Entrepreneur February 2013

www.entrepreneurindia.in

the business owner’s budget 2013pg 54

february2013 volume 4 issue 6 `100

MultiplexMogulthe pVR story just got a new twist with the acquisition of Cinemax pg 44

plus

ajay bijli

Ashish Chauhan on BSE’s new priorities

Premium Pools takes the deep dive

ACK Media brings back India’s childhood

5 of India’s hottest new startups

pg 32

pg 82

pg 72

pg 107

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44 King of the ScreensPVR's acquisition of Cinemax has made it the country's leader in the multiplex busi-ness. PVR's Ajay Bijli has gone from running a single-screen cinema to leading a business that runs 351 screens in the country

By Sourav Majumdar

INSIGHTS

16 It Isn’t About the Budget, Silly R Jagannathan on manag-ing the aftereffects of Budget Day

18 The Art of Brain-storming Richard Branson on effec-tive brainstorming

20 Startups Need Office! Nandini Vaidyanathan stresses upon the need for an office space

21 Ekla Cholo Re Manish Sabharwal says those who can walk alone will go far

22 The Curious Case of Awards Anurag Batra asks you not to celebrate awards too soon

24 How ‘Cultured’ is your Business? Ravi Kiran says that focusing on your com-pany’s culture is of the highest importance

25 The Indian Trade Deficit Debate Bharat Banka suggests a complete structural overhaul to resolve India’s trade deficit problem

26 The FOB FactorMitali Bose looks at four focus areas for family owned businesses

28 Build Human Brands Vikram Sood advises entrepreneurs on good brand building

cover STory

IN coNverSATIoN30 ‘We are trying to build sustainable businesses that are profit-centric’Richard Weingarten of Intellecap talks about the company’s plan to focus on social ventures in eight low-income states

By Avanish Tiwary

32 ‘We have tried to make fund-raising more efficient’Ashish Chauhan, the top boss at BSE Ltd, talks of the exciting developments taking place in the Indian capital market and more

By Sourav Majumdar

My STory

36 Bell The CatNilesh Parwani shares the ups and downs of his entrepreneurial journey through Printbell and Vistaprint

WoMAN eNTrepreNeur38 Moms at WorkFleximoms is helping women re-enter the work force after they take a break for the family

By Pranbihanga Borpuzari

SocIAl eNTrepreNeur41 The Next LevelSocial venture Dasra is helping other social ventures scale up. Find out how

By Shruti Chakraborty

SecoNd leAd

54 Budget and the Business OwnerBudget Day is less than a month away and all eyes are waiting to see what the Finance Minister has in store for India Inc. Voices from different industries share their expectations from Budget 2013

IN focuS

61 Global GainsTake a close look at how deal-making turned out in 2012 and its scope for this year

By Harish HV

SpecIAl feATure62 Need of the HourIndia’s healthcare sector is evolving and giving rise to a new breed of entrepreneurs

By VT Bharadwaj

INNovATorS INc.

64 Indie Up RisingCompanies like Imangi Studios and Bolt Creative are making games for smartphones which has even Hollywood taking notice

By Jason Ankeny

leGAcy

72 Bringing B(ACK) the GloryRead about the journey of the brands that were probably your favorite childhood comic books, Amar Chitra Katha and Tinkle


STrATeGy

81 Some Real Kick-StartersLooking for ways to propel your business forward instantly? You can. Find out how

By Erika Napoletano

offbeAT

82 The Big DiveVivek Mishra makes theme-based designer swim-ming pools for a living

By Avanish Tiwary

cover credITS

COveR DeSIGNArko Provo Mukherjee

COveR IMAGeAmit Kumar

table of contents

6 Intelligent Entrepreneur February 2013

Subscribe to Entrepre

ne

ur t

oday.

Three Creative Business Ideas That Were Before Their Time PG 70

The Real Batsmen of

Meerut PG 62

The Gururaj Deshpande

Interview PG 34

Samsung’s High Note

PG 100

5 Startups to Watch Out For

PG 105

Doing Good, Making Money, Changing India

DEEP IMPACT

A bunch of people are using innovation to power their ventures and bring about social change PG44

Naganand Murty (left) and Rahul Panicker

of Embrace Innovations, makers of low-cost warmers

for premature babies

www.entrepreneurindia.inNOVEMBER 2012 VOLUME 4 ISSUE 3 `100

THE DO-GOODERS

1112


www.entrepreneurindia.inDECEMBER 2012 VOLUME 4 ISSUE 4 `100

THE RATAN TATA LEGACY

1212


King Cobra: Karan Bilimoria’s India Strategy PG34

So Long, Mr TataThe Turnaround Man hands over a formidable legacy to his successor PG44

Kanwaljit Singh, Senior Managing Director,

Helion Advisors


INDIA VC/ANGEL SURVEY 2013

0113


VENUGOPAL DHOOT PLAYS A DIFFERENT TUNE PG 124

JANUARY 2013 VOLUME 4 ISSUE 5 `100

India VC/Angel Confidence Survey

EXCLUSIVE

Vishwavir Ahuja on rewiring Ratnakar Bank

AMW Trucks hits the high road

Rethinking farming with Bhushan Agro

5 startups to watch out for

PG 90

PG 80

PG 68

PG 105

EYES ON THE PRIZETop venture capitalists and angel investors pick their hottest sectors for 2013 PG 46

Three Creative Business Ideas That Were Before Their Time PG 70

The Real Batsmen of

Meerut PG 62

The Gururaj Deshpande

Interview PG 34

Samsung’s High Note

PG 100

5 Startups to Watch Out For

PG 105

Doing Good, Making Money, Changing India

DEEP IMPACT

A bunch of people are using innovation to power their ventures and bring about social change PG44

Naganand Murty (left) and Rahul Panicker

of Embrace Innovations, makers of low-cost warmers

for premature babies

www.entrepreneurindia.inNOVEMBER 2012 VOLUME 4 ISSUE 3 `100

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www.entrepreneurindia.inDECEMBER 2012 VOLUME 4 ISSUE 4 `100

THE R

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King Cobra: Karan Bilimoria’s India Strategy PG34

So Long, Mr TataThe Turnaround Man hands over a formidable legacy to his successor PG44

Kanwaljit Singh, Senior Managing Director,

Helion Advisors


IND

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VENUGOPAL DHOOT PLAYS A DIFFERENT TUNE PG 124

JANUARY 2013 VOLUME 4 ISSUE 5 `100

India VC/Angel Confidence Survey

EXCLUSIVE

Vishwavir Ahuja on rewiring Ratnakar Bank

AMW Trucks hits the high road

Rethinking farming with Bhushan Agro

5 startups to watch out for

PG 90

PG 80

PG 68

PG 105

EYES ON THE PRIZETop venture capitalists and angel investors pick their hottest sectors for 2013 PG 46

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REGULARS

10 Feedback11 ResouRces12 ask

entRepReneuR14 capsule134 backstage

TEch DEpARTmEnT

101 on the RoadGoing on a road trip? Sony has come out with a couple of products that you could carry with you

By Ankush Chibber

hOW TO

118 set up and Main-tain a company blogThe blog can help you connect to your custom-ers better

By Kingsley Jegan Joseph

120 assess leadership skillsPicking a good leader is an important aspect of an entrepreneur's job


122 be a super networkerEffective networking can help you propel your business forward

By Avanish Tiwary

124 give constructive criticismCriticizing employees to help them improve can be a challenging process


STARTUpS

108 In good companyEpoch Elder Care is helping the elderly through personalized at-home care services

By Avanish Tiwary

110 ad MenMyAdCorner has made it easier to book an advertisement in newspapers across India


112 Mister beanA Mumbai-based startup is selling Indian-grown coffee beans online


114 Friendly loansHaving trouble getting a bank loan? A Mumbai-based startup is trying to resolve this problem

By Ashna Ambre

116 platform for the FieldArtoo has an Android-based software that is helping change lives at the bottom of the pyramid

By Shonali Advani

BEyOnD ThE BOARDROOm

126 a different canvasFind out what drives Neeraj Gupta, Managing Direc-tor of Meru Cabs, outside the corporate walls

By Sulekha Nair

SpEnD IT

129 Food beyond curriesRed Zen in Mumbai’s Courtyard Marriott is a good stop for Thai food


130 blending comfort and good looksHyundai’s latest offering, Elantra, may be a winner


ShELf LIfE

133 decoding India’s behaviorFind out what we thought of Indianomix: Making sense of Modern India

By Ankush Chibber

SUccESS Inc.

