Shantanu Prakash (PGP '88), MBA from IIM Ahemdabad
Despite a regular middle class upbringing, Shantanu went into business while doing his BCom. The entrepreneurial streak continued after the MBA from IIM Ahmedabad. His company Educomp is today the leading provider of digital content for schools across India.
Are entrepreneurs born or made? Did they always know this is what they wanted from life or did an opportunity come up and light the way? Shantanu Prakash grew up in an “absolutely typical middle class background.” But he knew entrepreneurship was his calling, early in life. He founded a company while still in college and started another one right after graduating from IIM Ahmedabad. And this was in the late ‘80s, years before entrepreneurship was in fashion. The thing about Shantanu that strikes you is how much at ease he is as he relates the story. It's not like he made it big overnight, it's actually taken close to two decades. But through the hard times, the weak sales, the poor cashflows, he says it was “never difficult.” “When I look back, every single year of my life, I thought, was the coolest year of my life.” Sitting with him in the coffee shop of the amazing Trident Hotel in Gurgaon, a part of me said: “This guy is definitely lying. Aisa kaise ho sakta hai…” But at a deeper level, what he said seemed to ring true. Your reality is what you make of it. If you see life with an 'all is wonderful in this world' pair of lenses, that's how it is. This is against conventional wisdom. The middle class ethic of being careful and completely realistic about the big, bad world around you. But all I can say is the formula seems to have worked for Shantanu. His company Educomp works with 9,000 schools and six million students across India, US and Singapore, generating revenues of Rs 276 crores in FY ‘07-08. Its market capitalization is Rs 7,000 crores *. But like I said, it's the attitude with which it's been built which is more interesting than the building itself.
Despite a regular middle class upbringing, Shantanu went into business while doing his BCom. The entrepreneurial streak continued after the MBA from IIM Ahmedabad. His company Educomp is today the leading provider of digital content for schools across India.
Are entrepreneurs born or made? Did they always know this is what they wanted from life or did an opportunity come up and light the way? Shantanu Prakash grew up in an “absolutely typical middle class background.” But he knew entrepreneurship was his calling, early in life. He founded a company while still in college and started another one right after graduating from IIM Ahmedabad. And this was in the late ‘80s, years before entrepreneurship was in fashion. The thing about Shantanu that strikes you is how much at ease he is as he relates the story. It's not like he made it big overnight, it's actually taken close to two decades. But through the hard times, the weak sales, the poor cashflows, he says it was “never difficult.” “When I look back, every single year of my life, I thought, was the coolest year of my life.” Sitting with him in the coffee shop of the amazing Trident Hotel in Gurgaon, a part of me said: “This guy is definitely lying. Aisa kaise ho sakta hai…” But at a deeper level, what he said seemed to ring true. Your reality is what you make of it. If you see life with an 'all is wonderful in this world' pair of lenses, that's how it is. This is against conventional wisdom. The middle class ethic of being careful and completely realistic about the big, bad world around you. But all I can say is the formula seems to have worked for Shantanu. His company Educomp works with 9,000 schools and six million students across India, US and Singapore, generating revenues of Rs 276 crores in FY ‘07-08. Its market capitalization is Rs 7,000 crores *. But like I said, it's the attitude with which it's been built which is more interesting than the building itself.
Shantanu Prakash was born in Rourkela, a small town with only
one notable feature - the steel plant. Dad in SAIL, mom a school
teacher, an upbringing no different from thousands of steel town
kids in the 1970s.
After class 10, the family shifted to Delhi and he enrolled in DPS,
a “shiny, big city school.” A reasonably good student, Shantanu
joined Shri Ram College of Commerce. And that's when it first
became evident, ‘this guy is different.’
“Whenever my dad used to travel, he used to buy me books. In
fact, I don't remember getting any presents except books. I used to
read voraciously. And probably that unlocked something in the
mind. Big thinking, big horizon and so on.”
“Secondly, when my dad retired and wanted to come and settle
down in Delhi, he found that he didn't have enough money to buy
even a DDA flat. Right! So somewhere at the back of my mind I
thought that if I need to make money, then working in a job is
probably not going to do it for me.”
