This blog is a collection of some of the most interesting conversations I have had in my business life and the lessons I learnt from each of these conversations.
1. There has to be some differentiation!
Place – The Leela Kempenski Lobby (Powai), Mumbai.
People present – A Director of Courtaulds (a large UK Textile Company that supplies textile goods to Marks and Spencer), their Socks & Knitwear Manager (a Mr. Khan), Anand Kejriwal (my dad) and me.
My notes of the meeting still preserved with me!
Situation – My dad and I were representing our socks business and impressing Courtaulds to do a joint venture with us.
The CEO of Courtaulds asked me, “So Alok, what’s the difference between your factory and the many others we have visited in India? Almost all these factories have imported expensive Italian machines from Italy and they all promise to knit socks on those machines and then export them to the European markets. What is your great business idea?”
I felt inspired and said, “Sir, my great idea is to sell socks made on the Indian machines to European buyers and to sell socks made on the European machines to Indian buyers. The Europeans will buy our local made socks because of the sharp prices and the Indians will buy our International quality socks because of their novelty.”
The CEO’s face brightened and he told his manager Mr. Khan, “Hey, never heard that before. Write it down!”
Lesson learnt – As a 27 year old lad, I realized that I had said something significant. It made me realize that to create value, we have to be different, one of a kind, unique!
2. Everything starts small.
Circa – 1998.
Place – My Dad’s Cielo car.
People present – My dad and I.
Situation – My dad and I were being driven to the Indian office of C&A (a large European Chain) located in Andheri for a meeting with their buyers who regularly bought our socks.
I said, “Papa, I have an idea for the Internet and I think it has some potential.”
My dad said, “What is it?”
I said, “It’s an online contesting idea. To make contests happen online.”
My dad almost immediately said, “Do it. It doesn’t matter if it’s a small start. All good things start small.”
That was it. That’s how my dad blessed my idea.
The first c2w card!
Lesson learnt – My idea became my first Start Up called contests2win.com. I am who I am in the Internet space because of that very Start Up. But my dad’s advice still makes me try new things because I am neither ashamed nor embarrassed to start “small”.
3. Surprises happen!
Circa – July–August 1999.
Place – The Samarkand Restaurant (now the Gucci showroom), Trident (Mumbai).
People present – Ajay Mathur of Intel and me.
Situation – I had started contests2win.com and luckily it was an interesting business idea that excited brands. A few contests had been concluded and a momentum seemed to be kicking in. Also, the uniqueness of the concept had generated some good PR about the company. Being one the first dot coms of India helped. Traffic had begun picking up. On the website, we had this large standard 468 x 60 banner on top of the home page. I don’t know who put it there – I guess the firm who designed the site for me, as a standard site design feature. I never paid any attention to it because I had no clue of ‘Internet advertising’ – who paid for what etc.
The previous day, I got a call from a person called Ajay Mathur from Intel, who invited me for breakfast at the Samarkand. I had no clue about the agenda. I still remember ordering just a papaya and some coffee (thinking, if I had to pay the bill, then it was better to keep my side of the order to the minimum).
Ajay Mathur’s card is probably one my most precious possessions!
Ajay placed his order and straight away came to the point. He said, “Alok, we admire your idea of contests2win.com. At Intel, we like to demonstrate our support to new Internet Start Ups and we would like to be the first advertiser on c2w.com.”
I became breathless and said, “Wow! But Ajay, I don’t know what ads to sell you, the prices of the banners, etc. Also, I don’t know what the ads will deliver to you!”
Ajay said, “Alok, don’t worry. Just place a static Intel banner on the home page banner spot you have. And bill us Rs 5000/- per month until we tell you to stop.”
Lesson learnt – Sometimes, miracles happen in businesses also, when you least expect them.
What I did not realize at that breakfast table was that Ajay had given me 2 invaluable gifts – 1) The proof of the concept that advertising revenue was possible on c2w and 2) Intel was the first blue chip Company that was actually paying!
4. Your own worth is sometimes unknown to you…
Place – Office of eVentures in Khaitan Bhavan (Churchgate) Mumbai.
People present – Neeraj Bhargava (CEO of eVentures) and me.
Situation – Diligence meeting on the funding of c2w by eVentures. The 3 open questions that needed to be addressed were:
1) Why doesn’t c2w generate revenue?
2) Who is on the team other than Alok?
3) Is there a client reference for c2w and its business?
Neeraj asked me the first question, “Why aren’t you charging any of your clients for their online contests?”
I replied, “The idea and concept of c2w is literally the first in the world. Brands would take a lot of time to understand it, to pay us. It’s something brands need to get addicted to before we ask them to pay.”
Neeraj then asked me, “Who else is on your team other than yourself?”
I gulped and replied, “Two junior webmasters.”
Neeraj came to the third question about providing a client’s reference and twisted it by asking me, “Alok, give me the name and number of your most demanding client. Someone, who has given you lots of business. I want to talk to someone who didn’t get swayed by your sweet talk to give you business just once, but rather someone who finds real value in what you do and gives you business repeatedly.”