84 club classA home-grown brand in the hospitality sector, Country Club has gone multinational

By Shonali Advani

GETTInG ThERE

87 pest busterCamson Biotechnologies is looking to prune pests and change the way we farm

By Ashna Ambre

WATch OUT

90 ‘Have an instinct to know the demand of the market’Awaaz Entrepreneur’s Harshada Sawant talks to Swati Popat Vats of Podar Education Network on the education business

SpEcIAL REpORT

91 Malta for business

92 greater knowledge equals braver Investors

BAnk chAT

93 ‘the real entrepreneur-ship is in the extended pyramid’Ever since he took charge of IndusInd Bank in 2008, Romesh Sobti has been busy charting out a growth plan focused on ‘responsive innovation.’

By Sourav Majumdar

GO fRAnchISE96 testing for successDiagnostics chains in the country are looking at the franchise model to expand. Find out if you are cut out for the industry

By Avanish Tiwary

mOnEy

104 so You think You can be an angel?Are you planning to become an angel investor? Paul Singh, Partner at 500 Startups, has some advice for you


table of contents


Is there a bigger celebration of life and togetherness than an Indian wedding?

Canvera presents Better Photography Wedding Photographer of the Year Awards 2012... a contest that aims to recognize those who capture memories and make them timeless.

It’s time for those behind the cameras to be deservingly in front of it.

Rush in your entries now! Final Submission by January 26, 2013!To enter online, log on to: www.betterphotography.in/wpoy

To send in print entries, pick up a copy of Better Photography for the participation form.

The search for

India’s finest wedding

photographers is back!

Couple Portraiture

Bridal Portraiture Emotions Family & Friends

Behind the ScenesPhoto Series on a Single Wedding

PHOTOGRAPHS WILL BE JUDGED UNDER 6 CATEGORIES

Title Partner Associate Partner Wedding Magazine Partner Online Partner Television Partner

Q: I want to make an electronic product for which I would require technical support. Is there any firm which can help me?

- Anurag Swami,Bhopal

A: Have a detailed note on the concept of your electronic product, and the purpose of development. It should address some critical questions such as:1. What are you building?2. Who are you building this product for?3. What user need will it fulfill?4. How is this need currently being fulfilled?5. How will your product make the user’s life simpler or more efficient?6. How big is the market for your product, as per your assessment?

After you have this document ready, you can approach electronic product development companies. These firms provide the design and technology expertise required to create a prototype of your product concept. They also put the product through rounds of testing to ascertain the flaws and limitations in its current form, and how best they can be overcome.

Answer by: Tejasvita Rao, Consultant, Friends of AmbitionCurated by: Friends of Ambition, a growth advisory firm

Q. I started the private limited company with a few members as original directors of the company. However, only two directors are contributing to the company. A few want to join but I fear it would lead to the board being overcrowded. How do I manage the addition or removal of directors?

- Asked on vakilsearch.com

A: Every private limited company must have Articles of Association (AOA) which lay down the rules regarding

the internal management of the company. The proce-dure to be followed for the addition or removal of a direc-tor would be specified in the AOA. If the AOA is silent, the provisions of the Companies Act, 1956 would apply.Procedure to add a director:Every private limited company must necessarily have a minimum of two directors. If you wish to add more after the incorporation of the company, obtain a consent letter from the person who wishes to be a director and file this along with the form (in this case, Form 32) which is to be submitted to the Ministry of Corporate Affairs. Directors are generally appointed at the general meet-ing of the company by passing an ordinary resolution (a resolution passed by simple majority). The Board of Directors also have the power to appoint additional directors. However, the appointment of such direc-tors must be approved by the shareholders in the next annual general meeting.Procedure to remove a director:Removal of a director is also done in the general meeting of a company by passing an ordinary resolution. Special notice of such a resolution is a must. On receipt of this notice, the company must send a copy to the direc-tor who is to be removed. With this, the director has a chance to be heard on the resolution at the meeting. In certain cases, the person who is being removed as a director is entitled to receive compensation or damages which the company is liable to pay.

Answer by: vakilsearch.com, a legal advisory firm

Q: We have a small firm which is involved in cashew processing. We process, grade and sell it to the food processing industry. We now aspire to get into the food processing industry. How do we go about getting the necessary licenses, approvals and permissions?

- Ashish Shetty,Udupi

Running a business is not a cakewalk. At every stage, one can be inundated with problems ranging from regulatory to operational, taxation to HR. If you have any queries on running a business in India, write

in to us at [email protected] and our experts will answer your queries

Changing ThE DirECTors

ask entrepreneur


A: The Ministry of Food Processing Industries has exempted most processed foods from the purview of licensing under the Industries, Development and Regulation Act, 1951, except certain items reserved for small scale sector and alcoholic beverages. As ‘sweet-ened cashew nut products’ have been listed as reserved items, you may have to approach the Ministry to get clar-ity on the license requirements. If a license is required, you need to apply for a license with the Ministry. The guidelines and list of documents needed are speci-fied on the Food Safety and Standards of India website (http://www.fssai.gov.in/). Upon submission, a detailed inspection of your premises will be carried out by the authorities within 30 days. The overall application and license acquisition process takes about 45 days provided all the requirements are duly fulfilled. Once a license is granted, you can start the said manufacturing process.

Answer by: Tejasvita Rao, Consultant, Friends of Ambition

Disclaimer: All answers have been provided on best efforts basis, without any prejudice and based on limited information provided by the readers. Neither the organizations involved [Network 18, Entrepreneur, Vakilsearch and Friends of

Ambition] nor their employees, allies, and associates take any responsibility—legal, financial or otherwise—arising out of application of advice given herein

query Format For ask entrepreneur:For us to respond to your queries better, kindly send them in the Following Format:1. Name:2. Age:3. Educational qualification:4. Location:5. Do you currently own a business?a. Yesb. No6. If yes:a. Which sector do you operate in? b. What is the turnover of your organization (in `)? i. 0-10 Croreii. 11-30 Croreiii. 31-50 Croreiv. Over 50 Croreplease state your query as comprehensively as possible, giving adequate details.

13Intelligent Entrepreneur February 2013To read more, grab the February 2013 issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in


One Of the high pOints Of February every year is the annual presentation of the Union Budget. Everyone is interested in it for selfish reasons. Every finance minister loves it, because he is the hero in this one-act play and the nation holds its collective breath as he (always a ‘he’) speaks. The media loves it, for the budget is another event around which it can build adver-tising revenues. The taxpayer watches the spec-tacle since he is hoping to hear some good news for his wallet. And businesses wait for it to ensure that the FM hasn’t slipped in a Mickey Finn when they weren’t looking. They will want to confirm that all the tough talk before the budget (‘the rich must pay more’, etc) is just talk.

Damp squibsMost budgets, however, end up as damp squibs. The few that sent pulses racing ended up as disasters—or led to one anyway. Remember Manmohan Singh’s 1992 Budget, which sent the bulls into a feeding frenzy? It culminated in the Harshad Mehta scam. Or take P Chidambaram’s 1997 Dream Budget, which opened up an economic nightmare?

It is the boring budgets that really tend to stand the test of time. The NDA’s budgets all failed to impress, but barring the Ketan Parekh scam, all of them ended up pushing reforms and set the pace for fast-paced growth under UPA-1. Chidambaram’s UPA-1 budgets had an easy time since revenues were gushing in, thanks to general economic buoyancy and the global liquidity surge under George Bush.

