp Solutions Limited was conferred with the prestigious "Excellence Award" in the year 2011
  • Shantanu Prakash, won the prestigious ET Now 'Leap of Faith' Award in the category of Education in 2011

Quotes by Shantanu Prakash
  • "Not understanding what running a business means, you later relearn all those lessons the hard way"
  • "I need to make money, then working in a job is probably not going to do it for me"
  • "Educomp can keep growing 100 per cent over the next 10 years without reaching a saturation point"
  • "I think my family said this guy is crazy. So let him do whatever he wants"
  • "Milestones certainly keep one active and moving"

Jaithirth Rao Founder of MphasiS,

If you are a Newspaper buff, then you need no introduction to the man here. Yes, we are talking about Mr. Jaithirth Rao who writes fortnightly column for INDIAN EXPRESS news paper. This week’s our Spark of the corporate.

He built a corporate career.

Then he built a company.

Now he's sold it and moved on. This is his story in short.

Jaitirth Rao, or Jerry as he is better known, does not mix emotions with entrepreneurship and it is his philosophy in life.

Early Days

Jaithirth was born in Bangalore, Karnataka, has done his BSc Chemistry. His dad was working with the Government and so he was keen that Jerry should go into the IAS. As Jerry was just 19 years old, he was not allowed to sit for the IAS.

Two years later, Jerry joined First National Citibank (later known as Citibank) through campus placement. He went to Beirut for training and even sent the forms for the IAS but eventually decided to stay on in a corporate career as Citibank was a good company. It was a heady place in those days, it had great ambitions.

Citibank was then the second largest bank in the world and it was internationalizing its management staff. From a purely 'American' bank it was becoming more multi-cultural. So it was a good time to be there.

He came back from Beirut, worked for 2-3 years in India, and then went to the Middle East. Then he wanted to quit corporate life altogether and decided to go into academics.

In 1979 Jerry enrolled in the University of Chicago to do a PhD. Two years later he realized he wasn't cut out for that kind of life and abandoned the PhD halfway.

He rejoined Citibank, but this time in New York, and then South America. In 1984, a good friend Rana Talwar persuaded Jerry to come back to India and set up Citibank's retail and consumer business. Jerry says "It was within the umbrella of a large corporation but it was very entrepreneurial. Very unusual. We were writing on a blank canvas so it was quite an interesting time. There was no consumerism, no retail at the time. We introduced ATMs in India, for example. Even though the technology was 20 years old, it was revolutionary for India back then."

Nine years later Jerry moved to Europe, and then he was asked to head the technology development division of Citibank, kind of like an R & D unit. He was reluctant - after all wasn't this the job of a techie? "But there was a kind of feeling that in Citibank, technology was getting separated from business. It was felt that someone with a business background would be better to run that division."

It was a very exciting time because the internet was taking off – this was 1995. Jerry redirected a lot of R & D expenditure into the internet. In those days everybody in California was starting a new company and everyday Citibank was giving business to different vendors - many of them in India. That's when it struck Jerry, "Why shouldn't I be on the other side of the table?"

Jerry thought "Financially I was relatively secure so it wasn't a high risk kind of thing for me. And if it hadn't worked I could have always got back into a corporate career. Also my career in Citibank was plateauing. I was in the top 50, but it was clear to me that they were not going to promote me to the top 10 or 15. And I was not excited about pushing my way through corporate politics in New York."

The Birth of the spark

Jaithirth quit Citibank and started Mphasis in1998. Jerry remembers how he got his first work "I went to my boss and said, 'Look, I don't want people to say that you fired me so I want you to be the chairman on my advisory board. I am not going to give you any money, just lend me your name for exactly one year'." He agreed, and Citibank gave Mphasis its first small business. Very soon there were other, bigger clients.

People often ask whether MBAs have any advantage in doing business. Jerry's experience clearly shows how the IIMA network can help.

Early on they acquired a small division of an Indian company called Byzan Systems. Byzan Systems was run by IIMA alumnus Mohan Krishnan. So he became the third founder of Mphasis along with Jerry and Jeroen. Then, when they were looking for money, Citibank Venture Capital was very interested in investing with them and jerry was negotiating with Latika Monga, an IIMA alumnus also.

The Citicorp venture capital investment didn't come through. But the next investor who came to invest was from Barings Private.

Equity was headed by Rahul Bhasin and Subbu Subramaniam, both IIMA alumni. When it came to recruitment, again there were IIMA connections. Among their early employees were Radhika Rajan, Vikram Jaipuria and Preeti henoy.

The Citibank and University of Chicago networks also helped. The first investor in Mphasis was Rick Braddock. Braddock used to be the President of Citicorp and he liked jerry very much.

1999 was a very heady year. Mphasis was growing 100% quarter to quarter. Of course, it was the dotcom boom and everything was growing crazily at that time. And Mphasis positioned itself as a company which did internet based technology solutions for legacy companies - an area where Jerry had been on the other side and knew exactly what a client would want.

Besides, he'd been an early believer in the technology itself.

Jerry recalls "I had started internet banking, internet brokerage and I was chairman of the internet steering committee in Citigroup. So I was very much a part of the internet movement and was one of the founders of something called Online Banking Association. I had gone to Washington DC and testified before the US Congress about internet financial services."

Meanwhile, Barings had invested in a company called BFL whose CEO had quit the year before. Barings had a 25% stake in Mphasis and a 52% stake in BFL. Mphasis and BFL were merged and Jerry became the CEO of the joint company. Actually, it was a reverse merger. BFL was already listed in India.

Mphasis changed its name to Mphasis-BFL Ltd and got listed. The valuation was excellent; in fact, the combined stock price went "through the roof." Mphasis and BFL combined, the fiscal year ended March 2000, had done $34 million top line and had broken even on the bottom line. For the fiscal year ended March 2001, the company did $64 million in revenues. Almost a 100% growth and a 10% bottom-line ($6 million). So basically the merger seemed to have worked.

But there was a problem. Starting January 2001, as dotcoms crashed, the business also ran into trouble. Luckily in 1999, almost by accident, Mphasis had started a small call centre operation. In 2001, when the IT business slowed down, that took off. And today, of course, Mphasis is a major player in the BPO segment. 33% of its revenues come from BPO operations. So you can plan and plot but who can actually see the future? Putting your eggs in multiple baskets makes a lot of sense. Jerry says "In 2001, among the Indian public companies in the IT space, we would have been number 25 or 26. By 2006, we were in the top 10, basically because we continued to grow as others faltered. But also, it was becoming clear that this call centre business is capital intensive."

Mphasis raised capital from ChrysCapital. They were very bold investors because they invested with premium over the prevailing prices. But you know, nevertheless they did quite well with their investment.

Actually the company never used their money - the 10 million dollars was simply put away. "It helped us to sleep better." However by 2004-05 it became clear that something peculiar was happening. The top six players in IT and the top two in the BPO industry were growing faster than the industry average. Usually smaller companies grow faster than the bigger companies. Jerry and his team realized that the consolidation phase had set in. Also IBM, Accenture, all the global players were becoming big in India. It was time to look at a different strategy.

Jerry recalls saying "We could have continued as an independent business - it was nicely profitable. But we said 'No, then we will be marginalized.' So we initiated discussions with EDS and finally we became an EDS subsidiary."

