Making hay while dotcom shines

The Info Edge IPO has made Sanjeev Bikhchandani India's first dotcom millionaire. Well, at least the first created by a stock exchange listing.

As co-founder of naukri.com Sanjeev currently holds 44% of the company, estimated to be worth Rs 717 crores. The share price, on the first day of listing itself rose 85%,which means there is new confidence in 'dotcom' as a category.

No doubt this news must be exciting for the many many young people out there who have recently embarked upon dotcom ventures. But I do wish to put Sanjeev's success story in perspective. It has taken 16 long years.

Early on, while working at GlaxoSmithkline Sanjeev realised that employees love talking about jobs and career movement. "That jobs are an extremely high interest information category for almost all people and headhunting had tremendous potential".

In his own words
I started out as a partnership firm in 1989, where I was a sleeping partner. By 1990 I had concluded that there was probably a large, highly fragmented database of jobs out there with HR managers and headhunters which, if someone were to aggregate and keep current, would be a very valuable resource.

We set up office in the servant's quarter above the garage in my father's house, paying my father a rent of Rs 800. For the first few years we did salary surveys and built and marketed a database of pharmaceutical trademarks.

Though the company was kept afloat, I was unable to draw a salary and we ran the house on my wife's salary. To meet my personal expenses, I would teach at business schools as visiting faculty on weekends.

It was in response to a Department of Telecom's (DoT) advertisement to launch a videotex service in Delhi that I prepared a database of jobs. It was a pay-to-view model, where initially the employer would be allowed to host his job free and we would earn from the revenue share the DoT would give us. But the project never took off.

But, Sanjeev did not give up...

Turning point
It was on my visit to IT Asia in 1996 that I came to know of the World Wide Web. To register my website and get a domain name, I had to take help from my brother, who lived in the US and has a stake in the company.

The naukri.com site was set up in March 1997 as a division of InfoEdge. What was interesting was that I could not get any domain name I wanted (all such names which had the word job were already registered) and had to settle down with the Hindi term "naukri", which actually makes it different from other jobsites today. At this point I was joined by Anil Lall, the chief technical officer and V N Saroja, chief operating officer.

With the recession, I had to take up a part-time job, but in the same domain area. Between 1996 and 2000, I also worked at The Pioneer. Initially, the consulting editor of Avenues -- the careers supplement of The Pioneer -- I was instrumental in working out an investment package with a consortium of four financial institutions --ICICI, IDBI, IFCI and UTI.

In the morning, I used to work for naukri.com, go to The Pioneer during the day and then get back to naukri.com in the evening.

Naukri.com became profitable from the second year. Eventually, Sanjeev quit the Pioneer and joined naukri.com on a fulltime basis. The firm took in a round of venture capital from ICICI in 2000 and well, the rest is history.

The point is Sanjeev had an idea - but it was a little ahead of its time. It took him 7 years to realise that this idea could work - although in a different form than what was originally imagined.

But the internet was a facilitator. It was not the idea itself. Today, many folks jump into dotcom with offerings that do not serve a strong need. Or a large enough market. The rash of Indian social networking sites is, I think, a case in point.

What's more, how many will stick to the idea they have for 5, 10, 15 years? Constantly looking for new ways and means to make it work??

Another illustrative story is that of Nirmal Jain of India Infoline. He was featured in a recent issue of Businessworld, among India's new billionaires. His 26% holding in the company is worth Rs 215 crores (over Rs 2 billion).But it wasn't a smooth journey for him either.

As the BW article noted:

Nirmal Jain made the biggest gamble of his life in 1999, when he was running Probity Research, a stockmarket research firm with revenues of nearly Rs 1 crore. But Jain was dissatisfied. A steady but small business was no fun. So, he took the huge volumes of research data, their chief source of revenue, and put it on the Internet. Convinced that it was a foolish move, many of his core team members quit.

But Jain had just discovered the power of the Internet. It offered him a bigger scale than his firm could ever reach otherwise. Thus, India Infoline was born in May 1999.

Then came the dotcom bust. Suddenly, all the funding disappeared, the dotcom business was stigmatised and, worse still, the stockmarket also took a downturn. His business was struggling to survive, and it was the darkest time of his life. But Jain was not ready to give up just yet.

He drastically scaled down operations and stripped the profile of all frills, focusing on financial services and e-broking. He went without a salary for nearly a year-and-a-half, trying to keep his company afloat.

Things finally began to look up in 2003, when the market went positive. India infoline’s e-broking platform found many takers, and the company began doing well. It is making consolidated profits of Rs 49 crore today.

Again, a real world business that migrated and scaled up drastically through the power of the internet. And one that required doggedness and perseverance through tough times.

And on a personal note, both Nirmal and Sanjeev are my seniors from IIM A. Although I don't know them, their stories are inspiring. For entrepreneurs like me who have stuck it out... but not yet made billions :)

Those of you thinking of striking out on your own should remember: "Success" may take longer than you anticipate. And the journey itself should be your reward.

Or, you may be in for disappointment.