The spectacular bits of Chidambaram’s budgets—the gigantic farm loan waivers and huge social sector spending—actually set the stage for subsequent fiscal disasters which all landed on Pranab Mukherjee’s hapless plate. Chidambaram got the kudos for fiscal prudence,

Managing what comes after Budget Day is crucial

It Isn’t About the Budget, Silly

[ R Jagannathan ]

and Mukherjee the rotten eggs for the huge resul-tant deficits post-Lehman.

Budget rulesThere are several takeouts from these examples.First, budgets don’t have to be spectacular or exciting to be significant. A budget which makes no changes in tax rates is also a good one because it emphasizes stability and encourages normal business expectations from governments.Second, what is said in the budget may be impor-tant, but it is what happens between budgets that are even more vital for the economy. For exam-ple, how many times have finance ministers promised disinvestment and banking reform and not delivered on the same? It is the hard work of political give-and-take after budget speeches are made that is vital for progress.Third, budgets are given prime time for the wrong reasons—the revenue raising measures or reliefs. But the success of any budget should really relate to expenditure, the quality of government spending, and how they are monitored. What is the point in spending over `2,00,000 crore on make-work schemes like the Mahatma Gandhi National Rural Employment Guarantee Act, if half the money is going to be siphoned off by unscrupulous middlemen? If the finance minis-ter is the CFO of the government, his primary job should be to see where the money is going, and not just where it is coming from. The FM’s prime brief ought to be: How can expenses be managed without resorting to new taxes? Fourth, it is not right to judge a budget in one year. The true impact of a new tax or expenditure will be felt only over several years. For example, we know that lower taxes have given us revenue buoyancy, but it would be a folly to abandon tax cuts just because they don’t immediately bring

NEW THINK

Photo Joshua Navalkar

IN SIGHTS

17Intelligent Entrepreneur February 2013

in revenue growth in Year One. Right now, for example, if the FM makes drastic cuts in capi-tal expenditure, the fiscal deficit may look better, but the economic slowdown will worsen. This will lower revenues next year. The FM should be cutting wasteful expenditure, not capital expen-diture. The results of mindless cutting will not be known this year, but years later as private profits suffer from a lack of government demand.Fifth, budgets that try to do less achieve more. Many of the United Front (of which P Chidambaram was a part) and NDA budgets tinkered with this and that, but broadly did not attempt to do too much beyond following the trajectory on lowering rates, both excise and customs. By the time UPA arrived on the scene, the economy was ready for a rebound and the fact that the tax regime was stable helped. In the UPA, Chidambaram tried to introduce new tax ideas—Fringe Benefits Tax, Banking Cash Transaction Tax—which had to be withdrawn when they didn’t work. Trying to be flashy doesn’t work with budgets.Sixth, genuine reforms have almost nothing to do with the budget; though they do impact the budget numbers. For example, raising diesel or LPG prices has nothing to do with the budget, but they do help bring down the fiscal defi-cit. Disinvestment is not something that requires a budget announcement, but they bring in reve-nues. Recapitalizing public sector undertaking (PSU) banks may need budgetary support, but allowing PSU banks to make IPOs and further equity offers is a better option. But the govern-ment can avoid having to recapitalize PSU banks by giving them autonomy and authorizing them to find their own resources for growth.

Has anyone ever wondered why HDFC Bank has never had to raise capital in the last 10 years, but SBI seems to turning up at the FM’s door every other year for equity infusions? This is because HDFC generates enough internal prof-its for recapitalizing itself. If public sector banks can manage this, bank recapitalization will not need budgetary support. Reforms need legisla-tion and other action; budgets are not required for reforms, except on rare occasions.Seventh, budgets are not a one-day event. They

are all year-round. Many of us confuse the budget to mean the speech and documents made avail-able to us on February 28, or the last working day of February. But the numbers presented on that day are like the balance-sheet—a picture of the exchequer’s health on one particular day.

A finance minister who is on top of the situa-tion will focus not on the balance-sheet but the profit-and-loss (P&L) account, which cumulates every day, based on sales earnings and costs. Based on daily P&L trends, CFOs have to figure out how to keep the company (or the economy) in the black. Economic decisions have to be taken by the FM all through the year. If the textile indus-try is about to lose heavily due to falling demand, they should be given tax reliefs or incentives now, not next February. Disinvestment decisions ought to be taken based on market buoyancy, not

yearly targets. Eighth, the Union budget is an aggregation of several budgets and not one single thing. Every spending department in government makes a budget of its own. What the main budget does is match overall reve-nues and expenses, so that the bottom line is either positive or not very negative.

The ideal situation is one where most ministries gener-ate the revenues they are seek-ing to spend by themselves.

This means beyond basic government functions like defence, law and order, or foreign policy, and running the macro economy—which are pure spends with little revenue potential—most ministries should be asked to come up with their own revenue plans. Want to subsidise LPG? The oil ministry can propose to fund it through cross-subsidies or by levying a windfall profits tax on those minting money from oil or gas fields.

In this manner, the finance minister does not need to raise taxes in general to fund subsidies.

Broad pointBudget Day isn’t important. Managing the budget after Budget Day is crucial. Finance ministers are about more than just budgets. Their real job begins after the speech is done, and TV anchors are sent off with their exclusive interviews.

It is the boring budgets that really tend to

stand the test of time. The NDA’s budgets all failed to impress, but

barring the Ketan Parekh scam, all of them ended up

pushing reforms

R Jagannathan is the Editor of Firstpost.com



‘We have tried to make fund-raising more efficient’

Ashish Chauhan has taken over as Managing Director and CEO of the 137-year-old BSE Ltd, Asia’s oldest stock exchange, at a time when the exchange is in the midst of a major transformation and will soon become a listed entity. A former employee of BSE’s rival National Stock Exchange (NSE), Chauhan ran

a software company and worked in the corporate sector before taking charge at BSE last November.

In a freewheeling interaction with Sourav Majumdar, Chauhan talks of the new BSE agenda, the priorities for the exchange and the exciting developments taking place in the Indian capital market, among them a new trading platform

for smaller companies.

Excerpts from the interview:

in conversation

33Intelligent Entrepreneur February 2013 33

Q: Your initial public offering is due in mid-2013. You have appointed 14 investment bankers for it. What is its status? A: Yes, we have appointed investment bankers. The first thing they told me is to not speak on the IPO. (smiles)

Q: What are the structural changes you are making for the IPO?A: The structural changes are a part of the Stock Exchanges and Clearing Corporations (SECC) Regulations and have nothing to do with the BSE offer. The way it works is the regulatory framework is segregated and reports to a separate framework vis-à-vis the business part.

An exchange has two parts—one relating to the brokers and the other to the listed companies. Two and a half years ago, we separated the regulatory functions from both these business areas and created a separate regula-tory organization. Within that, there are two different functions and they report to a Chief Regulatory Officer and he reports into the Chairman and the CEO as defined by the SECC. This was done from a best practices per-spective, going by worldwide trends. Worldwide, exchanges have been doing this and we are compliant from that perspective.

Q: You have been in BSE for some time now, but have recently taken over as the MD and CEO. What are the key elements of your agenda as the CEO?A: The way we look at the framework is slightly old style.

How do you measure an exchange? You measure it in terms of the func-tion it performs for society.

We measure it on five pillars: fair-ness to all stakeholders; efficiency of information gathering, dissemination and transaction processing; and also transparency on every count. The fourth pillar is regulatory adherence and the fifth is cost-effectiveness—how cost-effective is the service you provide to society. If you take the framework, these are the five pillars

on which any exchange should mea-sure itself.

There are also perceptions about the volumes and so on. Usually, people want to measure exchanges on the basis of volumes, but that’s a short–sighted approach. Because, if the vol-umes are higher for a day or a month, and if you’re not taking care of these five aspects, in the long run you’re not adding value to society.

