Being A Young Company Helps

INITIAL DAYS

In 1987, I was bound for Stanford University, USA for a Masters degree after completing my B.tech in civil engineering from IIT, Delhi. I went on a teaching assistantship but after a year joined the new centre for integrated facilities engineering as a research assistant. The centre was funded by some American and the Big Six Japanese companies interested in integrated architecture, engineering and construction software. Towards the end of my final year, Kumagai Gumi (one of the big six) offered me the post of an engineer in their Tokyo headoffice.

It was a tough decision a traditional office, no knowledge of the Japanese language yet after a three-week feeler I signed a one-year contract for 190,000 yen a month (then $ 1,750) with lots of perks. Life there wasnt easy. The first three months I spent the morning half learning the language.

 

I negotiated with them to keep my employee status alive while I completed my Masters in the States. However, in the States I had an opportunity to set up something on my own in India, I grabbed it.

Some of my professors and batchmates from Stanford had started a company, Risk Management Solutions (RMS) commercialising their research work on earthquakes. I was to set up an office in India with RMS as an equity partner. After working with them for three months I came up with a very simple business design. It was quite naive but then I was only a techie-guy, not a businessman.

STARTING OUT

In January, 1992, a friend with a similar background and I started Risk Management Software India (RMSI), operating from a small rat-infested basement in Pushp Vihar owned by my partners father. This helped as we had to pay a nominal rent of Rs 750 with the liberty to pay rent later during cash crunch days. We also made use of his delivery boys and office phones paying highly subsidised rates.

The plan was to start the company with a seed capital of Rs 12 lakh six lakh from RMS and three lakh each from the two of us (entirely our savings from working abroad). In the first phase we both put in Rs 1.5 lakh each but had to run around for various approvals and RBI permission to get the equivalent amount from RMS. We refused to pay bribes and the price we paid was a lot of delay and endless trips to various offices. Finally, by August, RMS had put in its portion of Rs 6 lakh.

MAKE OR BREAK

The first seven to eight months were full of trouble, even the US company was floundering in its own problems. We did not draw a salary till October although RMS was feeding us enough work to keep us busy. All we got were actuals. Sick and tired, my partner decided to opt out and join his fathers business in October. This was a major blow as he wanted his portion of Rs 2.5 lakh back and later even the office space. In no position to return his money, I requested him for some time. I also had to cough up the remaining portion of the capital so I donated my two-wheeler and my own PC to the company.

Meanwhile, I approached a PhD student from Stanford, based in Mumbai for help. In October, I took on an accountant and an engineer. Working on Geographic Information System (GIS) and digitalising maps, we felt that it would be easy to find clients. But I had no marketing skills and eventually I was depending on whatever work we got from RMS. My sales pitch seemed to only work with them.

In June-July, 1993 we shifted to my fathers flat in Saket there were many days when we had no work at all. By this time, my new partner also left me after marrying a friend of mine. In this now or never situation, we got our first break we had to prepare a world seismic data base for AIG one of the largest insurance companies. We got business worth Rs 4 lakh or Rs 5 lakh and that too with five per cent profits.

TURNING POINT

Towards the end of 1994, RMS bagged a multi-million dollar contract from General Electric (GE) that included a pilot study. Based on our earlier display of dedication, we were handed the job of finishing 70 per cent of that operation within three months and I had an employee strength of only 10 people.

The first thing was to acquire a larger office. So, we got a 5,000-6,000 sq ft area in Mohan Co-operative Industrial Estate at a whopping rent of a lakh a month and set it up with generators. I also found two people who helped me form a stable team for the very first time. The need for money led to a sweetheart deal with RMS --- a loan for a portion of my equity. I was at the crossroads should I be happy with 50 per cent of a small pie or opt for lower stake and hope that the company would grow beyond my imagination. I opted for the latter.

Now, as a subsidiary, we went on an expansion binge and by April had hired 35 people, by July another 40 were added. GE provided us with free equipment so now we had good scanners, PCs, servers. In March 1995 we had made about a crore. Problems were still there customs clearance, electricity, fire hazards but now there was no looking back. All of a sudden we became international players.

Opening up of the telecom sector led to a chance encounter with Ericsson which required digital maps. From that point onwards, I started tapping other players entering India. We had an early bird advantage and could present ourselves as global players and not just local vendors. Gradually we reduced our 100 per cent dependence on the parent company.

Today, apart from GIS and digital mapping we are also doing some software development work and have a team of around 175 people.

RULES TO PLAY BY

Being a young company, with only young people we are more capable of adapting to changing technologies. The management is also more approachable and the work atmosphere is quite satisfying. We also try and get feedback from our customers.

Sometimes I feel the need for a change especially when facing people problems they hassle me a lot. Neither am I too keen on diversifying.

Money has never been that important I still dont have a house of my own but yes, when I look at something I have built from scratch I feel very proud that is my yardstick of success.

(As told to Sarika Dandona)