Background does not matter-Passion does

There are no business people in his family. His father is a doctor and he was in the government from 1950 to 1983. So he was brought up in government colonies. He studied at St. Columbus School in Delhi,. There was no business background in the family, no great financial acumen or anything. As per the standard middle class aspirations of parents in government service. he dutifully prepared for IIT entrance, took the exams and qualified. Then two or three things happened. His rank wasn't great. And he would not have got the top three or four departments.

Secondly, he went for a medical test and found out that he was colour-blind -- partially. Thirdly, it was a five-year course. So, he decided it was a better option to go to Delhi University and study economics.

Meanwhile, his brother had passed from IIM and told him not to do an MBA right away because it was useless unless you worked for a while. Then Lintas came to college for hiring in 1985. He joined as an Executive Trainee and worked in advertising for three years.

For a year he was in Delhi then was transferred to Mumbai. He then wrote the CAT and went off to IIM Ahmedabad.. He got a job at HMM, which is now Glaxo SmithKline.

Life Goal/Dream

He was there for a year and a half. But all along, ever since he was in school, He was pretty clear that he was going to do MBA, work for a few years and then start his company. This was there since he was 12 or 13. He wanted independence that he could only get by being in a business. This was his dream, a distant goal start out on his own. So he worked at HMM, came back to Delhi and within a year-and-a-half quit and started a company called Info Edge. That is still the name of his company, Naukri is the brand of the India's largest job site -Naukri.com and the founder-Saneev Bikchandani.

Struggle-the journey

Sanjeev started it with a partner and set up two companies, one was for salary surveys and one was a database of trademarks on which they did searches.

In October 1990, they were operating from the servants' quarters above the garage at home and were paying his father Rs 800 as monthly rent. They were doing trade mark searches and launched a salary survey in Info Edge and with the money we made from that, his partner had another idea -trademark research

The government takes five years to approve or reject a trade mark application so if you thought of a brand name today, you apply for it, launch it in six months and five years later if the government rejects your application you are dead, especially if somebody else is already using it before you.

People used to hire a law firm which sent out people to do a manual check in the library and assess whether the trade mark is likely to be accepted or rejected. This library is opened to public inspection. So we sent in 20 college students to note down all information filed under pharmaceuticals in all 134 classes. This data iwas dumped n a computer and they wrote software to search and provided the report for Rs 350/- to the pharma company who planned to do trademark registration .

In 1993 his partner and he decided to separate .He moved back to the servants' quarters and started afresh. Over the next three years he kept costs low .He used to do entry level salary surveys -- what companies are offering MBAs and engineers at the entry level and do a report and send it to maybe a 100 companies for Rs 5000.

Big Idea

When in HMM he noticed that when an office copy of Business India came in, everybody used to read it from back to front. It had 35 to 40 pages of appointment ads in every issue.

He observed that nobody was applying, nobody wanted to leave because they were in a comfortable MNC job with good brands, good pay packages etc., but they used to talk about it.

From these conversations he figured that even if somebody is not looking for a job, still he/she loves to explore, looking for a new benchmark and checking if he/she is missing out on anything. Also, every week 2-3 head-hunters would call offering jobs.

There must have been 100 headhunters out there and each of them probably had four to five clients. These jobs were never advertised because we never saw them in Business India or elsewhere. He figured, what is appearing in the newspapers is the tip of the iceberg. There is a massive market below the surface, highly fragmented and scattered across HR Departments and placement consultants.

If somebody could aggregate it, it would be a powerful product where you could somehow make money. When you are trying to become an entrepreneur there are a thousand ideas -- this was one of them

Idea to Business Model

This was only an idea and he knew something would come out of it but he didn't know how. It was just one of a thousand ideas -- file and forget kind of thing. By then he had quit his job.

The Department of Telecom(DOT) had put an ad on the front page of a newspaper saying it was looking for private information providers to launch a video text service, like the one in Paris. They would put up a server. . .. . and there would be terminals in 45 telephone exchanges and 50 other public places from where information can be accessed for a fee.

Sanjeev made a proposal where they wold get the job from the headhunters for free, and would charge rs 50 per search and do the 50-50 revenue split with DOT. The idea appealed to Dot and they were shortlisted.

Obstacles

They got the plan ready, produced documentation and end user schemes with classifications for every industry type. That was in 1991, before the Internet came to India. DOT approved their proposal and said they will get back to us on implementation. But the project was cancelled. So we had this concept ready in 1991-92 and didn't know what to do with it.

But by then he was charged up on the idea and wanted to try it out. They tried franchise models, couriered floppies, etc. They weret getting data but whatever was tried it didn't look like it would work. It was too cumbersome .

