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| The lure of a start-up |
| Vanita Kohli-Khandekar / New Delhi Aug 07, 2010, 00:24 IST |
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Alok Kejriwal tells Vanita KoHli-khandekar why exits in the Internet business are tough.
Alok Kejriwal, 40, could pass off as a goofy garage-style entrepreneur, except for his eyes. They are light and sharp. Within 15 minutes of meeting him, you know you are dealing with a charming but canny Marwari. Little wonder, then, that of the scores of Internet entrepreneurs in this country dying for an exit, he is one of the few who has managed one. The China operations of Mobile2Win, his third company, were bought out by The Walt Disney Company (China) and the India operations by Norwest Venture Partners in 2006, exactly three years after he had set up the company.
Kejriwal and his partners made $3-4 million on that deal. For someone who started life manufacturing socks for a living, that is not a bad situation to be in. “I am a Marwari baniya, I only know how to make money,” he says. It is the first of his many quotable quotes, which make the interview hugely entertaining. This man knows how say the right things to the right person. No wonder he’s got ICICI Ventures and Nexus India, among several others, to put money in his ventures.
A way with words, however, doesn’t seem to have taken Kejriwal very far in his other businesses. Mobile2Win is the only deal he made money on. He still holds stakes in his other three ventures — Contests2Win (50 per cent), Media2Win (50 per cent) and the latest one, Games2Win (30 per cent). Why is he hanging on the first two, when Contests2Win is, in fact, more than a decade old?
“It is the curse of the Indian Internet space. There is no exit for small-and-medium-sized profitable businesses; there is no liquidity. You can only IPO or wait for a strategic investor,” he says.
It is a sentiment that resonates among scores of media entrepreneurs who run successful, profitable firms which cater to small markets. In the Internet space this is probably true of business-to-business firms. In mass media, local newspapers and standalone television channels are the ones most difficult to exit. Mid-Day’s owners finally found an exit by swapping shares with a larger company. Kejriwal points to Rediff and Naukri, very small firms when they IPOed.
For a man who says he loves the whole chaos of setting up a new business, does it matter? The other exits will just bring more money. Why would he need it?
Kejriwal was born rich. He lives in his grandmother’s posh Peddar Road flat in south Mumbai, along with his family. With two daughters, aged 14 and 10, the need for space, however, is becoming more pressing. So the family will move out of nani’s house. But for Kejriwal and his daughters, only a south Mumbai flat, ideally on Peddar Road, would work. That requires an investment of upwards of Rs 10 crore. That is why he wants more money. “My fantasy,” he laughs, “is that someone calls me and says he wants to buy me.”
Assuming the fantasy comes true, the three companies that Kejriwal values at a total of $50 million are sold and he buys a flat, what would he do next? “Set up another venture,” says Kejriwal without a pause. What about a big holiday? His idea of a holiday is going to large cities — New York, San Francisco, Los Angeles — and just roaming the streets. That doesn’t take much money.
“Entrepreneurship is my leisure. I love the chaos, the trouble that goes into setting up a new venture — that for me is the turn on. The moment a company becomes largish and there is HR and processes to be dealt with, I get uncomfortable. I like to know the names of all my employees.”
And now that Kejriwal has done four startups, the formula is pretty simple. Half the effort of a startup is the sheer physical labour of doing it, setting up the company, getting investors, and so on. But the adventure is in understanding the industry. So, when he moved from contests to media to mobile, Kejriwal was spending a lot of the fun time on figuring out how these businesses worked.
Does he miss the socks? “I loved working there, I just hated the way it was run,” he says. Also the whole hierarchical Marwari way of running the business along with family did not work for him. His soul was thirsty for some adventure on the internet. With his father’s blessings and to his family’s horror he left the family business. His point is that the Marwaris came from Rajasthan and built businesses by trading and manufacturing jute or cotton or something else. “The cotton and jute businesses of today are on the Internet,” he says.
So which is the best company on the Internet? “Google. Sergey (Brin) and Larry (Page) are my Ram and Krishna,” says he. Another quotable quote.
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