Courtesy : Economic Times
Henry Ford , Bill Gates , Walt Disney , Soichiro Honda, Akio Morita...they have all been there, done that. No, we are not talking about their much-celebrated successes. Rather, this feature is about what hit them before they became rich and famous, the sledgehammer called failure. Gates gave up on Harvard, Disney and Ford stumbled into bankruptcy, Honda failed a job interview at Toyota and Sony founder Morita's first product, an electric rice cooker, had few takers.
That said, the timeworn truism of failure being a stepping-stone to success is not always true. It only works if you are willing to learn from failure. And that's where gut-wrenching misadventures from the past can be more meaningful and effective than blasts of previous big hits.
Past achievement is no guarantee of riding the gravy train in future. One entrepreneur who might agree with this is Sabeer Bhatia, co-founder of the wildly successful Hotmail. Bhatia, who sold the email system to Microsoft for some $400 million in 1997, has tried his hand with various ventures subsequently but none has come close to Hotmail in popularity and success.
Previous victories may encourage you to tread the beaten path. The value of learning from previous mistakes, on the other hand, lies in not repeating them, and finding new ways of making things work. This could result in the road ahead being littered with more failures. And that brings us to another time-tested adage of trying and trying till you succeed.
Says Deccan Aviation founder Captain GR Gopinath: "You are not a failure as long as you keep trying." Indeed, success cannot be always measured with dollops of wealth and cheers from the gallery. As corporate head honcho-turned-ad man Sandeep Goyal puts it: "Success is not an end in itself." Goyal put together a winning joint venture with Dentsu after leaving broadcaster Zee TV and spending many months in the corporate, and social, wilderness.
Not all who fail become case studies of grit and triumph in management books. For every entrepreneur who bounces back, there are many who either burned out or faded away. Failure cannot always be romanticised and transformed into heroic tales of turnarounds. But it does serve a purpose, of telling budding start-up artistes that botch-ups are par for the course; and that one must learn to deal with them to move ahead.
It is therefore vital to chronicle the tales of those who embraced risk wholeheartedly and, in the process, flopped spectacularly. Failure is an inevitable companion on the path to success. And whilst you may eventually succeed in leaving that friend behind, make sure you don't forget the lessons she taught you. The entrepreneurs, politicians and one sportsperson we have profiled have not
Past achievement is no guarantee of riding the gravy train in future. One entrepreneur who might agree with this is Sabeer Bhatia, co-founder of the wildly successful Hotmail. Bhatia, who sold the email system to Microsoft for some $400 million in 1997, has tried his hand with various ventures subsequently but none has come close to Hotmail in popularity and success.
Previous victories may encourage you to tread the beaten path. The value of learning from previous mistakes, on the other hand, lies in not repeating them, and finding new ways of making things work. This could result in the road ahead being littered with more failures. And that brings us to another time-tested adage of trying and trying till you succeed.
Says Deccan Aviation founder Captain GR Gopinath: "You are not a failure as long as you keep trying." Indeed, success cannot be always measured with dollops of wealth and cheers from the gallery. As corporate head honcho-turned-ad man Sandeep Goyal puts it: "Success is not an end in itself." Goyal put together a winning joint venture with Dentsu after leaving broadcaster Zee TV and spending many months in the corporate, and social, wilderness.
Not all who fail become case studies of grit and triumph in management books. For every entrepreneur who bounces back, there are many who either burned out or faded away. Failure cannot always be romanticised and transformed into heroic tales of turnarounds. But it does serve a purpose, of telling budding start-up artistes that botch-ups are par for the course; and that one must learn to deal with them to move ahead.
It is therefore vital to chronicle the tales of those who embraced risk wholeheartedly and, in the process, flopped spectacularly. Failure is an inevitable companion on the path to success. And whilst you may eventually succeed in leaving that friend behind, make sure you don't forget the lessons she taught you. The entrepreneurs, politicians and one sportsperson we have profiled have not
1) Captain GR Gopinath, Founder, Deccan 360
When I failed:
It was 2008. Air Deccan had become a Rs 2,000-crore company with 3,500 employees and a market capitalisation of $1.1 billion. With Air Deccan big and stable, I began incubating Deccan Express Logistics, a door-to-door multimodal air and ground logistics company. I decided to bring in a strategic investor and raise some capital. Investors and bankers lined up. I was on cloud nine.