This made sense because now Mphasis had a great marketing engine. And the EDS brand to get business. Post merger the company once again started growing faster than the industry average, proving Jerry's point. But of course it meant selling out.

Jerry recalls "In America, if you look at it, people are much more cold blooded about their companies. At the right time, the CEOs resign, retire, and sell out. In India I think, the first generation entrepreneurs get very, very attached to their companies. Not in rational market related terms but in very irrational emotional terms. We didn't have that. That is what made the EDS transaction possible." It's a cold blooded, clinical assessment. Actually the entire story has been related with a kind of detachment.

Some important experiences in Jerry's life

Jerry always believed in time; which is very critical. He says "In 1973, even if I had wanted to start a company, there was no private equity, nobody would have invested. Whereas in the 1990s, and today of course, there is capital available for people with ideas, people with intelligence and risk taking ability."

"Second thing is, networks are very important. Because networks give you credibility, they give you access. It still means you have to do your job, but at least it opens the doors."

"The third thing that I could say I take away from all this is you need some luck. In fact the call centre decision was luck. Originally our board was against it. They said: 'Oh my God! You are such a high end IT, internet systems architecture company. Why do you want to do this low cost call centre work?' In fact they forced me to put it in a separate subsidiary with a different brand name so that it wouldn't confuse with the high end brand name. But it was a lucky and a good decision."

"A couple of other lessons that I have is that particularly in the initial days, you have to be focused on two things. You, the founder, have to spend a lot of time with customers. It cannot be delegated to junior salespeople. You have the passion, you have the conviction, and nobody else can replicate that."

"And if you are a small company, you have to be extremely transparent and honest. Big companies can afford to cover their tracks, but in small companies, you have to say, 'we did a bad job, sorry, here is a refund'. So you establish a reputation of being reliable, of high integrity."

"Reputation is very important for attracting talent. Because when you are a small company, nobody has heard of your brand, you are not important. Why should anybody join you! One reason why many people joined me was that I had a very good track record at Citibank as a manager. People knew I always took good care of the folks who worked for me. I was fair to them."

Now research has shown that transparent companies have a lower cost of capital. But purely from experience Jerry believes that the more transparent you are, the more people are willing to invest in you. So from day one, Mphasis hired KPMG for audit. The company kept very strong, very high standards. The other thing you have to do in business is take some very tough decisions. There were two senior co-founders. "We had to part ways. It's tough when you have to sit down in the same room with a co-founder and say goodbye to him. But you need to look ahead, not look back as you grow" says Jerry.

Another lesson was that a company which is growing had to keep improving systems and processes. "We had absolute pain when we grew from $100 to $200 million. We suffered everyday because our systems were all cottage industry systems."

And of course one has to plan to set up these systems some time before they are actually required. Not too much in advance because no small company can afford to over invest. Focus on cash is very important. Jerry recalls "We had even taken a small loan which we didn't use. But that didn't matter. We were always sure that we would have cash. In some of the early months, I had to write personal cheques to meet our payrolls. Because cash is what can get you into trouble."

Mphasis, in the initial days, was very cost focused. The founders used their frequent flier miles for traveling. They lived in a friend's home in New York, never in a hotel. The idea was - don't create overheads you can't sustain.

The use of PR is also crucial for small companies which cannot afford to advertise. For instance, Mphasis had a small PR agency in New York who managed to get Jerry a front page article with his photograph in the 'American Banker'. "By God! That did so much for us. We were able to go to so many banks with that article. And it gave you immediate credibility. 'Ex-banker has started an IT company'. It was a great piece. I think investment in PR is very very important. It pays off disproportionately compared to advertising or general marketing."

Recruiting senior people is a major problem. It is as much a headache as buying a company. "Integrating a senior person who doesn't know your culture and who is not part of your original founder group, is very very difficult. We made at least two-three mistakes with that and it's very expensive" says Jerry.

Not only do you have to pay salary, which is expensive, but headhunters fees also. The person will bring in his/ her own people, bring his/ her own systems.

"When in doubt frankly, if the person on the inside is only 80% suitable, I would say promote that person. Because when you are in a growth phase, it is better to take that gamble than try and recruit senior people. Try and recruit people at middle level, and grow them. Do not try and get the senior sales person who is going to solve all your problems. Usually that doesn't work. It didn't work for us." There are no shortcuts!

Lastly, you have to offer a clear and definite advantage. If you are coming into a business where there are already existing players and you are 10% cheaper, don't even bother. You have to come into a business where you are 50-60% cheaper, by doing something different.

Mphasis also recruited some unusual talent. The company was very flexible with location, working from home and so on. And of course, like all new economy companies Mphasis-BFL shared a large chunk of equity with employees -15-20%. There is also a sense of pride in the fact that Mphasis contributed to the larger scheme of things. "We are doing to the service industry what Henry Ford and Frederick Taylor did to manufacturing and we are doing it globally... We also created 12,000 jobs in seven years. And each of them probably created four or five indirect jobs."

We are nearing the end and he hasn't yet mentioned the 'P' word (Passion). Is that part of the whole 'let's not get emotional' approach to running a company?

"I talk about passion, not emotion. The two are different words. Emotion is what you feel for your children. Even when they do something wrong, you are willing to overlook it. But passion is different. I did believe and I still believe in the liberating and productivity-giving power of internet technologies. I do believe and still believe in the Indian talent story."

"Emotional, one shouldn't be, that is my personal view. Some people are. Because emotion, translated in Sanskrit is moha. Moha is this kind of false attachment you feel that this is my company, I have built it, I don't want to leave it. I think that is stupid. I think you have to know when it is the right time to detach yourself and change your role. And maybe eventually leave it; at least be willing to change it from executive to non executive. From leader to mentor. All these things, you have to be willing to do."

Currently Jerry is on the Asia Pacific Advisory Board of EDS VP - a non executive role. Clearly, he has scaled down his involvement even as the company is going from strength to strength.

So what does it feel like to semi-retire after working 20 years and a 7-8 year stint as entrepreneur? Is it that stage of life now where you feel "Ah, I can now spend the next 20-30 years doing 'whatever I want'?"

"But why do you think I haven't been spending the last 20-30 years doing what I want? That too was what I wanted. I enjoyed every minute of working in Citibank. And in the last few months when I didn't enjoy, I made my plans to quit."

"You can't postpone your whole life to the future. People who are endlessly planning for their retirement are stupid. You could die tomorrow. There is no point in planning for retirement and saying 'When I retire, I will do something'. In short, anyone who thinks, 'I am doing this business so I can sell out and then enjoy my life' is an idiot. But there are many idiots out there. I sincerely hope you aren't one of them!"

This certainly is an important lesson for all the young entrepreneurs out there!!!

