Badri Seshadri, MD, New Horizon Media and cofounder cricinfo.com at IIT-M Research Park
Success is not well defined if you take the passion route. But a few people acquire larger-than-life image if they follow their passion without sense of what they are doing is of any business value. Badri Seshadri, whose claim to fame was through cricinfo.com, the comprehensive cricket platform to follow matches, view commentaries online, and statistics repository, is one of those rare entrepreneurs who did not let his academics and lack of business knowledge come in the way of building something out of passion. Badri was at IIT-M Research Park auditorium on June 18, 2010 to speak for the RTBI's Monthly Entrepreneur Meet, in which an entrepreneur speaks to an open audience on every third Friday of the month.He started with a startle: "If you want to become an entrepreneur, hate academics," he said firmly. He was enrolled for PhD at Cornell University and did not find it exciting enough. He narrated his experiences of radio commentaries in the US in the late 1990s when on a good day you could connect to Caribbean radio, Radio Australia and Radio New Zealand. The emerging Internet connectivity and the need for updating cricket scores prompted him to think of using Internet to connect to cricket fans. Then he started with building a portal for cricket with a few interested people. He went on to describe the first $100 million investment that he got for cricinfo.com without knowing how to write a business plan. Rather jocularly, he said that all the figures in the business plan excel sheet were fraudulent. He narrated how they spent $100 million in a year. Cricinfo had a diverse cofounder team of five people and ironically, when troubles started, Badri was left alone in the end. The portal went through a bad patch briefly and when was getting stabilized, it was taken over by Wisden. Talking about timing of Cricinfo's sale to Wisden, he felt it was a wrong time but he had no other option as Sify was exiting a few investments following its demerger with Satyam. He lost a few million dollars in between but ESPN's acquisition was the high point for Cricinfo. Now Cricinfo is part of ESPN.
Getting right on financial matters is crucial for an entrepreneur, according to Badri, who himself had difficult times when preparing the first business plan for Cricinfo. That’s the difficult part of the job. Taking a leaf out of his experience, he said it is important for entrepreneurs to take up a financial primer course to understand the basics of finance like balance sheet, profit and loss account, etc. From a novice who cannot digest accounting information, Badri has gained reasonable expertise in reading a balance sheet and statements prepared by accountants. He also advised entrepreneurs to invest as retail investors in big companies to get their annual report. Then you can compare the financial parameters like EBITA present on the annual report and measure yourself against the biggies and aim higher.His talk centered on "do you need a cofounder for your business?" Badri feels the ideal cofounder number is 2 people in a venture. He discussed his own partner K. Sathyanarayan and him starting New Horizon Media, which is now emerging as the top Tamil publisher in the country. It is a marriage, according to him, which involves lot of fights. The cofounder number could be 3 to the maximum. He also stressed upon the importance of naming a CEO among several cofounders, finding the right exit options, equal sharing of investments, and handling success the right way. He narrated an example of two cofounders starting a business, which obviously ran into trouble despite injection of two rounds of investment. He then said that one of the cofounders made the cardinal mistake of leaving the company. After sometime, the company changed its business strategy and began its climb to success and profitability. Now the cofounder returned to the company. When the company was sold off, fetching Rs. 50 crores, the cofounder who left the company got a lower sum compared to the cofounder who stayed on. This is heartburning for the cofounder who got less and should be avoided. So if three founders start a business with Rs. 1 lakh each and if two founders can afford additional Rs. 1 lakh and the third cannot, he says the best way is to equally share the investment by two cofounders lending Rs. 66,000 (Rs. 33,000 each) as an interest-free loan to the third cofounder so that any profit or sale is equally shared. He said that the value is not in the money invested but in intangibles like hard work, building value, and bringing in ideas.
A cofounder is an ideal peer with whom you can share your frustrations, ideas, and get fresh ideas. The employees may not come up with good ideas or may not rank equal to you as a founder of the business. Even impromptu discussions can result in new ideas, according to him. He feels personal and engaging conversations among cofounders are important as time is a precious commodity for a board. He says rarely do senior management executives talk to each other except in board meetings.
He also said that face-to-face meetings have no substitute and modern technology like mobile or email cannot take away the pleasure of meeting someone in person. He also feels cofounders from different backgrounds bring a lot of value although sometimes the conversations and meetings can become messy with a few calling names and leaving the meetings. Then they all huddle together to take forward the idea that cropped up.
The talk was engaging for 45 minutes with occasional derision such as the one on stock market investor behaviour in India, humour when narrating his own experiences, and funny moments when Badri talked about how he finally made Cricinfo’s first business plan. When he said, VCs wouldn't let you sleep if they feel their investment is not safe, the audience went in splits. His “hate academics” advice for entrepreneurs and his take on cofounder rivalry also had the audience go haha.