You may also not have the same importance in society.

Q: What you’re saying is volumes and turnover shouldn’t be the key parameters for judging the success of an exchange...A: Volumes are important, but one of the most important elements which is often taken as a given is what we call price signaling. Prices must be squeaky clean. If not, then the entire basis of the markets comes into ques-tion. Volumes are a by-product of doing a job which society expects you to do. Even now a number of questions are being asked about the stock mar-kets. Not just in India but elsewhere too. The question is: How much capital are you raising?

At least BSE, in the past one year, has been proud to have helped raise a lot of capital, either by way of tax-free bonds, IPOs, offers for sale (OFS) and the SME Platform which has 11 com-panies under it.

Q: What would be the total quantum of capital raised last year?

A: It would be pretty large. In OFS alone, I am told it’s in excess of `25,000 crore. In tax-free bonds, many issues of thousands of crores have come. And of course in the past month, there have been quite a few IPOs.

Q: And then there’s the SME Platform…A: On the SME Platform, the money raised is small but in terms of the importance to the economy, it’s very, very vital. So we think this is a much better way of measuring yourself as it gives you a perspective on where you should progress.

A single-minded pursuit of volumes may not finally yield the results for society or the exchange concerned.

Q: Why a listing? Is it an essential part of what your strategy entails?A: It is for transparency in your work-ing. How do you bring more transpar-ency? This is one such way. You also have to measure yourself against the standards you’ve set for others.

Q: The BSE will soon be a listed stock. Are you, therefore, undertak-ing a relook at the iconic BSE brand?A: The brand, as you know, is officially 137 years old. There are many institu-tions in the country but very few are this old. The service it has done to the nation is immense.

In fact, today BSE’s market capital-ization—which in some sense is seen as the wealth of the nation—is larger than the deposits in the banking sys-tem from December 2012 onwards. The country is depending on the exchange for its wealth creation, preservation and sustenance.

For me, the brand itself carries a huge weight. But you need to build on the brand rather than rest on it.

If it does a good job on the five parameters I mentioned earlier, that is enhancing the brand. Valuations and the like are commercial aspects and those may not be that relevant at this stage. What is more important is to enhance and work on ensuring that you keep up the good name and bring

“The fact is that the SME sector in the country is an engine of job growth and also an engine of growth. But more important, job growth in the SME segment is at a faster pace than in the organized sector”

Photos Mexy Xavier To read more, grab the February 2013 issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in

Website Ad.indd 153 9/17/2011 12:28:54 AM

Website Ad.indd 153 9/17/2011 12:28:54 AM


social entrepreneur

Photo Nachiket Gujar

T he early part of their story seems straight out of a film script. An Indian couple work-

ing with one of the world’s biggest investment banks in the US comes to India for a vacation. They see firsthand the number of social issues in the country that need attention. So they pack their bags and move back to help bring a change.

The real-life couple, Deval Sanghavi and his wife Neera Nundy, were work-ing at Morgan Stanley before shifting base to Mumbai to start Dasra in 1999. “India has a number of social entre-preneurs who have created innovative solutions for social problems at low-cost. However, they don’t have access to talent, skills and the funding needed to take their organizations to the next level,” says Sanghavi, Co-Founder, Dasra.

The duo spent their early days in India trying to understand how best they could help non-profit organiza-tions grow, so that the impact created could be scaled. “The aim has been to support them using what we learnt in investment banking in terms of man-aging teams, understanding sectors and then giving them not just capital, but hands-on support to succeed,” explains Sanghavi.

They started by conducting a research on the challenges social organizations in the country faced;

The NexT LeveL

[ big boost ]

Dasra works with social ventures to help create greater impact

Shruti Chakraborty

social organizations face in scaling up. Since 2007, the initiative has mentored 180 organizations.

Dasra has organizations from around the country in its program. Forty-eight ventures from different sectors participated in the last Dasra program. “The goal is to help them sort some of the organizational issues they may be facing which may be prevalent across sectors and geographies,” says Sanghavi.

“Besides other issues, we discuss with them board governance, HR con-straints, their plans for the next three to five years, etc.,” he adds. “Sometimes, the organizations themselves have the answers [to their problems], and other organizations can learn from them by discussing it among themselves,” explains Sanghavi.

The program runs for seven months, of which three weeks are allotted to intensive training in a classroom held in Mumbai and Bengaluru. The pro-gram costs `4 lakh per entrepreneur. The entrepreneurs have to pay `1 lakh for the mentoring program. The rest of the amount is raised through grants from corporates, among them Vodafone, which partners with Dasra for other activities.

Vodafone has a program that it runs for its employees, called World of Difference. Under this, Vodafone employees work with social organi-zations for a period of two months.

what worked for them and what did not. The first non-profit organization they chose to work with helped rag-pickers in a Mumbai slum to create better livelihoods.

Dasra helped the organization cre-ate sustainability by providing them with waste-recycling units. This helped them improve the ragpickers' income by eliminating the middlemen who the ragpickers had to deal with.

Scope for growth From 1999 to 2003, Dasra worked with eight non-profit organizations. “Back then, it was a highly engaged model. We spent a lot of time with each organization and provided hands-on support,” recalls Sanghavi. They soon realized there was a need to create a model which enabled them to work with more organizations in order to make a difference. From 2004 until 2007, Dasra worked with about 100 non-profit organizations.

The couple realized during this time that a lot of challenges faced by social entrepreneurs in the country were similar and that the organizations could benefit from each other’s experi-ences. This, in 2007, led to the creation of the Dasra Social-Impact program.

Mentoring for changeThe Dasra Social-Impact program is a mentoring program that was started to help resolve the challenges that

MoveMent for change: Neera Nundy


an entrepreneur exclusive

ajay bijli Managing director

pvr ltd

cover Story

44 Intelligent Entrepreneur February 2013 Illustration Chaitanya Dinesh Surpur

an entrepreneur exclusive

ajay bijli Managing director

pvr ltd

cover Story


King of the screens

From juggling the family trucking business and a single-screen cinema, PVR’s Ajay Bijli today is the undisputed leader in the multiplexes business, thanks to the bold acquisition of rival Cinemax.

The PVR ecosystem now straddles multiplexes, film distribution and bowling. But keen to keep rolling out more cinemas, Bijli and his team continue to be on overdrive. For PVR, the show has just begun

Sourav Majumdar

seat

no

: k5

audi

: 01

45Intelligent Entrepreneur February 2013Photo Amit KumarTo read more, grab the February 2013 issue of Entrepreneur

To Subscribe, visit www.entrepreneurindia.in

[ hope floats ]

Budget and the

Business OwnerIt is that time of the year again. The budget is less than a month away and the din towards it is on the rise. What budget would Finance Minister P Chidambaram have for India Inc. in his second term? There is much that is expected. To say that the promises of Budget 2012 were not met would be a gross under-statement. The cloud of negativity sat on India’s economy throughout this financial year. But it did start dissipating little by little in the last quarter when the government bulldozed its way through a slew of reforms. The question now is—will this last? Or will the government again succumb to poll pressures to be conservative in the short term? The answer by most leans to more conservatism.