More About Jerry
Country of Citizenship      :     India
Residence                         :     Mumbai
Alma                                  :     MBA from Indian Institute of Management, Ahmedabad and The University of Chicago
Occupation                       :     Founder of Mphasis
Marital status                  :     Married
Children                            :     Three

Awards and Accolades:
1.     Ernst & Young 'Entrepreneur of the Year’ 2004
2.     Karnataka honored him with the prestigious Rajyotsava Award of the year 2005
3.     The University of Chicago has conferred a ‘Distinguished Alumnus’ award on Mr. Jaithirth Rao for the year 2006
4.     He was also given the ‘Entrepreneur of the Year’ award by the Economic Times
Quotes by Jerry
  • "Why didn't other people see the crest and ride it? That's where I took some risks."
  • "In India I think, the first generation entrepreneurs get very, very attached to their companies. Not in rational market related terms but in very irrational emotional terms."
  • "You can't postpone your whole life to the future. People who are endlessly planning for their retirement are stupid. You could die tomorrow."
  • "There is capital available for people with ideas, people with intelligence and risk taking ability."
  • "If you are a small company, you have to be extremely transparent and honest."
  • "You need to look ahead, not look back as you grow."
  • "I did believe and I still believe in the liberating and productivity-giving power of internet technologies. I do believe and still believe in the Indian talent story."
  • "I enjoyed every minute of working in Citibank. And in the last few months when I didn't enjoy, I made my plans to quit."

John T. Chambers CEO (since 1995) Chairman (since 2006), Cisco Systems

"I learned an awful lot about what not to do. You could see management getting further and further from the customer, telling the customer that they knew what he needed better than the customer did"

John Chambers is an influential leader of the past one and half decade, a great strategist and visionary who took up reins as Senior Vice President of global operations of Cisco Systems in 1990 and later raised through ranks as CEO in 1995 till now and Chairman of Board since 2006. The company was operating with $70mn when Chambers started in 1990 and in 1995 when Chambers took helm as CEO, the company grew to $1bn and the growth continued persistently under the great leadership of Chambers to the rate of nearly $40bn. Today the company is the world leader in networking systems.

The company, which was a routers company, expanded itself into packets, switches, ATM's, Internets, and Intranets tapping new technologies and markets with quick moves of acquisitions and porting the new technologies to synchronize into Cisco's infrastructure.

The key strategies that were fundamental in success of Cisco Systems was its simple to use technology, the top priority given to the customers' preferences and needs, delivering more value to the customers as compared to its competitors.

In the previous past, Cisco Systems delivered a value of 26 cents per dollar. This was all made possible by the great and pioneering knowledge of Chambers about the growing markets and his unwaivered focus on the future growth of Cisco and his customer centric approach. He worked on his laurels relentlessly, raised the company through the odds, and made it to the top far beyond the expectations of his contemporaries and analysts. Thus, Chambers succeeded in building an innovative next generation company and stood a role model for the upcoming CEOs.

The Essence of Real Leadership

As all of us know that the times of turbulence are real measure of leader's success. As Cisco reported a marginal loss in the recent past, the CEO holds himself responsible for the weak performance of the company and addresses the customers and employees saying that he is confident that "Cisco's vision and fundamental strategy is right". He would act on what is to be fixed in the Cisco's portfolio and the fundamental changes are ahead.

The success of Cisco was mostly dependent on its acquisitions (as many as ten acquisitions in the first ten years of his tenure), where as the world has shifted to consumer dominant products. He says that he plans to boost Cisco's focus and discipline.

Chambers added, "We have disappointed our investors and we have confused our employees. Bottom line, we have lost some of the credibility that is foundational to Cisco's success – and we must earn it back." A Cisco's spokes person revealed "At Cisco we've been driving a value-based channel strategy since 2001 and are committed to earning our partners' loyalty each and every day. While many of our competitors' partner strategies remain unclear, Cisco is doubling down on the channel by investing $75 million in our new partner-led sales model."

Chambers named several of Cisco's strengths, including its ability to anticipate and take advantage of changes in the marketplace, its continued growth in the data center, its focus on collaboration, and its big leap into the world of technology. "We have been slow to make decisions, we have had surprises where we should not, and we have lost the accountability that has been a hallmark of our ability to execute consistently for our customers and our shareholders".

The way he was connected to the customers, shareholders, employees and partners shows his empathy and emotional intelligence, the real qualities of a leader. This bonds the Cisco's customers for lifetime, with encapsulating trust at the time of turbulence. Hats off for the great leadership of Chambers.

Educational and Career Outlook

John Chambers with his winning attitude has overcome his problem of Dyslexia, and got himself well educated as any other leader did. He finished his high school at Charleston High School, Charleston, West Virginia, in the year 1967. In the year 1967-1968, he enrolled himself in engineering in Duke's University, but failed to continue. Later he did his Bachelors in Economics/Science in the year 1971 from West Virginia University. In the year 1974, Chambers finished his JD in the law college, West Virginia University. He did his masters in business administration from Indiana University, Bloomington in the year 1975.

After finishing his Masters and deciding his future would be in business, Chambers accepted a job offer from IBM in 1976 as a salesperson, with least desire to be in sales. At the time when Chambers joined in IBM, the company was a giant in the computer industry, the most massive and powerful company known as "The Big Blue". Soon after he kick started his career as a salesperson, he found himself good at the task with determination and touch of southern gentility he could gain a positive response from the customers. John soon realized the shortcomings of IBM that it was working on business computers and typewriters, where as adventurous startups of that era worked on personal computers. As John was lacking an engineering and research background, he doubted his stepping up the corporate ladder in IBM, though he excelled in sales. Therefore, after a six-year long tenure of sales experience in IBM, he managed to convince Wang, Chinese American founder of Wang Laboratories in the year 1982, that he was the right person to head the Asian sales team of Wang Labs and walked the path of his ambitions with pride. Asian customers liked the easygoing Southern manners of Chambers as compared to loud and hard-driving American salesmen.

Chambers had utmost respect for his boss Wang and he stated that Wang was the most impressive person of his life after his father, who had belief and trust in him. Later things drastically changed and Wang passed away with cancer in 1990's and Wang's son Fred took up Wang's Laboratories as successor to Mr. Wang and the company's prospects turned worse and the stock fell steeply as the investors quit. Chambers happened to resign from Wang labs and looked for a new job.

John Chambers was seriously looking out for executive positions and Cisco was the only company that responded to Chambers letters sent out for job search. In fall of 1990, Morgridge, the energetic, veteran of both Honeywell and Stratus, appointed John Chambers as Senior Vice President of Cisco for Worldwide sales and operations. This was the beginning of the Cisco's way by John Chambers striving through the volatility of the technologies and marketplaces.

Cisco was found in 1983 by a married couple of Stanford, Len Bosack, head of computer-science department and Sandy learner, an MBA. The company was pivoted on device called router, built around a microcomputer, which helped interdepartmental communication through Internet Protocol. Moreover, by the year 1986 Cisco had revenues of $10mn approximately. A venture capitalist Don Valentine was given one-third of the company, for his $2.5mn investment. Len Bosack, Sandy Learner and Don Valentine took the company public on February 16, 1990.

Later the founders were out of the company selling their stakes at $170mn. In 1990's being selected by Morgridge, traditional John Chambers was not an easy fit for the fastest trends of Silicon Valley, which were out of control. At the time when Morgridge and Chambers worked together with "technological agnosticism" the major Cisco's policy, the company has a roaring business in routers. Both of them thought that routers were not the only game of the company. Therefore, they wisely took a decision, keeping in view the company's future generally and technologically to acquire Cresendo Communications, a switching company for $95mn. This was the first acquisition made by Cisco in 1993. These switches gave power users and devices easy and better accessibility to the servers making networking child's play. This acquisition proved to be a great success though the revenues of Cresendo Communications were as low as $10mn, because the giant companies like Ford and Boeing were interested in switching products. The saga of acquisitions continued (2001) and Cisco went ahead to acquire other small switching companies such as Kalpana, Lightstream, and Grand Junction, negating the switching competition gradually.

