| En Route To The Billionaire Club |
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A born entrepreneur, Microland's Pradeep Kar refuses to give up BS
Research Bureau In 1983, I joined Wipro Infotech as a marketing executive earning Rs 2,700 a month and met my quota in just three months. Then an offer from Indian Organic Chemicals to start their first computer retail outlet sounded challenging. I joined the company as a product manager in 1985 to start Computer Point. My first break In the three years there, I learned to start a business from scratch. I opened offices in four cities and went through marketing, material franchise, human resource development. I found out how to work around an unstructured system. We had conceived a walk-in-and-buy operation, but the customers failed to bite the bait. Home PCs were not popular and prices were too high. We switched focus then to providing a customer driven service and people came in droves. We also wooed talent from smaller rivals. I see Computer Point as my first break. Friends and family tried to stop me from working for a dukan (shop), but I took the risk. When I left Computer Point in 1989, it had a turnover of Rs 19 crore. In 1987, I went on deputation to the US to set up the company's software division, Sonata Software. For two years, I got a feel of the international market and saw how widely businesses were using networks. It was just a matter of time before desktop connectivity was picked up here, too. In fact, I modelled my company on an American networking company called Business Land. Timing it right It was not easy starting a business, but persistance, hard work (16 hour-days) and a never-say-die attitude propelled me. Frankly, it was the right business at the right time and was bound to take off. Microland opened in August 1989. I had mortgaged my father's savings to rustle up Rs 5 lakh. Three friends invested about Rs 4 lakh each in buying shares in the company. The balance was put in by my core team recruited from Computer Point, taking the seed money to Rs 20 lakh. Then in three months, I rented offices in Bangalore, Mumbai and Chennai, recruiting 55 people. Turning point For four years, I struggled. I used to wait outside the doors of sceptical financiers hoping to access at least Rs 1 lakh to Rs 2 lakh. I would offer my shares as collateral. In late 1990, I bagged my first buyer, the Mafatlal group's Indian Dyestuff Industries. Then came Citibank and ANZ Grindlays seeking large networks. In 1992, when I achieved my first million, I bought out my friends. Help came from Technology Development and Information Company of India (TDICI). It bought a 26 per cent equity stake in the company. By late 1992, there was another financial crunch. I needed money for working capital and the State Bank of Mysore approved my loan application. Looking back, luck definitely did play a part. Liberalisation also helped. What to expect My tips for anyone who wants to make his first million? Keep your customers and employees happy and ensure that you are very profit and cash focused. What I have learnt since is that one should plan meticulously. Another one is that don't delay in taking the money once the venture capitalists grant you the funding. Nobody wants to go back on their promise, but circumstances force them to withdraw funding. Look at my experience. NewsCorp was ready to give me $5 million, apart from the $2 million we already had for ITSpace.com. But we didn't want it then though we did our arithmetic based on $7 million. When the time came for getting the $5 million, the dotcom bubble had burst. NewsCorp was nice enough to write to us that they could not participate in the second round. One of the biggest lessons I learnt was, of course, the fact that one must raise capital when you don't need capital. Though we have gone through rough patches at Microland, in hindsight, we should have gone international in software services. We were so preoccupied with hardware services that we completely forgot about our software business. Doing it right But we have done a lot of right things too. For example, we took a very conscious decision to make our business softwarecentric. When the Internet economy happened, we got into it. We had indya.com, an entertainment portal. Planetasia.com, launched in 1997 was focusing on web design and integration. It now focuses on enterprise accounts. I have learnt that there is no point in pursuing a business just because you started it. The downturn in the economy has hurt us (Indians) more badly than the others. We could have spawned off more entrepreneurs if the dotcom bubble hadn't burst. Unfortunately, we didn't reap the full benefit of the dotcom wave. It was much, much shorter here. If it had lasted for two more years, we would have had many more successes, many more icons. Once you become an entrepreneur, you don't want to work for others. The market has changed dramatically. Rebuilding the leadership is now going to be more time consuming than in the past. Most of our core team has been with us for the last 12 years. So have some of our investors and customers. I might have made some amount of money. But money has a value upto a point. Money is a means of giving back to society. Personal wealth is so insignificant. How many times can you eat in a day after all? (This is a corrected version of the story)
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