“Revive the growth momentum”AjAy S ShrirAm Vice President confederation of indian industry (cii)

chairman and senior managing director dcm shriram consolidated

The domestic macro-environment is currently plagued with challenges on several fronts including sluggish growth momentum, persistently high inflation, high twin deficits (fiscal and current account) and uncertain global economic environment. With the global economic prospects fraught with downside risks, india’s exports are in a slippery terri-tory and will limit external stimulus to the economy.

growth prospects will, therefore, be largely shaped by domestic factors. in view of this fact, we believe that the Union Budget for 2013-14 should essentially focus on reviv-ing the growth momentum of the domestic economy at the earliest.

one of the crucial ingredients for reviving growth is reig-niting investment demand which has remained lackluster for most parts of the current fiscal. While the recent reform measures announced by the government have helped to dissi-pate some uncertainty, a lot more needs to be done to acceler-ate the pace of overall demand.

to address this, cii expects the government to fast track the decision-making process for approval of projects by putting in place necessary policy measures to clear 50 large projects with the intervention of the recently-instituted cabinet committee on investment.

additionally, raising the rate of depreciation for invest-ments in plant and machinery from the present level of 15 percent to 25 percent for a pre-defined period of three to five years is also crucial for lifting investment. this move will allow project developers to obtain the full tax advantage of depreciation in a shorter period of time thus rendering an incentive for fresh investments without affecting the revenue collection for the government.

there is also a need to prop up investment activities in the real estate sector, which, through its close relation with other sectors, would push up the overall economic activity. currently, the government offers interest subvention of one per cent for low-cost housing loans up to `15 lakh, provided the housing cost does not exceed `25 lakh. it would help if the interest subvention scheme is extended to total housing cost of up to `35 lakh.

the next key ingredient critical for revival of growth is fiscal consolidation. in order to bring the fiscal situation under control, it’s imperative to augment revenues. in this regard, cii suggests raising revenues through disinvestment (`50,000 crore), monetizing surplus land available with the govern-ment, utilizing the free cash flows of PsUs, clearing funds stuck in taxation disputes with government, and unlock-ing the assets locked up in sick PsUs that cannot be revived.

second lead


wishlist 2013

Mindful of the precarious condition of the fiscal health of the government, CII has resisted from asking for any reduction in excise and service tax rates and instead suggested that the present rates be maintained.

Further, it needs to be highlighted that a good Goods and Services Tax (GST), which brings all goods & services under its ambit is the best possible stimulus that industry can have; hence it is important for the government to make the neces-sary announcements to this effect in the budget.

On measures related to rationalizing of expenditure, CII believes that the most important measure would be to control subsides as much of the pressure on the fiscal deficit in the recent period has been due to the sharp jump in subsidy bill.

CII welcomes the decision of the government to gradually eliminate the subsidy provided on diesel. The government should target more realistic market prices of fertilizers, thus reducing subsidy and consolidating the overlapping parts of the central schemes on social welfare.

To conclude, the industry looks forward to a reforms-ori-ented budget which would galvanize the economy and cata-pult it into the higher trajectory of growth. DCM Shriram Consolidated is a large integrated business group, with an extensive and growing presence across the entire agriculture and chloro-vinyl industry

“Government must work with the private sector”Shantanu PrakaSh ChaIrMan and ManaGInG dIreCTOr educomp Solutions

From the next budget, one of the important things we need is for the government to increase focus on public-private partnerships. The thing with the education sector is that the scale of the problem is so large that it is difficult for either the public sector or the private sector to do it alone.

Though the government has made some efforts on this front, a lot more needs to be done. This is the only way we will be able to reach out to all the people who need education.

another requirement is for the government to find a way to increase focus on quality rather than quantity. They need to really change their perspective. We in India have inadequate capacity to educate everyone.

Currently, there is a focus on how much land is available and some other such parameters for someone to open a school, whereas what the government has to do is bring qualitative measures into the picture—like the quality of teachers.

The third thing that the government can do, which will greatly benefit the sector, is giving a tax break to investments made in the education space. This will encourage more invest-ment, something that the Indian education sector needs.

The year hasn’t finished yet, so we are still to see the outcome from some provisions made last year in the budget.

The Ministry of education has a new set of people. We are watching intently how things will turn out. Educomp is a globally diversified education solutions provider and the largest education company in India

“Lower the MAT, leave diesel vehicles alone”

Sunjay kaPur VICe ChaIrMan and ManaGInG dIreCTOr Sona Koyo Steering Systems

We had a difficult 2012 especially with the Maruti Suzuki shutdown, which ultimately affected the entire industry. By virtue of them being the largest manufacturer commanding the maximum market share, a shutdown affected everyone.

however, leaving the shutdown aside, we have not seen the kind of sales numbers that we had expected. Going ahead, I hope to see a turnaround since the fundamentals of the manufacturing industry and the auto sector are good. I do not see slackened growth as a long term situation and see much better sales in the coming year.

a lot of auto ancillaries are also seeing exports to the US pick up and we expect to see a surge in demand in the near future. In terms of the domestic economy, I am hoping that the interest rates come down and inflation is checked.

For the budget, I would recommend that the government increase depreciation on new capital investment. We are a capital intensive industry and any help in the form of depre-ciation would in turn enable the sector and those in manufac-turing to incur additional investment.

We are hoping that there is some kind of incentive intro-duced for r&d. If you look at the countries that have grown like South Korea, they have all benefited tremendously from the work done in r&d.

It was a similar case with Japan when they were an emerg-ing economy. We need all the support we can get when it

55Intelligent Entrepreneur February 2013Illustration Chaitanya Dinesh Surpur 55To read more, grab the February 2013 issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in

In the last 45 years, the Amar Chitra Katha brand changed hands a few times and has diversified its base. Today, ACK Media is contending to be the

country’s best storyteller

Shruti Chakraborty

Bringing B(ACK)

the glory

[ picture this ]

"Uncle Pai wanted to inform, edUcate and entertain indian children. he foUnd that children in india had very little knowledge of their mythology and history” - Vijay Sampath, ceo, ack media

Do you remember how much you paid to buy your first Tinkle Digest?

or an Amar Chitra Katha? for anyone who has read these comic books over the past few decades, these brands need no introduction. while reading these digests through their growing up years, not many were probably aware that a major concern for its creators was how to make it into a sustainable business venture.

it’s not as if Shikari Shambu or Suppandi and his master sprung up on their own and found their way into these comic book pages. a dedicated team worked to cull these popular characters into comic book titles that generations of indian children have grown up read-ing. it is even more likely that these characters have been a part of your childhood memories as much as they have played a part for a generation before you.

your first experience of a ‘facepalm’ probably came from reading the next silly thing that Suppandi did. you prob-ably learnt more about most indian gods and mythology from an Amar

Chitra Katha rather than from a history book or a religious text. to the read-ers, this was the creation of anant Pai, popularly known as ‘Uncle Pai’.

How it all beganPai was a cartoonist at The Times of India before he joined hands with gl mirchandani of india Book house and created brands that con-nected with many indian children.

the journey began when Pai real-ized indian children didn’t know enough about the country’s mythology and culture. there is a popular story about how the company started. once, while watching a quiz on television, Pai found that while students could answer questions about greek mythol-ogy, a student was unable to answer a question on indian mythology. “Uncle Pai wanted to inform, educate and entertain indian children. he found that children in india had very little knowledge of their mythology and his-tory,” recounts vijay sampath, ceo, ack media.

mirchandani founded india Book house in 1952. he was essentially a

distributor of indian and international books and magazines. amar chitra katha was founded in the latter part of the 1960s as a part of india Book house. even today, this iconic brand sells 4-4.5 lakh copies a month, sampath informs. a little over two decades later, Pai and india Book house brought out another brand, Tinkle. twenty two years later, Tinkle sells over 2 lakh copies a month, sampath adds.

india Book house continued to dis-tribute the titles until 2007 after which it sold the brands—Amar Chitra Katha and Tinkle—to ack media. also, with increasing presence of television and mobile phones, the dependence on comic books for entertainment began to decline in children, making it chal-lenging for india Book house to keep their brands alive.

Changing timesack media was a young company orig-inally founded by shripal morakhia and samir Patil with the objective of acquiring Amar Chitra Katha and Tinkle. this acquisition marked the beginning of a new phase in the

Legacy


Legacy


In good Company: Vijay Sampath with Suppandi, a character from Tinkle

"Uncle Pai wanted to inform, edUcate and entertain indian children. he foUnd that children in india had Very little knowledge of their mythology and hiStory” - VIjay Sampath, ceo, ack media

73Intelligent Entrepreneur February 2013 73Intelligent Entrepreneur February 2013Photo Nachiket Gujar, Imaging Chaitanya Dinesh SurpurTo read more, grab the February 2013 issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in

B ang in the middle of a busy neighborhood in Hyderabad stands a vast property that

once belonged to the erstwhile Prime Minister of the Nizam—its heritage remains intact.