In January 1995, Morgridge left the company, with John Chambers as successor CEO. Under the leadership of Morgridge Cisco not only went public but also had tremendous growth with takeovers and was at $1bn. The company which has a meager workforce of 34 employees rose to 2,260 by 1995. Chambers was strongly determined to take the company way too high beyond the expectations of industrial analysts and leave his mark in the corporate history.

The most valuable learning that Chambers got from IBM was that, customers liked simple one-step concept of technology rather than trying numerous components rigorously. Therefore, he implemented this learning in Cisco and made it a point to provide Cisco's customers with a full array of data solutions in order to stop them from reaching out competitors. Chambers wanted consistent and continuous growth of Cisco and navigated through routers, packets, switches and with explosion of telecom market; Chambers found that ATM is the key for Cisco's growth because of which he acquired StrataCom in 2001 for $4.5 billion far more than the company's market value. This pushed Cisco to the first place as vendor in 2002, to provide advanced network infrastructure for the intranet and Internet environments and the only vendor to offer end-to-end connectivity across public, private or hybrid networks.

Under the strong leadership of Chambers, Cisco started hiring best talent in technology and business as a part of its aggressive recruitment program. Chambers strongly believed that to stay on the top in the marketplace is to listen to the customers carefully and take into consideration their preferences for now and for five to ten years ahead of time and respond to the customers needs accordingly. Chambers always nurtured R&D and told them to integrate the technology of the acquired companies, making it compatible with Cisco's existing infrastructure. Chambers strengthened the position of Cisco forever by acquiring Linskys for $500mn in 2003 and Latitude Communications, a company specialized in conferencing for $80mn cash in 2004. In 2006, John Chambers took up as Chairman of Board in addition to the responsibility as CEO.

In his journey in Cisco from 1990 until date, Chambers experienced numerous peaks and falls, but steered the company towards excellence with his quick response to the ever-changing market strategies. One such instance; in early 2000 the network and telecom companies have been overvalued and in early 2001 Cisco experienced a fallout hit after 14 consecutive strong quarters till August 2000. As a response to this fall out hit, the company fired 15% of its workforce and the company's CEO received a salary of $1 per annum. He became the inevitable part of Cisco and stood exemplary to the future entrepreneurs.

More about John Chambers

Born                                    :John Chambers
                                             August 23, 1949(age 62)
                                            Cleveland, Ohio, U.S.

Country of Citizenship      :United States

Residence                        :Los Altos Hills, California, U.S.

Alma mater                      :Bachelors in Arts/ Science; in business, West Virginia University Juris     Doctor from West Virginia University of Law Masters in Business Administration, Indiana University

Occupation                      :CEO and Chairman of Board, Cisco Systems

Marital Status               :Married

Children                         :A daughter and a son

The born leader John Chambers took birth in Cleveland, Ohio, U.S.A on August 23, 1949. Chambers spent most of his childhood in Charleston, West Virginia, with his sisters Cindy and Patty. Chambers was from a well to do family. His father, Jack Chambers, was a famous obstetrician and gynecologist who delivered all of the children of big wigs like, the Governor Jay Rockefeller. His mother June Chambers was a Psychologist.

Young John at the age of nine had a problem of Dyslexia, a learning disorder, which often made his education and study more torturous. Nevertheless, John's parents were confident about John and arranged him a reading specialist, Lorene Anderson-Walters, to cope up with his problem. John was highly optimistic and had a competitive attitude and enterprising type of personality, by which he achieved his education and stood an exemplary leader for past two decades.

John's favorite game was basketball, which he enjoyed playing in teams and he always played tennis doubles. Later he married, Elaine, his high-school sweetheart and frequent doubles partner. With Elaine, he had two children a girl Lindsay and a boy John.

Awards and Honors
John T. Chambers had received numerous honors and awards from the past one and half decades of his stance at Cisco, as an outstanding leader. Here are a few mentioned below:
  • Chambers received "CEO Diversity Leadership Award" for his Diversity Best Practices in 2009
  • Chambers was named "The World's Most Respected CEO" by Barron in 2009 and "The World's best CEO" in the same list in 2008
  • Time Magazine in 2008 named Mr. Chambers one of the "World's 100 Most Influential People"
  • John Chambers stood as "Best CEOs, Telecommunications, Data Networking," six-times by Institutional Investor Magazine from 2003-2008
  • John Chambers was one among the "25 Most Powerful People in Business" by Fortune in 2008
  • In 2008 honored John Chambers with "Top 10 CEO Vision Award"
  • John Chambers received "Business Leadership Award" by NASSCOM India in 2007-2008
  • The Business Council in 2004 honored John Chambers with Presidential Award: "Ron Brown Award for Corporate Leadership"
Social Responsibility and Philanthropy depicted by John Chambers

Added to his entrepreneurship are his social responsibility and his philanthropy. Chambers played an active role in forming public-private partnerships to reorganize healthcare and education in 2008, for earthquake effected areas of China. Chambers also co-sponsored Jordan Education Initiative and the World Economic Forum. Chambers has also held several other education initiatives, including the 21st Century Schools initiative, to improve education and opportunity for children in the Gulf Coast Region affected by Hurricane.

He not only donated $180,000 for the Republican Party (Mr. McCain) and $100,000 to the Democrats Party (Mr. Bush) for the Presidential elections; but also served two American presidents; most recently as Vice Chairman of the President George W. Bush National Infrastructure Advisory Council (NIAC), where he provided industry experience and leadership to help protect the United States' critical infrastructure. He also served on President George W. Bush's Transition Team and Education Committee and on President Bill Clinton's Trade Policy Committee.

Leadership Lessons from Cisco's CEO
  •     There's almost nothing a leader cannot accomplish, if he does not care who gets credit
  •     Leadership is about getting tough issues, on not only the table, but also driving to resolution without it ever becoming personal
  •     Leaders have the courage to try new things and if it works, build a strategy around it and then integrate it into our technology and business architectures
  •     Leaders support other leaders especially during tough situations. If they disagree with other leaders' decisions, and only if it is important enough to continue the disagreement, do it peer-to-peer
  •     Leadership is about the ability to communicate the V / S / E objectives of a focus area, while still being realistic with ourselves and our group about the challenges that the V / S / E must overcome
  •     Leadership is about driving the culture and really walking the talk, including transparency about mistakes and what we need to do better
  •     Leadership is out Cisco Family
Lessons of Collaboration from John Chambers
As John Chambers is a strong believer of collaboration, he takes a chance to say that there's no miracle and that what the article says is only common sense. Anyway, it helps to identify the main lines of any successful change project:
  • Start with the "human matter": A leadership change is not something one can improvise. It needs explanations, people need to be reassured and to be able to imagine themselves in the future situation, to make the change theirs.
  • Align systems and remuneration: I often say "tell me how you're evaluated and I'll be able to tell you how you work". Trying to make people collaborate while they're given bonuses to ignore or even fight against each other is useless. In other words, in many cases it will be hard to avoid thinking about evaluation models.
  • Think about "articulation": Chambers talks about structure change, but what I can see beyond that is the necessity not to eliminate the hierarchical structure but implement systems that will help hierarchy to articulate with more horizontal and adhoc work models.
  • Frame and explain: Explain the future and make it clear. Autonomy and flexibility don't mean absence of rules. On the contrary, employees who are often mistrustful by nature (and sometimes for good reasons…) set. That's what will make them focus on their rethought work instead of continuously wondering about "how to work" and "how to implement change".
  • Use social media: I don't know if it's done in purpose but even if it's an essential part of the approach, it comes in last position in the list. Maybe because it's of no use if nothing is done about the above-mentioned points.

