Mindtree Ltd executive chairman
and co-founderSubroto
Bagchi set up his first company in 1985 in Kolkata when he was 30 years old. The
company, Project 21 Ltd an information technology (IT) consulting firm, folded
up after three years, forcing Bagchi to seek a job in India’s then-nascent IT
industry with Wipro Ltd. Years later, in 1999, just before the dot-com bust, Bagchi
and nine others, including then Wipro president Ashok
Soota, founded Mindtree. In an interview, Bagchi talks about his learnings from the failed
start-up and elaborates on the emotional trauma when Soota quit the computer
services company. Edited excerpts:
What is it like to start a company now compared with the
time when you founded your first company?
When I started my first company Project 21, I was
30 years old. The issues were related to social backwardness.
What has happened is while the stigma (of being an
entrepreneur) has gone, if you want to start a business, there are many
hindrances. Today, social stigma is replaced by spermicidal social behaviour
that preys on new and small businesses.
All of them (the venture capitalists and other
investors) want you to have a great business plan, they want a marquee
customer, they want the product to be ready, and the patents to be filed.
In India, we don’t want to engineer success, we
want to inherit success. We still don’t understand what it takes to build. So,
on one hand you have banks, venture capitalists, but the most crucial part for
a start-up is the period when it’s born to the time that you are ready to
scale. This interim period when you are testing an idea is very difficult
because you still need an office, a customer and other resources, and the money
does not back it then. We all know that corruption is high. The moment somebody
opens a shop, that guy becomes easy prey. If you are opening a restaurant, the
food inspector will come, cop will come and the first thing he will do is put
up a ‘no parking’ sign in front of your shop. There is a quid pro quo there to
remove that sign.
The young entrepreneurs are innocent, they want to
succeed, put all their energy to create something good. If half of your time is
focused on managing the petty intruders, how will you do it?
It’s distressing because here’s a country that
could take on the world with its immense intellectual capital and even that
social stigma is gone. Entrepreneurship requires freedom of the mind.
In many ways things have changed from the time I
built the first start-up and in many ways, we still have made it much more
difficult.
What did you learn from the first start-up, which was a
failure?
I think it was a failure because the business
folded up and I realized that it could not go any further and came back to join
the industry, joined Wipro. There are many lessons learnt from that.
The first lesson was in terms of what makes a
start-up fail usually is not market opportunity. Businesses don’t fail because
of lack of opportunity; start-ups usually fail in their first year because the
founders part ways.
Another critical lesson I learnt from my first start-up
was the issue of undercapitalization. It came to a stage where we couldn’t fund
growth. An undercapitalized start-up is a very difficult situation.
It can lead to a lot of heartburn; you suddenly
realize that the business is not competing with market forces, but with its
founders itself.
How can entrepreneurs build a stable founding team?
Even before you start, you need to have a
threadbare conversation with fellow founders on what price will you pay, how
long do we stick together, what do we really want.
How did you apply these learnings at Mindtree?
So when Mindtree took shape, we applied these
learnings. We took a good one year to reach a common vision and values. We
actually pooled our resources, drove down to Vizag from Bangalore and holed
ourselves in a hotel for seven days. I don’t know why we chose
Vizag—entrepreneurs are crazy people... We drove in two cars, took 24 hours to
reach there. We spent a lot of time asking who we are, what we want from life,
etc. We took it very seriously, wrote everything down.
How did it feel to see Ashok Soota quit Mindtree?
First of all, there is never a good time to say
goodbye to a good man. The rational way of looking at it is 13 years is a long
time. Even under the Indian Penal Code, lifetime (sentence) is 14 years. And I
have told you earlier that most start-ups fail in their first year when the
founders separate, so in that sense the 13 years we’re together is a long time.
And independent of the vision of the founders, a company has its own destiny
and it will play itself.
If you take a long view of time, and look at year
2020 when you will look back, you’ll say it’s a good thing that happened
because when a certain amount of churn happens, a company comes back in touch
with what’s really important. When that happens, it also means making way for
the new, it’s able to look ahead and think by shedding the past.
But having said all that, I would say there’s no
good time to say goodbye to a good man. In that moment, it hurts a lot, it’s
difficult. Emotions get mixed up. The problem with professional organization
like ours is different from those family-owned. You can’t suddenly split up
like the Reliance group did between
the two brothers. We couldn’t split Mindtree up between father and sons. It
brings its own complexities, which makes parting difficult.
So, what it’s like being an entrepreneur?
The No. 1 job of an entrepreneur is to keep the
faith during difficult times. You can’t have a cynical entrepreneur.
It’s a distressing statistic as to how many of them
come out of large companies to start on their own. You become numb in big
companies.
When Infosys’s first round of stock options happened, people speculated
about the new millionaires and what will they do next. You know what
happened—people took vacations, bought expensive watches, bought a second
house, a second car, nobody started a company.
In order to be an entrepreneur, you have to burn
your past, have to kiss your corporate success goodbye and be OK with living
the life of a stray dog. If you look at highly successful corporate executives,
they are like pedigree dogs—well groomed, well fed and with a collar around
their neck. Who will walk them and at what time is predetermined by management.
When you start a company, you are like a
mongrel—not sure about the next meal, life revolves around ducking the
municipal dog-catchers, fighting with other street dogs. But when you are an
entrepreneur, you know like a street dog that you can get up next morning and
go anywhere you want to.
Entrepreneurs are mongrels!
No comments:
Post a Comment