Back in 1989, Y Rajeev Reddy acquired the sprawling residential property for `2 crore to usher in the concept of family clubbing in India.

One can now say he has done justice to his dream—Country Club India stands out as a home-grown brand in the hospitality sector; and has now become multinational.

From realty to recreationY Rajeev Reddy, 56, Chairman and Managing Director at Country Club India, was always a real estate guy. He grew his first entrepreneurial

venture, Amrutha Estates, from a mere 4̀ lakh in borrowed capital, to a `10 crore company.

“The company was built on corpo-rate lines unlike other real estate companies [at that time],” recalls Reddy. Around the same time, he had become a member of Secunderabad Club, one of the many clubs in India that had been built by the British as a private place of recreation and leisure for themselves.

“They still functioned on old colonial rules and a formal ambi-ence which was not in sync with the

[ family ties ]

CluB ClassCountry Club has forged the concept of family clubbing in India and is touted to

become a global brand in just over a decade

Shonali advani

success INc

84 Intelligent Entrepreneur February 2013 Photo Suresh Vangapally

lifestyle of Indians. I felt people put on an act here,” he says. The regi-mented premises and ambience did not enthuse him. Instead, his displea-sure gave rise to an idea of a club that would be more in line with the way Indians live.

“The hospitality industry was booming in the early 90s, but there was no concept of family clubbing. We filled a void,” explains Reddy, saying he charted out plans to provide acces-sible and affordable clubbing services for everyone.

Counting clubsReddy’s idea grew to become India’s largest chain of family clubs with 55 group-owned and 175 franchised properties globally today, through a mix of acquisitions and organic growth. “Seventy percent of our own properties are acquired,” mentions Reddy who, thanks to his background

in real estate, understood the time and investment required to build every property from scratch.

This strategy was consciously adopted to grow the company as fast as possible and they made their first international acquisition in 2005—a 50-room property in Sri Lanka bought for $2 million from a Dutch gentle-man. To further accelerate growth, Siddharth, Reddy’s 29 year-old son, was brought into the system as CEO at the same time.

Siddharth joined the business,

after an educational stint in the US and a three-month work experience at investment banking and advisory firm Merrill Lynch.

He made his first contribution to business by bringing in a fran-chise model in 2006—inspired by the success of franchisees he had seen in the US during his stay.

Country Club works on a non-ex-clusive arrangement with franchi-sees that allow non-Country Club members to use their facilities.

“We earn 5 percent as royalty on revenues generated from these members,” says Siddharth.

However, the founders have since shifted their focus from franchisees to company-owned properties.

“Real wealth is built when you own properties,” explains Siddharth, referring to the benefits of appreciat-ing land value.

The company had moved towards a pan-India expansion 1995 onwards, when Reddy built Amrutha Castle in Hyderabad, a huge four-star boutique hotel constructed in medieval European architecture style, as part of the Country Club there. “This was to put us in the time-share market,” he says of his plans.

Ahmedabad-based businessman Sameer Shah, who has been a member with Country Club for five years, is content with his experience of having stayed at six properties including Sri Lanka and Dubai. However, Shah feels the firm’s properties in South India are of a higher quality. “They acquired an old property in Goa but it is neither well renovated nor at a good location as compared to other resorts,” he says.

The company was listed on the Bombay Stock Exchange in 1992. In FY12, the company clocked in reve-nues of `370 crore, with profits of 4̀9 crore riding on a brand name largely built through celebrity-driven shows and events.

Wealth in healthInvestment in physical properties aside, the Reddys have spent heavily

power of three: Y Rajeev Reddy with his sons

Siddharth (left) and Varun

"I HAD TO OFFLOAD nOn-CORE ASSETS AnD REInVEST WHERE IT MADE SEnSE"- Siddharth reddy, CEO, COUnTRY CLUB InDIA

85Intelligent Entrepreneur February 2013 85To read more, grab the February 2013 issue of Entrepreneur To Subscribe, visit www.entrepreneurindia.in

testing for success

[ chain care ]

The franchising trend in diagnostics is offering viable opportunities for budding entrepreneurs

AvAnish TiwAry

go franchise


H ealthcare in India has always suffered due to the lack of adequate hospitals and test-

ing centers in remote areas. Three decades ago, with the aim

of increasing the network in small towns to correct that, diagnostics chains in India decided to adopt the franchise model.

Back in 1981, the 60-year-old diag-nostics chain, Dr Lal Pathlabs, began the diagnostics franchise model in India. It now boasts of more than 135 labs across the country. “In the healthcare and diagnostics industry, it is we who brought in the trend of franchising. Like any other franchise model, ours is also based on a hub and spoke model,” says Dr. Arvind Lal, Chairman and Managing Director, Dr Lal Pathlabs.

In the hub and spoke model, there is one main laboratory at the central location (hub) around which small collection points (spokes) are located. At the end of the day, these collection points take all the testing samples to the main laboratory, where the actual testing is done.

Sanjeev Vashishta, Chief Executive Officer of SRL Diagnostics, says the reason they took the franchise path was when they realized that it was difficult for people to travel long dis-tances for their diagnostics needs. SRL Diagnostics, which is the diagnostics arm of Fortis Hospitals, started opera-tions in 1996, but did not adopt the

franchise model until 2003. “Right from the beginning we knew that we had to reach out to people, instead of expecting them to come to us. In 2003, we thought of having a franchise model which would reinforce our existing network in the remote areas,” Vashishta says.

The franchise model has also helped SRL Diagnostics get local support. “As we are always moving ahead aggres-sively and want to have a pan-India presence, we realized that franchising is the way to go,” he adds.

All-India reachThe firm, Vashishta says, is now pres-ent in nearly every nook and corner of India. Speaking on the growth trajec-tory, he says that till 2006, they had only about 20 laboratories. Post 2006, the company spread much faster and now has 242 laboratories and more than 1,300 collection centers across India. “We have labs in far-flung places like Imphal now,” he says.

The unique quality of the franchise model is that it can make the com-pany’s presence felt in more places. Birla Kerala Vaidyashala (BKV), a part of Birla Wellness Private Ltd., which offers ayurveda treatment, was able to reach remote areas in the country with the help of their franchisees.

“The model allowed us to expand beyond Mumbai to Bengaluru, Chennai, Puducherry, Kerala, and smaller towns of Maharashtra like Shirdi, Wada, etc. It has also helped us increase our presence in Mumbai and Thane. Our revenues almost doubled in a very short period of 18 months,” informs Tanjai Kapoor, Vice President, Marketing and Sales, BKV.

The franchise journey, which BKV started 10 years ago, did not meet with success initially. The model started showing results only from 2009 after the management brought in a few strategic changes.

“It is only in the last three years that the numbers are up as we have minimized the investment from the company’s side and have been choosy in terms of access to good retail

locations. We also started targeting niche segment such as clubs, residen-tial societies and hotels,” says Kapoor. Over 30 percent of the overall rev-enues of the Kerala-based BKV comes from South India and they are also looking to expand in Andhra Pradesh and Karnataka.

The latecomersGradually, the growth of diagnos-tics chains with franchise models started affecting business of other diagnostics and healthcare companies. They too decided to adopt this model.

Dr. Reddy’s Path Labs, which has been in the diagnostics market since 2009, decided to take up the franchise model a couple of months ago. “When we were doing direct operations, we faced a lot of logistical problems. Our services were getting affected due to the time taken for a sample to reach us,” says Dr. Madhusudan Reddy, Director, Dr Reddy’s Path Labs. He adds, “It also increased our costs, after which we decided to adopt the fran-chise model.”

