eWorld talks to a bunch of entrepreneurs who rode the IT highway in the midst of the dotcom crash..
“The last decade has seen entrepreneurship in India move up the value chain — from services to owning and selling products to different markets...”
“The road of life twists and turns and no two directions are ever the same. Yet our lessons come from the journey, not the destination.” — Don Williams Jr, poet and novelist.
The start of the last decade saw a few bright young minds deciding to take the entrepreneurial plunge in the IT and technology space. Their journey, replete with twists and turns, is ten years long and still going strong. eWorld talks to a bunch of them to understand the lessons the ride has taught them — through the troughs and crests, and the promise the future holds.
With the year 2000 seeing the dotcom bust, times were tough indeed. It required courage, conviction and common sense to pull through the challenging phase.
Deep Kalra, Founder and CEO of makemytrip.com, a travel portal, says initially it was easy when the US business of MakeMyTrip took off with venture capitalists ready to invest fairly quickly. Competition in the online space was very small then compared with today. The primary competition was from the unorganised sector in the form of numerous travel agents, who had a “strong customer base” but did not offer packaged deals that took care of all the needs of the travellers. Says Kalra: “Gradually, as people realised the convenience associated with online ticket booking and value-for-money package deals, MakeMytrip started establishing its foothold in the online travel market, which eventually resulted in our becoming the market leaders in this segment.”
“However, post the 2000 dotcom crash and 9/11 , the company faced a really tough time all the way till 2005, as the investors decided to pack up all their operations. We took money from investors, made personal investments, right-sized the business and focused on turning profitable at the earliest, hence obviating the need for further capital. This helped the management run a tight ship and the company turned profitable in 2002 and continued to be profitable till 2005. Thereafter, MakeMyTrip launched its operations in India, and from then onwards there has been no looking back.”
The dotcom bust was a blessing in disguise, says Shalin Jain of Ten Miles Corporation that has to its credit Internet-based products such as HelpDesk, a customer service and trouble shooting tool, and DoAttend, an online event registration and management product. “The dotcom bust strengthened our belief that we weren't doing things the herd way. We were focused on building products with very deep understanding or passion behind it. We did not really worry too much about the market trends or the competition,” says Jain.
For BPO company 24/7 Customer, it was about finding opportunities in difficult situations, whether it is the Internet bubble burst or the recent recession. “The dotcom bust opened up opportunities for us in voice play. The recession actually helped us explore newer geographies, so we have always found opportunities in every adversity. Being one of the first three companies to start in India helped us with the first-mover advantage. Today we are one of the very few pure-play BPO companies that have not sold out to a larger corporation,” says Shanmugam Nagarajan, Co-founder & Chief People Officer, 24/7 Customer.
The recession also meant customers and clients were willing to experiment with a low-cost model such as the Internet, which worked to the advantage of Ten Miles, whose primary focus was on small and medium enterprises. “The recession brought us many enterprise customers who had become cost-conscious and hence were willing to give newer products in the market a go. Our lean start-up-like operations mode gave them huge cost advantage without having to compromise on quality,” says Jain.
With the recession and slowdown behind, things began looking up for entrepreneurs. But for makemytrip, there was another storm brewing across the skies. Literally so, what with blizzards and fog playing havoc with the travel schedules of people and impacting the sales of makemytrip. But the company managed to weather that too as it looks to happier times ahead.
In hindsight, is there anything the entrepreneurs wish they had done differently? Any decision or strategy you would like to change, given another chance,? we asked them. “I wish I had launched in India around a year earlier. It would have helped us to consolidate our position,” says Kalra of makemytrip.
When asked what is the one thing that caused maximum impact on business, Nagarajan of 24/7 says it has to be globalisation. “It has helped as the target companies in the market geographies accepted globalisation as a norm to leverage the talent pool in the developing nations.” Thus, the companies that offshored were able to compete better even during the recession, explains Nagarajan, who is very happy with the growth path of 24/7, which started as an e-mail management company and diversified into customer lifecycle management. Today, 24/7 employs close to 10,000 people in five countries and three continents. “We did not diversify into the fads of the season that came along in the BPO industry. In the last 10 years, even as our competition shunned the kind of work we are doing, we did not waver from our core competencies. That helped us be the strongest and the leader in customer lifecycle management (CLM). It has helped us achieve another first in the industry —getting a US patent approved for the way we deliver services. In fact, we have eight more patents pending for our CLM solutions.”
All the growth has been organic. “Being one of the first three companies to start in India gave us the first-mover advantage and our thought leadership and execution that followed helped us maintain leadership position in the industry,” says Nagarajan.
Makemytrip says a slew of factors have impacted the industry — the travel boom, emergence of low-cost carriers, proliferation of the Internet and the growing acceptance of e-commerce over the last few years.
With the ecosystem maturing in the country from 2000 to now, things are finally taking shape as India sets about in search of its next Facebook. The talent is finally here, says Jain of Ten Miles. “The emergence of a good start-up ecosystem towards the end of the decade has made finding, retaining and hiring talented people much easier. We also value better role, job satisfaction and a real intrapreneurship opportunity inside a smaller company.”
Moving up the value chain
Asheesh Raina, Principal Analyst at research firm Gartner, comments on the IT entrepreneurial landscape in the last ten years: “The last decade has seen entrepreneurship in India move up the value chain — from services to owning and selling products to different markets with companies realising they can no longer only depend on the US for survival. The decade saw a lot of specialisation and innovation across verticals.”
As the entrepreneurs look at the coming year and the next decade, their vision is clear and their dreams are big.
With the Indian online travel industry growing rapidly at an annual rate of 40 per cent, the prospects are bright, says makemytrip. The emerging sectors in online travel are bus and rail ticketing. It also seeks to enhance its presence in the mobile travel platform, an area till now not tapped fully.
“Travel is inherently mobile and we plan to provide more in-trip assistance to users on the move.”
MakeMyTrip also plans to keep introducing innovative packages for customers with a special focus on charter services. “We would also like to focus on increasing the hotel capacity — even in the most exotic parts of the country. We look forward to acquiring travel technology-based global or domestic companies, in 2011, details of which are still in the initial phase of planning,” says Kalra.
Says Jain of Ten Miles, which has grown from a one-product company to multiple products for the desktop and the Web, “We have leveraged the Software as a Service model and are bullish on delivering more products on the Cloud. We also plan to open offices in the US and across Europe in the next few years and be more aggressive in the enterprise space for our flagship helpdesk software.”
24/7 is also looking to grow into three-four newer geographies, specifically developing nations, “providing incredible opportunities for smart people out there, again making them global citizens and uplifting their socio-economic conditions.”
Advice to the entrepreneur setting out this decade?
Partner with the right people and if possible stick to only one partner and focus on ideas that bring value to the customer, says Nagarajan of 24/7.
“Bank not only on the western markets but look at the domestic market too and other Asian markets, such as the Philippines, Bangladesh and Sri Lanka, where a lot of consumption is happening,” advises Raina of Gartner, while Kalra of makemytrip says it's important to research the industry well and spend time in realising one's area of interest.
Adds Kalra: “Before setting off, acquire some valuable work experience as it helps in the long run. Also, have faith in your venture and accept that there are bound to be hard times which might make you think about the viability of your venture, but if you have the relevant experience, are armed with industry knowledge and have the passion, there's nothing that can come in the way of transforming your dream into reality.”
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