Neeraj Roy, MD & CEO of Hungama on his entrepreneurial journey, challenges and what it has meant to take his own path

Hungama- Taalimaar Entertainment and more

Some entrepreneurs make it big through hard work and bitter experience and some are simply born to it. Neeraj Roy is one such individual who seems to have been born to be an entrepreneur. Whether it is his passion, or his ability to predict the next big thing he will always be known as the founder of Hungama Digital Media Entertainment Pvt. Ltd. His company has lasted for more than a decade innovating and growing each year to touch more than 46 countries and be recognized as the leading South Asian mobile and digital content publisherYourStory met up with Neeraj for an inspiring interview on his entrepreneurial journey and what lies ahead…please note we have tried to present a story which looks at the challenges, motivations and real journey of an entrepreneur. We all know the successes but what it takes to succeed is an area of immense interest for us and hope this interview captures it.

Tell us about yourself and what led to your Hungama business idea

I am from Allahabad and came to Mumbai to finish my graduation from Sydenham College. I worked with Taj Group of Hotels in Mumbai for 4 and half years. I left them as Marketing Manager for South Asia where I was looking after 42 properties across this region. After that I spent about 5 years as an investment banker with Prime Securities and I set up the equity business along with a couple of colleagues. Then, in 1999 I set up Hungama, along with a few of my friends from Prime. At that time(those were very early days), there were close to 1 million online users out of India and the proposition of Hungama was simply a promotion site primarily making a proposition of being able to deliver interactive content online. So, we would do games, advergames, and e-promotions for brands where consumers would come to the site, participate, interact and in return would get a chance to win stuff.

Did you stick with the same business idea or did you evolve?

Very simple proposition. Very early on within a couple of months we realized that pure play online at that time would not work, so we developed an online-offline proposition. Hungama never advertised to build brand Hungama, but instead we went into high density net connected hangouts, pubs (During those days there weren`t malls and shopping complexes etc), places where we found our TG was right and created a buzz about what we were doing. In about 9 months or so there was a bid on our company, we were making close to 25lakhs in revenue and somebody wanted to pay 33Mn $ to acquire our business and everyone asked me why I didn’t opt for it.

Within 10-12 months we had really seen a lot, within a matter of few months of the launch, because the internet was such a hyped up business at that time, we almost made little poster boys out of some of us, but fortunately in some way we were fairly grounded in our approach, we never got carried away, the entire communication was handled in a fair manner. Those were days when a 19 year old would come up to you and ask ”So what about my stock options” and I would say “yes, you are entitled to stock options but they mean nothing until and unless we are able to build some business and equity on what is being done out here.”

I like to believe that there were 3-4 traits which helped us grow:

• We were very passionate in what we did
• We were fortunate with the kind of team

In fact, 4 years after that, was the entire bust phase, where it was all about the survival. I call it the Ostrich Era, where we had to do nothing, just put our feet on the ground, heads down and just hang in there. For the next 3-4 years, that’s all we were doing as a company.

When do you feel was the period where you started to grow as a company?

In 2005, we chanced upon the mobile opportunity, the mobile opportunity has scale in some manner. But, during that entire phase it’s not that we were passive as a company. Within 10 months we acquired 100% of indiafm.com, which subsequently got rechristened tobollywoodhungama.com. In Jan 2000, the AOL merger happened, that was the peak of the market. Internet and Dotcom became a bad word then. But our online offline proposition to brands sort of helped us then, a year after we set up the consumer activation and events promotion business. We kept doing innovative cutting edge stuffs, we kept winning 8-10 awards year on year, in the international market. Infact, the energy level really helped us, we never had scale in terms of business revenue, but we kept doing stuffs.

What was the biggest crisis that Hungama has faced?

In 2000, we had an incidence where we got a VC firm committed to put an x amount of money and they paid 55% but a year later they called and said I am sorry but we cannot carry on with fulfilling the entire investment obligation. When I look back I think that was the Best Thing That Happened To Us. We at that time had about, revenue of 25 lakhs a month, cost structure of 45 lakhs a month and in the bank we were left with 30 lakhs. So technically we had 5 weeks of cash. At that time we were about 68 people on the organization. We approached another firm and they said no, so I brought the management in our room, and talked about what we can do at that point of time. In that year we kind of broke-even in terms of cash, the following year, we had no external funding, but next few years we kept the business growing, by then we were around 200 people. Then the entire mobile opportunity came to us.