Reddy is quick to add that in these two-three months, they have already begun feeling a marginal decrease in logistics costs.

Currently, Dr. Reddy’s Path Labs offers three types of franchisee models for individual entrepreneurs—district centers, collection centers and pickup centers. Under district franchise, there

Birla Kerala VaidyasHala

Started franchiSing: 2002

number of centreS: 30

PreSent in: Maharashtra, Kerala, Tamil Nadu, Karnataka and Rajasthan

requirementS: Retail space of at least 1500 sq. ft with space for three to four therapy rooms, consultation room plus reception and waiting area. Investment could be in the range of `15-20 lakh apart from basic fixtures.

dr. reddy’sStarted franchiSing: 2012 number of centreS: 62PreSent in: Jammu and Kashmir, Uttarakhand, UP, Haryana, Delhi-NCR, Chandigarh, Madhya Pradesh,West BengalrequirementS:For district franchise: `70,000, refund-able amount For collection centers: `50,000, refundable amount Pickup centres: `25,000


Photo Nachiket Gujar

An online store helps you to find the ideal brew

real coffee,

anyone?pg 112


B orrowing money at a rate lower than what banks offer, or lending at a rate higher

than what fixed deposits would fetch seems to be a lucrative offer. But is that possible?

Gaurav Aggarwal, 36, has proved this to be a conceivable proposition. He has created a person-to-person lending platform for online transac-tions of this kind in India. “I have worked in the financial sector for 13 years. This gave me an insight into the functioning of banks. I realized that there were huge inefficiencies caused by structural, regulatory and fixed costs,” points out Aggarwal, Founder, MutualLoans.

Not bankable Rent, staff salaries and other opera-tional costs for branches are major cost components for most banks. In addition, regulatory capital or cash reserve ratio and statutory liquidity ratio, deter banks from lending out potential amounts, explains Aggarwal.

Subsequently, cost recovery, risk premium and profits are only earned by charging high interest rates on loans, the burden of which is ulti-mately passed on to borrowers. “Today, interest rates for loans vary from 16 to 24 percent and fixed deposits with the same banks provide nine to 10 percent of interest,” he points.

After identifying these core operational inefficiencies, Aggarwal decided to provide a solution through a disintermediation process or, sim-ply put, cutting out the middlemen. According to Aggarwal, banks act as intermediary agents and create effi-ciency losses, so he decided to break these links with this process.

He began a study in 2009, partly aided by newsletters from Finovate, a conference that showcases the future of financial and banking technology.

Peer benefit“In my research, I came across a UK-based company called Zopa that enabled and encouraged peer-to-peer

MutualLoans is making the lending and borrowing process simpler with a website

AshnA Ambre

Friendly loans

[ bet on debt ]

Fund a loan: Gaurav Aggarwal

start ups

114 Intelligent Entrepreneur February 2013 Photo Nachiket Gujar

Launched in: November 2012

Seed money: `15 lakh

Monthly operational costs: `1 lakh

Transaction Target for 2015: `50 crore

Registered Borrowers: 50

Friends with beneFitslending. This process sidestepped banks; so lenders and borrowers could mutually benefit from each other. The concept was interesting and caught my attention,” recalls Aggarwal.

This concept of an online financial exchange forum for lenders and bor-rowers to interact was virtually absent back home. These reasons prompted Aggarwal to launch a website.

Without further delay, he dug deep into his personal savings to carry out the groundwork for his portal in October 2010. The initial few tasks undertaken for this project included application development, evaluation of market environment and formulat-ing regulatory aspects.

This took him a good two years to complete before his company was able to begin operations.

Novel schemeSince no definite regulations for peer-to-peer lending exist in India, MutalLoans is not regulated by the Securities and Exchange Board of India (SEBI) and its functions are not similar to any Non-Banking Financial Corporations or Co-operative Incentive Schemes. “MutualLoans creates an intermediary medium for borrowers to reach out to family and friends, for funds that could be large or small. It provides a formal agree-ment for a transaction that is infor-mal in nature due to the personal relationship involved,” says Rajiv Prakash, Founder, Next In Advisory Partners, and mentor and advisor to the startup.

Loan logicLending only between friends and family is permissible on the site to give the business model an initial momen-tum, and create brand value and credit worthiness to such a process. “There is a lot of momentum in the use of online space; however, there are not many who would undertake financial transactions online without the pres-ence of a credit-worthy brand,” notes Aggarwal, who shares his reasons for creating these restrictions early in

the day. The platform works like this: first, a borrower needs to register on the site which charges a sign-up fee of `250. He charts a detailed proposal about his plan, lists the amount, dura-tion and interest rate that he would like to pay. The loan calculator then estimates the equal amount of funds a borrower would have to return at regular intervals.

The contacts are imported from their respective Facebook, Yahoo! and Google accounts and then, these proposals are sent out to friends and family members of a borrower’s choice. Thanks to privacy rights, con-tact information is not stored for any future references.

Interestingly, the amount a bor-rower is looking to raise can be financed by a group of people as per their lending restrictions and inter-est rates. Such a case can differ from lender to lender. In addition, there is a confidential legal contract with terms and conditions between the borrower and the lender. Currently, the site is not open for commercial lenders.

The site’s back-end is also designed to generate automated online remind-ers before the payment date.

Ground rulesAggarwal knows he has miles to go before business can stabilize, consid-ering the project has only gone live in November 2012. He plans to introduce a regular market borrow–lend model with zero restrictions in terms of nature of lenders. An adequate three-step credibility check process would be

put in place through verification, diversification and recovery as pri-mary tools.

This verification process would involve a basic background check, credit history details and demographic data which will be outsourced to specialized agencies. Diversification would allow multiple lenders to pool in finance to a single borrower thereby diversifying the risk of default.

Lastly, recovery would essen-tially involve payment follow-ups. In extreme cases involving non-recov-ery of payments, Aggarwal says they would bring in recovery agencies to handle defaulters.

In addition to these services, the founder plans to provide legal docu-mentation and stamp duty fees so that borrowers aren't hassled about paying any pre-payment penalties.

Prakash of Next In Advisory Partners anticipates that only people comfortable with social media will essentially become MutualLoan customers given the nature of these transactions. “Those who create cash reserve for special occasions and have a good network of friends and family can benefit a lot,” he says.

Way forwardOptimistic about its potential, the founder aims to create one-way transactions worth `5 crore by April 2014, and `50 crore by 2015. Currently, the business is managed by a team of four who look after the web development and design, application and customer support. Aggarwal will increase this number to 12 by 2014.Most of his costs incurred today are a result of get-ting regulations in place for the site to function smoothly. He spends `1 lakh on operations every month.

As a scaling-up measure, Aggarwal is also considering raising angel investment of `1 crore over a period of time. With his eye on the ball con-stantly, he is confident of creating new synergies in financial transac-tions online and make lending and borrowing an easier task.


how to


Be a Super Networker

How many of you did not wish Happy New Year to your old friends, relatives, bosses and colleagues? A few hands will go up for

sure. This is a rookie networking mistake and it generally doesn’t make a big dent to your image. But exchanging pleasantries with an acquain-tance who you think is important, will surely earn you bonus points. Don’t let that chance go.

This is a part of networking or what is known in general terms as ‘increasing the contact base’. As an entrepreneur, it is important that people know you and your work.

It may be difficult to reach out to a stranger and strike an interesting conversation. But in a social gathering, it becomes imperative to talk to people unless you don’t care. Meeting new people will not give you an immediate incentive, but it does increase your contact list. It might help you in striking an important business deal some day. Social networking websites has made networking easier, faster and more effective. The caveat is: You have to be very careful in your approach.

Here are a few guidelines that will help you maintain good contact with people effortlessly; both online and offline:

The right placeBefore going to an event, make sure that you know what the event is about, the topics that would be covered and who are the ones attending it. This will ensure that you don’t waste time figuring out whom to approach and look lost and naïve in the process. Be sure of what you want to achieve by meeting people here. Do you just want to say ‘Hi’ or do you want a long-term business relationship with anyone in particular?

