This Marwari entrepreneur sold his startup to Disney. His story has now won a book award
Born and raised in Mumbai, serial digital entrepreneur Alok Kejriwal’s startup Mobile2Win China was acquired by the Walt Disney Company. He graduated from Campion School and Sydenham College. Alok’s entrepreneurial journey of riding the early Internet and mobile wave in Asia is captured in his autobiographical book Why I Stopped Wearing My Socks.
At the recent Bangalore Business Literature Festival, his book won the BBLF CK Prahalad Best Business Book Award 2019. The award, launched in 2018, offers a cash prize of Rs 1 lakh. The prize is sponsored by the family of late Professor C K Prahalad, a global management guru (see the quotes compilation here: ‘You cannot lead unless you are future-oriented’ - 35 quotes from business guru C.K. Prahalad).
The 2018 award was won by Subroto Bagchi, Co-founder of MindTree for his book Sell: The Art, the Science and Witchcraft (see my book review here). The 2019 award was presented by Infosys co-founder Narayana Murthy, with the jury comprising Prof. Rishikesha Krishnan, Faculty at IIM Bangalore; brand expert Harish Bijoor; and senior journalist K Giriprakash.
The book spans 190 pages, divided into 40 short chapters capturing key incidents in Alok’s journey of over 20 years. Each chapter ends with the author’s lessons learnt from that incident, and makes for an entertaining and informative read.
Here are my ten key clusters of takeaways from the book. See also my reviews of the related books Young Turks, Startup Land, Cut the Crap and Jargon, I Love Mondays, Lean Impact, China’s Disruptors, The Prosperity Paradox, and Arise, Awake.
Family influence – and politics
Alok grew up in a Marwari business family, with exposure to two generations of business communities. He eventually set up the export division of his father’s socks business. But he also faced obstacles, coldness and even hatred from some of his uncles, and that eventually drove him to strike out on his own.
“I channelised my inherited paranoia of ‘not having enough money’ positively into developing a relentless and ambitious drive,” he recalls. “I believe that entrepreneurs must learn business development and sales skills early in their careers,” he adds.
“Each entrepreneur comes across a profound, personal moment of calling,” Alok recalls. This may seem like the only logical way ahead and must be embraced.
The drive of youth
Alok encourages youth to start off with small projects on their own. In his journey, Alok took up a range of projects like bank referrals, locating leak-proof drums, and financial services for NRIs. This helps better understand the basics of doing business.
“If your solution is scalable and affordable, it can become a great business,” he advises.
He also made a number of mistakes when he was young (like calling an ONGC inspector ‘yaar’), but advises mature professionals to be forgiving of such mistakes. Bullying causes hurt and long-term pain.
The importance of curiosity
Alok urges aspiring entrepreneurs to develop curiosity as a serious habit. “It could become your passport to success,” he adds. This habit helped him diagnose a fault in a costly imported sock-making machine. It also led him to his Eureka moment, when he discovered the power of the Internet as a resource for information and business.
Networking and interacting with other people opens up new ideas and inspiration, provided one is curious. Connecting with friends impressed upon Alok the importance of creative technologies like the Internet, and its power for innovation.
While being curious and open, entrepreneurs should also think things through carefully, and play their own devil’s advocate. This helped Alok weed out early infeasible business plans such as a portal for balance sheets, or for online darshan of deities.
Alok Kejriwal (left), V Raghunathan, Narayana Murthy and Benedict Paramanand (BBLF 2019)
Values and qualities
Purpose, persistence, perseverance and tenacity are the hard tenets of entrepreneurship, particularly in the face of sceptics, naysayers, disbelievers and other negativity. Alok learnt this while setting up his first export order for socks at the age of 24.
Entrepreneurs need to commit at least ten long years to scale their business, and the marathon journey will be filled with pain, agony and mental toughness. They should choose a large problem that is “screaming for a solution,” and in a field which they enjoy. Alok also advises having some initial savings as a cushion.
Patient observation helps assess how different people value money, and how business operations are structured. Alok learnt many such lessons just sitting in his father’s cabin and observing factory activity.
“There is no ‘easy money’ in this world. If it comes easy, it will go away even easier,” Alok cautions. He was inspired by the deep research practices and long-term investing habits of successful traders.
Alok advises against joining companies where there is deceit, cheating or manipulation. “It is better to be in “the search for excellence, not the management of lies,” he explains, drawing on his unpleasant experience with unscrupulous truck fleet owners.
“Be entirely transparent and forthcoming about business matters,” Alok advises aspiring entrepreneurs. “Bad times never last. Honest people always do,” he adds. Being true to his conscience helped him open up in advance to a supplier about a defect in one of his socks batches, which won him appreciation for his honesty, and further business.
While will, intent and motivation are important, overconfidence should be avoided, since it can lead to self-destruction. “I painfully realised that a single act of greed could kill a successful business,” Alok recalls.
