Have you ever been criticized for day dreaming or for thinking and acting differently from others? If so it’s a good thing and you can become successful in life says Sanjeev Bikhchandani!
While addressing a seminar at IIMA (Ahmedabad) Mr. Sanjeev Bikhchandani asked the audience, “How many of you daydream?” He surveyed the sea of faces staring back at him and noted that only seven or eight students had raised their hands. To the audiences’ great surprise, he told them that he loved to day dream! He told them that when he was ten years old, he had dreamt of a world of arc lights and the world of Rajesh Khanna, when he was eleven years old, he had envisioned a fast-paced cricketing career like that of Mr. Sunil Gavaskar and when he was twelve years old, he had aspired to be an entrepreneur. On hearing this, many people became relieved (of the fear of what others may say if they knew that that particular person was a day dreamer) and started cheering and clapping loudly.
Sanjeev Bikhchandani opinion on ‘vision’ for companies
Sanjeev does not believe in having a vision for a startup. He believes that vision is often too big a word attached to entrepreneurs. “When we launched Naukri, we had no vision. We simply said that if we can get 1,000 companies a month to pay Rs 500 to this one-dollar startup, that’s 60 lakh a year. It looked like a nifty idea! Three years after launching Naukri was when I got my vision.” He firmly believes that the vision of a company is something that evolves along the way and can never be defined at the beginning. He also believes that vision is not one of the factors that determines the success of a company. According to him, whether or not a company succeeds depends on how well the company markets and sells its ideas or product. Unlike most people who cannot talk about their career without criticizing their school or college, Sanjeev is thankful to his college from where he learned more than 10,000 things. “You are taught 10,000 things and you don’t know what you will use. But the point is that you are taught to critically analyze and understand why what is happening is happening” he said.
Sanjeev Bikhchandani advice to his listeners
One of Sanjeev’s most important advice to his listeners is, “Understand the value of money. Spend every rupee sensibly.” He says that identifying the right opportunities is 60% of the success. “If the customer doesn’t need your product, sales will be difficult, and you’ll typically not break even or be viable in the future” he said. He says that being an innovator and not a copier of ideas is one of the key ingredients to success. He also said it is not at all bad for a company to start small because the smaller the venture, the smaller will be the failure (if at all), which will not impact one much whereas starting big with too many risks will definitely pose a big risk of failure and will severely impact the person in the case of a failure. He says that companies should start with a small idea, experiment with it and develop it further in case it is successful. He also said that the people who work with you at the beginning, when you have little money are the people who firmly believe in the idea or the product. “You have to sell them your idea. After a few years, you’ll call it a vision” and last but not the least of his advises is, “Be the kind of person whom people want to work with”. He was met with deafening applause from the crowd, whose questions and remarks at the end of the session suggested that a significant number of them felt more confident about carving out a niche for themselves.
After graduating from IIMA, Sanjeev was sure of his goal. He joined the Horlicks Company and he had survived through the bureaucratic systems, top-down decision making and intense competition from colleagues. Once he was called upon to test a design change on short notice, Sanjeev braved a hot, dusty journey in an overnight bus from Chennai to Madurai. He did not know a word in Tamil and was quite sure that he would be murdered if he spoke in Hindi. “It was November 1989, I didn’t know a word of Tamil and I’d have been murdered if I’d spoken Hindi,” he recalled vividly. On interacting with the customers about whether they liked the new design of the Horlicks container, they curtly said, “Go back and reduce the price! Did you come all the way from Delhi to ask us such stupid questions?” It was then that he realized the futility of the sales function. He decided that the rat race wasn’t for him: “I just didn’t want this life” he said.
His life at IIMA
After resigning from the Horlicks Company, he briefly went back to Ahmedabad and met some of his ex- classmates to whom he said, “We were all a bunch of misfits.” Most of the students’ knowledge was bookish and their only ‘salvation’ was to study hard to become so called successful in life. They had all lacked outside world exposure. One of his ex- classmates, Arvind Sahay, had become a professor in the same college and deeply appreciated Sanjeev for having a different bent of mind. Professor Arvind Sahay recalls how Sanjeev had always wanted to create something new. “What makes him an entrepreneur is his sense of curiosity” he said. He highlighted Sanjeev’s knack for observing customer needs upfront. As a result, his company was not built on technology but on solid customer insight.
His first experience in marketing and his ideas on developing a startup
When he was doing his first project at IIMA, he escorted the people of Placement Committee at IIMA from dorm to dorm, brought them tea and coffee and took them out for lunch. He then noticed an interesting phenomenon: competing companies would latch on to a candidate with an offer and they would drop the offer if the candidate did not accept it immediately. “This was my first product idea. If companies can come to blows over recruiting bright talent, and if someone were to do a salary survey of what companies are offering fresh MBAs, that report would sell like hot cakes,” Sanjeev explained. Sanjeev is of the opinion that entrepreneurs should base their ideas on customers’ insights so that their chances of success are high. “Solving an unsolved problem increases the chances that you’ll get a hot product. If you hit a hot market, people will want to buy your products and you won’t have to sell – that’s a great position to be in.” he explained.
Sanjeev like most people found running a startup very uncomfortable, difficult and tiring at the beginning. “If you dream of a work-life balance, don’t start a startup. It’s a 24/7 job, you have to obsess over it” he said. He found it difficult in the beginning because he had to sacrifice getting a regular paycheck from the company he worked for (Horlicks), he had to get used to living on his wife’s salary, he had to address the financial crisis of his family when his wife left her job in 1995 by undertaking multiple jobs like newspaper journalism or teaching at primary schools and last but certainly not the least, he and his wife had to sacrifice their dream of sending their children to good nursery schools and staying in a luxurious apartment complex. “You don’t necessarily feel the pain once you’re making the sacrifice, but in the long-term, it has an impact” he said. Ideating on how to solve an unsolved problem is all fine, but how did he drive himself to actually do it? How did he take the plunge when his friends are landing corporate jobs and earning twice, maybe even thrice as much as you are? Where does the motivation come from? To these questions Sanjeev answered that an entrepreneur does not follow the rat race but creates his own track. “I was really afraid for the first two years. It took courage to leave my job. I was attached to my pay check. I was still afraid for two years after leaving – it took me those two years to get used to living off my wife’s salary” he said. When he started ‘Naukri.com’ he set aside all glamour and concentrated his efforts on saving money and spending it wisely. He is of the opinion (unlike the common belief) that entrepreneurs should be ‘risk averse’ in order to succeed. He says that this quality makes the difference between a successful entrepreneur and a failure. He is also of the opinion that Entrepreneurs do not need venture capital to succeed. Giants like Infosys and Reliance did not start out with venture capital. In fact, there was no concept of venture capital in the 1990s, but companies were still built. “Your customer’s money is always better than an investor’s money. If you get your customers’ money repeatedly and make a positive margin, it means you probably have a viable business but if you get investors’ money, it’s not guaranteed that you will get customers’ money as a result” he said. Sanjeev always ensured that his products looked appealing to the customer and earned returns. Many companies are of the opinion that advertising builds a brand and spend a significant percentage of their profit on advertising. However, Sanjeev believes that focusing mainly on the product and customer experience will be more than sufficient to succeed and win over the competition.