The truth is that when you have this going in your head, you don’t go around telling people. My friends know that even before I started ChrysCapital, I wanted to have a second career.
I had set a goal for myself that at age 30 I wanted to turn entrepreneur. And a few months before I turned 30, I quit to start ChrysCapital. My second goal was that by age 45, I wanted to have a career number two.
I have often spoken about this to the rest of the organisation; that I would leave someday. In the last couple of years we have created a more empowered organisation so this was the right time for me to leave.
We came and set up shop in Mittal Chambers, Mumbai back in 1999 and you know we were too ‘start-up’ at that point in time.
There was a lot of energy.
We worked very hard but with no direction. [At that time, 1999] there was no strategy we could figure out that would work; we sort of said let’s just be purely opportunistic and do everything. So the thing that was most exciting at that point in time, the Internet and BPO, consumed almost all our energy.
I’ll say for the first two years the Internet was a complete disaster, but it was a period of time before we could see an idea and in two days we could put out a term sheet and literally within 30 days we could be writing a cheque and get going.
And that’s how we funded Baazee and Jobsahead. We invested in the BPO space because Raman Roy, who founded Spectramind was leaving GE and we knew this space would open up. Obviously we were aware that Nasdaq had crashed in 2000 but we had a little bit of a delayed reaction here.
We didn’t realise that we were going to hell in a hand basket.
We had invested half a million dollars in Baazee which was set up by two Harvard Business School guys whom I knew. This was January 2000. In March 2000, we closed the second round five times our [Baazee’s] valuation. We closed the third round in May 2000 at 25 times our [Baazee’s] first round valuation.
Between January 2000 and May 2000 we had signed a deal at 25 times our initial valuation. We thought we were geniuses.
In June, I was in New York trying to bring in another investor in Jobsahead. I was with this guy from a very large fund, travelling in a Limo. I thought it was a done deal. Puneet [Dalmia] (founder of Jobsahead) had spoken at this fund’s annual conference.
And then this guy says: “The opportunity is very exciting but Ashish the world is cratering. We gotta walk away!”
That incident made me realise that maybe something is starting to turn.
We got seduced into dotcom and things came crashing down very, very quickly, but the problem is there was such a flurry of activity in that 12-month window that we did make multiple investments. And we made multiple mistakes also.
That was our darkest hour. It does impact morale. Many people had to decide: Do you want to do this or do you not want to do it. [Raj Kondur, co-founder of ChrysCapital, left in 2002].It was not clear that we were going to succeed, that things were going to work out. There was high stress.
The lesson I learnt is that you have to be good at spotting people and it’s important sometimes to just say, from a business stand point, “This is my focus.”
We had to quickly come out of the Internet and re-tool ourselves. Getting out of the Internet freed up our mindspace. We had a little churn but thereafter a more stable team. Having worked in a private equity as well as a hedge fund, one had developed the ability to look at themacro [picture].
So, in 2002-03 I got the organisation to step back and look at some of the debris around us. And take a little helicopter ride.
What areas were going to do well? Take something like construction. When we studied this industry, globally we realised there are 10-15 companies that win a disproportionate amount of business.
(This article is excerpted from the latest Forbes India 29 July, 2011 issue which is now available at news stands and book stores. You can buy our tablet version from Magzter.com)