Two of my earlier investors gave me a few million dollars. I returned the money, partly out of arrogance, partly out of my optimism and stupidity. I thought they were not recognising my contribution and being unfair to me. Then global markets crashed. The radiant cloud I was sailing on evaporated and I realised I had no parachute. Investors, credit lines dried up. With 150 staff and advance payments made for aircraft, cash was being burned. Call it hubris but we kept chasing more private equity players.
What I learnt:
When you are successful you become arrogant and complacency sets in. When you are knocked down you realise that humility is important. I also learnt that you are not a failure until you quit. I learnt to be optimistic through difficult times. You have to push yourself to act and not despair. It is difficult to take decisions but indecision is worse. You need to listen to people and hear their views but there is a time when you go with your intuition and take the tough decisions.
How it helped me succeed:
I realised if I did not act with speed, we would come to grief. I took drastic decisions. I re-jigged the entire business plan, switched from doing everything to a franchise model and cut pay. Things started falling into place. The economy started looking up. Doors started opening banks like the State Bank of India gave credit. The response from franchisees was overwhelming, 2,800 joined up. What would have taken us 20 years with our own funds was done in under six months. We launched in November 2009 from Nagpur.
It was 2008. Air Deccan had become a Rs 2,000-crore company with 3,500 employees and a market capitalisation of $1.1 billion. With Air Deccan big and stable, I began incubating Deccan Express Logistics, a door-to-door multimodal air and ground logistics company. I decided to bring in a strategic investor and raise some capital. Investors and bankers lined up. I was on cloud nine.
Two of my earlier investors gave me a few million dollars. I returned the money, partly out of arrogance, partly out of my optimism and stupidity. I thought they were not recognising my contribution and being unfair to me. Then global markets crashed. The radiant cloud I was sailing on evaporated and I realised I had no parachute. Investors, credit lines dried up. With 150 staff and advance payments made for aircraft, cash was being burned. Call it hubris but we kept chasing more private equity players.
What I learnt:
When you are successful you become arrogant and complacency sets in. When you are knocked down you realise that humility is important. I also learnt that you are not a failure until you quit. I learnt to be optimistic through difficult times. You have to push yourself to act and not despair. It is difficult to take decisions but indecision is worse. You need to listen to people and hear their views but there is a time when you go with your intuition and take the tough decisions.
How it helped me succeed:
I realised if I did not act with speed, we would come to grief. I took drastic decisions. I re-jigged the entire business plan, switched from doing everything to a franchise model and cut pay. Things started falling into place. The economy started looking up. Doors started opening banks like the State Bank of India gave credit. The response from franchisees was overwhelming, 2,800 joined up. What would have taken us 20 years with our own funds was done in under six months. We launched in November 2009 from Nagpur.
"Glory is in rising every time we fall"
When I failed:
It [a lawsuit filed against him and Infosys, alleging wrongful termination and sexual harassment of a female employee in the US] was a big setback, nothing short of being to the hell and back. Imagine people judging you before knowing, pronouncing you guilty. What more can happen to you? For about two months I considered myself a victim. I slipped into a deep whining syndrome. Lots of people told me that I should retire. One moment that shook me out of this state was the visit of a close friend who told me: "Phaneesh, what are you doing? You are a tiger, go out there and prove it to the world."
What I learnt:
His words taught me: It's only when we fall that we come to know who we really are and if we are strong enough to rise again. I am glad I had what it took to recover and rise. I wouldn't have been able to pull this through but for my wife's support. In her, my anchor was always there. She knows me the best and there was no wavering in her support.
How it helped me succeed:
I had done no wrong. I was confident of setting up a business and found immediate support for it. People had seen me build Infosys. They were confident of my capabilities, but the fund-raising got stuck on one point, my reluctance for an out-of-court settlement. People willing to fund my venture wanted the case closed at the earliest. I understood their demand. When you are starting something, even 100% attention does not guarantee success. With the case on, funders thought I wouldn't be able to give my 100% attention. So I accepted their advice. After the incident, every year I do one extreme thing, like bungee jumping. My confidence level is higher now. What you go through changes your conduct. For instance, my HR department is very protective of me. I rarely close the door of my cabin and all our office cabins are made of see-through glass.
