For S. Parthasarathy, founder, Nu Street Technologies Pvt. Ltd. (Nu Street), third time is indeed, lucky. He began his career with Wipro when it was a lesser known entity and it inspired him to start up his own company. And start up he did, not one company, but, two more that followed. In this interview with The Smart CEO, Parthasarathy talks of his experiences while establishing three different organisations with three distinct objectives.
When did the entrepreneurship bug bite you?
The time spent at Wipro was a big influence. I saw the company grow from a start up to a huge entity in the four years that I spent there. Also, Azim Premji had proved that a business could be successful yet clean. I had seen first hand, our team, walking out of deals as we refused to grease palms. And this inspired me to start up on my own and follow a similar value system.
Take us to the start – how did Computer Garage Pvt. Ltd. come about?
Using my personal capital, with some help from friends and family, two friends and I established Computer Garage Pvt. Ltd. The late 80’s saw the personal computer (PC) make a big appearance and it allowed us the chance to be third party maintenance service providers who could handle multi-brand requirements. The first year went extremely well, but, we restricted the number of customers we took on. It was also the time that we got into reselling of PCs and took up distribution for a company called Siva PCs. We ended up being their largest distributor, but, we took a decision that was a turning point – we shut down our sales division to focus on services. Over the next eight years, we were at 13 locations and had become the poster child for the independent computer service category. We had also managed to raise capital from Technology Development & Information Company of India.
Why is that you chose to exit this venture and not persist with it?
I exited Computer Garage in 1995 and this was primarily because of two reasons, I was interested in the software industry as I saw a large international market, waiting to be tapped, and another reason was that there were three of us working as equal partners which at times, can slow down decision making. So, I sold my stake to new investors and moved on.
In 1996, you founded Aztec Software, what was different this time around from Computer Garage?
With Aztec Software and Technology Services Ltd. (Aztec Software), the idea was to build a software products company. The Internet space had huge opportunities and we spotted that early on. We built a product that later on came to be known as the application server.
What was most challenging as you were driving growth at Aztec Software?
The biggest challenge for us was to find people. People of quality, people who wanted to stay in India instead of heading off to the U.S. In fact, we did a billboard campaign in Bengaluru that spoke of the high quality of work that we did and that was a success, it helped us build a great team.
It was also a challenge to keep cash flow alive so we took to doing product services for other companies. We decided to make outsourced product development our primary category. We made price effective proposals to customers and did some high value work. We found support in an angel investor, K.B. Chandrasekhar, around that time. I was based out of the U.S. and holding fort. Backed by the growth that we saw, we had an initial public offering in 2000. The question in front of us was – how do we build scale and make this a large company? We hired an American chief-executive, an ex-IBM person, and I took a backseat.
Was it always a part of the plan to exit Aztec Software at some point?
Unfortunately for us, the dot com bust followed and our new chief-executive had a hard time adjusting to market realities. We had a rough time up to early 2003. We had to let go of the chief-executive, I went back in to bring the company to profitability. Soon, the company fell into the generic category of services companies as opposed to the initial idea of making products. I had two choices ahead of me; I could turn the company around or step away and go back to making my initial vision of a products company. I did not believe in forcing a change to happen, so, I brought in a services person to take over from me and I exited. The merger of Aztec Software with Mindtree Consulting happened post my exit.
Did Nu Street Technologies happen right after your exit?
I took a two year hiatus and enjoyed that time-out with my family. This was also the time I relocated to Chennai, India. I contemplated retirement, but, the entrepreneur in me wanted to address the unrealised dream of starting a products oriented company. The timing could not have been better as there was better market acceptance, higher capability, more awareness on business processes and a lot more that worked in my favour. Right at the start, I knew that I did not want to start a me-too company. I was looking for a large, unserviced sector when I identified the small and medium business (SMB) sector as my target. With SMB, information technology (IT) was not proving to be effective and my idea was to help SMB owners stay on top of their business with the right IT solutions. And that’s how my journey began, again, with Nu Street.
What is your business idea for Nu Street and how do you plan on driving growth?
As opposed to working on a customer mandate as is the case with services, with software product development, one needs to know what the customer wants, figure out the product and then take it to the market. Our business idea at Nu Street is to customise in the first mile as opposed to the last, that is, build multiple, suitable products for a specific micro-vertical. Also, we are embracing cloud computing in a big way as it suits our client’s needs. I personally think that cloud is the next Internet. We follow the subscription model as against making our clients invest in software equipment (capital equipment purchase business model).
What were the most significant business challenges that you have faced in your time as an entrepreneur?
For any knowledge business, finding the right people is a big challenge. No one team is right for all business, so, you have to find the right mix, each time. The next challenge is to motivate and retain the team, especially, through rough patches. Finding a position for your company in the market place is critical. When you are small, you cannot mean everything to everybody, so you have to choose a position to operate from. And lastly, marketing and selling is always a challenge for anybody or any business.
Did turning venture capitalist cross your mind?
Before I founded Nu Street, I contemplated becoming a venture capitalist (VC) as at that time, I had already made some small-time investments. But, I knew heart of hearts that I enjoyed being an entrepreneur first and stuck to that. There might come a time when I go the VC route and live vicariously through my investments and what they do.
What is your personal ‘take away’ from being a serial entrepreneur?
What I saw was that passion led to success. I would personally ask people to go with their heart, even if the idea looks stupid at first, that is what I did and it paid off. I had the confidence to take a gem of an idea and turn it into a company that was a real business with real people.