Vinayak Chatterjee Co-Founder, Feedback Ventures Group

  

Early Days

Vinayak Chatterjee was born and brought up in a small town, about 40 kilometres outside Calcutta. His father was a production supervisor in a jute factory. Those were good days in jute, it was owned by the Scottish, so they had a good life - compound, swimming pool, all of that. His mother was a lecturer in Calcutta University, she taught economics and political science. So a reasonably middle class life, very small town upbringing and only child. Like so many middle class Bengali families, the Chatterjees were in the corporate world and teaching, but there was no history of anybody in the family having anything to do with business.
After schooling in Calcutta, Vinayak went to Delhi for higher studies. On the advice of some senior he then joined St Stephen's college. The college experience widened his perspective and exposed him to people from varied backgrounds including those from elite schools.

Instead of being diffident about it, Vinayak meshed in extremely well there, forged some deep friendships and became extremely confident.    Vinayak changed the idea of going to Economics and then sat for the CAT exam, mainly because of his best friend at Stephen's - Ajay Banga. So the entire gang appeared for CAT with barely any preparation, and Vinayak made it to Ahmedabad. As it turned out, Ahmedabad was good for Vinayak, although he hated the quanti courses in the first and the second term the third term, has changed his opinion. Vinayak warmed up to what management had to offer. He enjoyed courses such as business policy and marketing which had a wider perspective. But Vinayak still didn't know what he wanted to do in life. So he followed the herd into summer training at Pond's. It was a high profile job and Vinayak took the pre-placement offer that came his way. Pond's treated him extremely well and confirmed Vinayak as Area Sales Manager just six months after joining. Two weeks after getting the confirmation letter, Vinayak told his boss he wanted to resign. Something in him revolted. But he just didn't feel his job had any content. He couldn't get excited selling Pond's cold cream or Cutex nail polish remover. It meant nothing. He looked at himself in the mirror and said that if these products don't mean anything, then he thought he is unfair to himself and the company also. Vinayak was clear about what he didn't want. "It wasn't an easy decision but it was a call of the heart that said if you don't like something, nobody is forcing you to do it. It was January 1982 and Vinayak was on the rough road to 'finding himself'." He had no great pressure from parents to bring in the bucks. But it was important to do something-Something respectable! Vinayak had always enjoyed writing. He'd been part of the Stephen's magazine and also editor of the IIMA mag 'Synergy'. So he thought why not combine the business degree with journalism? There was an offer from C R Irani, to start the business section of Statesman in Calcutta and an offer from Ashok Advani, to become the Bombay correspondent for the recently set up Business India. But Mrs Chatterjee was keener that Vinayak go back to IIMA and complete his PhD. She said, Vinayak did just that. He went back and joined the fellow program (FPM) at IIMA. Vinayak met Raunaq Singh, chairman of the Apollo group. He hadn't heard of him back then. Prof Mote introduced Raunaq, saying he has a company called Apollo Tyres, which is badly in debt because the government had nationalized it. But essentially, the chairman wanted an MBA to turn around the company. Prof Mote said, "Vinayak, we know you are back here to do a PhD but do you want this option of joining as executive assistant to Raunaq Singh?" Vinayak recalls "It was one of those uncertain phases in life. One side of my mind was very clear that I don't want a multinational FMCG job. The other half was still not clear what I wanted to do with life. But picking up ideas, picking up opportunities, some being created, some coming my way, picking, moving on." Vinayak decided to take the offer. He joined what was known as 'Raunaq Group' in those days consisting of Bharat Steel Tubes, Bharat Gears and Apollo Tyres - a fairly large north Indian setup. The next three years - 1982 to 1985 - were extremely challenging. Because in those years, Apollo Tyres actually turned around. However, at 22, Vinayak was the youngest person of the lot. The work was hectic but satisfying. This was all about being part of the big picture – getting your hands dirty, taking small and big decisions which re-engineered the very DNA of the company. In many senses, Apollo Tyres was his finishing school. They grounded him in practical management. Something which every fresh MBA definitely needs to learn! The other thing was that having seen the world top-down, from the chairman's office, Vinayak realised that he still wasn't excited by the proverbial rat race. "At the age of 45, if I am damn good, I will be the MD of Apollo Tyres. So what?" It seemed like a pretty easy thing to achieve, where was the challenge? And that's what sparked the idea of becoming an entrepreneur.

