Vinayak Joglekar was employed as an EDP (Electronic Data Processing) manager at Alfa Laval in the eighties, when he caught the entrepreneurial bug. Being a risk-averse manager from IIM Cal, he applied his first lean principle, by not quitting his job, but hiring an employee at Rs. 500 per month, to find out if people were ready to pay for Data. After a thousand rupees worth of salary, he realized that they were. So he dived into the entrepreneurial jungle in 1983 \u2013 with his first company \u2013 Informex \u2013 to sell information \u2013 to whoever wanted it!<\/p>\n\n\n\n
Informex found that low hanging fruit at that time was in giving companies information about prospective employees. Informex was probably the first Placement agency in Pune. The company started off by charging Rs. 5 per address supplied, supplemented it by charging people Rs. 15 to regiser. Still not making ends meet, they tried increasing candidate fees to Rs. 25. Faced a lot of resistance \u2013 and decided to charge a higher amount from the company. The next revenue model was to charge 25% of the first month\u2019s salary \u2013 which again saw the company making losses \u2013 and finally over the years settled down to the 8.33% of CTC \u2013 that has been the norm now for decades. A very interesting insight into how revenue models stabilize over time!<\/p>\n\n\n\n
But I think, we are putting the cart before the horse. Because we need to realize that Informex was not just a placement agency \u2013 thanks to Vinayak\u2019s EDP background \u2013 it was a computerized placement agency. Vinayak was quite emotionally attached to the micro-computer that Alfa Laval had \u2013 and he decided that the USP for Informex was that all information was computerized. So he contacted the sellers \u2013 PSI Data \u2013 and found that it cost an astronomical sum of Rs. 150,000 in those times. Having not more than 10% of that in his pocket, he approached IDBI head office in Mumbai for financing this purchase. They did \u2013 and he was in business!<\/p>\n\n\n\n
With computers being assets which were so highly prized (or should we say priced) \u2013 there was a good market for renting them. So that became Informex\u2019 second revenue stream \u2013 renting them out for a 100 bucks an hour. People would come and work late nights on the machine. Vinayak\u2019s previous employer \u2013 Alfa laval \u2013 pitched in with a data entry contract to Informex \u2013 and thanks to all of these \u2013 the IDBI loan got repaid!<\/p>\n\n\n\n
Having a computer available, meant that Vinayak could also indulge in his hobby of coding. PSI \u2013 the computer company that sold him the machine \u2013 knew of this. They started sending him assignments from other companies that had purchased their machines. So this led to an additional cash flow channel.<\/p>\n\n\n\n
In the meantime, the HR business continued \u2013 being handled by Vinayak\u2019s wife. Amongst that business\u2019 dubious claim to fame \u2013 is to have turned back NRN Murthy of Infy as a client. When NRN first came to meet Vinayak, the shirt was half tucked in, there was chalk powder on his hands – he resembled a school teacher much more than an IT entrepreneur. The Infy office in Pune was NRN\u2019s house \u2013 where the company name was printed using alphabet stickers which came gratis with VIP suitcases. Alas, Vinayak in his wisdom, decided that placing people with Infy may cause him trouble later!<\/p>\n\n\n\n
In the nineties, his placement company started receiving requests from US based companies for people to work on projects in the US. This was what was the first phase of India\u2019s IT exports \u2013 body shopping. There was a requirement of Java professionals \u2013 and a shortage at that time. Vinayak, the opportunity spotter as always, took a month to pick up Java skills \u2013 and started training people to acquire Sun certification. Quite a few of his trainees landed up in the US within a few months of doing his course. This was circa 1999 \u2013 and the requirement was for mostly Y2K projects.<\/p>\n\n\n\n
Unfortunately for Vinayak, by the time Y2K+1 came, most of his trainees were back in India \u2013 as projects dried up totally. Vinayak invited them to \u2018free\u2019-lance with him (pun – he did not pay them any salary) and decided to use his bench to get working on developing cross enterprise performance management dashboard. Realising that this was a blockbuster project \u2013 requiring good capital \u2013 he started doing rounds of VCs. Each VC would ask him about whether his product could support the latest fad \u2013 buzz. And every time Vinayak would say off course \u2013 and then rush back to incorporate that into his software. In hindsight, one of his biggest mistakes. The project, as a result, was quite patchy \u2013 and even though he did get funded for half a million dollars \u2013 it was not enough.<\/p>\n\n\n\n
But remember our old friend \u2013 Opportunity. It knocked again, and as always Vinayak kept his doors open. The VCs gave up on his product \u2013 but told him \u2013 why don\u2019t you work on the products that our other portfolio companies are working on. Through his career Vinayak\u2019s linkages with his IIT Bombay alumni seem to have helped him much more than his friends from IIM Calcutta. Synerzip\u2019s first potential customer had come visiting from the US, and had wanted to drop into its office to chat up with the team. The problem then was that there was no office \u2013 and no team. Vinayak managed to convince his bum-chums from IIT Bombay \u2013 Gireendra Kasmalkar, who heads SQS India today, was one of them \u2013 to enact the roles of the team. An office was \u2018sourced\u2019 from a neighbour who was a builder with a semi-finished building which had a furnished office. Rehearsals were held at a restaurant for the team \u2013 and voila, the customer went away impressed enough to give Synerzip its first client! Today, it has grown to a 400 strong team \u2013 focused on just product development. It counts companies like Google as its customers \u2013 having developed Quick Office for Google.<\/p>\n\n\n\n
The only asset that an IT company has is people. A culture of trust has been something that has differentiated Synerzip. There are no attendance and leave norms at the company. That has led to a happy non-politicised atmosphere \u2013 which has led to very low attrition rates (about 8%). Happy people means happy customers. Happy customers mean more references. In fact Synerzip\u2019s simple measure of quality is \u2013 are our customers referenceable. They try to do whatever is humanly (I thought humanely would fit better over here J) possible to ensure that customers say good things about the company.<\/p>\n\n\n\n
And what does the future hold for Vinayak? With a gleam in his eye \u2013 he looks at the likes of Zomato \u2013 which have proven that Indian \u2018products\u2019 can succeed globally. However he is clear \u2013 it will not be under the Synerzip auspices. He is clear \u2013 you cannot have services and products under the same umbrella. The DNA just does not match! Vinayak\u2019s DNA has lean all over it. He now talks of \u2018lean\u2019 investments. Most VCs invest in business plans. Reality is that most business plans work only with version 2 and version 3. However an entrepreneur who has sold a story to a VC \u2013 and received funding for it \u2013 cannot go back to them \u2013 and confess that the story is not working. Vinayak\u2019s vision is to have investors who can work with entrepreneurs who are ready to learn from mistakes. The idea is to spend small sums on validating hypotheses. What we are trying to do is to test not just the presence of customer pain points, but whether they hurt enough. If a customer pays, build, if not write off.<\/p>\n","protected":false},"excerpt":{"rendered":"