Indian Harvard grads turning biz plans into success stories

Courtesy: Economic Times

Back in 2005, Ashwin Damera, a student at Harvard Business School (HBS), had a bright idea. What India’s booming e-commerce industry lacked, he believed, was a comprehensive travel portal. His idea won him second place in the classroom business plan contest; the winner of which was a proposed plus size lingerie company. He doesn’t think that one came through, but a year later Travelguru did, thanks partly to generous cheques from three unexpected investors - Damera’s own classmates. Meet Ankur Daga, one of Damera’s angel investors, and himself an entrepreneur. Fresh out of HBS he founded Angara, an online jewellery company that emerged from watching friends struggle with purchasing jewellery. Despite his family background in jewellery, Daga wasn’t expected to follow suit. “The question was always ‘You’re highly educated, shouldn’t you be working for a private equity or a consulting firm’ ?” he says. But Daga doesn’t feel deprived. “I’ve done the McKinsey stint; I wanted to start something on my own, and the earlier the better.” Daga and Damera aren’t the only ones to go against the grain. More and more Indian graduates from HBS are rocking the boat by ditching traditionally espoused careers on wall street or in consulting for entrepreneurship , ending up with cross-border businesses and bifurcated lives. They include people like Naveen Tewari (Class of 05), a McKinsey consultant who returned to India to start mKhoj, a mobile advertising network . “When I went in to HBS all I wanted to be was a partner in McKinsey . That disappeared in exactly three months,” he says. According to William Sahlman, Senior Associate Dean at HBS who teaches a second year course on Entrepreneurial Finance, after 10-15 years, almost 50% of graduates are involved in entrepreneurial settings. India has seen its share of successful HBS entrepreneurs from Ashish Dhawan of ChrysCapital to Avnish Bajaj and Suvir Sujan of Bazee (later gobbled by eBay). Lately, though, they are jumping into the water and getting their feet wet earlier, sometimes , while still in school. Kapil Vishwanathan’s was a case of campus entrepreneurship. He floated Pre-Media Global, a Chennai-based leading vendor providing content services to the US publishing industry , while still at HBS, along with his sister Kami, also an HBS alum. He’s wanted to become entrepreneur as long as he can remember. “It had to be a cross-border enterprise . It was just a question of when,” he says. He even tried to support other young business leaders pursue their entrepreneurial dreams by starting the Entrepreneurship Club at HBS. “Of course, the investing and banking clubs were larger,” he jokes. Entrepreneurship has never been more in vogue than now. Paresh Vaish, a partner with Boston Consulting group and HBS Class of ‘86, says, “The top quartile of the class got jobs in investment banking and the rest aimed for corporate jobs.” Since his time, the number of electives in entrepreneurship has gone from three to 20, and number of dedicated faculty from five to 32, the largest faculty contingent focused on entrepreneurship at any business school in the world. “In the 70s, 80s and even the 90s, HBS was all about propelling you the quickest to make partner in McKinsey or Goldman Sachs. It’s no longer the case,” says Sumeet Narang, batch of 06, who rejected an offer from Goldman to start Samara Capital, an India-focused private equity firm. For Narang, this was his second management degree; he’s also an alumnus of IIM Lucknow. His second stab at it was largely driven by the fact that HBS offers one of the most “international and diverse candidature among business schools” . With a history in private equity and investment banking in his six-year career with Citibank, Narang says the tug to turn entrepreneur was always there, but HBS intensified it. Like Narang’s , many of these startups were based on business plan entries in the second year business plan contest. Georgia-born , Gujarat-raised Abhi Shah, founder of Clutch — voted top Legal Process Outsourcing (LPO) company from among 80 LPOs worldwide — says he and a classmate came up with 38 different business ideas during Think Week, a concept they borrowed from Bill Gates. A part of the plan generating process was to have them be thrown out the window. Anshul Arora (MBA 04) followed neither of the two plans he submitted for the contest. Instead, with an “atypical” career at McKinsey with exposure in developmental work, Arora pursued his dream of a business with a “clear social mandate and a commercial motive” . The result was Edvance Learning, an inventive education model that spots gaps in the education and training landscape, and designs products to fill the lacuna. For Arora the choice was between Harvard and Stanford which, he says, also has a great entrepreneurial flavour to it, along with physical proximity to Silicon Valley, the birthplace of aggressive entrepreneurship. A key Harvard advantage, he says, lay in its international leaning. “HBS with its general management perspective naturally has a strength in entrepreneurship vis-à-vis business schools like Wharton or Stanford that have strengths in finance and strategy ,” says Ashish Singh, MD Bain Consulting and HBS alum. Another trump card for the school, according to Tewari, is its famed case study methodology. “The case study method means there is no structure and no formula. Life is like that. You’ll never get a situation that is a replica of what you learn,” he says. Every week, he recalls, the class was introduced to the case of a thriving entrepreneur, ranging from Narayana Murthy (Infosys) to Jeff Taylor (Monster) and Andrew Viterbi (Qualcomm). “I began to realise that I could be just like them and it didn’t involve rocket science,” he says. That’s a sentiment everyone felt at some point in the course of two years , says Daga: “In a class of 900, at least 200 think seriously about entrepreneurship .” Those that do act upon it have a common starting point — the HBS alumni network — deemed one of the world’s most powerful networks with over 70,000 members. “The best part about graduating from HBS is that you can get a meeting with anyone at anytime. And as an entrepreneur that’s the hardest part,” says Daga. “We have more than a 20% share of the global venture capital business with examples like John Doerr at Kleiner Perkins and Tim Draper at Draper Fisher Jurvetson. That kind of network is hard to replicate ,” says Sahlman. A significant part of mKhoj’s $7 million Series A investment was landed through the HBS connection. “There is immediately a connection and the first question is, ‘Which section are you from’ ?” says Tewari. In fact, HBS has made such a success out of institutionalising its network that Vishwanathan didn’t require an investment banker when he raised $18 million for PreMedia ; he knew exactly who to call. For Shah, on the other hand, the HBS advantage wasn’t just about fund-raising . Having built a political advocacy group for the Indian American community with 65,000 members , and a successful summer internship with Jerry Rao at Mphasis, meant his network of influence was fairly extensive and with deep pockets. “For me the choice was going the Bobby Jindal way or coming to India and making an impact as an entrepreneur ,” he jokes. Where the HBS connection did come to play was in his endeavour to recruit the best and the brightest. “It’s the credibility that comes from a school with pedigree,” he says.