    Few Inspiring Quotes by John Chambers

  • "When in doubt about our goals, we would encourage you to take the conservative view".
  • "Education and the Internet must go hand in hand ... It will serve as one of the great equalizers".
  • "It's not about size; it's about your ability to make a difference. At that small size, collaboration is all the more important".
  • "The Internet economy continues to create unprecedented growth opportunities for people, companies and countries on a global basis".
  • "Assume employees are going across a lot of networks. So you have to build in security from the home to any number of networks".
  • "Globally, business and government leaders are beginning to dramatically transform their traditional business models into Internet economy business models ... Customers are increasingly seeking Cisco's expertise to help them through this transformation".
  • "We see no major changes in that model for the next several years ... In fact, we are more optimistic about Cisco's position and opportunities in both the enterprise and service provider markets than at any point in the last several years".
  • "While we remain cautious about the implications of a brief pause in the current 10-year expansion of the U.S. economy, we believe that Cisco has never been better positioned to help our customers solve their two most important business issues: Increasing productivity and creating new sources of revenue".
  • "We always try to look three to five years out in the decisions we make and there's no question that the Cisco brand, our opportunity in the commercial market and the evolution of our leaders are going to take us to the next level".
  • "Through the wisdom of its government leaders and the entrepreneurship of its private sector, India has rapidly risen to become a major force in the global economy. Cisco believes that the Internet and related technologies will be a key enabler for India to achieve its goal of becoming a developed nation".

Ashank Desai Founder & Chief Executive Officer, Mastek Ltd

This week, in the "spark of the corporate", we will talk about the forgotten hero of the Indian IT industry, not many people can recognize him by seeing his picture. Certainly a forgotten hero isn't?

He is one among the very few people who had the vision to see the future and growth scope of the IT industry. He dreamt about floating a software company when we did not have proper telephone connection.

In the early 80's, much before IT was a buzzword, Ashank Desai set up Mastek along with a couple of friends. Mastek was the first company to focus on India as a market and is today one of the top 15 IT companies in the country. Mastek may not be the biggest Indian IT company in terms of size or scale, but it is certainly one with a lesson for many an entrepreneur wanting to start a company with his college buddies. More than friends getting together though, it is friends staying together for 25 years that is intriguing. Because partnerships which endure are such a rare thing in today's world!

Many a dream is born on an IIM campus, only to die out when faced with the real world. However Ashank, Ketan and Sundar kept that dream alive and made it happen. What's more they did this in an era when it took, on average, 15 years to get a telephone connection. And you could start an IT company, but forget about owning a PC. In fact, the 'PC' was not even in the market, technically speaking.

But life in the Doordarshan era was kinder and gentler. There was less pressure to perform, and leeway to make some mistakes. The team was young and flexible, and figured out a way. And they had patience, which is another commodity in short supply today!

Early days

Ashank Desai came from a family where becoming a professor, doctor or engineer was the ultimate goal. Yet he had the bug of doing something out of the box always, at the back of his mind.

The core group at Mastek was formed on the IIMA campus - Ashank, Ketan Mehta, Sundar and Wasan. The group would sit and discuss what kind of venture they could take up after passing out. They decided to make use of a course called PPID (Project Planning Implementation and Development) to actually put together a workable plan.

The team took up a project based on 'IT' which at that time was a little known concept. They took advantage of being IIMA students and contacted very senior bureaucrats in Delhi and IIMA alumni.

Of course, there was this feeling that it's fine to plan but once you get a job, once you get married, all this will be over. Yet somehow they managed to keep the spark alive.

Ashank's joined Godrej, who offered the advantage of a house. So the friends literally 'stayed together'. "I tell Jamshyd Godrej that you are indirectly responsible for starting Mastek," grins Ashank. The flat mates spent most nights chatting away till 2 am, discussing their business plans.

Ashank desai did a lot of market research, voltage stabilizers and even manufacturing computers (they were not called PCs at the time though!). But finally they settled on IT because it required less investment, no manufacturing and also, it was a field they were comfortable with. This was the era when computer data was stored on 'tapes' and Ashank admits they had no clue about the PC revolution which lay ahead. But they did know IT was important to companies at a strategic level; software as a field would grow.

"We genuinely believed, and still believe, that IT should help with management decisions, it should offer solutions. That's why we didn't call ourselves Software Technologies, or Information Systems, but 'Management and Software Technologies' (Mastek, in short)."

The Birth of the Spark

In 1982 Mastek was born in Ghatkopar, where Ketan had a house. The total investment was Rs 15,000. Business started coming in through friends and contacts. Sundar's stint at HCL helped, and the first big contract Mastek secured was from Richardson Hindustan (now Procter & Gamble), through IIMA classmates.

It was a classic management problem. Richardson Hindustan were manufacturers of Vicks. It was a product whose peak demand was in June, July and August (cough and cold season, so to speak). The dilemma they faced was whether to manufacture in advance and stock goods or produce just in time. There were costs and benefits associated with each option.

The problem came to Ashank's group for solution, Mastek built a complete model based on the transportation algorithm and it worked really great, they solved the problem.

The first contract fetched Rs 30,000 and long with a bonus for completing the work early, the first income for the company.

Mastek quickly moved out of Ketan's drawing room to Nariman Point because they wanted a 'good address'. It was a 35 square foot office, but it was in the prestigious Mittal Towers. The other problem was that there was no phone in Ghatkopar, it used to take 15 years to get a connection in those days!

A jeweller friend agreed to take their calls, but he stopped when there were one too many! Sounds like science fiction in today's day and age but it tells you the kind of 'true grit' one needed to get into business in pre-liberalized India.

"We have started business with a public phone. We did not have a computer for the first five years, can you imagine that?" grins Ashank. The business was executed at the customer's office, on their machines. "But it was a difficult time. Like all new businesses, it took time to stabilize. We were not earning money..."

They literally have taken any salaries. At this point, friends and batch mates working for multinational companies were 'moving up in life' while the Mastek team was traveling second class. So, once in a while, the thought of closing down and getting back to a job did come to mind. But what carried the team was two things - moral support from the family and the vision of building an institution.

An exhibition by CSI (Computer Society of India) proved to be a turning point of sorts. The PC had just been launched and Mastek was the only software company to advertise there. The company bagged orders from companies like Citibank and Hindustan Lever through its visibility at this event. So Mastek started getting some kind of traction in the market and somewhere, the IIM brand also helped. But the 'struggle phase' lasted six years.

By year six, Mastek was in Dataquest magazine's list of top software companies in the domestic market. The company was ranked #6. "So we said 'Aha! We are not small now!'" The actual turnover of the company at this point was Rs 46 lakhs. The year was 1988.