Till about 2005, the company was largely a Digital Agency cum part Digital Media Company as such. In 2005, the mobile opportunity converted us into a Mobile and Digital entertainment company. We already had some experience in that area, because we had set up service for Nokia when they had launched the 5555 service. So we kind of tasted a little bit of that market. We realized that there was a need to create scale. We felt there was an opportunity to consolidate the content, so we invested there. We went back to the telcos and showed them a path to monetize.

Thereafter, it’s been a significant journey for us. A year later we started building the international distribution network, after understanding the domestic market, I felt the interest in Indian content outside and we targeted 135 countries and dubbed content in 40 odd languages. I remember even those journeys were not easy, colleagues of mine would go to different countries and meet MTN in South Africa and say that we would like to launch a Bollywood channel here, we hadn’t got our zoozoo act in place, but we believed that was possible and kept on doing it. Now, there are numerous facets to the business.

How large is Hungama Digital Media Entertainment today?

The company has around 750 people; we have operations in about 46 countries, work with 150 telecom and online partners, and work with over 400 content owners, 300+ brands and 2000 campaigns. The core of all this stems from the fact that we were always passionate, our principal team stayed with us for more than a decade, few who went, came back. Whatever we did, we did with tremendous amount of integrity. Integrity and commitment is in our DNA as an enterprise.Be it with stakeholders like colleagues, shareholders, clients etc, we have built a business with a lot of trust and a lot of integrity. On that context there can never be any shortcuts. We are one of those companies which have seen euphoria very early and not got carried away.

There are two parts to our business today –

• Mobile Digital Entertainment Business – Where we aggregate, develop and publish and distribute content in 46 countries We are the last entrant, we have been able to come from behind and establish our leadership
• Mobile Digital Media & Services Business – Media properties, services, WAP, games, etc

As an entrepreneur what have you learnt from your experiences?

In technology business like ours you need to have resilience and it’s like playing the Mario Game where you`ve got to jump but you must know when to jump, if you jump right you move up. It’s sort of leap-fogging and if you jump wrong it’s not that you will fall but one wrong move gets you in a certain way. To me spotting mobile was apt; spotting internet was apt, spotting what we do with connected devices was apt, investing in international business was apt. Then your relevancy is consistently enhanced. Also it’s not just about your vision, it needs to percolate down to the rest of the team.

It’s easy to grow from 1 to 10, not so easy from 10 to 100, very difficult from 100 to 1000 but in % terms they are all the same. As you create scale, all your energies have to be adapted in a certain way, you are fundamentally thinking and executing projects which has scale in them. Your bandwidth is limited. Now it becomes a question of those sorts of challenges where adaption is the key. We learnt to adapt early on and were nimble footed to change.

What has kept you motivated in your journey? Also please tell us how you dealt early on with the challenges, rejections etc?

Being the founder, MD or CEO of any business, in reality is a lonely job, you are burdened with responsibility, in the best of times you have to be pragmatic. You are building expectations, in euphoric times expectations can be unreal as well. In the worst of times you need a heightened dosage of optimism but not optimism which is irrational. Because in both instances you have responsibility towards people... That’s when it’s gets a little hazy and colored. You don’t need your internal jingoism to psyche yourself into thinking and believing that you are some sort of a superman. Yes, when things are very dark and chips are down you need a lot more optimism to see it through.

The meaning in my journey came from various factors:

• First I would say it was my upbringing, my father and family, when you are on a path which is by and large a path of honesty and integrity, things just seem lot clearer, because you are true to yourself, true to your stakeholders, you are honest. But to be honest is not easy. If that is the path that you have taken then it becomes a lot clearer. For instilling such values in me I thank my parents, especially my father.
• A Sense of prudent aggression – we must be very ambitious in what we do, when you are very small it’s not wrong to think that you will rule the world.
• I feel had I started the venture immediately after my graduation I would have failed. I personally feel that I would not have patience to stay on for so long. The fact that I worked for 10 years prior in two organizations(Tata’s reinforced the belief on building honest business and Prime gave me understanding of variety of businesses because being an investment banker you need to understand all kinds of businesses)gave me a headstart.
• Fortunate to have the kind of partners who stood by me all this time, ofcourse they were times when I was questioned on what I was trying to build. I relied on my ability to see the trends and opportunities which lay ahead.The challenge which an entrepreneur has is to balance when you are able to see a business and build a commercial model around that.Its easy to become a dreamer and maverick but building commercial value is the key. You need to do that in the right way since you are not like a research lab with limitless grant.