"More than qualification, it's attitude that makes a winner"
When I failed:
After selling my brands such as Thums Up, Limca and Gold Spot to Coca-Cola in 1993, I made the mistake of retaining employees who were a part of the company. I ought to have offered voluntary retirement to these employees who were associated with the brands for a long time. And I should have recruited another set of people to work on the new product I had launched Bisleri bottled water.
These employees were used to dealing with the earlier fast-moving brands and were clueless on how to move Bisleri. Those were really painful 4-5 years and I lost a lot of money during that time because I had employees who did not know how to market Bisleri. During those days we also launched Bisca cup noodles based on a board member's suggestion. Apparently he had the cup noodles when he travelled abroad and sold us the plan to launch it in India. Not only was the product ahead of its time for India, the distribution system required for noodles was completely different from what we were used to. Also, the fact that we had just no domain knowledge of the product made it a complete disaster.
What I learnt:
I learnt that it is very difficult to change people's mindsets. Our earlier set of employees were habituated to listening to the distributor and accepted what they said as the gospel truth. There was no attempt to listen to the consumer. And all attempts to get them to be open to new ideas and strategies failed completely. I also learnt, with the Bisca fiasco, that one should not meddle with plans in areas where one has no core competence or understanding.
How it helped me succeed:
Since then every time we launched a new idea or product we made sure that the people handling the product had the right mindset to make it a success. The Bisleri experience also helped me while hiring new recruits: more than qualifications it is the attitude and mindset that make a winner.
4) Sandeep Goyal, Founder chairman, Dentsu India, and former CEO, Zee
"Success never comes, you have to seek it"
When I failed:
At 35, I became president of Rediffusion DY&R , one of India's largest advertising agencies. At 38, I was Group CEO of Zee Telefilms , India's largest broadcaster. A few weeks before I turned 40, I resigned from Zee. One day, I was one of India's highest-paid professional executives. The next day, it was all gone, my Merc, memberships of the Chambers, the Belvedere, Bombay Gym and Willingdon, secretaries, retinue of hangers-on and myriad 'friends'. Reality took a while to sink in. My mobile stopped ringing. 'Friends' started avoiding me. I started avoiding parties. I was hurting. More importantly, I was alone. My wife, Tanya, was my only support. It took her a while to coax me to open up, introspect and do a reality check. Think ahead, rather than think about the past. I brooded. I wallowed in self-pity. I got angry at myself, and at the world. I hated not being in the limelight. I hated myself.
What I learnt:
It took me three months to piece myself together again. Looking back, my Zee debacle was the best thing to happen to me. I matured and learnt to introspect. I learnt self-restraint. I became discerning about 'friends'. I learnt to keep my head down and my mind focused. Success is not a one-way street. Nor is it an end in itself. I understood that success never comes to you: you have to seek it.
How it helped me succeed:
The first thing I told myself: the less a life depends on another, the better it is. At the peak of my high-flying career, I couldn't send an email on my own. My secretaries and assistants did it. So I quickly taught myself the basics. The hiatus had shown me who my real friends were. In my earlier successes I had showered favours indiscriminately. Going forward, I shed a lot of 'friends'. One morning, I walked into the hallowed portals of Dentsu Inc , the world's largest advertising agency to seek a joint venture (JV) with them. I did not have a company of my own: no office, employees, clients or credentials to woo them. I just had self-belief. No one gave me half-a-chance. Except, God and Tanya. Nine months after I left Zee, I saw success again: Dentsu and I signed a JV. It was a coup. A month ago, after seven years of building Dentsu India into a Rs 1,200-crore entity, I exited the JV. I exited on top. I exited young. I exited decently rich.
