Subramani Ramachandrappa spent a few years at Biocon, the biopharmaceutical company, in its marketing and technical services division. That stint was enough to spur his entrepreneurial passion. He identified hybrid enzymes as his area of focus and decided to start Richcore in 2001 as a proprietary concern. He wanted to startup in an industry – making enzymes for various applications – that was almost 100 years old. Enzymes are catalysts that, typically, spur a chemical reaction. Enzymes are found in several applications – in the fruit juice industry, in detergent and starch industries, in paper, bio-fuel and brewing industries, among others. But Ramachandrappa felt there was very little innovation happening in the sector. For example, he thought, there was tremendous potential to use enzymes in the treatment of wastewater. Ramachandrappa says, “A blend of enzymes, in some sense, hybrid enzymes, could cater to several new applications. It was this market I wanted to target.” Ramachandrappa went on to pursue this business idea. However, in the first few years, he wasn’t seeing enough traction. In 2003, he decided to pursue an MBA from the Indian School of Business (ISB), Hyderabad. “The ISB experience got me to think big. I put together a team and then started to look for venture capital funding.” The process took a while, but, eventually in 2008, he raised money from venture capital firm, Ventureast and got started.
In some ways, Ramachandrappa’s journey at Richcore had no structured Plan B. His Plan A (to make and sell industrial enzymes) worked. He only had to tweak his sales and distribution model to ensure scalability of the business. We call this his Plan B.
Plan A: Making and selling hybrid enzymes
Richcore’s strategy towards R&D was to rope in the customer as a co-creator. The company would identify a problem in a particular industry (say, the textile industry) and then, along with the customer, come up with an enzyme to spur a chemical reaction to solve the problem. Ramachandrappa says, “Our fundamental expertise is in organic matter. We, basically, understand organic chemistry. Then, through structured research, we are able to come up with newer patented products which find applications in various industries.” Till date, the company has four approved patents and three more are pending approval. Richcore was comfortable from a product development standpoint.
The next hurdle was to setup its sales and distribution. However, here, establishing scale to cater to a global audience was a challenge.
Plan B: Natural progression in the journey
Ramachandrappa took a step back and thought about the situation. Here, he was making patented products targeted at various applications. One option he had was to license his technology to a larger player, who in turn, had access to a whole lot of customers. Different patents were licensed to different companies. Today, Richcore works with global companies in petrochemical and refining, pulp and paper and textile industries.
Richcore has also recently setup a manufacturing plant to manufacture high-value, low-volume enzymes. Broadly, Ramachandrappa’s goal is to create a happy workforce that can continuously churn out these newer technologies. “It’s always one battle at a time for us. The macro market is as big as ever. If we can continuously identify applications and breakdown the problem to the organic chemistry level, we will be able to propose a solution to it.”
Key lesson learnt from the Richcore journey:
Ramachandrappa’s big challenge was on the distribution side. His patented technology was solving a problem, but in order to reach several industrial customers he needed to rope in partners. Instead of creating a huge sales and distribution network (which may not work for small and mid-size companies), he decided to partner with large companies who could provide him that distribution muscle. The channel partner strategy for customer acquisition is what works for Richcore.