While at SRCC, Shantanu started a company along with a friend.
The business was organising rock music concerts. Not that he had
any particular fascination for rock music but it was a good
opportunity.
“We used to collect sponsorship from companies, do these events
and shows in hotels and sell tickets.We made a lot of money.”
How much? Rs 4-5 lakhs - truly a lot of money 20 years ago!
“I thought I was completely rich. And then the stock market bug bit
me. So I used to be on the floor of Delhi Stock Exchange, every
single day for almost two years. Till I lost all the money! And I
thought it was really cool you know - we were not going to college,
doing things which were more 'adult'. It was just a completely
different rush.”
Shantanu got into IIM Ahmedabad although he was actually more
keen on FMS Delhi.
“(Laughs) Honestly at that time I didn't know what this whole MBA
thing meant... Someone from our event management company
flew down to deposit the form in Ahmedabad, because it was too
late to post it. So it was all a last minute kind of a thing.”
Shantanu joined IIMA, even as the event management business
back in Delhi continued to flourish. A contract had been signed
with Thums Up to do a series of concerts all over India. A concert
in Bombay was yet to be staged.
“Every weekend, in the first year of IIM Ahmedabad, I used to go
down to Bombay and work with my friend organising this concert.
It was a great hit.We got Remo to perform, it was held in a hotel
in Bombay and one time when I came back, I had this board
outside my dorm room in D-14, saying ‘Visiting Student’.”
“So I had a complete ball during the two years in IIM Ahmedabad.
Honestly, I didn't take it very seriously in the first year. Then in the
second year, I said okay, let's see the curriculum, what it's all
about. I always had this bindaas outlook. Why are these kids
studying so hard, what is there to take so seriously here, you
know! That sort of a thing.”
And at the time salaries from campus weren't exactly
stratospheric. Shantanu recalls that 17 of his batchmates joined
Citibank at salaries of Rs 7-8,000 a month in 1988.
Not surprisingly, Shantanu did not go for placements at all. With his
friend and partner from the event management business he
launched a company focused on education. The idea was to set up
computer labs for schools. The business model was innovative -
the schools did not invest. They only paid a monthly fee for every
student who used the lab and signed a multi-year contract.
“That was the time when IT was coming into schools. So there was
this whole mystery around IT. When we went and spoke to school
principals, they welcomed us with open arms saying these guys
know more about how to retrofit a computer lab in the school than
we do. So we actually got off to a great start. Lots of schools.”
In two years, the company did 50-60 schools and boasted a
couple of hundred employees. The turnover was Rs 4-5 crores.
Again, huge for 1990.
But, there were ideological differences among the partners.
“I wanted the company to go in one direction, he wanted to go in
another. But we were great friends, we are still very thick.”
Shantanu decided to do something on his own. The partner kept
the company and pretty much all the money, while he made a fresh
start. The year was 1992.
Educomp started very small. And with a different focus. Instead of
hardware, Educomp went into software. The first product it
launched was a ‘School Management System’, an ERP of sorts for
schools which took two years to build.
On paper it seemed like a phenomenal market to automate
schools - there is a real pain that you are trying to address. But it
wasn't a very successful product. After getting the product into 10
schools Shantanu realised that every school wants customisation.
And they don't want to pay for the customisation.
“All the stuff they teach you in terms of case studies at IIM
Ahmedabad, all that is really relevant. But while on campus you
appreciate none of it because you haven't gone through the grind.
Not understanding what running a business means, you later
relearn all those lessons the hard way.”
Besides, Educomp started its life with zero capital base.
“So one day you just opened shop, sat in one room with a
computer and started?” I ask.
“Yeah, almost like that. I had two employees in the very beginning.”
“What about the two years that went into developing the product?”
“A few school computer lab contracts kept some cash coming in”
he says.
“But the focus was on building this piece of intellectual property.
Even before it was fully developed, we started going to the market
and selling the product. And I think I am quite a good salesperson.
So I managed to convince a number of schools to buy it and
business started growing.”
Eventually the product was abandoned and Educomp expanded
into digital content for schools, and subsequently into e-learning.