"Success never comes, you have to seek it"
When I failed:
At 35, I became president of Rediffusion DY&R , one of India's largest advertising agencies. At 38, I was Group CEO of Zee Telefilms , India's largest broadcaster. A few weeks before I turned 40, I resigned from Zee. One day, I was one of India's highest-paid professional executives. The next day, it was all gone, my Merc, memberships of the Chambers, the Belvedere, Bombay Gym and Willingdon, secretaries, retinue of hangers-on and myriad 'friends'. Reality took a while to sink in. My mobile stopped ringing. 'Friends' started avoiding me. I started avoiding parties. I was hurting. More importantly, I was alone. My wife, Tanya, was my only support. It took her a while to coax me to open up, introspect and do a reality check. Think ahead, rather than think about the past. I brooded. I wallowed in self-pity. I got angry at myself, and at the world. I hated not being in the limelight. I hated myself.
What I learnt:
It took me three months to piece myself together again. Looking back, my Zee debacle was the best thing to happen to me. I matured and learnt to introspect. I learnt self-restraint. I became discerning about 'friends'. I learnt to keep my head down and my mind focused. Success is not a one-way street. Nor is it an end in itself. I understood that success never comes to you: you have to seek it.
How it helped me succeed:
The first thing I told myself: the less a life depends on another, the better it is. At the peak of my high-flying career, I couldn't send an email on my own. My secretaries and assistants did it. So I quickly taught myself the basics. The hiatus had shown me who my real friends were. In my earlier successes I had showered favours indiscriminately. Going forward, I shed a lot of 'friends'. One morning, I walked into the hallowed portals of Dentsu Inc , the world's largest advertising agency to seek a joint venture (JV) with them. I did not have a company of my own: no office, employees, clients or credentials to woo them. I just had self-belief. No one gave me half-a-chance. Except, God and Tanya. Nine months after I left Zee, I saw success again: Dentsu and I signed a JV. It was a coup. A month ago, after seven years of building Dentsu India into a Rs 1,200-crore entity, I exited the JV. I exited on top. I exited young. I exited decently rich.
5 ) Nitish Kumar, Chief minister, Bihar
"Be close to ground realities"
When I failed:
One of my biggest failures was my inability to gauge the mood of the people of Bihar correctly when we contested elections in 2004. We were under the impression that the good work done by the National Democratic Alliance would bring us back to power. But the ground reality was different.
What I learnt:
Be close to ground realities; ground-level issues and social issues are far more important. For the next one year I worked at the ground level.
How it helped me succeed:
The results were there to see in the Bihar assembly elections in 2005. I worked with the people of Bihar and attacked Lalu Prasad Yadav's strategy of winning votes by misery mongering. I worked with only one goal of development and nothing has distracted me from that goal in the past five years. The 2010 elections, where we managed to beat Lalu's strategy, shows how I have used my learnings.
"Be close to ground realities"
When I failed:
One of my biggest failures was my inability to gauge the mood of the people of Bihar correctly when we contested elections in 2004. We were under the impression that the good work done by the National Democratic Alliance would bring us back to power. But the ground reality was different.
What I learnt:
Be close to ground realities; ground-level issues and social issues are far more important. For the next one year I worked at the ground level.
How it helped me succeed:
The results were there to see in the Bihar assembly elections in 2005. I worked with the people of Bihar and attacked Lalu Prasad Yadav's strategy of winning votes by misery mongering. I worked with only one goal of development and nothing has distracted me from that goal in the past five years. The 2010 elections, where we managed to beat Lalu's strategy, shows how I have used my learnings.
6) Priyanka Chopra, Bollywood actor
"Failure makes place for something better"
When I failed:
I was a 17-year-old girl, put out of her school uniform straight into the Miss India pageant. Unlike all the models around me, I had no experience. I did not even know how to stand in heels! I didn't win a single of the six or seven sub-events, not even the singing, which I am really good at and which all the rest were sure I would. That really broke me.
I cried that whole night and felt stupid that I was even there. That's when my mom sat me down and told me not to take the winning seriously, to give it my best, so that there were no regrets later. I did that and had a great time. I was also very focused but all through I knew it was not a do or die situation. Thank God I failed, or I would never have been Miss India or an actress today...
