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Rs 50,000 to Rs 50 Crores – How I Did it?

SUBJECTS’s PROFILE

Education: Bachelor of Arts

Last job: United Database

Last salary: Rs 1,100 a month

No. of years as employee: Three

Age at starting business (Askme): 24 years

Initial investment (in Just Dial): Rs 50,000

Sources of fund: Personal savings

Company: Just Dial, a 24X7 information service provider

Turnover: Rs 50 crore (2006-7)

No. of employees: 2,600

Take # 1:

vss_maniA Tamil Brahmin and a first generation entrepreneur, 42-year-old VSS Mani, has a very unlikely role model. “I look up to actor Shah Rukh Khan for inspiration,” he says, and lives by the star’s credo of enjoying work. The similarity in their struggle has struck a chord with Mani. “Like Shah Rukh, I too moved to Mumbai from Delhi with a vision to make it big,” he says.

Mani started his career in 1985 in Delhi at the age of 20 as a salesman with United Database, a directory service of businesses and services listings. While selling the printed directory, Mani realized the potential of starting a similar service, but one that used the telephone as the medium. He received a positive response when he sounded out a client and a colleague.

In August 1989, the trio launched Askme, a 24X7 dial-in set-up, with an investment of Rs 25 lakh (the money provided by his partners). In two years, the company had set up offices in five other cities. However, by 1991, the Indian economy was going through a downturn and having spread too thin, the company’s growth took a beating. Mani eventually walked out in 1992.

Take 2:

“I had no money and the family’s responsibility was on my shoulders,” recalls Mani. By now he was hooked on to the idea of starting his own venture. Through a friend, he came in contact with a businessman who wanted to in on a plan of distributing a free wedding planner to matrimonial advertisers in Delhi newspapers. The planner would carry listings of all services associated with a wedding.

“From bandwallahs to fashion stores, everybody advertised in the magazine,” says Mani, who had a 33% stake in the company called Target Audience Communication. But by the end of year one, Mani fell out with his co-promoters.

Take 3:

But the twice bitten entrepreneur had honed his business skills and was now better equipped. He took the wedding planner proposition to another national newspaper for its Delhi and Mumbai editions. By this time, Mani had managed to save Rs 80,000, of which he deposited Rs 30,000 in a bank fixed deposit as a security backup.

“I left my two brothers in charge of the Delhi market while I moved to Mumbai with Rs 50,000 as seed capital,” says Mani.

Making the idea work:

The wedding planner business generated a turnover of Rs 25 lacs in 1995-96, which he discontinued after two years. But all along, Mani held on to his dream of starting a service where people could receive information 24X7 using the telephone.

He also realized the importance of an easy to recall/vanity number. He approached telephone service provider Mahanagar Telephone Nigam and finally managed to get his dream number – 8888888. There were other hurdles: getting an easy-to-use software for the telephone operators so that the required information could be delivered in the shortest possible time.

Training the operators was the next difficult task. “We asked our advertisers to give the key words and that made the task simpler,” says Mani, who started by charging Rs 900 a year from advertisers. With hired computers and furniture, Mani launched Just Dial in 1996 in Mumbai. It found favor with consumers from day one.

Growing Locally:

“Spreading too fast was our undoing at Askme. I did not want to repeat it here,” he says. Making the service efficient was his focus. His conservative approach helped the company stay afloat during the tech meltdown in 2000. A dedicated team was put in charge to collect and update data on a regular basis. Mani focused on creating unique packages for advertisers.

“Under each category, we auctioned first to be read out numbers. This gave advertisers an edge and we could charge a premium,” he says. Putting back the money in the business, he slowly began to expand to other cities such as Delhi, Bangalore, Ahmedabad, Chennai and Hyderabad.

In 2001, Mani did the unthinkable. He asked his brothers to look after the business and took a sabbatical. “I had worked non-stop for years. I needed a break; to spend time with my wife and daughter; to catch up on my reading,” he says.

Going Global:

A year later, Mani returned to the helm of the business, by which time the turnover had crossed Rs 4 crore. He started by consolidating the business in other cities. In 2004, a print version of the service was launched. With the Internet proving its viability, Mani started work on building an online phone number search site.

“I adopted Google’s model of sponsored advertisements,” he says. There were many takers. A text message service was launched in 2007. For a company that never sought loans, venture funding too came on its own.

In October 2006, Hong Kongbased private equity firm, SAIF Partners, invested Rs 50 crore in the business. “They tried our service, loved the idea and walked into our office to invest,” says Mani with pride.

In March 2007, Tiger Global, a US hedge fund, invested Rs 77 crore in Just Dial. “I will be using it for setting up business in the US.” With a presence in 42 cities, Mani thinks it is time to go global. “No one can provide our kind of service,” he says confidently.

TIPS FOR STARTING AN INFO SERVICE

Minimum investment: To start on a national level, execution can be a challenge. One can start small with region specific services with an investment of Rs 2-3 crore.

Skills required: One needs to continuously update data and tap new medium of services.

Break-even period: 2-3 years

Attitude: Be ready to evolve your business strategy regularly.

Bottom line: Wrong information can ruin your company’s reputation.

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