Hailing from small-town Tamil Nadu, Groupon COO Kal Raman has taken many a risk in his dream career — all ‘for the learning and not the money’.
I am mad at Kal Raman — he’s kept me waiting for 45 minutes. I threaten to leave, but don’t because he has a great story to tell — a textbook rags-to-riches tale. When he finally arrives, I mention punctuality, but he is sufficiently, and smartly, contrite. He isn’t feeling too well, and so on.
In two minutes, I can see why the man who couldn’t “even say ‘My name is Kalyan Raman in English without shivering’” when he joined Anna University’s electrical engineering course in 1984, has today become the Chief Operating Officer of American company Groupon, with an annual billing of $5.5 billion.
Raman is disarming, can talk his way through tough spots and, in his dream career, has taken huge risks — but more for learning, he says, than money.
The son of a tahsildar from a village in Tirunelveli, Tamil Nadu, a 15-year-old Raman, his mother and four siblings were literally thrown out on the streets after his father died of a heart attack. “From a nice house, three servants and a jeep, we were on the road.”
With a pension of Rs 420, and the Rs 100 she earned through reading palms, his mother raised the five children with a single goal — they’d have the best of education. “She became an expert at pawning; pay the interest for a piece of jewellery or kodam (utensil) by pawning another.”
After high school, he qualified for both a medical course in Tirunelveli and an engineering course at Anna University, Chennai. He opted for the latter; “I took the first risk of my life because I didn’t want my life to begin and end in Tirunelveli, so I chose Madras.” He didn’t even know about the existence of Anna University — “a friend’s dad applied and picked my courses. There was nobody to help or guide.”
One of the toppers in his batch, Raman cruised into Tata Consulting Engineers (TCE). We now have the famous story of how he landed at 4 a.m. at Dadar East in Bombay, slept on the platform, and left his bag with a vegetable vendor from Tirunelveli. Reporting to the office in chappals, he got ticked off by his boss, who soon turned sympathetic after hearing his story and gave him a month’s advance… and shoes!
AC, not computers, important!
After nine months at TCE, when Tata Consultancy Services wanted staff, he volunteered, “because the computer guys worked in AC rooms”. At TCE, he had done very well, and was offered a jump from Rs 2,350 to Rs 3,600, but he turned it down, quit, and applied to TCS. “Maybe I was naïve, crazy or audacious, but I enjoyed the power of computers and wanted it as a full-time job.”
He stayed at TCS for six months, his last stint in India. The highlight of it was his trip to Singapore as a “glorified courier” to deliver a software tape to IBM — but it crashed, robbing him of the opportunity to shop at Mustafa! After fixing the problem over two days, he whined to a senior about his bad luck. “He extended my trip, gave me an extra $1,000, and a car and driver. And I returned to India like a king, with a new suitcase, two gold chains for my mother and sister, shoes for my brother, TDK cassettes, Tiger Balm, etc.”
TCS next sent him to work for a Scottish insurance company. It was launching five new policies, and Raman found the statistical fundamentals of one model flawed. When he pointed that out to his TCS boss in Bombay, he was asked to mind his business and stick to software writing! But when a director of the company, Chris Nicolty, stopped to chat with him, “I told him, ‘Please educate me, I am trying to understand how this will work.’ He listened and said ‘You might have a point’… but nothing more, and walked on.”
Two weeks later, the Scotsman came back to him and said, “Good job, I’m proud of you.” The project was stalled, Raman was given a bonus, and even offered a job at that company, hiking his salary from £500 to £2,500. “My life was made; in my mind I could see a house for my family, sister’s marriage, etc.”
But, interestingly, Nicolty advised him not to take the job because his biggest strength was the ability to take risks. In the UK he would soon hit a glass ceiling, so he should go to the US. “He said ‘don’t make your strength your weakness’.”
It was 1992. Fighting the urge to grab the opportunity, with his Scottish friend’s help, Raman soon had an offer for a contracting job with Walmart at an annual salary of $34,000. “But by the time they processed my visa, within a month the offer had gone up to $60,000,” he says.
By then he was married; he met his wife at TCS. “So with a Prestige cooker, two suitcases, and $100, we landed in Atlanta.” He joined as a Cobol programmer.
Raman’s dream run continued, with a helping hand from his ability to take risks. Walmart was making some of its contractors permanent employees, but the catch was reduced income — from $60,000 to $34,000. “Many others refused, but I took the job. By now my wife was also working, and we were comfortably sending $1,000 home every month,” he says.