What I learnt:
That nothing is a do or die situation. In whatever you do, be it beauty pageants or films. That nothing is worth compromising my values for. It taught me a great balance as well as a very important thing, failure is not an option or God is making place to give you something better. What is most important is that be it any task from tying shoelaces to acting, everything should be done with perfection. There must be a pride to do it better than anyone else. And if its not good enough then I have no regrets because I have given my best to whatever task is on hand, small or big.
How it helped me succeed:
By giving me this drive. In fact, it's always happened with me that failures have made place for something better or taken me to a better place. Success lies in having the right attitude, to start looking at the failure as positives, for example, I never dissect a film. I stand by all my films. I know when I took it on, I believed in it. So if there are mistakes they are fine and I always have the courage of conviction of what I do and move on. In fact, never take on something if you do not have the courage of conviction.
"Failure makes place for something better"
When I failed:
I was a 17-year-old girl, put out of her school uniform straight into the Miss India pageant. Unlike all the models around me, I had no experience. I did not even know how to stand in heels! I didn't win a single of the six or seven sub-events, not even the singing, which I am really good at and which all the rest were sure I would. That really broke me.
I cried that whole night and felt stupid that I was even there. That's when my mom sat me down and told me not to take the winning seriously, to give it my best, so that there were no regrets later. I did that and had a great time. I was also very focused but all through I knew it was not a do or die situation. Thank God I failed, or I would never have been Miss India or an actress today...
What I learnt:
That nothing is a do or die situation. In whatever you do, be it beauty pageants or films. That nothing is worth compromising my values for. It taught me a great balance as well as a very important thing, failure is not an option or God is making place to give you something better. What is most important is that be it any task from tying shoelaces to acting, everything should be done with perfection. There must be a pride to do it better than anyone else. And if its not good enough then I have no regrets because I have given my best to whatever task is on hand, small or big.
How it helped me succeed:
By giving me this drive. In fact, it's always happened with me that failures have made place for something better or taken me to a better place. Success lies in having the right attitude, to start looking at the failure as positives, for example, I never dissect a film. I stand by all my films. I know when I took it on, I believed in it. So if there are mistakes they are fine and I always have the courage of conviction of what I do and move on. In fact, never take on something if you do not have the courage of conviction.
7 ) Deep Kalra, Founder & CEO, MakeMyTrip
"I learnt to read the market right"
When I failed:
Academically, opting out of engineering in favour of economics was a big mistake. Computer science would have helped me immensely at MakeMyTrip. Career-wise, I think I laboured on for too long, an extra year or two, at AMF Bowling in the hope that the market would pick up. I should have read the writing on the wall. Way back in the 1995 to 1999 period, development of malls and the like was not taking take place in a big way. That was a limiting factor for large bowling centres to come up. These failures were courtesy of an inherent trait of stubbornness to prove to myself and to others, that a business/venture undertaken has to be successful. But then there's a fine line between stubbornness and perseverance.
What I learnt:
The failure at AMF Bowling helped me a great deal at MakeMyTrip in reading the market right in 2000. The Indian market was still not ready for online travel, which is why we focused on the market for non-resident Indians. This, frankly, kept MakeMyTrip alive at a time when other online travel ventures that focused on the domestic market perished.
How it helped me succeed:
Whenever confronted with a new market scenario, it's become first nature to deep-dive into the market potential and customer-buying habits. This has helped me a great deal when getting into new business lines, ventures and markets as well as when evaluating new businesses.
"I learnt to read the market right"
When I failed:
Academically, opting out of engineering in favour of economics was a big mistake. Computer science would have helped me immensely at MakeMyTrip. Career-wise, I think I laboured on for too long, an extra year or two, at AMF Bowling in the hope that the market would pick up. I should have read the writing on the wall. Way back in the 1995 to 1999 period, development of malls and the like was not taking take place in a big way. That was a limiting factor for large bowling centres to come up. These failures were courtesy of an inherent trait of stubbornness to prove to myself and to others, that a business/venture undertaken has to be successful. But then there's a fine line between stubbornness and perseverance.
What I learnt:
The failure at AMF Bowling helped me a great deal at MakeMyTrip in reading the market right in 2000. The Indian market was still not ready for online travel, which is why we focused on the market for non-resident Indians. This, frankly, kept MakeMyTrip alive at a time when other online travel ventures that focused on the domestic market perished.
