Atul Nishar is a CA by qualification. He started a corporate career advising people how to run their businesses. That’s when he realised that he could practice what he had been preaching. His first venture was started along with his job – Apple Leasing. He quit when the venture started doing well – but was not happy to limit himself to just leasing. He started exploring business ideas. Market scanning is done not just to explore what is happening outside, but also what is happening inside. One has to be sure of one’s own aptitude. If you don’t explore options – how would you know what excites you?
Atul visited Baroda to check out a plastics moulding unit. Did not think he would enjoy it. Computers seemed Ok. At that time in the software arena, companies who operated in the domestic Indian market were not earning too much. Hardware in India then was basically screwdriver technology (The same is largely true even today.) So by the process of elimination, education was arrived at. Computer education was tiny in terms of potential. If you do something that you enjoy doing, you will do well.
A visit to then existing institutes revealed student unfriendly practices. Students wrote code and submitted to instructors, who typed it for them into the computers. So in early 1985, Apple Computer Education was birthed. It had to be rebaptized soon as the US sibling was not too happy with the brand. So Apple computer became Aptech. The leasing and computer entities were merged – and Aptech came out with a public issue.
The idea for further exploration into the IT space came for a consultant who approached Atul to become a co-sponsor for an IT company. Atul was thrilled by the idea of opening up offices in the UK and the US. Giving back to the West was a matter of pride. The industry was a measly 100 m $ industry at that point, but Atul decided to take the plunge. No calculations were done – and Hexaware was jumpstarted in 1990.
Success starts with hunger. Atul has always been obsessed with scale. He believes that there is nothing which is small, beautiful and profitable. The two pillars on which scale stands are strategy and people. Professional management was roped in from day 1. The top team was sold Atul’s vision of growth. And were promised power, freedom and financial benefits. Apple being a listed company also must have helped.
His leadership recruitment mantra is to look for passion, energy, and enthusiasm. Experience is overrated. You are not hiring a resume – you are hiring a person. While building any long term relationship, differences will exist. How you handle these differences is important – it should be in a fair manner. Strong accountability and review systems help in having good relationships. If you are a lone promoter, don’t be lonely – discuss problems with your top team honestly. As a promoter you need to be generous – you need to share the wealth. At Hexaware the liberal stock option plan helped.
Atul is neither an engineer, nor tech savvy, and can’t code. His tech team loved him because he would never venture to a client meet without a good techie along with him. They also loved him because he respected them – they had to teach and guide him. Atul was willing to listen, observe, learn and party with his team. He believed that real solutions to problems always involve process changes because this attacks the root cause.
Strategy for Atul is a trial and error story. At Aptech, exponential growth happened when they realised that franchising can make them capitalise on opportunity much faster. This franchising strategy led Aptech to grow to 2000 centers in 50 countries in 5 years. In hindsight, given the narrow windows that exist in most businesses, it makes sense to derisk by franchising. Benchmarking with the best in class on each parameter – gross margin, growth, employee turnover etc helps growth. It ensures that your company continues to be aspirational. Even if you are small, you should compare with the biggest and best in industry. You need to be global. And when you move to a different market, you have to understand its different dynamic. For example, market leadership was attained in China when a decision was taken to have a JV with the government in China – the primary business owner there.
For Hexaware strategy was to get into multi-micro-niche segments. The idea was to become big fish in relatively small ponds. ERP was an upcoming area then. But unlike the rest of its peers, Hexaware did not get into SAP, focussing instead on the little known PeopleSoft. Lots of Fortune 500 companies came onboard as a result. Barring TCS, in 1990 there were a lot of small companies. Potential was equal for all. Selection of the CEO was not so good at the start. Only from 2001 onwards was Atul satisfied with the leadership quality. In hindsight, Atul feels if he had been more aggressive in sales, business promotion and setting up sales offices – growth would have been higher.
Being a listed company, Atul had to become adept at investor management. Most of his shareholders were institutional investors and mutual funds. Managing their expectations is important. Winning confidence and trust happens when you deliver. Make your investors earn, and you will get ample money. One word of advice from Atul to new entrepreneurs – plan for raising money 2 years in advance. Unlike listed companies, the startups have to manage expectations of angels and venture capitalists – but the principles discussed above remain the same.
Where is the computer education business today? After the initial heydays, the formal sector started offering computer education – so the private education market was shrinking. The business as we knew it, is gone. No new Aptech or NIIT can come in now. The opportunity available is only in digital. Absolutely no classroom training. Online can be skill based – AI, Robotics etc.
2001 saw a major global slowdown. Aptech and Hexaware were both going through crises. Atul saw more potential in software than education – so decided to focus on Hexaware by divesting Aptech in 2003. Leaving after nurturing the company for 17 years was a painful decision, but attachment should not be to such an extent, that you don’t think logically. He had a similar pessimistic forecast for the leasing business a few years earlier – and had exited the NBFC business. Should have exited finance business earlier – would have helped focus on Aptech.
The divestiture helped get focus on Hexaware – and it grew 5 times in 5 years – from 50 to 250 m $. As the years went by, Atul wanted to slow down his hectic business life. Also derisk his family wealth. The Hexaware stake was sold to Baring private equity – but Atul continues as chairman. The company has done even better after he left.
So what is Atul up to nowadays? He has cofounded Azent, with his daughter Priyanka. She is a Harvard MBA who went on to work at the NYU admissions department. She felt that there was good scope to counsel students going abroad. Can a business like Azent scale fast? The current year is a major setback in that business. Atul doesn’t know how Azent’s future looks like. The same grayness was there even when he started Aptech. But if executed well, opportunities will open up. He has a conviction that if Azent focuses on growth, it will grow bigger. Doesn’t know how and when. But the future is definitely online. Devangi, his other daughter, is also online – where she runs Ada Fashion.
Atul has no plans to retire. His family office keeps him busy, evaluating investments. His focus in investments is the digital space. Decisions to invest are based on talent of management team. There has to be a team – no one man armies for Atul. Also the idea has to be scalable. And he has to be assured of the integrity of promoters. If you think you have the idea, Atul can be your investor-mentor.