"Where we have started and where are we now?" Ashank believes there is a difference in the trajectory followed by Mastek, compared to other software companies. Mastek was one of the first companies in India to build 'software products'. It introduced both financial accounting and stock broking packages. The company also signed on with 'Ingres', a database package competing with Oracle.

Now the challenge is to crack the overseas market!!!

The team had no experience in software export. Neither did it have a family nor friends network in the US. "That's the way it started, all exports in India at that time. Some NRI cousin would say, 'Can you do so and so project for my company'?"

So Mastek took much longer to break into the export market. In fact, it took 10 years. Ashank was the first person from Mastek to go abroad. It was a big thing; he recalls, all his colleagues came to drop him at the airport as he boarded the flight to Singapore! The role models for Mastek were TCS and Tata Burroughs. Yet Mastek stayed true to its roots, which lay in 'solutions'. The bug was to do something different, to build complete solutions for the global markets.

So in 1989-90, the company began working on a product called 'MAMIS' - a manufacturing ERP which was unheard of at the time. The company received venture capital of Rs 80 lakhs for this project from TDICI (an ICICI company). TDICI had burnt its fingers eight times; Mastek was the ninth company it funded. But the faith was well placed this time. Mastek went public in 1992 and TDICI made a 25x return on its investment.

Mastek was the first software company to go public post liberalization at 'free-pricing'. Its shares were sold at a 60 rupee premium. Incidentally, 80% of Mastek's revenues, at the time of its initial public offering, came from the domestic market. Yet people had faith and invested.

Mastek itself strongly believed in the domestic market. The company's approach was to build products and solutions which were IT based, launch successfully in India and then take them to the world market. It did not quite happen that way, but that was the operating philosophy.

Well things did not go well this time because of some technical and monetary issues.

What about the money Mastek took to build MAMIS? Well, that capital was not linked to the development of a particular product. So the world did not come crashing down.

There was no finance available from banks for software, where there are no physical assets to pledge.

The trick was to get 20-30% advance from customers. The other strategy was to divide the project into many micro steps so that every delivery gets some money. In time, some banks started giving credit against invoices.

The next phase from '95 to 2000 was one where the company focused on exports. One of the partners, Sundar, practically settled in the US to make this happen. Ashank was based in India but running around all over the world - Singapore, UK, Germany, Japan. Ketan and Sudhakar were busy building the software, the team and the organization as a whole.

Software exports became a larger cause and that helped the whole industry, including Mastek. Ashank became chairman of NASSCOM in 1996, taking over from FC Kohli.

The other major milestone was building internal systems and processes, so crucial for any company but especially in software. No outside consultants were involved; it was all done by the founding team.

Powered by strategy, systems and new markets to conquer, by the year 2000, Mastek achieved a turnover of Rs 250 crores with 900- 1,000 employees on board. The growth rate on the export side was 40-45% year on year. Mastek has consistently ranked among the top 10-15 in the software industry.

As a solutions company, Mastek had built a lot of work in the internet domain much before any other Indian company, including a tool called JAAL. So the company did a lot of work for dotcom companies but, unfortunately, also lost a fair bit of money when most of these companies went down the tube in 2001.

However, Ashank has no regrets. In fact, he recalls, it was a conscious decision to stay away from Y2K work and focus on the internet and new technologies which were more challenging.

The point is, the bar keeps moving and you have to move with it.

Technologies change, customer requirements change and your old software gets obsolete in no time.

Mastek was doing work across many industries upto the year 2000. The company was trying to figure out what worked best for it. With time there came focus but the question is who decides what to focus on?

Coming to the most recent phase, post 2000 was the era of 'focus'. Under an initiative dubbed 'MASTEK First', the company decided it made sense to focus on large customers and in particular, the financial space. In insurance, for example, the company has built a package and the Gartner Group has given Mastek a ranking as one of the promising companies in this space. Further, Mastek's core strength lay in systems integration and large projects, so that was the positioning the company adopted. That was how Mastek bagged the prestigious 'London congestion charge' project. Ashank is especially proud of this project, not only for its size but its impact on the lives of six million people. "If we had screwed up, India would have screwed up," he says in all seriousness. All went as planned and it was a feather in both Mastek and Brand India's cap.

Of course, all this effort to focus and consolidate involved considerable heartburn. Many projects were scaled down, some were discontinued. Several employees felt disheartened and left the company.

But there was one silver lining through these clouds. Mastek entered into a joint venture with Deloitte Consulting, which brought some more experience and more focus in the company. A strong management team was in place and CMM assessment also happened in the year 2000.

"We were the first IT company in the world to get 'People CMM' or PCMM. They had built an institution, an organization which has vision and values."

The values were articulated way back in the '90s. Although the vision was a little fuzzy, it all worked very fine. In time, focus got clarified, there was a sense of stability, sense of financial discipline came and now, there is financial muscle as well. But that has happened only in the last 8-9 years. After 1994, all the money was self-generated.

As of 31st March 2008, Mastek is a $200 million company with a strength of 4,000. It celebrated 25 years in the software business with considerable fanfare. No doubt a great achievement but one cannot help comparing it with some other names in the software business!

Ashank admits the Infosys and Wipros of the world have scaled up much faster - but they followed a strategy of size while Mastek focused on 'IT solutions'. Y2K gave these companies a foot in the door of many Fortune 500 companies. Mastek on the other hand did not climb on board the Y2K bandwagon at all.

"There is a DNA for each company. And that DNA has to manifest. So that is why I say again and again, Mastek is a story still unfolding." And the founders believe in that story and have firmly refused every M&A offer that came its way.

"All these years, there was always a constant pressure, somebody coming and saying, 'Why don't you join us. Together we will be larger.' But we never diluted. We said, 'We want to run this company ourselves. Whatever we want to do, we will do it ourselves.' We had that confidence. And I don't think that was a wrong decision."

Ashank is now vice chairman of SINE (Society for Innovation and Entrepreneurship). This is an organization set up by IIT Bombay which mentors and incubates young companies.

But as the Mastek story shows, you don't wait for someone to step forward and 'support' your idea. You simply go out there and make it happen.

More About Ashank Desai

Country of Citizenship        : India
Residence                            :Mumbai
Alma                                     :M.Tech from Indian Institute of Technology,
                                               MBA from Indian Institute of Management.
Occupation                           :Founder of Mastek
Marital status                      : Married

Awards and Honors
Ashank desai has received many awards. Listed are some of them:

  • Ashank Desai honored with the Distinguished Alumnus Award by IIT Mumbai
  • Ashank Desai was awarded with Outstanding Entrepreneur Award at the Asia Pacific Entrepreneurship Awards (APEA) 2010 India in a gleaming ceremony at Hyatt, New Delhi
  • Ashank Desai was bestowed with this prestigious honor for his outstanding contributions to the Indian Enterprise Solution industry
  • Mastek has been assigned a composite (two parts - Financial Strength Indicator and Risk Factor) rating of 5A2 which indicates a Financially sound and Low risk trading record by D&B
  • Excellence in education award by LOMA in 2009 and 2010
  • Ranked among world's top outsourcing service providers in the Global Outsourcing 100 list produced by the International Association of Outsourcing Professionals (IAOP) in 2007, 2008 and 2009
  • Mastek Ltd. solutions have been recognised with two Celent Model Carrier Awards in 2009
  • Mastek bagged the "Maharashtra Information Technology Award 2008" under the category "IT Software" in 2008
  • Ranked among Top 15 Indian IT companies as per NASSCOM survey in 2007
  • Forbes Asia ranked Mastek amongst the World's 200 Best Small and Medium-sized Enterprises, all under $1 billion in revenues, using factors including five year return on equity and growth in 2006
  • Awarded the 'Best Solution developed on .NET by an Indian System Integrator' by Microsoft in 2003
  • From 2001 to 2004, consistently ranked among technology companies in a "CLSA Study on Corporate Governance" for 4 consecutive years among 25 emerging markets including Asia, Eastern Europe, and Latin America & South Africa
  • Mastek's Elixir Distribution Management (EDM) solution rated "Positive" in Gartner's Incentive Compensation Management (ICM) Marketscope in 2010
  • Mastek's client Apollo Munich Health Insurance, has won the "Celent Model Carrier Asia" award in the policy administration category in 2010
  • Mastek's STG Billing solution developed for Farmers Alliance Mutual Insurance (FAMI) won the overall Celent Model Carrier award in 2010
  • The Mortality management solution co developed by Mastek for Transamerica Life Insurance Company won the Celent Model Carrier award in the underwriting category in 2009
  • Mastek ranked 69th in the FinTech Top 100 in 2009
  • Earned prestigious standing in the vendor ranking of the Vanguards in Insurance Practices (VIP) program by INN and Celent - determined solely by voting from insurance carriers, brokers and agents in 2009
  • INN (Innovators Awards) recognized the mortality management solution co developed by Mastek for Transamerica Reinsurance as a runner up in 2008
  • Ranked 1 in Insurance Outsourcing in 2007 by the Black Book of Outsourcing in 2007
  • Awarded the prestigious Social Contribution Award 2003 by the British Computer Society (BCS) for the London.
  • Global Outsourcing 100 by IAOP ranks Mastek among the best 20 Leaders by Services Offered – Information & Communication in 2009.
 Quotes by Ashank Desai
  • "The key requisite for becoming an entrepreneur, and especially a first generation one, is to have the vision and risk taking ability to build something out of nothing."
  • "I tell young people, we were not as lucky as you guys. You have some support."
  • "Don't just think about it, don't just wish for it, jump into it and do it, if you are really serious."
  • "Once you get into it, go all out; never look at quitting as an option."
  • "Remember that if the startup fails, it is your idea that failed, not you."
  • "What is needed is ability to focus on opportunities and leverage existing resources to make valuable difference to all the stakeholders."
  • "Small vs big vs superbig is a choice that an entrepreneur makes himself or herself depending upon the ambitions, values and what he likes doing."
  • "There is no one formula but I would say yes, get 4-5 years of experience - learn at somebody's cost if I may use the word. Get a bit of a feel, bit of financial stability, and some savings. After all, venture capital is there but you need your own money too. But don't wait too long."

Deep Kalra Founder & Chief Executive Officer (2000-till date), MakeMyTrip

At one time, we were scouting from different sources for booking tickets, accommodation, reservations and planning for a trip on the whole. Now, we can get all these at a click of a button. Thanks to Deep Kalra for making it happen through

The founder, the ever inspiring entrepreneur—Deep Kalra.

Early Days

Deep Kalra is from Delhi. His grandfather was into dry fruit business in Chandni Chowk. But his father was far away from that business. He believed in ideas of his own which inherited to his son- Deep Kalra.

Struggle for the Spark

Out of campus, Deep Kalra joined ABN AMRO. After a year or so he realized ‘Banking is not his cup of tea!’ There was the seed of a thought - it would be fun to do something of your own. But it remained a thought. After three years in banking and exploring various options in marketing, Deep Kalra chose to do something ‘crazy’.

He joined AMF Bowling, which pioneered the concept of bowling alleys in India. AMF had no operations in INDIA, so the job was in essence entrepreneurial. “India knew billiards, India didn't know pool. And India didn't know ten pin bowling, at all. The more he studied it, it's got to do well here!” AMF did set up a couple of hundred bowling alleys but bowling never quite became the “storm of the moment” that Deep Kalra wanted it to be. And there was a reason for it. The cost of real estate in India (even in 1995!) was just too high. Plus, the idea was probably ahead of its time as there were no malls and multiplexes.

Deep Kalra spent four years with AMF, and “really, really tried very hard to make it happen.” Although Deep Kalra worked for AMF as an employee, it was entrepreneurial for two reasons. The fixed salary component was low, it was based around bonuses and how much equipment you sold.

Second, there was very loose support from the US office. Apart from equipment support and service support, you pretty much did your own thing. The disadvantage was that there was nothing new to learn beyond a point.

So Deep Kalra began exploring options once again, and decided it was time to go back and work for a big company. An exciting opportunity came up from GE Countrywide - the consumer finance business. Although it was back to financial services, the job was to look at new avenues for distribution.

He knew somewhere deep in his heart that, the spark of entrepreneur is just about to trigger and waiting for the right time.

He realized internet is going to change our life fundamentally. And so, he will be doing something using the cutting edge technology.

He is clearly a risk taker at heart, won't gamble too much in cards, but just had an inner confidence that things are never going to get so bad that you won't have a job even if this thing does not work out.

So even as he continued with the day job at GE, the nights were spent planning his own venture. Two models came to mind – one was online stock broking. It made perfect sense, given his training and work experience. But Deep Kalra's heart was in travel and that's what he ultimately chose to do - an online travel portal. And heart should rule over mind when it comes to such a decision. Because that's the only way you'll put not just your body but your soul into what you do. The math you can learn for any business.

Of course it can't be purely love. The market size and opportunity as a whole must make sense. Deep Kalra recalls a third idea. His first child had just been born, and he thought, “Why not a kids portal?” Thankfully, better sense prevailed and the idea remained stillborn. Online travel made better business sense -50% of all e-commerce in the US was around travel.

However, Deep Kalra actually made two plans. One was for online stock broking. Besides being an avid traveler, Deep Kalra had another connection with the industry. His wife was making travel shows like Namaste India and Indian Holiday for a production house. So travel it was! The venture started out as ‘India Ahoy’ - a site which is still used to attract high leisure travelers from overseas.

Finally the Birth of the Spark – Travel portal – a name more suited for the Indian market
The biggest challenge is to convince the investor to fund in X crores of rupees, for a project which they have never funded before.

The first guy who was ready to fund him was Neeraj Bhargava, Managing Partner of eVentures. They actually closed the deal sitting in a café in the Crossroads Mall on a paper napkin! As per the investor “we will give you x million dollars and we will take so much percentage.”

Talking about business, when makemytrip set out, it said, “We will be the defining travel portal for travel to India, from India and within India.” So it was domestic travel, outbound travel, Indians going overseas, NRIs coming to India, foreigners coming to India. Everything!

Within two to three months, it was apparent that, in the India of 2001, no one was buying online. Lots of lookers, very few bookers. Everyone was coming to the site and saying “Wow, this is cool”. But that was it.

In June 2001, the irony was that now, a majority stake was with the management, and minority was with some angel investors. Some of these angels were individuals in eVentures. So even as the VC firm bailed out, they really believed in the idea and put in their own money.

Salary payments became difficult. The company shrank from 40 employees to around 20.

