E-commerce may be the rage now, but one entrepreneur had seen it all even 15 years ago. Kal Raman, former CEO, Asia Pacific region at Groupon, a deal-of-the-day website, figures in the who’s who of the e-commerce industry. He was the CEO of Drugstore.com, a listed e-commerce company focussed on healthcare, in 2001 and steered the company’s revenue growth in a challenging period – post the dotcom bust. The company’s top-line grew 70 per cent to $246 million under his watch in three years.

GlobalScholar, an education start-up he founded, provided software to K-12 schools in the US. It raised $50 million, made four acquisitions and was sold for $160 million to M&F Worldwide.

Kal is currently the CEO of Solutionstar, a subsidiary of US-based Nationstar Mortgage Holdings, which processes US home mortgage payments. Solutionstar provides technology solutions to home owners, brokers and companies in the home loan segment.

As someone who has run technology operations in India for GlobalScholar and being a start-up founder himself, what does he think of the start-ups in the country? Kal, who was in Chennai recently to launch a software development centre, says the future is bright for entrepreneurs and he is gung ho about what is in store.

Solve a big problem

He offered some handy advice to budding CEOs, drawn from his vast experience of working with big names in the industry including Jeff Bezos of Amazon and the Waltons of Walmart.

If all you do is solve a very niche problem, you cannot build a big enterprise. You must, therefore, define your problem space to be large enough and to be quite generic. Kal’s example for a company that has done it quite well is Amazon. Its mission is to ‘provide wider choices to buyers, offer products at cheaper prices and make it hassle free to shop’. These requirements will not change across geographies or over time, he notes.

So, by scoping out the problem broadly, as Amazon did, the company you build will be able to carve out a piece of a larger pie. And given the evergreen nature of the problem, the leadership advantage will likely remain unchallenged for many years.

Start-up founders are eager to change the world and make a lot of money doing it – and all in a hurry. “But the secret is to think like a missionary, rather than a mercenary,” he says.

Think long-term

What he means is that one must patiently build on values with an eye on the long term. And, importantly, one must not cut corners to earn short-term benefits.

He says that market forces will eventually ensure that those that are in it for the long haul and playing the game fairly are the ones who will last and grow their business. And those who have their eyes only the quick buck will certainly lose out.

Paying attention to customer service is one aspect of thinking long term. He says that companies that keep this as a top focus will reap rich dividends for many years.

Fail forward

Success is all that is celebrated, but Kal is a believer in failure. “It is an essential part of the learning process in a start-up,” he says. This does not just mean that the environment accepts failure, but it must do something beyond that – it must foster failing quickly.

“Failing forward is where you fail quickly and take the lessons learnt in moving ahead,” he explains. Additionally, there must be an open culture to communicate issues and for the team to gain insights from mistakes.