Unbelievably, Raman says he got 18 promotions within just 18 months, and his salary jumped from $34,000 to $96,000.
Fascinated, I ask Raman how much more time he has for the interview. “I came late, so I don’t get to decide on the time; you do,” he says.
So, is he really good, or is it his gift of the gab that got him so far, I ask cheekily. Or does the US really recognise and reward talent? “I happened to be lucky; just like Forrest Gump, I was at the right place at the right time. God was disproportionately unkind to me when I was young, and disproportionately kind to me later.” He believes the US is “the most meritocracy country in the world… there is no question about it. You can take shots at America for so many things, but for honesty, work ethics and meritocracy, there is no country like it.”
So, was Nicolty right about the UK? “I think so… experience, tenure, that s**t works there. But in the US, I became a director so soon. At 24, I was negotiating $100 million deals with AT&T, without knowing the zeroes in one million.”
By 1993, he had shifted to retail, and when Walmart bought Pace Club the day before Thanksgiving, his challenge was to “integrate everything by Christmas — only six weeks. At this time, about 90 per cent of the people are on vacation. I wrote a bunch of codes and the system went live the day after Christmas.”
This is the day of heaviest returns, but everything worked without glitches. “So my boss introduced me to Rob Walton (the Chairman), saying, ‘he is the guy who did it’.”
Next, he moved to Walmart’s international division; “I moved away from technology to marketing and sales, and in the six years I spent in Walmart, I played every single role you can in retail business.” That laid the seed for his present role in Groupon.
So why did he leave?
“Because my boss, Doyle Graham, a father figure to me, died at 45 — just like my father. After he died, I lost the spark.” He next went to Blockbuster (a home movie rental provider) as a senior director running international technology for 26 countries. Here, too, he found the business model was flawed, and wrote a white paper detailing why it would go bust. But the Chief Executive Officer didn’t care for his views. So he left for Drugstore.com. “It was 1998 and the Internet was becoming big.” He joined as Chief Information Officer, became COO, and then CEO — all within two years.
Then the dotcom bust happened; everybody wrote the company off, but “I said the company would be profitable in two years. We got there a quarter earlier… and then I got bored.”
Amazon founder Jeff Bezos was on the board of Drugstore; “and I made another weird call. I became CEO when I was 31, and when I left I was 34, I said I’ve got promotions too fast in my career, so for the next two years I won’t be CEO and will undo all the bad habits I’ve learnt.” Bezos “invited me to solve a complicated technology problem at Amazon. I said I’ll work for a couple of years, but I want to start my own company in education.”
“I don’t work for money”
In 2007, he started Global Scholar to “help teachers give differentiated education to kids using technology. It was a fantastic experience. I raised $50 million in the toughest economy since the Depression. In 30 months, I gave four times returns to my investors and then sold the company in 2010-11.” On why he did so, he quips, “The moment you start a company, it is for sale… at the right price. You can’t have emotions…”
Also, by then he must have made enough money, I prompt. “I don’t work for money; every penny I make in Groupon, I’ve pledged to charities…”
To my sceptical look and arched eyebrows he responds: “I don’t need money; I work hard because I want to work hard. Why do I need money? My daughter (studying computer science at Carnegie Mellon) says she won’t take a penny from me. My son, too, is the same, and my wife is cool with it. I still take care of my siblings… I play cricket, watch Tamil movies, read books, that’s it.”
No fancy yachts? “I can’t even swim. I have the same car, a Lexus, since 2001.”
Groupon’s Chief Financial Officer, Jason Child, a colleague in Amazon, got him on the board of the company, which has 14,000 people and 500 offices in 46 countries.
But isn’t Groupon doing badly?
“It is under pressure, true, but not doing badly. That is a distorted reality. I like it this way, though. I want everybody to think we are doing badly, so that all of a sudden you guys will call me a magician. We’re not going to do anything different, but will look like winners.”
On the speculation that he might be named Groupon CEO, he says, “Why should anybody care? Let’s get the stuff going in the right direction.”
During his last visit to India, Raman adopted 24,000 physically challenged kids in a village in Tenkasi — he’ll help with their education, healthcare, vocational training, and employment. “My goal is to give them both dignity and hope… and the ultimate goal is to create one million jobs in Tirunelveli district.” And to own an IPL team!
On India’s future, he says nobody can stop the country from becoming a superpower — “We will work hard to mess it up, but India will prevail because of our intellectual talent and the average age of Indians.”