WHEN BUSINESS IS TWO GOOD

They’re never content starting just one business and resting on their laurels. Anirvan Ghosh delves into the mind of India’s serial entrepreneurs

Fresh from writing his book ‘Simply Fly’, which chronicles his experiences with India’s first low-cost airline Air Deccan, Capt GR Gopinath is already immersed in his second venture. Sitting in his office at Residency Road in Bangalore, the man who made flying affordable to Indians is now talking about Deccan 360 with the same passion. So what does it take to keep going time and time again?

“The rules are the same—be excited about creating something new,” says Gopinath. According to him, this creation is not just about the product but also a whole new business model to go with it, which has to be implemented by a new team. Gopinath says he learnt more than that. He also learnt how to manage his best pilots and employees getting poached by rivals, including 15 in a single day, and how to overcome not just competition but lobbying against low-cost airlines by the big guns of the industry. “They tried predatory pricing, I responded with more hitting them on all routes,” says Gopinath.

Starting your first venture and watching it grow has its own rewards, and first-time entrepreneurs know that heady feeling too well. But there’s a different breed of entrepreneur that isn’t content with doing it just once. The serial entrepreneur gets his kicks from building a business, selling it off, and moving on to the next, new challenge.

And the previous experience, irrespective of whether it was a success or failure, becomes vital. “After going through the entire process of creating a new company, a new team, and new business models and processes from scratch, you are now ready to do something bolder and bigger,” says K Ganesh, who’s among India’s successful serial entrepreneurs. In 1990, he became CEO of his first venture, which he started with five partners from HCL. Their company, IT&T, specialised in maintaining and integrating computer systems. It was sold to iGate. In April 2000 Ganesh and his wife Meena started a company, CustomerAsset, among India’s earliest BPO companies, which grew to 2,200 employees within two years. This firm was acquired by ICICI in May 2002 for $19.3 million. He then started TutorVista, an online tutorial firm.

“There is this continuous need for thrill, and this is also the motivation,” says Ganesh, whose company now employs 2,000 teachers up from 400 in 2007. These teachers teach 20,000 students online across the US and the UK. After exiting his last venture, Ganesh wanted to try something new, and different from what he had done before. “We created a consumer brand sitting here in India.” His previous experience helped him in forming a new team, and an innovative business strategy. “I can take more risks now because I have the experience,” he says.

A previous track record helps in more ways than one. “It makes you more confident, and you are eager to prove that you were not a one-venture wonder,” says Sunny Balijepalli. His first venture Half.com, which sold items online, was sold to eBay for $350 million in 2000. It was a great sale in a year when most dotcom companies were hit hard and the Nasdaq crashed. Balijepalli worked at eBay for a while while some from his former team of 40 used the new-found wealth to start their own ventures. He then moved to Mumbai from Silicon Valley, and started ZoomIn.com, an online portal which enables users to get printed albums of their uploaded pictures anywhere. “Even if you are a failure, this drive will go on. You will want to prove yourself on your own, again,” he says.

A common thinking, say these entrepreneurs, is that being experienced in starting your own venture is mostly an asset. That is the case, says Ganesh, as potential investors believe in you, having seen you succeed the first time round and getting good returns on their investment. Others, who did not invest the last time, might be more willing this time. This was one of the reasons that Sequoia Capital invested in them despite this model being untested, and unproved, and eventually led to $18 million funding. Same goes for ZoomIn’s raising over $5 million. Attracting good people is also easier after a successful venture, as they are more ready to believe in your dreams.

But a previous record can also work against you at times. “You can get typecast,” says Ganesh. So investors would be more confident if Balijepalli went on to create something similar to Half.com, or when Gopinath stayed in the airline business.

The good news is that investors are now open to people who might have failed despite doing the right things. “I would fund an entrepreneur who has failed previously if I see that he has not made the same mistakes, and has a great idea, a competent team, and is in a potentially large market,” says Harshal J Shah, CEO, Reliance Tech Ventures, the VC arm of the Reliance ADAG.

Most entrepreneurs do not like to return to a regular corporate environment. “We are too driven to do something new, and prove ourselves over again,” says Gopinath. But some do come aboard. Shah gives the example of Vikash Varma, who sold his first venture P-Cube to Cisco for $200 million in the year 2000, and then instead of starting a new company, as most normally do, he became the CEO of Stoke, which was then in Series C funding. “Stoke got a good CEO, who could make things work in difficult times,” says Shah. Varma’s experience came handy last year when Stoke bagged a large order from Japanese telecom giant NTT DoCoMo, to build a gateway for its 4G services to be started later this year in Japan. “Varma carried the lesson from several years ago, to today,” says Shah. Those lessons were how to retain your best people, and how to keep innovating in a recession-hit market, critical for success for a startup like Stoke.

Prof K Kumar, under whom several start-ups are being incubated at IIM Bangalore, maintains that the risk-taking ability of a serial entrepreneur rises with each new venture. This theory is true, as most entrepreneurs become bolder with each passing venture.

As Gopinath flips through the pages of his book he says that although Air Deccan lost money, it was enough to change the rules of the aviation game. Sometimes, he says, success or failure is not as important as trying, and trying well. As Walt Disney said, “I failed. I think it is important to have a good hard failure when you are young.”