My heart sank. Our toughest and most demanding client was Pepsi Mumbai, headed by a person called Thota Ranganath. In my mind, I assumed that this discussion was over. Ranga was not going to be kind about us and about our work because we could never satisfy his endless demands.
I gave Ranga’s reference and telephone number to Neeraj.
Neeraj immediately called Ranga in my presence which was absolutely nerve-wracking for me. I clearly heard Neeraj asking questions like, “Do you deal with c2w? How is their work? Do you like the team?”
He then asked, “Why don’t you compensate them?”
Ranga’s reply made Neeraj get up and walk out of the room.
A few minutes later Neeraj came back. He looked point blank at me and said,
“Alok! Ranga told me that he loves your ideas and work.”
Neeraj continued and said, “I asked Ranga the reason why Pepsi doesn’t compensate c2w?”
‘Ranga told me that “Alok never asks(!!)” and further added that Pepsi was actually worried if there was something fraudulent about c2w, because nobody works with Pepsi for free.’
Finally Neeraj dropped the atomic bomb on me. He said, “I also asked Ranga if he would ever consider working for c2w and with Alok. Ranga told me, “Of course! It sounds very exciting!”
Lesson learnt – True value lies in the eye of the beholder. Do your best and then let partners and well-wishers help you unlock the real value you have created.
(Ranga did join c2w as COO and went on to launch mobile2win in China as a co-founder with me.)
5. Hard Knocks are important sometimes.
Place – Small sofa facing the piano in the Trident Lobby (Mumbai).
The sofa as it is even today!
People present – Renuka Ramnath (CEO of ICICI Ventures), Bala Deshpande (ICICI Ventures), Gopala Krishnan (COO of c2w), Sushanto Mitra (c2w advisor), and me.
Situation – The 2001 dot com bust. contests2win.com had raised seed capital from ICICI and eVentures in 1999 and that money had, been used to build the teams, etc. Now in 2001, we had 6 months of cash left to survive. eVentures had closed down their operations. I was desperate. I knew I had a great idea and had to ride somehow survive this storm. The agenda was to beg Renuka for some more funding.
I began the conversation and rambled a bit on how great an idea c2w was and then told Renuka,“Ma’am, we need more money to survive.”
Renuka looked at me, smiled and said, “Alok, when we have children, they fall down sometimes when they begin walking. As parents, we can easily hold them, but we don’t. Allowing them to fall is what teaches them to walk.”
Renuka and Bala then left the meeting.
Lesson learnt – Fall. Stumble. Get hurt. But get strong! My team and I were shattered as we walked out. Yet something had been triggered inside.
We struggled, beat ourselves to death and survived. Almost 10 years later, we are miles ahead of those horrid times, and that advice remains unbelievably hard to beat.
6. Let’s try one last time…
Place – Small conference room of Contests2win at 42, Film Center, Tardeo Mumbai.
People present – GK (COO of c2w) and me.
Situation – c2w had survived for one year after the bust. We had received no more VC funds. GK, Ranga and I had halved our salaries. GK and I had not collected our reduced salaries for 1 year. The sales funnel was worsening because dot com clients were fast disappearing. Our own VC – eVentures closed operations. We calculated that we had 4 months of salaries left and had decided to let most people leave and keep a bare existence. It was a dignified expression of saying we were shutting down. GK and I were meeting to discuss the plan of action of winding up.
GK said, “Alok(ji), after this month’s salary, let’s send a mail to everyone telling that we are laying them off and to advise them to start looking for new jobs. And we will promise them salaries for the next 2 months.”
I despondently said, “GK, isn’t there something else we can do? I mean we have a clear 4 months left.”
I distinctly remember the conference room being dark. We had not switched on the lights to save on the electricity as a routine practice. GK looked around and fixed his eyes on the large c2w brand cut-out, that was always a permanent fixture in that room. This cut-out had our partner brands’ logos printed on it.
This is the first signage you see when you enter my office
I remember GK’s eyes gleaming when he looked at the logos and he suddenly said, “Alok(ji) – we have been meeting the wrong people for funding. We have been pitching to the wrong VCs. Our VCs are our clients – NO ONE ELSE! You need to double up your efforts by getting business from real world clients. Stop wasting your time in chasing the VCs and get the business funded by business cash flow – not investments. Investments will not happen now, but Business can always happen!”
I walked out feeling like a mercenary on a mission to survive.
Lesson and Outcome – I live today to tell you this tale.
7. A generous helping of Vulture Capital.
Circa –August 2004.
Place – Dinner time at Va Bene – A famous Italian restaurant in the Xintiandi district of Shanghai.
People present – Peter Hua (Softbank China), Helmut Struss (Siemens Mobile Acceleration Fund) and me.
