Anatomy of a business failure

The Biography of a Failed Venture

Author: Prashant Desai

Publisher: Harper Business

Pages:256

Price: Rs 316

In 2017, when former employee-turned-entrepreneur Prashant Desai turned to Kishore Biyani (CEO of Future Group) with a business idea to build a truly Indian sports brand, the latter urged him to rethink.  He cautioned him about the power of global brands such as Nike and Adidas and the not-so-discerning Indian consumer. Yet Mr Desai, high on the conviction in the business opportunity he felt he had discovered, defied his mentor’s advice and went ahead to launch D:FY, a home-grown sports brand for shoes, apparel and accessories.  Unfortunately, this startup did not have a unicorn ending. Instead, 30 months later when the venture was closed, it had wiped out Rs 30 crore of investors’ funds, and eroded much of Mr Desai’s personal wealth. 

Mr Desai then opted to examine what went wrong and what lessons can be extracted from this failure. The result is a startlingly original memoir The Biography of a Failed Venture that recounts a life of hard choices, greed and mistakes.  “Distance does not only lend enchantment to the view; but it also enhances objectivity,” he writes.  Interestingly, the book begins with an apology — to family members, investors, his team and customers.

Mr Desai was only seven years old when he lost his father and grew up poor. Later, propelled by academic success and the desire to accumulate money, he picked up a career in stock markets. This career choice prompted his move from Kolkata to Mumbai and he landed opportunities to work with industry stalwarts such as Kishore Biyani and Rakesh Jhunjhunwala. It was Mr Biyani who encouraged the author to widen his horizons beyond the narrow field of stocks and impressed upon him the importance of being a well-rounded generalist as opposed to being a specialist. “You are Economic Times, Prashant, but you need to become a TOI,” he said to the author.  Later, Mr Biyani wasn’t particularly pleased when Mr Desai decided to leave him to join Mr Jhunjhunwala’s firm.  But he lasted under two years at RARE.

Eventually, the author met with immense success at FT. He writes, “Even as the company I worked for was passing through its biggest challenge, my personal net worth was at its largest.”  But the pull of money proved to be irresistible and the ambition to turn Rs 20 crore into Rs 2,000 crore in 10 years led him to embark on a venture making sports gear. He managed to rope in Rajiv Mehta, ex-MD and CEO of Puma India, as a co-founder and things gained momentum after that.  Hardik Pandya, Anil Kumble and Farhan Akhtar came on board as ambassadors for this new brand and the team set up 17 stores in seven cities as well as an online presence in a short span of time. 

But as the author now acknowledges, “there were blunders all around.” One such instance was recruiting for familiarity rather than expertise. And as the lines between professional and personal blurred, the team faltered on multiple fronts.  They did try to course correct. But one expert they hired turned out to be accustomed to a large corporate culture. The start-up environment burnt him out to the extent that he collapsed and had to be hospitalised. It was no surprise that he quit soon after. 

When a venture fails, it is convenient to blame either the jockey (the startup founder) or the horse (the business opportunity). But as Tom Eisenmann argues in his book The Fail-Safe Startup, this approach is simplistic. In reality, entrepreneurial failure is not typically on account of a single reason but rather due to a confluence of factors. Towards the end of the book, Mr Desai offers a list of things he would do differently in his venture.  For example, he admits that he did not build the right team nor did he know his customer. 

One can always open up the playbooks of successful ventures and offer advice based on what has worked well.  But here’s an interesting statistic: Nearly two-thirds of all startups fail.  Why do these startups fail and what can aspiring entrepreneurs learn from post mortems of these failures? If success is instructive, then so is failure.  Mr Desai has done a great service to the venture community by writing this book.  He has dug deep into his own experiences so that others can side-step potential landmines. 

The book is told in a matter-of-fact voice, without bitterness and succeeds in generating a range of emotions in the reader — excitement when the venture is launched, concern when it starts to go belly-up and curiosity to discover the denouement. On occasions, it reads like a fond farewell letter. “D:FY was a family member; I breathed D:FY; I lived D:FY.  Now came the time to bury it,” the author writes.  He avoids the trap of playing the blame game and settling scores. The candour and fast-paced narrative make for a thought-provoking read.