The Downturn Antidotes

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Mateen Sayeed finds three Indian entrepreneurs who succeeded against the odds in Silicon Valley

Illustration: Naorem Ashish

AMONG THE antidotes fighting the global economic dep – ression, the mantra of entrepreneurship should be on top of the list and widely attributed. Entrepreneurs are the modern-day avatars of sailors of yore – they are adventurers who muster the courage to sail against the wind, who strategise on the best and quickest routes to market, who fulfill the demands for goods and who inspire a team to join the journey for adventure and better returns.

Interestingly, some of the biggest and most successful enterprises today were started during an economic downturn – Microsoft, Apple, Sun Microsystems. Consider the case of Jag Kapoor, an admirable oddity in the high net worth circles of Silicon Valley. In a land overwhelmed with technology breakthroughs, Kapoor succeeded as a retailer. In a career spanning more than 30 years, Kapoor has owned retail chains that include Bonfare and Quick Stop, a string of gas stations, a 24-store chain of Mexican eateries called Unamas and three high-end restaurants.

Still, being in Silicon Valley has meant that even Kapoor could not resist the temptation to plunge into the tech sector, although he remained connected to retail: he helped start a promising software company called Xprotean, which uses cloud computing to build operational and logistics software for retailers like convenience stores, fast-food restaurants and grocery stores.

Kapoor migrated to the US at the young age of 19 with his family. Son of an accountant father and homemaker mother, Kapoor soon realised that his undergraduate degree in arts from Delhi would not take him far in the US. He pursued a masters’ degree in Silicon Valley along with small jobs like working at a small convenience store, where he learned the elements of retail. In the next two years, hard work and savings enabled him to own a store and run it with his brother Sean. It was his first real business. “Every sale of candy for 25 cents was important to me. I had to make money a trickle at a time,” says Kapoor.

Unique show (left to right) Anu Shukla is not a technologist; Jag Kapoor owns the Bonfare retail stores; Manish Chandra has sold his company to Hearst Corporation
Unique show (left to right) Anu Shukla is not a technologist; Jag Kapoor owns the Bonfare retail stores; Manish Chandra has sold his company to Hearst Corporation

In time, he eventually bought out the stake of the original owner, becoming the largest Bonfare convenience store retailer in northern California. “Once you master the art, the impulse keeps you going,” he says. Kapoor is also the chairman of the Bonfare Foundation, famed for its annual golf tour. For Kapoor, living in Silicon Valley meant he could not escape the influence of the technology businesses. The thought of starting a tech venture was constant until a friend suggested he should capitalise on his extensive knowledge of the retail industry.

THAT ADVICE led Kapoor to identify an industry problem and start working on a software solution that would encompass the entire activity of any retail outlet – from the point of sale to inventory and logistics. A few years later, he brought in seasoned tech players as advisors and directors who helped refine the strategy and product offering of the new company Xprotean. The company has so far partnered with Sharp and Intuit to bundle its software with their products.

Anu Shukla sold her first company Rubric for $366 million. She started her second company Rubicon Soft (which later became MyBuys Inc), and passed it on to the management team before starting her third and current company Offerpal, which facilitates online social media users and gamers to trade in virtual currency. The amazing part is that Shukla started three hi-tech companies without being a trained engineer or a technologist. She capitalised her forte in marketing to gauge the needs of the market and build solutions to address the vacuum.

An undergraduate of St Stephen’s College in New Delhi, Shukla was visiting family in the US when she was encouraged to apply to the local university in Ohio. She completed her MBA from Youngstown, Ohio and flew to Silicon Valley for her first job in marketing with a semiconductor company. She worked in several other start-ups where she did the grunt work and eventually contributed to some of the companies going public.

Almost a decade later, she had become a pro at learning the cycle of entrepreneurship, from idea to product management, sales, venture money, formation of boards to successful mergers and IPOs. The idea for her first company Rubric came out of her knowledge of product management while working for an enterprise software company. Leading a large team and managing a huge line of products, Shukla had developed a process as a convenience tool to handle marketing automation. “This process was appreciated by my peers and it helped me identify the need of the market. This was an opportunity to fill that need,” says Shukla, who helped build cutting-edge applications for the emerging online landscape. “We went to nearly 200 companies identifying their needs,” she says. The company was founded in 1997 and raised close to $14 million; within 19 months, it was acquired for $366 million.

Neither an engineer nor a technologist, Anu Shukla sold Rubric for $366 million

The exit strategy, or the decision to sell, merge or go public is the last and most important milestone for entrepreneurs. Rubric was addressing one element in the customer relationship management (CRM) world. In 2007, Shukla founded her newest company Offerpal to handle monetisation challenges of social media, networking and gaming sites.

Manish Chandra is a suave rising star, whose company Kaboodle was acquired by one of the world’s largest publishing houses, Hearst Corporation, for an undisclosed sum in 2007. A product of IIT Kanpur, Chandra was the eldest of three sons of a retired judge in Uttar Pradesh. He joined Intel as an engineer and worked with the database company Sybase when it was an 80-person startup and saw it grow through its IPO. His last stop before starting Kaboodle was with Versant as Vice President, marketing and product development. In 2004, Chandra and his wife Asha felt the need to collaborate with friends. The company’s co-founder, however, was electrocuted while paragliding on vacation in South America, and took about six months to recover.

The final hurdle, in the spring of 2007, was when the company had spent its cash and had to struggle to provide its payroll. Chandra had to call on investors and personally pick up checks to keep the company going. But such challenges did not dampen progress and the site gained traffic and attracted attention from prominent VCs. Before their cash flow desperation took them to the next round of funding, Hearst Media came calling. “The exit happened at the right time and at the right price,” says Chandra. It indeed proved a good time to exit, given that a few months later the current global economic crisis began. Chandra had got the most important entrepreneurial lesson — when to expand, how to leverage expert knowledge and most important, when to exit — right.

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