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August 18, 1999
M D Riti in Bangalore
The tension in the air is palpable at the Wadiyar Hall of the Taj Residency in Bangalore as the world waits for the unveiling of Mindtree.
Nine famous men from India's software industry have come together to promote Mindtree, a Rs 400 million electronic commerce and telecommunication solutions company. And Ashok Soota, ex-managing director of Wipro Infotech, is perhaps the most famous of them.
The promoters choose a simple but innovative way to tell the tale. A short video film takes viewers through the entire genesis of the company to its launch today.
Krishna Kumar is former CEO of the Electronic Commerce and Financial Solutions Division of Wipro Infotech. Subrato Bagchi used to be the vice-president of Lucent Technologies in Bangalore.
The initiative came from Bagchi who figured it is the right time to put together what he describes as the "next generation" infotech company.
He discussed the idea with Krishna Kumar, or KK as he is known in industry. The duo then decided on a plan of action: First they would induct some likeminded people with an immediate market presence in the US and then seek venture capital.
Bagchi identified Anjan Lahiri, an old friend who worked for Cambridge Technology Partner in the US, and mooted the idea of the new company over a leisurely dinner at the home of Anjan and his wife Poorva.
After getting Lahiri involved, they began to look for what they describe as "outstanding technology leadership", and found their man in N S Parthasarathy who was the technology manager (software) in the Technology Solutions Division of Wipro Infotech.
The ponytail wearing Partha went back to Bagchi with four pages of doubts and questions that Bagchi and KK answered with a full-length presentation.
The group, as it existed, decided that they needed to have some brainstorming sessions to formulate a mission statement and some targets.
So they decided to drive down to Visakhapatnam, which is 1,200 kilometres from Bangalore, on Christmas Day last year.
"If KK and I had been seen together in Bangalore people would have known something was up," says Bagchi. "Poor wives thought we were crazy but KK and I drove two cars with all the others through a gruelling 20-hour journey to Vizag."
The prospect of their agenda there revived all of them instantly on arrival and they were at the whiteboard early in the morning, listing the features that distinguished them as a group: domain, use of tools, methodology, quality, branding and innovation.
Then came the thought of trying for funding. Somshankar Das, general partner of Walden International Investment Group, is a good friend of both Bagchi and KK.
Walden was approached for funding over a luncheon meeting with Das. "We were very positive about the proposal," says Das now.
Then came the twist in the tale. "One night, about 9 pm, I got a call from the most unexpected person, Ashok Soota, who said that he was thinking of getting out of Wipro and starting his own company and would I be interested in financing him," says Das. "I promptly suggested to him that he might consider combining forces with another similar project also in the area of e-commerce that I was considering."
Soota promptly took a wild guess at KK being the source of this proposal, much to the amazement of Das.
Soota, KK and Bagchi then sat together for another round of discussions. "There was so much synergy in that first meeting that I knew it would work," says Soota now.
He suggested bringing in the Indian venture capital agency Sivan Securities because it would give the company some national standing.
"We were delighted to be approached, as I had suggested to Mr Soota two years ago that he should try starting his own company," says V G Sidhartha of Sivan Securities. "We are sure that this firm will soon become a great international name."
KK and Bagchi did all the groundwork before the venture capital people were approached. "They worked far more on the ideas than I did," Soota told Rediff. "My first move was to approach the venture capital funds. They had come much further in determining what the company should be. Our real commonality was our interest in the broad area of e-commerce. Also, the arena I had in mind was a bit bigger and I wanted to include telecom as the backend of this new business with e-commerce as the front-end."
The others now on the list of promoters joined in after this. There is Kalyan Banerjee, an operating systems expert from Wipro Infotech who also once headed the HR department there. Then there is Rostow Ravanan, a finance whiz from Lucent who will do long-range planning and strategy. Kamran Ozair and Scott Staples from Cambridge Partner will handle areas like sales and customer delivery in the US and elsewhere.
"Everyone told us that we had a dream team," says KK. "We decided that we now needed strong branding to position ourselves.