The belief in the business was so strong that he went on, without drawing a salary, for 18 months. And whatever was he not taking as a salary, was converted into equity. He also encouraged two senior colleagues to do the same and they were elevated to cofounder status. Of course many others said We can't handle this thing,’ and left.

So they decided,” We are going to fight it out boss.”

It became clear that ‘India focus’ was pointless. So makemytrip simply stopped marketing in India. All energies were focused on US based NRIs. And that saved the company.

“This strategy saved us through 9/11, it saved us through SARS, it saved us through the attack on Parliament, it saved us through the dotcom bust.” Because that market was a very developed one, NRIs were used to buying online. Also they had a natural reason to come to India year after year. The US focus continued right up to 2005. Makemytrip became a nice, robust and profitable business. But it wasn't huge - about $15 million in gross billings, $2 million in commissions or ‘revenues’.

Trouble was, this market was not tremendously scalable. The same model did not work in the UK or Australia for various reasons. The question was, now what?

Then, fundamentally two or three things changed in India. New domestic airlines were launched. Complete and utter chaos ensued in the market. Every day there were ads in the newspapers offering fares of 99 rupees, 7 rupees and even zero rupees! So it was the perfect time for a portal like makemytrip to come in. With the help of technology, the site gave all the choices at one go. And people could make their own decision. Power shifted from the travel agent to the customer. The second big trend which gave Deep Kalra a lot of courage was a meeting with the folks at Indian Railways.

Of course there were also some numbers put out by NASSCOM which said the internet user base would soon be 30 million. But that is more a statistic to take note of, not bet the company's future on.

Ultimately many think tanks churn out reports, with all kinds of projections. Some estimate correctly, others are way off the mark. However real change can be sensed when people start behaving differently... and that's what was happening here.

“Air Deccan did a lot for us” says deep Kalra “they managed to bring the cheap ticket buyer to the net by screaming and giving these crazy prices. So makemytrip did not have to do that evangelization.” Now the company was faced with another decision point - should it launch a real quick with a rough and dirty site or be build the coolest site in the world and take 6-9 months to launch?

He has chosen the first one, launched on September 2005, when nobody else was in the market. That made them synonymous with the term ‘online travel’. And they still occupy that space. Even though other portals have gone crazy advertising. The current challenge is to make the India business profitable.

They are six months old! Bangalore is going to cross one crore next month. Travel means travel- means travel on land, on sea, on air, offline, online, under the line, whatever. You start with an innovation, but then you extend tentacles into the regular side of the business as well.

Within 11 months of launch, makemytrip became the highest issuer of air tickets for any single travel agency location, including the traditional players.

The growth story has been astounding. By March 2008, makemytrip achieved $250 million in sales, i.e., approximately Rs 1,000 crores. That translates into $20 million in commissions or Rs 80-90 crores. 70% of the business is now from India, with close to 10,000 tickets being sold online each day.

The big challenge now is to sell other products online. With hotels, makemytrip is beginning to see a breakthrough. Still, a big change of habit is required. Then there is the sale of holiday packages. Mostly people collect information online but purchase offline which made makemytrip has an 'army' of people selling packages over the phone. The company has set up 20 ‘travel stores’ across the country to be able to sell holiday packages to the various regional markets.

Growth is a hydra headed monster with an endless appetite! Of course all this growth did not just happen. Cash had to be burnt to build a national brand, so investors once again came into the picture. SoftBank Asia Infrastructure Fund was the first to invest. In subsequent rounds, Deep Kalra took money from three other funds - Helion Partners, Sierra Ventures and Tiger Global. But why take money from so many different people? Because different guys bring different things to the table. They also help to manage competitive pressures. Of course, managing so many investors is definitely a challenge in itself!

Deep Kalra has a meeting with IRCTC officials. He hopes to convince them to let him sell railway tickets through makemytrip. As they say, “Try, try and try until they give in!” which has finally happened and also serves its customers with the facility of booking Rail tickets online.


When you talk about Spark, you should also know that spark has the feature of blazing and it has its own roller coaster to drive you, which will bend you with its unexpected twists and turns.

The journey of downsizing the business and to then massively scaling it from 20 to 750 people says it all.

Deep Kalra says “Once you have tasted blood, working on your own, you just don't want to work for anyone. For me, that would be the hardest thing to do.”

First the idea then the implementation and then the inclusion of other add-ins has been the success story of make my

However, the future Deep Kalra would much rather carve out for his company is an IPO. To provide liquidity to all stakeholders, make the company even bigger and most importantly, to remain in control.

More About Deep Kalra
Country of Citizenship       : India
Residence                          : Delhi
Alma                                   : Bachelor's degree in Economics from St. Stephen's College, Delhi                        (1990),MBA (PGDM) degree from the Indian Institute of Management, Ahmedabad (1992).
Occupation                         :FOUNDER OF MAKEMYTRIP.COM
Marital Status                   : Married
Children                             :2

Deep Kalra holds a Bachelor's degree in Economics from St. Stephen's College, Delhi (1990), and a MBA (PGDM) degree from the Indian Institute of Management, Ahmedabad (1992). Deep Kalra is a member of the Executive Council of NASSCOM and chairs the NASSCOM Internet Working Group. He is also a Charter Member of TiE (The Indus Entrepreneurs) and serves on the Board of TiE, New Delhi. He is also a member of CII's Tourism sub-committee and a regular speaker at numerous internet and travel conferences across the world. He currently serves as an independent Director for, a leading B2B website. He is also a founding member of “I am Gurgaon”, an NGO focused on the improving the quality of life in Gurgaon.

Awards and Honors:

Deep Kalra has received some awards. Here are listed a few:

  • MakeMyTrip(MMT) won awards for the Best Domestic Tour Operator and Best Online Travel Services firm.
  • MMT has been voted one of Asia's hottest technology startups by Red Herring in 2006.
  • MMT has many awards to its credit like the 'Best Online Travel Company' by Galileo Express Travel World in 2007.
  • MMT won the 'Emerging India Award' by ICICI Bank & CNBC-TV18.
  • Additional recognition came by way of Deep Kalra, the Founder & CEO of MakeMyTrip, being named the Deal Maker of the year 2010.
  • Mr. Kalra has been named “Internet Man of the Year” by the Internet and Mobile Association of India in 2010.
  • He was named as Person of the Year for 2010-11 by the exchange4media IDMA.
  •  He received GMR Express TravelWorld’s Editor’s Choice Award in 2010-2011 for initiating India into the OTA world.
  • MakeMyTrip has been consecutively ranked for two years in a row (2010 & 2011) as one of the top 3 'Great Places to Work'.
  • Quotes by Deep Kalra
  • “Once you have tasted blood, working on your own, you just don't want to work for anyone. For me, that would be the hardest thing to do.”
  • “First, work for a professional. That way, you know the value of someone who works for you.”
  • “We will be the defining travel portal for travel to India, from India and within India.”
  • “Our edge is clearly our expertise in innovation. Any technological development can be replicated, but being an industry leader, we have always managed to be the first to offer unique services.”
  • “The minute you start thinking you are cool and something big, that’s the end.”
  • “The customer is always the focal point of our activities and all our efforts are directed at creating a ‘delightful experience’ for our customer.”
  • “Technology will play a major role in differentiating the leaders of tomorrow.”
  • “Being ahead on the technology curve is what gives us an edge. It’s very important to keep on upgrading and reinventing new processes to enhance customer experience.