Approach a groupOnce you know who, and why you want to talk to someone, the next step is to approach him or

her. If you are an introvert, opt for the safe route and look for an approachable face in the group of people amidst whom is your potential contact. Stand in the group and pay heed to what people are discussing. If the person makes positive eye contact, seize the opportunity and air your views and counter views on the topic being discussed.

Let them do the talkingThe smartest approach in networking, when you don’t know much about the event and the person, is to let the other person speak once you have introduced yourself and exchanged small talk. Lead the discussion by asking open-ended ques-tions and make sure you look interested and inquisitive about what is being said.

The corollary to this is to be a good listener during a networking session. But don’t be a silent onlooker, and add to the conversation wherever necessary—it will show you up as someone who is informed and also, a good listener.

You too are important While meeting a business celebrity or someone who you admire, introduce yourself in a way which shows that you are also an important person; but don’t boast. It’s a two-way communication process and a relationship requires two individuals. The contact you are seeking to make should also know what he or she would benefit from knowing you. Give that person a valid reason.

A common connectIf you are a regular at these networking sessions, chances are that there will be a mutual acquain-tance or a friend in common to you and your contact. Share anecdotes and trivia about you and that acquaintance (don’t gossip). Apart from talk-ing about a common friend or an acquaintance, you can also find a common ground or shared

A good networking strategy will ensure your business stands out from the crowd

AvAnish TiwAry


interests with the person you choose to network with. Something as simple as being fans of the same football team can be helpful in building a rapport with the contact. This will make your conversation flow easier and in some cases, it works best as an ice-breaker.

Refrain from seeking help at an eventThis is the biggest mistake people make when in a networking session.

Take note: Do not ask for any kind of medical or professional help from doctors, lawyers, etc., while attending an event. You can casually mention your problem, but always ask for an appointment to discuss these matters in detail later.

Many are not comfortable giving professional advice during events or at a conference and consider it opportunistic behavior. People frown on this kind of behaviour.

This can also mar your relationship with them to a point of no return.

Social networkingThe likes of Facebook and Twitter give you enough opportunity to make new contacts. But there are many hidden rules while networking with some-one over these social networking platforms.

If you want to have a professional relationship with someone, think twice before sending a friend request to him or her on Facebook. Many consider Facebook an informal networking platform. Twitter and LinkedIn work best for the purpose of meeting unknown people over the Internet. However, if you are friends with your professional acquaintance over Facebook, don’t tag him or her regularly in your posts or photos. Remember this: Networking will be possible only if you have the basics right.

Having people skills, business etiquette, the ability to communicate clearly and using your judgement while talking to people over the Internet can boost your contact list and make networking worth your while.


BUILDING SUSTAINABLE ENTERPRISES (IV)

It is not Business If it is not Growing

Presenting an interactive session where your business finds new pathways to growth

Silver Sponsor Hospitality Partner

An Initiative By

Gold Sponsor

Organised By

& &Sanjay Lodha Ajay Bohora

Platinum Sponsor

Mr. Vilas Shinde Call : 08390757931 / 08390757944

For any further queries contact: For event schedule & to fill the online application form visit

www.bizeventindia.comNote: Register before 13th February 2013 by submitting the application form.

The form is subject to review by the advisory team before acceptance.

Participants will also get: Certificate signed by Director, Indian School of Business (ISB) & Entrepreneur Magazine. Registration fee includes Annual membership to Entrepreneur magazine.

Saturday, 23rd February 2013, 8:30 a.m. to 7:00 p.m.The Gateway Hotel by TAJ, Mumbai Agra Highway, Nashik

Venue Details:

shelf life


Ankush Chibber

DecoDing inDia’s behavior

[ eco-cool ]

Yes, we know You are instantlY thinking of Freakonomics, that epic book by University of Chicago economist Steven Levitt and New York Times journalist Stephen J. Dubner, which made eco-nomics mainstream and perhaps a little more hipster-cool than we would have liked. We confess we also dived into this book expecting somewhat the same treatment.

Authored by Vivek Dehejia and Rupa Subramanya, who are econo-mists, prolific columnists and also huband and wife, Indianomix: Making Sense of Modern India is definitely along the same lines i.e. it delves into behavioural economics but within an Indian context—which for us makes it a far more personal and interestng experience than Levitt and Dubner’s books.

Some excerpts clearly stand out from others in this fairly long book. One of our favourites, and we sus-pect it would be of many others who read it, was the one about the shy Italian girl called Antonia Maino, who is more popularly known as Sonia Gandhi in our country. The authors track her journey from the time she was just Antonia to now, one of the most powerful persons in India, and explain how the odds of her being where she is today were probably zero at the beginning of it all. After all, it “took two assassi-nations and five unexpected deaths after her chance meeting with her future husband” as the authors put it—take a shot calculating these odds if you are brave.

Some other sections of the book stand out as well, especially the insight into India being the fourth-most dangerous country for women and an exploration of

why humans cannot be as altruistic as the much maligned (thanks to Dracula) vampire bat—which is known to vomit warm blood into a fellow starving bat that might have not fed that night.

We also read with deep interest the chapter about India’s pain-ful humiliation at the hand of the Chinese in 1962. To be precise, the chapter here dives into why Nehru said after the military loss that “We were living in an artificial atmo-sphere of our own creation”—a statement that is explored further to reveal how a combination of arrogance and bad advice landed us and our troops in a tragic down-ward spiral.

There are many other such interesting chapters, which are well-researched and presented—being columnists, both Dehejia and Subramanya know how to draw in and keep the reader engaged. Both have used economics and more than a dash of other disciplines including psychology, sociology, evolutionary biology, history and religion to explain their ideas—which could be fascinating to some

and frustrating to others, but keep readers riveted. There are some factual errors we expect from a

book of this genre—academicians rely on sources and analysis, and both can never be 100 percent reli-able. One glaring error is the description of a sup-posed threat to Calcutta in 1962, which some other early reviewers have caught on to as well.

But let us be clear where we stand with this book—the story telling is first rate and engaging even though the book does not quite make good on its promise of making sense of modern India.

IndIanomIx: makIng SenSe of modern IndIa Author: Vivek Dehejia and Rupa SubramanyaPublisher: Random House Price: `399 (Hardback) Pages: 288


Business Words that

should die in 2013

If you are in the business of running/starting/funding a business, please try avoiding these game-changing terms. Yes, we know what we just did there

Ankush Chibber

1. offline – Stop. You were never online in the first place to take it offline. And be honest. What you really mean is that you are never going to talk about it again.

2. hyperlocal – Every time we hear this term, we think of a Mumbai local train doing drugs that are not sold legally. Just local would do fine.

3. Glocal – It pains more than the word above—it also sounds like a local train, but on Glucose. Seriously, we would pay to have this word assassinated.

4. synergy – Please. Just take that synergy you want to have with me or anyone else and hide it forever and ever. It is just too much to take.

5. rightsizing – Use this term instead of honestly saying that you are letting people go because of costs and get punched. It does not make getting fired any better!

6. sector agnostic – Okay, so two words. Repeat after me. You can be agnostic about only one thing—God. And even he would prefer you do not use this word.

7. enabler – What is this word? Sounds like a Jason Statham-Transporter kind of charac-ter who would come fix all sorts of things for you...“enable them.”

8. Going forward – It is how bad news is generally broken. “You did this. Good. But going forward, we are looking at __________ for better ___________”

9. revolutionary – The last time someone invented something truly revolutionary, we all thanked him for the toilet seat. A new tablet is NOT revolutionary.

10. the new normal – This is our new favorite. Or let’s just say our new normal favorite. For some, a changing or changed situation just does not work.


back stage

Illustration Chaitanya Dinesh Surpur

Entrepreneur February 2013

Documents

Transcript of Entrepreneur February 2013