Californian company Name It gave them 729 names based on their brief. They shortlist 10 out of these and zeroed in on Mindtree as it appealed the most to all of them.
Then, they decided to get their logo designed in a novel manner. They approached the Spastics Society of India at Bangalore and assigned the logo design to 10 students with cerebral palsy from there.
"We told them we wanted the ingredients of imagination, action and a sense of joy to come through," says Soota.
"I did not know what a logo was when Uncle Soota asked me to design one," says K S Chetan, 17, who is present at the launch. "I just held my paintbrush and was struck by an idea."
He used blue to symbolise imagination and painted a tree trunk with a single straight stroke, and peppered it with yellow dots like leaves all around to signify bubbles of joy. That had to be the Mindtree logo! And thus was born Mindtree, the e-commerce solutions company.
Soota is chairman of this private limited company, KK is vice-chairman and president, sales. Bagchi is vice-chairman and chief operating officer. The company plans to create ownership through stock options at all levels in the US.
The majority of the funding comes from venture capital. The rest is from the promoters. But the promoters are not yet willing to divulge a detailed break-up of the investments.
The core values that the company delineates are reduction of the total cost of ownership for customers and forming partnerships as a cornerstone. Their area of focus will be Net enabled solutions in electronic commerce.
The fact that they have a world-class management team, they feel, will be one of their greatest advantages.
Initially, they propose to have 100 employees, distributed between the two development centres that they have already set up in Bangalore and New Jersey.
Two more centres are planned for Europe and Japan next year.
Seventy per cent of these employees will be doing development work in the four centres and the remaining 30 per cent would be involved in customer engagement.
"We are not looking at the rate per person per month at all," says KK. "We only want to achieve rapidity and quality, hence these four centres."
Why Bangalore and New Jersey, for starters? "Because you are not in the software business in India if you do not have a base in Bangalore," quips Bagchi. "As for New Jersey, it has a strong concentration of companies we are interested in. The CIP community has a strong presence on the east coast of the US. So also the telecom companies."
Staples adds "We are looking at three levels of companies: The Fortune 100 companies, the mid-level companies and the start-ups."
Will Mindtree never attempt to make e-commerce products? "You cannot have products and services successfully under the same roof," Soota tells Rediff at the launch. "We may eventually make products but they will just be building blocks to help us function better, that's all."
Bagchi chips in. "The 21st Century will really see the dawn of the service economy as a major thing just like the manufacturing economy took off in the 20th Century. By 2020 AD, I expect that the service economy will be fully evolved. I anticipate a huge hunger for services as the world economy is going to be fully enabled very soon."
Are they then just going to join the bandwagon of the infotech industry that specialises in body shopping called by various fancy names like offshore and onshore development? "No, we will not be like the others," Bagchi promises Rediff. "We will only do high end IT consulting in our specialisation."
Das extrapolates that "Products are a transient manifestation of a technology platform. The lifecycle of products is short. The old licensing model is now dead. Big companies may be reluctant to take the new ASP model, but this is the best way to penetrate medium and small enterprises successfully. Service is a very powerful thing, and not a dirty word in today's business."
Mindtree claims to already have two clients: One is a pharmaceutical company and the other is a telecommunication company. Also Mindtree is already in negotiations with a third client.
Is Mindtree worried about being top heavy with so many big names on board? "Not really," says Soota. "You need seasoned professionals to be able to face international challenges of this kind."
Despite the big names on board, how will they set about establishing themselves as an international brand?
"Alliances and partnerships will help bring in business," says KK. Besides, Walden has an extensive network in the US because they are known well there and are experienced. But most importantly, you just need to be faster, cheaper and better to succeed in service provision in the Net business."
By 2005, they hope to achieve a turnover of $123 million. Beyond this, they are unwilling to disclose yearly business targets. "We will deliver Web based solutions, ERP wraparound and front office applications," says Bagchi. "The company sees a future in which the backend of e-commerce will be telecommunications so a strong telecom focussed technology practice is also being set up."
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