On The Start-Up Trail
His phones have not stopped ringing. There were many who thought that Jaydev Raja, the erstwhile chief of soft drinks major Coca-Cola and Iridium India, had returned to his homeland armed with a Rs 600 crore kitty. Even as the amount for which he has approvals will flow in over a 10-year period, this time around, there is no high-profile multinational tag. Now, Raja touches base as an entrepreneur.
From selling cola to satphones, Raja is now gearing up to exploit as he says, "the multiplier effect of value creation". He is playing his cards close to his chest, for this is the age where ideas matter more than anything else. And Raja is back with ideas. "It's the idea which matters. Capital is a function of the evolution of each and every venture in context to the economic returns. The capital will be raised as and when the need for it arises and will be sourced through the most attractive options," he says.
So what are Raja's plans all about? With Motorola's Iridium project failing to create waves, Raja left Iridium in June last year, citing "personal reasons". As he headed for the US, it was almost certain that the man who brought Coke back to India, was through with his Indian innings.
In the process, he had earned vital experience and the rudiments of starting up businesses. And in today's world, it is all about start-ups making it big. The stint at Iridium also probably helped him realise the new paradigm of convergence.
It is this experience which Raja wants to cash in on now. He wants to do it here in India where all the action is going to take place. Not that this is a new-found love for Raja. He says that the urge to be an entrepreneur was always there and so on his return last June, when a US-company specialising in developing systems for call centres, approached him to partner them in their proposed foray in India, he got excited.
Almost simultaneously, Raja saw the e-revolution unfolding in India in a big way and felt that he could play a role in providing consultancy to new and existing ventures. "There are going to be a large number of companies who would need help in restructuring their businesses in keeping with the new Net-based revolution. There would be a lot of existing companies who would also venture into these areas and would need consultancy. So if it is an existing company or entrepreneur, then the consultancy would step in and if it is a college kid with a great idea then our incubator facility would be ready to take the idea from feasibility to viability," says Raja.
He claims that the role of an incubator is not entirely understood in India. "On the one hand, the incubator hand-holds an idea till commercialisation. On the other, it earns its revenue either in the form of a fee or takes warrants which are converted into an equity share as and when the entity goes public," he says. In fact, he claims that this is the reason why several venture capital funds like to invest in incubators, as they get the first option of taking a holding in a venture even before a venture fund steps in. "At the same time, they also get access to a large number of ideas," he adds.
Therefore, Raja has decided to float a company called Commence Concepts.com Pvt Ltd. To be launched on Monday, it would be the holding company for his initiatives in India.
Consultancy would therefore be the core of Raja's operations here, but it will also set up an incubator which would cater to the new generation entrepreneurs. Of course, considering that a synergy between an incubator and a venture fund is ideal and often imperative, Raja is close to sewing up an alliance with an Indian venture capital fund.
There's a possibility of this tie-up getting a third partner, and this could be a state government. There are atleast two state governments who have had talks with him for a possible joint venture for setting up an incubator in their states to harness potential for ideas.
This will complete the circle of consultancy, from idea stage to funding stage, as Raja sees himself playing a part in all of these. On the consultancy front, he is banking on his extensive contacts, both in India and globally. He is hoping to take a fresh crack at incubation with support from a state government as well as an established venture capital fund.
But that is one part of Raja's strategy. He is obviously not staying away from the business of Internet portals, which is catching on like wildfire. Here he goes silent. "It is all in the idea. How can I give it away," he says. "But I promise you it will be something different," he says. For a man who has done enough research on customer preferences, be it on soft drinks or on telephones, one cannot but believe him when he says that he has something interesting up his sleeve.
It will all start from a call centre project. "Call centres are a big business opportunity for India. We will set up a call centre facility here. With low labour costs and an English speaking advantage, not to forget the immense software development potential that exists here, we are looking at a huge market for India," he says. According to him, the only competition really is Brazil. He feels that the Indian government needs to wake up and make telecom tariffs more globally competitive or else India could lose out on this big opportunity. "The world's top corporations are looking at setting up call centres in India, and most of these would source this function to an external agency. This is where we will step in," says Raja.
For call centres, Raja has struck an alliance with DCT Systems of the USA. The 50:50 joint venture will shortly seek approval from the foreign investment promotion board (FIPB) for setting up shop. It is proposed to be housed at the Software Technology Park at Pune.
A second joint venture for engineering services has been struck with CP&Y, a team of three engineers, which will develop CAD/CAM (computer aided design/computer aided manufacturing ) solutions and do design detailing services for the spate of infrastructure projects coming up globally. This too would be housed at Pune.
"In the case of the two joint ventures, it was really a desire by these companies to partner us. This project will therefore be independent of the Internet and venture capital related business. We are in the final stages of putting together the pieces of our plan and these would be unveiled shortly," he says.