Birth of the spark By this time Vinayak felt it was time to do something new. He was all of 26. Vinayak recalls "I realized that I had some weaknesses. I am not a details guy. I am better at strategy, marketing and networking than operations. In those days I believed I didn't know finance also. So I said if you have to start a business, let's put together a group of like-minded people who also complement each other's strengths." Vinayak roped in some of his batch mates - BK Jain (the batch topper) and Ram Subramaniam, his wife Rumjhum, who was a Calcutta University psychology graduate and a very good friend from Stephen's - Rashmi Malik - an IIMA batchmate who had worked with AF Ferguson. Each member of the team brought in some special skills. Ram, for example, was an IIT engineer, MBA and CA who had worked with Prof SK Bhattacharya, in management structural systems. The team decided that starting a market research firm made sense and put in Rs.15, 000 each as startup capital. At that time, 'Feedback' seemed a very logical name. That name has stayed, though the company has nothing to do with marketing anymore. The first thing the young entrepreneurs did was meet Prakash Tandon and ask him to be their honorary chairman. To celebrate this, Feedback threw a large party and blew up half of its initial capital! But luckily, clients were not hard to find. Batch mates from IIMA had reached managerial level. Someone was with Nestle, somebody in AmEx. Market research projects started coming in. So they were in business, the market research business. The story of how Feedback went from a market research agency to an infrastructure company is more accident than design. Serendipity, not well chalked out strategy. Vinayak's old employer Raunaq Singh came to him and said, "There is a group called Booker (the same people who give the Booker Prize) who wants to set up a factory. Will you do it?" He agreed. Feedback went in as market research consultants. "But they saw in us a capacity to help them build up a project in India where they did not have management. So we ended up building a factory. Then word spread that this group of guys from IIMA, professional ethical chaps are available to do this kind of work." They ran the MR business for five years - from 1985 to 1990. They were number four in the country, with 4-5 branch offices, good clients. It was a good business but they somehow got more excited by the projects story. Market research services had become boring. Vinayak says "Money is a by-product. Business growth, turnover, bottom line is a byproduct of what your heart and head want you to do. So if you follow that, money will follow. Find purpose and the means will follow." The switch to projects happened easily and naturally for Feedback, there was no real sacrifice involved. Word spread and work flowed in. Then a state government heard about Feedback. By a very interesting quirk of fate again, they got called by the government of Tamil Nadu to do India's first private sector industrial park in Chennai, which today is incidentally called Mahindra World City. So by the mid nineties, they got into industrial parks from factories. And a company of 5-10 people grew and grew. The plan is to ramp more in the next 3-4 years. Feedback's first real outside shareholders were HDFC. Now there is also IDFC. These are the two biggest shareholders and the chairman is common - Deepak Parekh. And he took a lot of interest in Feedback, guided the company, and suggested it should go for private equity. One piece of advice from him which Feedback took was. Feedback gave up factories and got into hardcore industrial projects - parks, roads, highways. But is it necessary to vacate an existing space to capture a new one? Don't many companies somehow manage both? Well, many do but Feedback has always just moved from one thing to the next. Feedback describes itself as 70% engineering, 30% consultant. Consulting comes easy to MBAs, but hardcore engineering and execution of mega projects is a whole different cup of coffee. Vinayak traces it back to a chance meeting with the then Malaysian High Commissioner, Mr Nambiar. Mr.Nambiar told about a Malaysian company which wants to enter India. So Vinayak and Ram went and met the company, liked them and did an on-the-spot 50:50 joint venture. The company was called HSS Integrated. Basically, they brought in pre-qualification, or PQ, and in a few years Feedback bought them out. And today Feedback is one of the top ten engineering companies of the country. With kilometers of roads, bridges and industrial parks to its credit The company is adequately capitalized with shareholders like L&T. But the original promoters still hold 40% of the company. But it wasn't a smooth ride all the way. There was, in fact, a point when the company almost shut down. Somewhere in '98-99, they built up overheads far higher than the order book. To cut a long story short, three times in its history, for reasons of bad business planning, or wrong decisions, Feedback came close to liquidation. If some friends or institutional assistance had not bailed the company out, put in money without any security or collateral, purely on faith... Feedback would have been history. Vinayak says "And that is a debt that I can never repay in my life. The financial debt is cleared, we are debt-free today, but it is a very humbling experience. Because today if anybody calls and says, "Oh you are successful today", I know in my heart of hearts there were three occasions when I have made such stupid mistakes, that I was almost on the road." Each time it was tough. But once you come out of it, you are stronger. You have learnt the meaning of 'taking a risk'. Vinayak recalls "The real issues that bothered were the peer group, what your friends and family will say if you fail. We just decided to be thick skinned about it." The interesting thing about Vinayak - and so many entrepreneurs - is that sense of self awareness.

Advice to Young Entrepreneurs The trick is to find something you care about and do a damn good job of it. And that applies to just about anything. My only advice is, be true to your inner voice. If your inner voice says you really love the rat race and can be great in the rat race, please do it. Just don't attach any value systems to it. Many of my batch mates have made great careers for themselves, built great brand equity, done well as global managers. If your inner voice says, that's my route, go for it! If your inner voice says, my route is social entrepreneurship, do it. If your inner voice says, I want to be an author, journalist, write books, please do it! What I find is many people hear that inner voice but just don't have the conviction to act upon it. Don't get too concerned about peer pressure. You may be successful, you may not be unsuccessful, but in the philosophical market, what is success and what is failure? At least you will have the pleasure when you face yourself in the mirror to say "I did what my inner voice told me!" I don't want to put a premium on entrepreneurship. It's not a fad or fashion to follow. So my only piece of advice is find purpose, means will follow. Life's journey will take you wherever it is. Don't worry about the fruits. But be prepared to stick it out. Remember Narayana Murthy's quote: "It has taken me 25 years to become an overnight wonder."