Today if you look at the product portfolio, the company has
footprints in almost every space from KG to class 12.
“But you are making it sound so easy,” I protest. “From 1992 to
2006 (when Educomp got publicly listed) what was the process
that you went through?”
“Honestly speaking, for me it wasn't a difficult process at all. And I
think it's more a mindset issue than anything else.”
“I remember, the first office didn't even have a fan. But I didn't
seem to mind at all at that point in time. I was so completely
obsessed with what I was doing and what I was building. So every
single year of my life when I look back, I thought, that was the
coolest year of my life. That I was doing the most significant things
that I could ever hope to do.”
“And that basically translates into being happy. So one way to
describe myself would be, you know, an eternal optimist. When
you are an optimist some of the external environment stuff doesn't
really bother you. It never bothered me.”
Getting into the details of how the company grew, it was slow.Very
slow initially.
In 1998, six years after starting, Educomp’s revenues stood at Rs
3.5 crores. Then the company started growing. In the year 2000, the
topline was around Rs 12 crores. Then it really took off and in FY
‘07-08, Educomp clocked revenues of Rs 276 crores, with net profits
of Rs 70 crores.
Did something happen at the Rs 4 crore level, due to which the
company started growing 50-60%? Because a lot of people start a
business but most of them are never able to work that scale-up
magic.
Shantanu believes there are two questions which need to be
asked:
a) Is the business inherently scalable ?
b) Is the market opportunity large enough?
“In our case, the solutions that we were offering were technology
based, so they could easily be scaled up. Secondly, the universe
of opportunity in India is phenomenal. There are 220 million kids
going to school. There are one million schools, five million
teachers, all of that stuff.”
“So even today, the market penetration levels are less than two per
cent. And Educomp can keep growing 100 per cent over the next
10 years.Without reaching a saturation point.”
Additionally, the market started responding favourably to digital
content.
“It could have happened 3-4 four years earlier, it could have
happened 3-4 years later. As far as we were concerned, we were
passionate about it and believed this was the way to improve the
quality of education.” 75% of Educomp's revenues today come from
licensing content to schools - helping teachers do their job better.
To grow, you need people. Good people. Of course all companies
start with just a few, with the founder managing all the strategic
functions. The question every entrepreneur grapples with then is,
how can I get more people as good, or better than me?
“I wanted to work with high quality, smart people. But the problem
was, the high quality smart people didn't want to work with me…
So it was a lot of struggle.”
One of the many reasons Educomp was eventually able to attract
talent was because people easily become passionate about
education.
“The trick is to identify the DNA in a person, where he or she wants
to do something different, and wants to be differently incentivised.
It means not just a big fat salary cheque, but things like stock
options, feeling of partnership, being part of a start-up
organisation, fast growth, all of that. That’s how I was able to get
some really good people as partners.”
Almost all of whom are still with the company. There are 4,000
employees at Educomp but the attrition rate is amazingly low, at
less than three per cent.
Aisa kyun?
“People are happy, I would like to believe that. And the company is
growing 100 per cent a year, we are now five times larger than our
nearest competitor in India in this space... so where do you want to go!”
With the company going public, Educomp today has at least 25
employees who are dollar millionaires. Like all new generation
entrepreneurs, the secret sauce of stickiness lies in sharing the
wealth. And the heat of growth is fuelled by a timely dose of
venture capital.
Educomp received $2.5 million of venture capital in June 2000. It
wasn't much of a struggle given the IT and dotcom boom at the
time. The funding was wrapped up in two months.
Did life change after the funding?
“Practically - nothing. The canvas was always large. With more
money you can just buy more paint and do a better painting.”
Six years later when more funds were needed for expansion,
Educomp decided to raise the money through an IPO.
“Our company had reached a critical size, and we thought that
capital markets are ready. A lot of people ask us, ‘Why did you
take your company public at the small size that you had?’ Rs.50
crores in sales. We are very happy we took the company public
rather than take private equity money.”
The important thing is that Educomp went IPO at the right time in
its growth curve. Since then the company has been growing 100%
a year.
But 20 years into the business, isn't a sense of fatigue setting in?