How it helped me succeed:
Whenever confronted with a new market scenario, it's become first nature to deep-dive into the market potential and customer-buying habits. This has helped me a great deal when getting into new business lines, ventures and markets as well as when evaluating new businesses.
8 ) Glenn Saldanha, MD & CEO, Glenmark Pharmaceuticals
"Plan for the bad when the going is good"
When I failed:
Between 2000 and 2008, our revenue grew from $40 million to $450 million. We also concluded several out-licensing deals of our novel molecules. But 2008 was different. We were hit by a storm we didn't anticipate. The recession impacted sales and receivables across the globe.
Alongside, our out-licensed molecules did not meet their primary end point in human trials. Moreover, our fixed costs remained high because we had invested in infrastructure across countries. Our growth plans had hit a major roadblock.
What I learnt:
Uncertainty is a given. So one needs to factor it in while charting growth plans. It is important to prioritise keeping in mind the vision of the organisation. During the recession, we had to conserve cash and manage debt. So we put fresh capital expenditure and acquisitions on hold but continued to invest in drug discovery. This was contrary to the worldwide trend of slashing R&D spends. The decision paid off. Not only did more molecules progress to clinical trials, we also concluded one more outlicensing deal in 2010. In these tough years, we also got a sense of the commitment of our employees to the organisation.
How it helped me succeed:
When I took over as the CEO, we had only witnessed phenomenal growth year after year. At the age of 38, for the first time, I witnessed a crisis of this magnitude. It was a learning of a lifetime. Glenmark is definitely a stronger organisation than before. I realised that for every few exceptional years there will come a bad year. So plan for that year when the going is good. The bad years are the ones that mould an organisation and make it stronger.
"Plan for the bad when the going is good"
When I failed:
Between 2000 and 2008, our revenue grew from $40 million to $450 million. We also concluded several out-licensing deals of our novel molecules. But 2008 was different. We were hit by a storm we didn't anticipate. The recession impacted sales and receivables across the globe.
Alongside, our out-licensed molecules did not meet their primary end point in human trials. Moreover, our fixed costs remained high because we had invested in infrastructure across countries. Our growth plans had hit a major roadblock.
What I learnt:
Uncertainty is a given. So one needs to factor it in while charting growth plans. It is important to prioritise keeping in mind the vision of the organisation. During the recession, we had to conserve cash and manage debt. So we put fresh capital expenditure and acquisitions on hold but continued to invest in drug discovery. This was contrary to the worldwide trend of slashing R&D spends. The decision paid off. Not only did more molecules progress to clinical trials, we also concluded one more outlicensing deal in 2010. In these tough years, we also got a sense of the commitment of our employees to the organisation.
How it helped me succeed:
When I took over as the CEO, we had only witnessed phenomenal growth year after year. At the age of 38, for the first time, I witnessed a crisis of this magnitude. It was a learning of a lifetime. Glenmark is definitely a stronger organisation than before. I realised that for every few exceptional years there will come a bad year. So plan for that year when the going is good. The bad years are the ones that mould an organisation and make it stronger.
9) Sourav Ganguly, Former captain, Indian cricket team
"I used a setback as a stepping stone"
When I failed:
"The most glaring failure would be during the Greg Chapell era when I was dropped from the Indian team. That was in December 2005. I had been playing for 11 years and had always been part of the Indian squad. For me that period of six months when I was left out of the team was the most challenging.
What I learnt:
Failure or an apparent setback is not important in itself. It depends on how we handle the situation. I tried to see it positively and do things to improve.
How it helped me succeed:
I did come back into the team and into the game after six months but it was not something I did to prove to the world. I have never believed in having to prove anything. I have never played the game that way. Each time I scored, I only knew I was good enough to play the sport at that level. That's how I have always seen the game and that's how I saw it then. In hindsight, I think I used that phase as a stepping stone to come back into the game.
"I used a setback as a stepping stone"
When I failed:
"The most glaring failure would be during the Greg Chapell era when I was dropped from the Indian team. That was in December 2005. I had been playing for 11 years and had always been part of the Indian squad. For me that period of six months when I was left out of the team was the most challenging.