Situation – mobile2win China was a joint venture between c2w and Softbank. It was later funded by Siemens Mobile Acceleration Fund. The company was drifting sideways. The board included Peter, Helmut, Oliver Kolbe (also of Siemens) and me. The board had fired 2 previous CEOs and the company was now being run by GK. The dinner was a prelude to the board meeting the next day.
I knew something was amiss because when I suggested we share a bottle of wine as we were ordering, Peter and Helmut kept quiet. That meant that there was no chance of this being a friendly meeting.
The situation got worse when the dinner ended. None of us reached for the bill! In the end, Peter paid the bill, but very reluctantly.
Then, Helmut spoke, “Alok, thanks for coming to Shanghai for the board meeting. Peter and I have been having discussions about GK and how he is managing the business. It’s in a sad state.”
I said, “That’s not what he tells me. But I respect your views. Let’s thrash it out in the board meeting tomorrow.”
Peter said, “Well, there is no scope for that. We are firing him in the board meeting tomorrow. This dinner was just to tell you about our decision.”
I gulped and before I could protest, they got up from the table (Peter did drop me in his car to my hotel but the car ride was silent).
Lesson learnt –VCs can make decisions about your own Company and implement them with an iron fist if things go wrong. This was my first brush in learning that an Entrepreneur is not always in control of his Company.
(GK was fired. Not in the board meeting, but a few weeks later after the investors found Nick Zhang – a local mobile business veteran via Heidrick and Struggles. He was made the CEO. Interestingly, Nick turned the business around and sold the Company successfully, and for cash, to the Walt Disney Company in 2006.)
8. Hello! I like your Company but I don’t like you!
Circa – October 2005.
Place – Kamini Banga’s house in South Mumbai.
People present – Kamini Banga and me.
Situation – I had gone to Kamini’s house to discuss a book she was writing. She asked me what I wanted to drink, and I requested for some coffee. While she had gone to get me some, I received a phone call from an unknown number that read +1 (650)… I did not know at that time that the call was from a Californian mobile number.
I answered my phone.
A man on the other side said, “Hi, Alok, this is Vab Goel from Norwest Venture Partners.”
(Background – I had met Vab Goel and the legendary Pramod Haque of Norwest a few weeks back when they had visited mobile2win.)
I said, “Hi Vab… It’s 4 pm here. What time is it in California?”
Vab said, “2:30 am.” (Later I would learn that Vab called people anytime he liked, not when it suited them.)
I said, “I am actually in a meeting. Can we speak in the evening?”
Vab did not care to listen. He said, “Alok, we have taken a good look at mobile2win India. We like the business, the Company and the management. We are moving towards sending the board a term sheet to make a large investment. However, we have also decided to acquire your shares since we believe you are not adding any value to the Company.”
The phone on which I received that dreaded phone call
I was stunned and said, “Vab, do you realize it’s MY Company, and……”
Vab simply cut me and said, “Alok, entrepreneurs rarely make money in final exits, leave alone when the Company is raising a Series B. You are lucky. Look at me. I walked away from millions in the last company we sold because it was good for the company. Also, every man should first do what is good for his family, etc, …..” Vab proceeded to give me a speech that made no sense.
I ended the call abruptly and was in no frame of mind to continue with my meeting with Kamini.
In the end, Vab Goel did make me rich. And he took over my Company.
Lesson learnt – All VC funded companies have their own destiny. As a promoter who may not play an operating role, you will have little control in managing shareholding changes given the preferential terms that VCs have. It’s best to get rich and get out when something like this happens!
9. Here’s cheering you, Mr. Entrepreneur!
Circa –September 2010.
Place – The large conference room of Clearstone Venture Partners in their 4thstreet office in Santa Monica, California.
People present – Sumant Mandal (g2w board member and MD of Clearstone), Jim Armstrong (Joint MD of Clearstone), Bill Elkus (Founder of Clearstone) and me.
Situation– Presentation of the games2win business to the management of Clearstone.
I had drawn a large circle on the whiteboard – representing our business of g2w. Within the circle I started carving out areas (think pie charts) that defined the business lines of the Company. The carve-outs showed online games, portals, social games & virtual worlds. It quickly looked pretty crowded. Yet I had a marker in my hand to fill in new sections representing our forthcoming iStore games and Android games.
As my marker approached the circle once again, I was nervous. This was the classic ‘doing too many things’ syndrome. My marker touched the white board and just as another line began to appear, Jim Armstrong hollered at me in a rather stern voice and said, “Alok! Don’t tell me you have more offerings to explain to us?” I calmly said, “Yes Jim, we have these new lines rolling out as we speak and…” Before I could complete my sentence, Jim suddenly sat upright, broke into a big smile and exclaimed loudly, “That’s audacious Alok – and we love you for your audacity!!”
Lesson learnt – When you get the right partners, they encourage you for being yourself. In my case, for being a bold, brash entrepreneur.
Games2win couldn’t have been where it is today without Clearstone.
(g2w raised a follow on Series A investment from Clearstone in March 2011 and I earnestly hope that I can make them all proud when we exit.)