“No, my role is changing, the company is changing, we have a
phenomenal growth opportunity in front of us. Educomp is valued
at about one and a half billion dollars (as of May 2008). I think we
can be a ten billion dollar company in the next three years. So I
am certainly there, in charge, driving growth for the company.”
There are new thrust areas. For example, Educomp is now
building schools. The company will invest Rs.3,000 crores in the
next 2-3 years to set up 150 odd schools in India. The company is
planning to get into higher education as well as making
acquisitions outside of India. “So again, this is the most exciting
year that we have ever had. But I felt the same way in 1995!”
There's the whole romantic aspect of taking your company, your
creation to new heights. The desire to see your company doing
better and better and better. And there is always a 'next milestone'.
“Milestones certainly keep one active and moving. But I think for me
personally, understanding how value is created is a very fascinating
subject. Studying consumer behaviour, getting new products out into
the market, working with really smart people, it's a rush.”
“Every single day of my life, I experience that and I go out of my
way to create those experiences that give me the challenge of
being alive, driving something, doing something meaningful.
Especially in the business that I run, which is education, it’s so
easy to feel that you are contributing to society.”
Wonderful! But have there been any sacrifices on the family front?
“I think my family said this guy is crazy. So let him do whatever he
wants… When I got married, certainly I was an entrepreneur at
that time, my wife was understanding. But business every year has
become more and more demanding of my personal time.”
“More than the monetary sacrifice, it is really the sacrifice of time
when you are an entrepreneur. And that is a much more expensive
sacrifice than money.”
Shantanu admits he works 24x7. Even this interview is scheduled
on a Sunday afternoon, right after lunch.
“My life is completely unidimensional.Yes, had I been working in a
job, I would have been very conscious of leisure time, very
conscious of how much I am working. Here I am working for
myself. I had decided a long time ago that the next 10 years of my
life I am completely going to devote to building up my company.”
The family has learnt to be okay with it.
“But you don't see it as a sacrifice as such?” I persist.
“It is a sacrifice, no doubt about that. Maybe I am not intelligent
enough to balance or do this right, I am not proud of the fact. I think
the ideal situation is to be successful professionally and take out
enough time for your family and for other vocations, hobbies.”
“I have this nice little picture, it has not happened to me. That's
something that I guess I will have to learn.”
We all have to, actually.
one notable feature - the steel plant. Dad in SAIL, mom a school
teacher, an upbringing no different from thousands of steel town
kids in the 1970s.
After class 10, the family shifted to Delhi and he enrolled in DPS,
a “shiny, big city school.” A reasonably good student, Shantanu
joined Shri Ram College of Commerce. And that's when it first
became evident, ‘this guy is different.’
“Whenever my dad used to travel, he used to buy me books. In
fact, I don't remember getting any presents except books. I used to
read voraciously. And probably that unlocked something in the
mind. Big thinking, big horizon and so on.”
“Secondly, when my dad retired and wanted to come and settle
down in Delhi, he found that he didn't have enough money to buy
even a DDA flat. Right! So somewhere at the back of my mind I
thought that if I need to make money, then working in a job is
probably not going to do it for me.”
While at SRCC, Shantanu started a company along with a friend.
The business was organising rock music concerts. Not that he had
any particular fascination for rock music but it was a good
opportunity.
“We used to collect sponsorship from companies, do these events
and shows in hotels and sell tickets.We made a lot of money.”
How much? Rs 4-5 lakhs - truly a lot of money 20 years ago!
“I thought I was completely rich. And then the stock market bug bit
me. So I used to be on the floor of Delhi Stock Exchange, every
single day for almost two years. Till I lost all the money! And I
thought it was really cool you know - we were not going to college,
doing things which were more 'adult'. It was just a completely
different rush.”
Shantanu got into IIM Ahmedabad although he was actually more
keen on FMS Delhi.
“(Laughs) Honestly at that time I didn't know what this whole MBA
thing meant... Someone from our event management company
flew down to deposit the form in Ahmedabad, because it was too
late to post it. So it was all a last minute kind of a thing.”
