Genesis of Directi
It was in 1989 that I was in my sixth grade and I fell in love at first sight with computers at my school in Bandra, Mumbai. I still remember trying to spend as much time as possible on it – lunch breaks, after school hours, and so on. By tenth grade, I spent hours together on the programs available back then for building software, writing code, etc – simply because I loved it. It is since then that I had it in my mind that I needed to do something in my life around computers. Thanks to my Dad, I had read a lot of biographies and I knew that I had to do a business on my own.
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| Bhavin Turakhai, Directi |
That said, it was around 1994-96 that India started witnessing the internet revolution, with BSNL giving out TCP/IP, Shell accounts, etc. I got a connection for my home PC and tried out couple of different businesses side by side – assisting with network setup, hardware assembling, buying and selling computers, and so on.
In 1997 I booked the domain Directi.com and I started building a job board similar to what Naukri or Monster is today. I had tried to build software at that point of time which does artificial intelligence job such as matching employers & employees. However, as it turns out, this concept back then was way ahead of its time. With only 30-35 thousand people connected on the web in India, there were no buyers for such software. By 1998, I and my brother (who had just joined me in the venture) realized that this concept is not going to work out and that we needed something so fundamental that people will want to buy it today. So in November 1998, bought my first server in US and started providing the most fundamental web services. To be clearer, we were the one stop shop for any company which wanted to set up anything on the internet (email, website, shopping cart, and so on).
We borrowed 25 Thousand rupees from Dad. We started our business operations from a residential property, owned by Dad, which was not being used at that point in time. Within a couple of months itself you know I made enough, we sold 40 times in the first months a more in the next month we made enough money to pay back the loan. This business was well accepted and our first year turnover was around 4 Lack rupees. This was the start of Directi.
How did you see through the dot-com bubble burst?
The dot-com bubble burst happened two and half years after we had set up Directi. By then, we had clienteles in two main categories. One was the corporate organizations who wanted to set up portals for their employees, emailing, etc. The second category consisted of all those portals, which spent extravagant amount of money on useless things to catch more eyeballs. Luckily, we had fair share of the first category of clients in the growth phase i.e. around 1999-2000. The fact that these clients were growing rapidly in the dot-com boom helped us in making reasonable amount of sales and revenue, because they were in need of the software services and products that only few of us had to offer. By the time things started fall out, we already had a significant client based that wasn’t dependent on dot-com boom per say for revenue. So there was a marginal impact during that phase nothing that would damage us in any manner.
If you look at the dot-com burst there was no tangible business model behind these businesses that went burst. There was no value being provided by them per se. I strongly believe, the simple formula that gets businesses through rough patches is that the amount of value that your product or service is providing to the consumer should be greater than the amount of revenue you expect from the consumer.
How was it like to start your own business at an early age?
Like most parents in India, my parents too were worried about me securing my future in terms of academics, career, etc. Academically, I had always been a bright student from the beginning. The expectations were that I would do engineering. I switched gear after 12th grade and decided to drop out of engineering. I subsequently, on my parents’ insistence, picked up a commerce degree, while setting up my company. They had been critical about my decision, and my Dad never failed to speak out his opinion, that was in the lines of I should finish my academics and then go ahead with this plan of doing my own business.
The thing about them is that despite the fact they didn’t agree with my decision, they never failed to support it. Like I mentioned earlier, my dad provided me with the initial office space and capital, besides many other things.
My argument was that the earlier you start up a business, the risk remains lower because the worst case scenario is if you don’t succeed you are still young enough to finish your academics. I saw a lot of people getting stuck in this rut of getting a job and getting settled. This whole concept of getting settled is quiet in contrast of being an entrepreneur – an entrepreneur is never settled, he always tries to find some new challenge.
What were the mistakes that you learnt a lot from?
There have been several mistakes, and those have been at different stages. The early stage one for me was not looking beyond the credit and collections problem. We used to spend 30 to 40% time collect money from clients who already owe to us. This was a ridiculous! So we took a decision that we will just reverse the entire process. We decided to collect money in advance, and this did bring about the loss of 20 percent clients, but this was a risk we were willing to take.
The other thing, which is not a mistake, but more of a learning experience, is that as the numbers of people in your business grow in size, in the likes of 30-60, you owe them an office space. When everybody is on the same floor, they bump into each other at the cafeteria, water cooler, and so on – they end up sharing time, information, and knowledge. This information automatically gets circulated across the organization, without having to put in any efforts.
The moment you are a 500 people company, it is a completely different ball game. The environment does not remain the same, and you have to put into place processes to maintain the same culture, the openness, the transparency, to ensure that everybody has the right information to take the right decisions.
What is the one thing that any aspiring entrepreneur should avoid when starting up?
As an entrepreneur running a growing business, there is a need felt for bringing in more people. Over a period of time, entrepreneurs start compromising on the quality of hires, and that is when the growth stops or slows down because the entrepreneur spends all the time sitting and managing people.
You need to make sure that you hire the best people, so that the growth never stops. If you have even the slightest of doubt of him/her being the best, do not hire the person.
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written by camera, March 18, 2011
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