What defines an entrepreneur?
Is it the constant drive to follow their passion or a desire to construct the best of opportunities and build a scalable and successful business model?
The answer to this question lies with Mr. Sanjeev Bikhchandani – an individual who believed in his idea that he formed more than 20 years ago. Today, his name echoes through the hall of fame of Indian entrepreneurship on how he established his venture that went on to become one of the leading industry names in the country. My Big Plunge features an exclusive interview with the Info Edge founder where he talks about his brainchild Naukri.com and how his entrepreneurial spirit took him to where he is today.
MBP : Tell us about the journey of Info Edge. What was the initial idea that started it?
Bikhchandani : So for the first seven years, till 1997, we drifted into various small spaces. We dealt with salary surveys, database studies, training – basically anything that came in our way to survive. Sometimes I could take my salary, sometimes I couldn’t. But then I was just happy to be an entrepreneur.
In 1997, we launched Naukri as a brand in Info Edge. It was a small idea that could operate in a small space. There were only 14,000 internet users in the country. Work hard, work smart, got lucky – it turned out that we had stumbled on a big idea. That took us around two and a half years. That is when we stopped everything else and focussed only on this. That is the story of the first seven years.
The next few years were spent in bootstrapping Naukri. 2000 turned out to be a turning point when we were able to raise venture capital from ICICI. We raised about Rs. 7 crore which right now seems small but we were happy. We went for loss in the first two years, expanded, then broke even and then finally in 2006 we were able to list the company.
MBP: You bootstrapped the company for a long time. Has it made the venture stronger?
Bikhchandani : Bootstrapping is a great experience. It teaches you the value of money. You learn how to do more with less. The focus is sharper towards the customers. You are essentially surviving on sales revenue. So basically, you are using the customers’ money rather than investors’ money. To me, the former always has a higher value. If you get money from investors, you may get too comfortable and not work hard enough.
MBP: What were the key points in Naukri’s successful journey?
Bikhchandani : When you solve an unsolved problem, you hit a sweet spot. When the customer wants to buy, it pushes down your marketing and sales cost. You get your terms of price and trade. Solving an unsolved problem always makes you a pioneer or a first mover. But from the beginning we always had a great team of people. That makes a huge difference.
MBP : What kind of capital did you start Naukri with?
Bikhchandani: We had a small business that had a turnover of around Rs. 20 lakhs. I was running it out from my house. We spent around Rs. 4-5 lakhs from that on Naukri in the first year. Subsequently, we got revenue of around 2 and half lakhs so we lost some money there. The following years were better, we broke even. This initial capital came from all other existing activities we were doing. Then we raised around Rs. 7 crores of which we used 5 crores. The next time we raised money was in the IPO.
MBP : How did you beat the competition to reach this stage?
Bikhchandani: We were quite clear. We were not competitor-focused, we were consumer-focused. If you solve the problems of your customers, you will beat any competition. Sure you should keep a check on your rivals to see if you’re missing any tricks, but on a larger scale, you should react to customer needs and unsolved problems.
MBP : What are the new tools that Naukri has come up in terms of product innovation?
Bikhchandani: In the last 2-3 years we have built some really good new products. One of the products we’ve built is something called the Career Sight Manager. This gives the HR departments control over the career section on various corporate websites. This is selling really well. We’ve built an employee referral platform to tackle the referral market. We have rolled out an employee recruitment profile. This has started to do well.
Mobile has been a big thrust. Close to 40% of Naukri sessions are coming up on the mobile app.
MBP: We can now see a shift from traditional classifieds on print to classifieds on the online platform. How has that transformed an internet company like Info Edge?
Bikhchandani : The shift has been gradual. Having said that, it has really accelerated in the last few years with the mobile. We’ve seen a huge acceleration of usage in mobile. Naturally, this is an opportunity but it’s also a threat. It is potentially disruptive – we have to be on the top of our game.
MBP : How was Info Edge’s shift to investing?
Bikhchandani : We had the money but there were plenty of opportunities out there. We could not address them but there were many good entrepreneurs out there who could grab these opportunities. These entrepreneurs could create value for the shareholders.
MBP : We’ve seen some of the Info Edge-backed start-ups like Zomato being immensely successful. What are the key things you look at when investing in a venture?
Bikhchandani : We first look at the team and find out how good and committed the guys are. Can they scale up? Can they attract talent?
Secondly, we look at what they’re doing. Are they solving an unsolved problem? Is it innovative? What’s the competitive environment like? That’s when we decide to go into it.
MBP : After entering a start-up, what kind of engagement do you aim at?
Bikhchandani : We are entrepreneurs ourselves. So we know what’s inside the entrepreneur’s head – the fears, the concerns. We know it’s a lonely journey. We have a lot of respect for entrepreneurs. Perhaps more respect than investors who are not entrepreneurs. And therefore we certainly don’t interfere or intervene. We may advice, we may nudge, we allow them to talk to all our departments but only if they want to.
MBP: The start-up boom has taken off with the access of internet. There are countless successful internet start-ups all over the country. Being a part of a pioneering internet company, what kind of advice would you want to give to any budding internet start-ups?
Bikhchandani: Dream big but start small. It’s good to make small mistakes. We say bootstrap for a while; get customer validation before raising any capital; raising money when investors come to you and not the other way around; solve an unsolved problem.
MBP : How’s Sanjeev the entrepreneur different from Sanjeev the investor?
Bikhchandani : As an entrepreneur, you have to do it yourself. As an investor, you should be ready to stand in the side and advice the entrepreneur without interfering. So it’s a balancing act of doing stuff and just talking to people.
MBP : If you look at the kind of valuations start-ups are raising at seed level; we’re looking at around a million dollars. Some say that this amount of capital has made the investing scene topsy-turvy. Your thoughts?
Bikhchandani : We’re conservative. We have not invested in any company in the last 2 and a half years. Partly because we want to conserve our capital for our current portfolio companies. But we’ll probably get back to it soon enough if we find something worthy.
MBP : We see a lot of start-ups who are impatient. How important is patience when growing your company?
Bikhchandani : No big company got build in less than 10 or 15 years. It’s natural for young people to be impatient. But I do think success takes time.
MBP : So how did Sanjeev handle success?
Bikhchandani: The truth is, even today, we do not believe we’re successful because there are so many challenges and new things to be done. For entrepreneurs, they should not be looking at raising capital. They should be looking at building an enduring organisation – an institution that outlives there. Whatever success you have, you should take it with a lot of humanity.
MBP : Any advice to young entrepreneurs?
Bikhchandani : Dream big. Start small.
Bikhchandani’s final words can be taken as some of the most valuable wisdom in the entrepreneurial world. Today, Naukri.com is India’s largest job search portal and has solved the answers of numerous unemployed people in India. Parent company Info Edge went ahead to launch more brands like Jeevansaathi and 99 acres too – both of which are successful as well.
Bikhchandani’s story is inspiring on many levels and his legendary working tenure is a story that will resonate in the ever expanding start-up culture in the country.