Shantanu joined IIMA, even as the event management business
back in Delhi continued to flourish. A contract had been signed
with Thums Up to do a series of concerts all over India. A concert
in Bombay was yet to be staged.
“Every weekend, in the first year of IIM Ahmedabad, I used to go
down to Bombay and work with my friend organising this concert.
It was a great hit.We got Remo to perform, it was held in a hotel
in Bombay and one time when I came back, I had this board
outside my dorm room in D-14, saying ‘Visiting Student’.”
“So I had a complete ball during the two years in IIM Ahmedabad.
Honestly, I didn't take it very seriously in the first year. Then in the
second year, I said okay, let's see the curriculum, what it's all
about. I always had this bindaas outlook. Why are these kids
studying so hard, what is there to take so seriously here, you
know! That sort of a thing.”
And at the time salaries from campus weren't exactly
stratospheric. Shantanu recalls that 17 of his batchmates joined
Citibank at salaries of Rs 7-8,000 a month in 1988.
Not surprisingly, Shantanu did not go for placements at all. With his
friend and partner from the event management business he
launched a company focused on education. The idea was to set up
computer labs for schools. The business model was innovative -
the schools did not invest. They only paid a monthly fee for every
student who used the lab and signed a multi-year contract.
“That was the time when IT was coming into schools. So there was
this whole mystery around IT. When we went and spoke to school
principals, they welcomed us with open arms saying these guys
know more about how to retrofit a computer lab in the school than
we do. So we actually got off to a great start. Lots of schools.”
In two years, the company did 50-60 schools and boasted a
couple of hundred employees. The turnover was Rs 4-5 crores.
Again, huge for 1990.
But, there were ideological differences among the partners.
“I wanted the company to go in one direction, he wanted to go in
another. But we were great friends, we are still very thick.”
Shantanu decided to do something on his own. The partner kept
the company and pretty much all the money, while he made a fresh
start. The year was 1992.
Educomp started very small. And with a different focus. Instead of
hardware, Educomp went into software. The first product it
launched was a ‘School Management System’, an ERP of sorts for
schools which took two years to build.
On paper it seemed like a phenomenal market to automate
schools - there is a real pain that you are trying to address. But it
wasn't a very successful product. After getting the product into 10
schools Shantanu realised that every school wants customisation.
And they don't want to pay for the customisation.
“All the stuff they teach you in terms of case studies at IIM
Ahmedabad, all that is really relevant. But while on campus you
appreciate none of it because you haven't gone through the grind.
Not understanding what running a business means, you later
relearn all those lessons the hard way.”
Besides, Educomp started its life with zero capital base.
“So one day you just opened shop, sat in one room with a
computer and started?” I ask.
“Yeah, almost like that. I had two employees in the very beginning.”
“What about the two years that went into developing the product?”
“A few school computer lab contracts kept some cash coming in”
he says.
“But the focus was on building this piece of intellectual property.
Even before it was fully developed, we started going to the market
and selling the product. And I think I am quite a good salesperson.
So I managed to convince a number of schools to buy it and
business started growing.”
Eventually the product was abandoned and Educomp expanded
into digital content for schools, and subsequently into e-learning.
Today if you look at the product portfolio, the company has
footprints in almost every space from KG to class 12.
“But you are making it sound so easy,” I protest. “From 1992 to
2006 (when Educomp got publicly listed) what was the process
that you went through?”
“Honestly speaking, for me it wasn't a difficult process at all. And I
think it's more a mindset issue than anything else.”
“I remember, the first office didn't even have a fan. But I didn't
seem to mind at all at that point in time. I was so completely
obsessed with what I was doing and what I was building. So every
single year of my life when I look back, I thought, that was the
coolest year of my life. That I was doing the most significant things
that I could ever hope to do.”
“And that basically translates into being happy. So one way to
describe myself would be, you know, an eternal optimist. When
you are an optimist some of the external environment stuff doesn't
really bother you. It never bothered me.”
Getting into the details of how the company grew, it was slow.Very
slow initially.
In 1998, six years after starting, Educomp’s revenues stood at Rs
3.5 crores. Then the company started growing. In the year 2000, the
topline was around Rs 12 crores. Then it really took off and in FY
‘07-08, Educomp clocked revenues of Rs 276 crores, with net profits
of Rs 70 crores.
