A vibrant venture capital ecosystem is contributing to the spurt of innovative business models.
What is common between Romesh Wadhwani, Gururaj Deshpande, Sabeer Bhatia and Krishnan Ganesh? They are not only successful entrepreneurs but are also successful serial entrepreneurs.
A serial entrepreneur, according to the Wikipedia definition, is one who continuously comes up with new ideas and invests in new businesses. While there is no data on serial entrepreneurs in India, industry experts say the trend is on the rise.
While some believe that a more vibrant and mature venture capital eco-system in India is contributing to the trend, others say interesting business models that have developed over time has made the difference. Internet is one such area that has seen a spurt in activity from entrepreneurs to repeat their success.
Krishnan Ganesh, co-founder and CEO of TutorVista – an online tutoring firm – received Rs 577 crore from Pearson, when the global major acquired a majority 76 per cent stake in the Bangalore-based education company. For Ganesh, TutorVista is his third successful entrepreneurial debut.
Ask him what makes a successful entrepreneur? “An entrepreneurship must have passion for an idea and the stupidity to believe that the idea will work. To do it serially, these two traits are required in stronger doses with an adventurous spirit that keeps exploring new avenues and is never satisfied with the last mountain conquered.”
His views are evident in his ventures. In 1990, Ganesh along with a few other IIM-Calcutta graduates left HCL to set up IT&T and network services company with just Rs 93,000. By 1998, he was out of his executive role in the company and helped run Wipro BT, which eventually became Bharti BT.
His second venture was CustomerAsset, one among the first four independent call centres in India, which was acquired by ICICI Bank in 2002. This business was later named ICICI OneSource and is now know as Firstsource. He sold his stake for $20 million to the bank.
All of Ganesh’s ventures have been greenfield. “One of the reason for choosing such greenfield areas is that you have an open canvas and can afford to experiment, go wrong, make mistakes, learn and come back. The other reason is just pure ‘gambling odds’. Less than five per cent of greenfield start-ups succeed.”
In 2005, Ganesh wore his entrepreneurial cap again to give birth to TutorVista — this was the first initiative to provide online tutoring to American students by teachers in India.
Third-time Lucky
Manu Agarwal, CEO and Founder, NaapTol, 40, was third-time lucky. An IIT-Kanpur graduate and University of Minnesota Masters degree holder, Agarwal has seen the highs and lows of an entrepreneurial bet.
After spending four years in the Silicon Valley and working as a flash memory chip designer, Agarwal returned home. In 1998 he started an internet technology firm Design Expo that provided internet messaging solutions to clients like Indiatimes. As part of Design Expo, Agarwal developed two portals Shubhyatra.com and Criclive.com.
“This was in 1999, Shubhyatra ramped up really well. It was one of the largest travel portals then. Same was the case of Criclive,” says Agarwal. But despite the successful debut both these ventures were caught into the dotcom bubble.
“Thomas Cook had already agreed to acquire the company, they paid us the initial Rs 50 lakh. But the deal fell through as the dotcom bust hit us. Similarly, CricLive that was acquired by Lalit Modi was valued before the bust at $3 million. But he acquired the portal for $1 million,” says Agarwal. In 2001, Design Expo was acquired by Payment Systems Company, SLMsoft. Both portals could not be sustained.
For a person who has no business background – Agarwal’s father is a retired IAS officer and mother a professor – taking risks came naturally to him. “I started Naaptol because I wanted to do something in the internet space. I realised that the comparative shopping space was pretty vacant in India and there is room for a good venture,” says Agarwal.
Naaptol, which was launched in 2008, has good traction both online and through its call centres. On a daily basis the site draws 70,000 visitors, while the call centre gets about 25,000 calls on a daily basis. “On someday we do transactions as high as 6,000. But on an average we have 4,000-5,000 transactions per day. With the average price of each transaction at Rs 3,000,” he said.
Bargain king
The entrepreneurial bug bit 27-year-old Kunal Bahl, CEO Snapdeal.com right during his student days in the US. His first stint as an entrepreneur was for a detergent business. He realised the reach of couponing in a market like US. The business went on do well and Bahl sold his product to 3,000 stores in the US. He was working on a degree in business from the Wharton School and then went on to do his post graduation from the Kellogg Management Institute.
Back in India in 2008, Bahl realised the potential of coupons in India. Especially with the growing retail reach in India. “I also realised that retailers where building a huge inventory, which we can leverage,” says Bahl.
Snapdeal, which was launched in February 2010, is one of the fastest growing e-commerce sites in India. Since its launch the site has a subscriber base of three million and on a daily basis receives 1.5 million visitors.
“The service is simple. Everyday there are deals on products, services, travels and other categories. We were taken by surprise to the interest that the portal generated so soon,” said Bahl.
But Bahl agrees that India is a difficult market, especially when it comes to retailing. “We were creating a new category. Also, coupon is about structured bargaining. Initially, retailers were not open to offer coupons, we had to change their perception about the business,” said Bahl. The other challenge for Bahl was the internet reach in India. “That meant we needed to create a brand. We have invested heavily in creating brand. We have used TV, radio and other routes for branding and reach.”
Snapdeal also managed to raise funding of $12 million from venture capital. With a 50 per cent growth month-on-month, Bahl feels that he is still three-four years away from where he wants to take the company. The portal is expected to generate a revenue of Rs 100 crore this year.
Pays to be a domain expert
For Manoj Gursahani, CEO, Co-founder Vamoose.in 25 years of experience in the travel industry helped brave two waves of recession. The inspiration to start Vamoose – a group buying site for travel – came from the success of US group buying site GroupOn.
In the early 1990’s Gursahani, with the help from his father, started his travel business. “Then the focus was to consolidate air ticket. While initially this was an offline mode, we started TravelMartIndia in 1980s. We started as an offline venture and then took it online,” he added. This was precisely why the company could manage during the dotcom bust.
But for Gursahani, Vamoose is a disruptive model in the group buying segment. It has been six months since the portal went live but it already has 10,000 registered users and is growing by 2,000-3,000 users per week. The portal has tie-ups with 500 vendors but of these 60-70 are active players.
Gursahani is looking at scaling the portal now. We have 20 people now working for the portal, I want to take it to 50 in the next few months.