What I learnt:
Failure or an apparent setback is not important in itself. It depends on how we handle the situation. I tried to see it positively and do things to improve.
How it helped me succeed:
I did come back into the team and into the game after six months but it was not something I did to prove to the world. I have never believed in having to prove anything. I have never played the game that way. Each time I scored, I only knew I was good enough to play the sport at that level. That's how I have always seen the game and that's how I saw it then. In hindsight, I think I used that phase as a stepping stone to come back into the game.
10) Kiran Mazumdar-Shaw, Chairperson & managing director, Biocon Ltd
"I was told I was taking too many risks"
When I failed:
I have faced many failures but I have dealt with them unflinchingly. Back in India as a young graduate from the University of Ballarat in Australia, I found that there was no job for a woman in the male-dominated brewing industry. I was perceived as a failure when I started a company in my family garage to make industrial enzymes.
Bankers were reluctant to lend and asked me to drop ambitious plans to build in-house technology. Nobody would lend money to Biocon until N Vaghul, who promoted India's first venture capital company, invested in it. In 2003, bankers were sceptical about my plans to develop novel drugs for diabetes care; they sold out their stake to AIG. I was told I was taking too many risks. Why couldn't I be like other pharma companies?
What I learnt:
There is no slam-dunk in business; in developing oral insulin we might have failed in the initial clinical trials but we will take the learning and refine subsequent trials... Investors look for commoditisation; they don't appreciate measured risk taking. It is always about managing risk.
How it helped me succeed:
I have never betted the bank on anything. I take positions that mitigate risk; that is my strength. I convert my failures into success. Nobody believed me when I went after development of insulin molecule. Investors want to see deal flows and regular returns while I wanted to always challenge myself to see what more I could do.
"I was told I was taking too many risks"
When I failed:
I have faced many failures but I have dealt with them unflinchingly. Back in India as a young graduate from the University of Ballarat in Australia, I found that there was no job for a woman in the male-dominated brewing industry. I was perceived as a failure when I started a company in my family garage to make industrial enzymes.
Bankers were reluctant to lend and asked me to drop ambitious plans to build in-house technology. Nobody would lend money to Biocon until N Vaghul, who promoted India's first venture capital company, invested in it. In 2003, bankers were sceptical about my plans to develop novel drugs for diabetes care; they sold out their stake to AIG. I was told I was taking too many risks. Why couldn't I be like other pharma companies?
What I learnt:
There is no slam-dunk in business; in developing oral insulin we might have failed in the initial clinical trials but we will take the learning and refine subsequent trials... Investors look for commoditisation; they don't appreciate measured risk taking. It is always about managing risk.
How it helped me succeed:
I have never betted the bank on anything. I take positions that mitigate risk; that is my strength. I convert my failures into success. Nobody believed me when I went after development of insulin molecule. Investors want to see deal flows and regular returns while I wanted to always challenge myself to see what more I could do.
11) Jaithirth 'Jerry' Rao, Chairman, Value and Budget Housing Corporation
"Invest in advanced systems and processes"
When I failed:
It was 2003. Our company [MphasiS] was growing rapidly. But we never seemed to have all our engines firing at the same time. If one division was doing well another was failing. And we always seemed to get the bad news when it was too late to do anything about it! One of our directors, Jose de la Torre, told us that he had seen this with many growth companies. We were so keen to do business that we under-invested in our internal systems. Our systems were always good enough for the previous year. They invariably lagged our requirements.
What I learnt:
If we have plans to scale up, we have to invest in advance in our internal capabilities, not try piecemeal investments after the deluge hits us. The idea that when we grow, we can somehow "wing it" is a fallacy.
How it helped me succeed:
In my new venture, I have made it a point to invest in systems and processes upfront even when our business levels may not justify them. We have purchased a good enterprise resource planning (ERP) application and are making changes to it to ensure that it is a world-class support system for a large organisation even though we are a small one. We have chosen to appoint a senior person as our HR head rather than managing this function tactically. We are developing systems across all aspects of our company on the assumption that we will have 50 times as many customers as we do right now. This is going to pay off in terms of customer delight, early detection of problems and company-wide optimisation.