Sanjeev struggled for 13 years. Sometime living on wife's salary and sometime by doing the second job as the consulting editor of a career supplement of the newspaper. For three years his had a punishing schedule.He was in the office by 7.00, worked till 12.00 then would go to The Pioneer come back and work till midnight again. This went on for three years.

Opportunity

In October 1996 he attended the IT Asia exhibition in Delhi which was held every year. Usually at IT Asia they have one pavilion with 100 or more tiny stalls where one always found a lot of interesting things. He saw one stall with www written on it. So he asked this guy what it meant, he said it was the World Wide Web.

At that time there was no TCP/IP access, only black and white monitors .The guy was a retailer selling email addresses, There he was exposed to the Yahoo website, and was shown how to search, browse, check other sites .

Sanjeev immediately caught on to it that he could put all the data of the job vacancies in a website. At that time there were total 14,000 internet users in India and all the servers were based in US. Enter his brother a professor at the UCLA business school, who hired a server for him in US.

The journey

in 1997 his brother paid for the server and got 5% in the company. At $25 a month he got a good deal for the server. He went to another friend who was a very good programmer and told him about the idea to start a Web site. He gave him the old file and asked him to do the programming. Since Sanjeev didn't have the money he gave him a 7% share in the company.

Then there was another friend, a year junior to him, called Saroja. She was also doing an independent consulting project. Sanjeev told her that he was doing a second job in the afternoons offered her 9 % of the company for coming for 6 hours a day .

29 newspapers with appointment ads were collected and the structure of the database was created with thousand jobs and Naukri-first version of the website was developed.

Naukri was launched on April 2, 1997. It was a very rudimentary site.It was the first site that was targeting Indians in India. All others like rediff.com, Khoj and Samachar were all targeting Indians in the US. At around that time, journalists in India had begun to write about Internet and they got the massive publicity
Their contact strategy was very good -- allowing to log on free. Because with 14000 people accessing the Net, they had to get people to keep coming back.

The success ride

In year one Naukri did Rs 2.35 lakh (Rs 235,000) of business and 80% of the jobs were free. In year two the figures jumped to Rs 18 lakh (Rs 1.8 million) . The company still was very very stretched even though it broke even.

What Sanjeev did was to shut other parts of the business and all resources were directed to Naukri. The next year, turnover jumped to Rs 36 lakh (Rs 3.6 million) and they made Rs 1.8 lakh profit, but that was because Sanjeev did not take a salary.

In 1999-2000 Naukri did Rs 36 lakh, So the success came after 10 years of struggle.Then, around May-June 1999 VCs started chasing Sanjiv , he refused to take the bait ,content in growing at his own pace but realized that funded competition was coming in and the game was going to change. Naukri could not be a Rs 50 lakh Web site and make a 10 lakh net profit. Naukri has to be a Rs 5 crore (Rs 50 million) Web site and make a Rs 1 crore (Rs 10 million) net profit -- that is the only way to survive .And then the Jobs Ahead was launched on the India-Pakistan Sharjah Cricket tournament. With the ad-budget which was twice the Naukri turn over then.

Sanjeev panicked ,went back and took the money from ICICI venture. There were lot of the foreign Vcs who were willing to give the better valuation but he trusted the Indian VCs more. He was lucky to do the deal just before the internet meltdown and the dot com burst started. .He was wise enough to put the money in the fixed deposit rather then foolishly spending it in the fancy ads as was the norm then.

His faith in ICICI was justified as they never ever asked for revised valuation and did not hold back subsequent tranches inspite of worldwide crash and internet melt down.

Sanjeev with the money started expanding and began to invest in servers, technology, people, products, sales offices and began to focus on growing the business -- not just by spending but through better products and a feet-on-the-street approach. Around this time the IT meltdown began. That was in November 2000.

Then 9/11 happened and although Naukri continued to grow it was scary. There was a time when only two years of money was left. And then slowly the revenues caught up. Naukri made two years of losses and then broke even and made a one crore profit.

Naukri.com (the company is listed as Info Edge India Ltd on the Bombay Stock Exchange) is India's number one job portal. It is one of the few dotcom company to have a successful IPO. It has a turnover of Rs 1 80 crores and a market capitalization of more than 3000 crores.Almost 7 lakhs people have got the jobs through Naukri.com.

His advise for young entrepreneurs
-understand the risk and try to reduce it.
-keep de-risking at every opportunity

Article contributed by Shailja Chopra-She wins a Parker penset.Send your conribution to vivek@kamyabology.com

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