Do you think your time as an investment banker helped you see things clearly?

In many ways the investment banker in me helped me see things more clearly. I am a firm believer that capital is only a means to build a business, it’s important but not the most important thing, I believe in today’s age capital can be enabled, and the investment banker in me should have gone about raining a lot of capital but our business was not built that way. The investment banker in me has made me value the significance and the need for profitability in business. Being a private business, this is of paramount importance

You thought far ahead from all of us, predicting the importance of mobiles etc. Was it because you had global exposure or something else?

Global exposure happened afterwards, I chair the Mobile Entertainment Forum and numerous other bodies. I feel I was fortunate, our generation and the generation next and the generation before have been very fortunate to witness this journey of India which brings exuberance. It was the start of the conducive external environments; I could see scale and value in mobile early on

How important is innovation for Hungama as a business?

I feel for the next 5- 10 years, Hungama, will continue to seek innovation. All of this is being driven by two things - Connectivity and Device. We sit in the centre of all this, so as a company we have no choice but to innovate, to play that Mario game…. but to be able to see a little bit into the future and continue to take risks from time to time. Having secured a certain path, we are embarking into sports we are embarking into education, we believe in the next 12 to 19 months these are avenues which will be coming to the surface so as a company we continue to innovate from time to time. Innovation is reflected in the 100+ awards we have won; it’s an integral part of our business.

As a leader in the market do you feel insecure, threatened?

You can never have any element of complacency; none of us are super beings. There always comes cycles of lives in a company. We have two types of threats, one we can control and one we cannot control. The one we cannot control is the external environment. If I am in the digital economy, I am dependent on the infrastructure being prevalent, but there we have been fortunate to see the growth of devices and connectivity and it almost seems irreversible. Threat of peers and threat of other competing companies is there… it’s like playing monopoly. That much competition is required, I will be saddened if that hunger for growth if is not there…

Do you have any message for your fellow entrepreneurs and youngsters planning to startup?

My first message would be to genuinely and very openly embrace the idea of entrepreneurship; it first starts from the fact whether I can do it and therein lies this whole part. Then it gets down to a lot of things from the kind of team you are able to put together, the kind of industry you are looking at etc. I would encourage people not only to dream but to go out and execute their dreams. There are so many ways by which you can test what you want to do. One of the biggest advantages that an entrepreneur has today is one 7 letter word called Internet, today almost any business can be studied, gauged and evaluated and you can test your ideas in a very prudent manner.I would definitely like to caution you about timing. A lot of businesses with great ideas have failed on two counts, one is poor execution and the other is poor timing.

You are part of the Dell Take Your Own Path Campaign. How are you leveraging technology in your company?

Technology is and remains the key drivers of our growth. It is important to have a robust infrastructure in place to power the scale within an enterprise.

We rely on Dell PowerEdge™ servers , powered by Intel® Xeon® processors, for their high-speed performance to keep up with our fast-paced business.

How has the entrepreneurial journey been for you personally?

Supremely satisfying, I wouldn’t have been able to achieve as much if it hadn`t been for the support of my family. I am happily married man with a daughter who is an absolute delight. My wife is my biggest pillar of strength. When you are passionate about what you are doing, you are in the thick of large scale opportunities, it always comes with a lot of hard work and that happens with at the cost of something. You always have to figure out ways to compensate; you cannot not make up for lost time because it always shows in some ways if you are only driven by work.

YourStory wishes Neeraj Roy and Hungama a long and prosperous entrepreneurial journey. We congratulate them on their longevity and competitive innovation while urging you to sneak a peek at their work at http://www.hungama.org/

To know more about Neeraj Roy log on to www.dell.co.in/takeyourownpath

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