"Invest in advanced systems and processes"
When I failed:
It was 2003. Our company [MphasiS] was growing rapidly. But we never seemed to have all our engines firing at the same time. If one division was doing well another was failing. And we always seemed to get the bad news when it was too late to do anything about it! One of our directors, Jose de la Torre, told us that he had seen this with many growth companies. We were so keen to do business that we under-invested in our internal systems. Our systems were always good enough for the previous year. They invariably lagged our requirements.
What I learnt:
If we have plans to scale up, we have to invest in advance in our internal capabilities, not try piecemeal investments after the deluge hits us. The idea that when we grow, we can somehow "wing it" is a fallacy.
How it helped me succeed:
In my new venture, I have made it a point to invest in systems and processes upfront even when our business levels may not justify them. We have purchased a good enterprise resource planning (ERP) application and are making changes to it to ensure that it is a world-class support system for a large organisation even though we are a small one. We have chosen to appoint a senior person as our HR head rather than managing this function tactically. We are developing systems across all aspects of our company on the assumption that we will have 50 times as many customers as we do right now. This is going to pay off in terms of customer delight, early detection of problems and company-wide optimisation.
"Everything takes more time and money than you think"
When I failed:
It happened in 1998 when I took venture capital money for my earlier venture, India Life, which was a piece of paper. It was too early to put the meter down and that kind of money always has an expiry date. This happened because there was a mismatch between how much time the opportunity needed and how much time the investors had.
What I learnt:
I now understand the investing business and that funds have finite lives and fiduciary responsibilities. This does not make them a bad fit for every venture; just for some ventures; or at particular stages of some ventures. I learnt that you have to take your venture as far as you can without raising money from somebody whose money has an expiry date. Everything takes more time and money than you think and your investors need to understand that; or you are better off without them. Good judgement comes from experience and experience comes from bad judgement.
How it helped me succeed:
We did not raise any external equity in TeamLease for the first five years. TeamLease has been able to scale faster and engage with public policy much more aggressively than we could have if we had taken external money from Day 1.
"Put your difficulties to work"
When I failed:
I am the only editor to be dismissed not once but twice from The Indian Express. The first time, Mrs Gandhi put such pressure on [Indian Express owner] Ramnath Goenka that even a tiger like him made a goodwill gesture out of me.
But he did call me back and I was delighted to go back. But then he had a series of strokes. Those who were trying to swallow the company thought that S Gurumurthy and I would be the obstacles. And therefore, they first removed me, and then Gurumurthy.
What I learnt:
My first learning is never look back. Or else you will suffer the fate of Lot's wife [in the Book of Genesis, Lot's wife ignores the advice of the angels not to turn back when fleeing the city of Sodom, and turns into a pillar of salt]. My second learning: put your difficulties to work. There are very few difficulties that cannot be put to work. This is easier if our goal is inner growth. Third: always have three careers going at the same time. And carry each one lightly.
How it helped me succeed:
I have never looked back in my life. On the personal front, I have had to face several challenges: my 35-year-old son has multiple handicaps and my wife has had Parkinson's for the last 22 years. I have worked towards putting these things to work. I have followed at least three careers at the same time. I have written books, I have written columns and I have been a minister. I have carried each one of them lightly so that if I am thrown out I don't get disappointed. [Former prime minister] Vajpayeeji asked me a few years back: "Where are you living these days?" I said: "In my parents' house that they left behind for me. He asked me why I had not taken government accommodation. I said: "[If I do not take it] there is one less thing to give up."
Hi,
ReplyDeleteThis is slightly off the rack, but essential for any Indian citizen
I have just signed a petition standing with Anna Hazare, who has committed to fast-unto-death -- unless the government agrees to create a powerful law called “Jan Lokpal Bill” -- which is desperately needed in India to fight corruption. Join me by adding your voices and helping build a national outcry and force Prime Minister Singh to urgent action:
http://www.avaaz.org/en/stand_with_anna_hazare/96.php
With Regards,
Vikas
Dear Valuepick,
ReplyDeleteThanks for the wonderful post..Its really amazing how the leaders came out of their bad patch and move on to achieve greater things!!
Your Follower from Chennai