Did something happen at the Rs 4 crore level, due to which the
company started growing 50-60%? Because a lot of people start a
business but most of them are never able to work that scale-up
magic.
Shantanu believes there are two questions which need to be
asked:
a) Is the business inherently scalable ?
b) Is the market opportunity large enough?
“In our case, the solutions that we were offering were technology
based, so they could easily be scaled up. Secondly, the universe
of opportunity in India is phenomenal. There are 220 million kids
going to school. There are one million schools, five million
teachers, all of that stuff.”
“So even today, the market penetration levels are less than two per
cent. And Educomp can keep growing 100 per cent over the next
10 years.Without reaching a saturation point.”
Additionally, the market started responding favourably to digital
content.
“It could have happened 3-4 four years earlier, it could have
happened 3-4 years later. As far as we were concerned, we were
passionate about it and believed this was the way to improve the
quality of education.” 75% of Educomp's revenues today come from
licensing content to schools - helping teachers do their job better.
To grow, you need people. Good people. Of course all companies
start with just a few, with the founder managing all the strategic
functions. The question every entrepreneur grapples with then is,
how can I get more people as good, or better than me?
“I wanted to work with high quality, smart people. But the problem
was, the high quality smart people didn't want to work with me…
So it was a lot of struggle.”
One of the many reasons Educomp was eventually able to attract
talent was because people easily become passionate about
education.
“The trick is to identify the DNA in a person, where he or she wants
to do something different, and wants to be differently incentivised.
It means not just a big fat salary cheque, but things like stock
options, feeling of partnership, being part of a start-up
organisation, fast growth, all of that. That’s how I was able to get
some really good people as partners.”
Almost all of whom are still with the company. There are 4,000
employees at Educomp but the attrition rate is amazingly low, at
less than three per cent.
Aisa kyun?
“People are happy, I would like to believe that. And the company is
growing 100 per cent a year, we are now five times larger than our
nearest competitor in India in this space... so where do you want to go!”
With the company going public, Educomp today has at least 25
employees who are dollar millionaires. Like all new generation
entrepreneurs, the secret sauce of stickiness lies in sharing the
wealth. And the heat of growth is fuelled by a timely dose of
venture capital.
Educomp received $2.5 million of venture capital in June 2000. It
wasn't much of a struggle given the IT and dotcom boom at the
time. The funding was wrapped up in two months.
Did life change after the funding?
“Practically - nothing. The canvas was always large. With more
money you can just buy more paint and do a better painting.”
Six years later when more funds were needed for expansion,
Educomp decided to raise the money through an IPO.
“Our company had reached a critical size, and we thought that
capital markets are ready. A lot of people ask us, ‘Why did you
take your company public at the small size that you had?’ Rs.50
crores in sales. We are very happy we took the company public
rather than take private equity money.”
The important thing is that Educomp went IPO at the right time in
its growth curve. Since then the company has been growing 100%
a year.
But 20 years into the business, isn't a sense of fatigue setting in?
“No, my role is changing, the company is changing, we have a
phenomenal growth opportunity in front of us. Educomp is valued
at about one and a half billion dollars (as of May 2008). I think we
can be a ten billion dollar company in the next three years. So I
am certainly there, in charge, driving growth for the company.”
There are new thrust areas. For example, Educomp is now
building schools. The company will invest Rs.3,000 crores in the
next 2-3 years to set up 150 odd schools in India. The company is
planning to get into higher education as well as making
acquisitions outside of India. “So again, this is the most exciting
year that we have ever had. But I felt the same way in 1995!”
There's the whole romantic aspect of taking your company, your
creation to new heights. The desire to see your company doing
better and better and better. And there is always a 'next milestone'.
“Milestones certainly keep one active and moving. But I think for me
personally, understanding how value is created is a very fascinating
subject. Studying consumer behaviour, getting new products out into
the market, working with really smart people, it's a rush.”
“Every single day of my life, I experience that and I go out of my
way to create those experiences that give me the challenge of
being alive, driving something, doing something meaningful.
