A serial entrepreneur in India is someone who tries to build many companies at one go and, in the process, gets his fingers burnt badly. K Ganesh is an exception, having built and exited many companies successfully over the past two decades. Even with so much success, Ganesh is modest. ?I am an accidental entrepreneur. If you can do it for someone else, why can?t you do it for yourself?? he asks.
Our lunch meeting with Ganesh, arranged at the Leela Palace, Bangalore, starts bang on time. We settle into a space just outside the main restaurant, hoping to take advantage of the balmy weather. ?Shall we start with a soup?? he asks, looking up at us and then proceeding to kickstart our two-hour long conversation.
Ganesh had indulged himself successfully in four greenfield ventures and exited all, and is today steering another four including Bigbasket.com and Portea Medical. The four companies he promoted?TutorVista included?had a total exit valuation of $300 million. Quite an awesome record.
We wonder how he manages to turn his ventures into winning propositions, at a time when there is a 95% probability of failure in the start-up world. The line between success and failure is very thin, he says. ?We have come close to being bankrupt, were bereft of ideas and struggled to make the business model work. That is true of most of entrepreneurship journeys. With experience and trial-by-fire, we have become slightly smarter,? he says, as we walk to pick up plates for the buffet lunch.
There is method to his madness, he says with a grin. Specific processes and a certain philosophy are adhered to while finding companies for exponential growth. ?More than investing in companies, we promote them. We write the business plan, fund it, get the core team together and take it quickly to Series A institutional funding. This is a parallel entrepreneurship model wherein I am not running one company. This is not spray-and-pray angel investment,? he says.
We settle down. Ganesh is a vegetarian but looks quite happy to watch us tuck into some non-vegetarian delights. ?I am a Tamil Brahmin brought up in central government quarters in Delhi. I have worked with Tata Motors and HCL. I was comfortable with corporate life. But I could see how people like HCL?s Shiv Nadar did their business in corporate life from close quarters. I picked up quite a bit from people like him and Sunil Bharti Mittal, with whom I have had a close association in my career,? says Ganesh, who is a post-graduate from IIM, Calcutta, and also has a degree in mechanical engineering.
Ganesh?s last venture, TutorVista, an online educational services platform, was acquired by education leader Pearson for $213 million (R1,000 crore). His data analytics BPO firm Marketics, which he ran till 2007, was acquired by NYSE-listed WNS for $63 million. CustomerAsset, which was started in mid-2000, was later acquired by ICICI Bank and is now publicly listed in India as First Source Solutions. In 1990, he founded his first company?IT&T, one of India?s top multi-vendor IT service and support companies?which was acquired by iGate in 2003.
We move on to the main course and decide to have some noodles. Ganesh continues to enjoy his vegetarian fare, this time polishing off a plate of curd rice.
?I do not like to venture into overcrowded sectors,? he says. Ganesh takes a good look at whether he will be able to contribute to the destiny of the company and whether it has got a fine chance of surviving before putting his money into it. ?You need to be much bigger than your nearest competitor and be a category leader. Thus you create a valuation that is multiple times your revenues,? says Ganesh of his success mantra.
Now a member of Board of Governors of IIM, Calcutta, Ganesh is currently promoting Portea Medical, a technology-led home healthcare service company, and BigBasket, which delivers groceries to consumers? homes. Portea Medical, which sends doctors at homes of the consumers, is the largest and is present in more than one city. The company, which does 18,000 visits a month, raised the largest amount of funding in the sector. BigBasket was started two-and-a-half years ago from scratch by Ganesh and today has a presence in three cities. It has also raised a million-dollar funding and is in the process of raising Series B funding according to Ganesh. He actively mentors, incubates and funds start-ups and is a strategic investor and promoter of several Indian consumer internet and e-commerce companies apart from his own ventures.
?When your margins are small, the business will be profitable only at large scales. In a service business, you might be profitable from day one. We have a clear scale in mind before we enter a particular category. After you enter, you could be left high and dry if you don?t know the limits. That is a mistake most entrepreneurs commit. They underestimate the cash required to reach a steady state,? Ganesh says.
Despite having cash to fund the companies he is promoting, Ganesh approaches venture capitalists to kickstart his new ventures. ?My money is always there. Twice in TutorVista?s history, I had to put in money to pay unsecured loans even after VC funding. To build great businesses what we need is not just money and a promoter-led business model, but also strong governance. A VC brings in the network, the sanity check, guidance and credibility. For instance, Sequoia helped us get the Pearson deal for TutorVista,? he explains.
Most of the companies that Ganesh invests in these days are not technology-driven despite his technical background. ?I am a generalist and all my businesses are governed more by opportunities. You need to have deep domain knowledge in tech-focused businesses and we don?t have any domain knowledge in any of the things we do,? admits Ganesh candidly, sipping his coffee.
Although Ganesh is emotional about the companies he promotes but that does not mean that he will be wedded to the companies he starts. ?Ownership and management are not necessarily the same,? he says, adding that it hurts to exit a firm. ?Last month when I went to TutorVista, I had to enter in the visitors? register. It hurt a bit. Then I looked at the fact that they paid $213 million and it did not hurt that much,? he says, laughing.
Ganesh says that most entrepreneurs must think through till the exit before starting out. ?You must not stumble upon an exit. Every entrepreneur will exit, either with his head held high or carried on a stretcher. It is always easy to enter but tough to exit and you need an exit strategy first. You can?t get emotionally attached to an idea and then not think it through.?