Opening doors If there is one thing the school doesn’t provide, it is in first-hand startup operational exposure, but that is acquired by candidates over their summer internships, typically spent shadowing first generation entrepreneurs. When Damera was torn between BoozAllen, London and assisting the CEO at Jet Blue in New York, he chose the latter. “I realised I want to be this guy, taking all the decisions,” he says. Daga got a bird’s eye view of mining operations, manufacturing and wholesale when he interned with the CEO of Rosy Blu. The CEO promised he would be the first investor in Daga’s venture, and Rosy Blu emerged the largest of four. There’s something also to be said of affluent classmates. Narang wangled a $1000 cheque from a classmate as well as the use of his father’s office in New York for the few months before setting up office in Mumbai. Daga himself “successfully” invested in more than one friend’s venture; in some cases followon rounds have come from top-tier VCs or have received substantial offers for acquisition. And where chequebooks didn’t count, the collective intellect in the classroom certainly did. Vishwanathan recalls a classmate who, at 26, sold his first company — an auction site — to eBay for 75 million and he wasn’t the exception. “It really helps to have a peer group with such varied perspectives. HBS is very focused on that in its selection process,” says Nandu Madhava (Class of 06), who himself deferred a job with Goldman Sachs after his undergraduate degree to volunteer with the Peace Corps in the Dominican Republic as a medical and teaching assistant . He saw the transformation in the city of Bangalore while on a vacation and chose it to launch mDhil, a medicare information portal. Sometimes, as those same classmates start giving in to the trappings of a job in consulting and i-banking, even the bravest of resolves waver. Vishwanathan recalls hanging out in shorts and loafers while friends attended recruitment day. “When they were talking about their signing bonuses, it wasn’t always easy,” he says. Most graduates exit HBS with substantial debt and the economics of rejecting a $175,000 job with a $50,000 debt doesn’t always work out. People like Shah chose to skip recruitment entirely so that he “wouldn’t have a back-up to tempt him to cop out”. Rahul Aggarwal, class of 05 and ex-Bayers , did the same because his heart was in returning to India. He started Red Earth, a hospitality company that turns around underperforming assets and converts them into branded two and three star properties . According to Madhava, this trend of US-raised HBS grads of Indian origin coming to India to start ventures coincides with macro factors. “Our year (2004) was the tipping point. Not only has the number of students coming directly from India gone up but the HBS India research center has come to life bringing richer case studies to the school and world class executive education to India,” says Arora. Still, with all the conviction they had, some say there was nothing that prepared them for start-up growing pains. The hit they have to take on their lifestyles often comes as a shock. “Conceptually one knows what entrepreneurship is about, but living it is a whole different ballgame,” says Daga. Shah recalls how his first employee landed up in the emergency room before finalising his contract and his first client passed away one day before signing the contract. He’s not especially unhappy to have to take a hit in lifestyle — flying economy and taking rickshaws is not a problem, maybe because he understands he may not have to do that for long, given his ambitions to take Clutch public for a billion dollars in five years. And if that doesn’t go according to plan, he says Harvard is the best insurance policy you can get. “I know that at the end of the day if I don’t succeed, I’ll get a $200,000 job,” says Damera, who admits that it might just be thanks to the safety net of HBS that he took the leap. Luckily, nobody believes they’ll ever need it. “Harvard forces you to think big, which unfortunately is not part of the Indian middle class mentality. You just realise that just working for a large company is not making full use of your resources,” says Tewari. Madhava believes that the most important lesson learnt at HBS is not how to cope with failure but a strong moral code. He recalls how an entrepreneurial professor once told him - “You’re so fortunate to be at Harvard, the only thing that you can ever do to jeopardize your future is something unethical or illegal”. Those futures are being written. For most going back to consulting or banking would be like trying to fit a square peg into a round hole. “I think most of my section wishes they had done what I had done,” says Daga. For Tewari nothing could top being summoned to the entrepreneurship class of 2020 as a case in point.