Especially in the business that I run, which is education, it’s so
easy to feel that you are contributing to society.”
Wonderful! But have there been any sacrifices on the family front?
“I think my family said this guy is crazy. So let him do whatever he
wants… When I got married, certainly I was an entrepreneur at
that time, my wife was understanding. But business every year has
become more and more demanding of my personal time.”
“More than the monetary sacrifice, it is really the sacrifice of time
when you are an entrepreneur. And that is a much more expensive
sacrifice than money.”
Shantanu admits he works 24x7. Even this interview is scheduled
on a Sunday afternoon, right after lunch.
“My life is completely unidimensional.Yes, had I been working in a
job, I would have been very conscious of leisure time, very
conscious of how much I am working. Here I am working for
myself. I had decided a long time ago that the next 10 years of my
life I am completely going to devote to building up my company.”
The family has learnt to be okay with it.
“But you don't see it as a sacrifice as such?” I persist.
“It is a sacrifice, no doubt about that. Maybe I am not intelligent
enough to balance or do this right, I am not proud of the fact. I think
the ideal situation is to be successful professionally and take out
enough time for your family and for other vocations, hobbies.”
“I have this nice little picture, it has not happened to me. That's
something that I guess I will have to learn.”
We all have to, actually.
ADVICE TO YOUNG ENTREPRENEURS
The risk-reward equation is completely in favour of the
entrepreneur. There is no way that you will be
economically rewarded lesser for being an entrepreneur
than by taking up a job.
Recently, Educomp invested in an online tutoring
company. This company, Three Bricks E-Services, was
started by three very young IIMA entrepreneurs.
Chandan Aggarwal, Riju and Mohit. They were in
business for a year and a half and then Educomp
acquired a 76% stake in their company.
In a short period of two years, each of these people, if
you value their 24% stake in the company, would be
worth at least Rs.15-20 crores each. There is no way you
can do that if you are doing a job. Impossible!
Two years you may struggle. If the average salary is
Rs.15-18 lakhs p.a. (gross) how much do you make in five
years? 18 x 5, right? After tax, you make some 50 lakhs.
In 5 years, I can guarantee you, any business you do, will
earn you that. Assuming that you are at least a little bit
intelligent, within a year, the valuation of your business
itself will exceed fifty lakhs. No matter what you do.
So if a 24 year old entrepreneur came to me, I would say
choose anything that you want, that interests you, the
internal passion you have.
How to choose what to do? I came from a background
where I did my Bachelors in Commerce from SRCC and
then my MBA - no 'skills', right? So I could have chosen
any domain, but you have to keep some of those key
principles in mind - ‘Is the opportunity big enough, are
you able to make a contribution and fundamentally
change something that generates value?’
The risk-reward equation is completely in favour of the
entrepreneur. There is no way that you will be
economically rewarded lesser for being an entrepreneur
than by taking up a job.
Recently, Educomp invested in an online tutoring
company. This company, Three Bricks E-Services, was
started by three very young IIMA entrepreneurs.
Chandan Aggarwal, Riju and Mohit. They were in
business for a year and a half and then Educomp
acquired a 76% stake in their company.
In a short period of two years, each of these people, if
you value their 24% stake in the company, would be
worth at least Rs.15-20 crores each. There is no way you
can do that if you are doing a job. Impossible!
Two years you may struggle. If the average salary is
Rs.15-18 lakhs p.a. (gross) how much do you make in five
years? 18 x 5, right? After tax, you make some 50 lakhs.
In 5 years, I can guarantee you, any business you do, will
earn you that. Assuming that you are at least a little bit
intelligent, within a year, the valuation of your business
itself will exceed fifty lakhs. No matter what you do.
So if a 24 year old entrepreneur came to me, I would say
choose anything that you want, that interests you, the
internal passion you have.
How to choose what to do? I came from a background
where I did my Bachelors in Commerce from SRCC and
then my MBA - no 'skills', right? So I could have chosen
any domain, but you have to keep some of those key
principles in mind - ‘Is the opportunity big enough, are
you able to make a contribution and fundamentally
change something that generates value?’