He once agreed to take on a new order involving a cotton mélange, unaware of the complexity and extra cost involved; delivering the order of socks on time was a prolonged and frightening nightmare. “Entrepreneurs must go through such trying times to discover how strong they are,” Alok says.
“The hardest times provide the most excellent moments of clarity,” he adds. The dotcom bust forced Contests2Win to move away from investors as a source of money to raising business cash from sales. They met a hundred clients a month to meet sales targets.
Naivety also has implications for creativity in the entrepreneurial journey. It was a suggestion from a young engineer which helped deal with a server overload problem for Mobile2Win during a campaign peak. Minds not fuddled with preconceived notions can have amazing clarity and breakthrough ideas, Alok explains.
It is important to master the fine art of costing of products and services, though it can be a long and intensive exercise. “Costing is the lifeline of a business,” Alok emphasises. Over three years, he created a detailed costing of socks in his father’s company, right down to quantity of yarn, electricity used, packaging, and labour.
It is important to stay on top of external technology and economic trends since they can also impact costing and open up new opportunities. This involves being aware of the technical details of the business, right down to the individual machines and parts.
Understanding the customer and partner
It is important to get deep insights into how products and services are used, even in unforeseen ways. For example, Alok learnt from a European quality expert that babies put objects like socks into their mouths, hence the colour must not run!
While pitching his online adver-gaming solution to business customers, Alok realised that he needed to understand their problems well enough so that he could explain how his innovative model helped. The amount of marketing and education involved is like pushing a plane until it takes off, he jokes.
Finding the right influential customer early on is important, and involves lots of industry research. This helped Alok bag HLL as his first client for Contests2Win and had a good rub-off effect.
Spending quality time with business clients and their consumers yields new insights into emerging opportunities, as Alok discovered through his association with Cyrus Oshidar, Creative Director at MTV. This led him to launch campaigns like the ‘Jockey Pants Down Contest.’
Sunil Lulla, head of Sony Entertainment Television, also helped by bringing Mobile2Win on board subsequent deals for programmes like Indian Idol. “He demonstrated to me that cultivating partners and trusting them was vital and crucial to creating long-term value in a business,” Alok explains.
Other clients who were exemplary were Amish Tripathi of IDBI Bank and later DBS Bank (before he became a famous author), who wrote outstanding client briefs. “Clients like Amish taught us how to do business beyond just giving us business,” Alok explains.
Alok was fortunate to benefit from a range of mentors and experts. “All that one has to do is ask,” he advises, observing that there are many successful people willing to help others.
The business model
Many tech entrepreneurs do not pay adequate attention to how their product will make money, and only address the features and their novelty. Alok learnt this the hard way, when he used the barter model for brands to promote the Contests2Win website (“piggyback value creation”).
Entrepreneurs must continually think of new extensions to their core product, and think of new ways to disrupt business processes and entire industries. Alok extended his advergaming model to the market research sector, and to in-house promotions in airlines. Later on, he rode the mobile wave by launching Mobile2Win in China and India.
Validation of the business model comes when clients, partners and even investors come knocking. This shows that the startup is relevant, interesting and valuable, as Alok experienced when he was approached early on by investor Abhay Havaldar and Rediff founder Ajit Balakrishnan. Though they did not invest, Ajit became a sounding board.
Investors: the good, bad and ugly
“VC” can stand not just for venture capital, but also vapour capital, vulture capital and even vampire capital, Alok explains. Entrepreneurs should choose their investors wisely. “That decision should be treated with the same care and sensitivity as when selecting a spouse,” he adds.
Alok was approached by ICICI and eVentures, and chose both as investors in Contests2Win for their money and insights, respectively. Good investors ask tough questions, bring talent aboard, make business connections in new markets, and keep the focus on generating revenue from clients.
Investments from Softbank China and Siemens Mobile helped Contests2Win expand to China, with a focus on mobile. Mobile2Win China successfully launched and scaled in China, with most leading brands on board.
The company weathered some challenges when it faced a dysfunctional board, but was eventually approached by the Walt Disney Company for an all-cash acquisition deal. It is important for founders to distinguish between strategic and financial investors, and understand what alignment means in each case, Alok advises.
Unfortunately, a later investor made the company Mobile2Win entirely VC-managed, and used the “drag out” provision to drive Alok out of the company. In addition to the forced exit, he had to sign a three-year non-compete agreement. Investor contracts can be draconian with deadly clauses embedded, Alok cautions.
His company needed the investment to survive, but would lose the entrepreneur DNA. In later years, industry dynamics changed for Mobile2Win, MVAS company margins narrowed, and the company was eventually sold off. “I learned that VCs could destroy and wreck a great startup if left uncontrolled,” Alok says; for many of them, a business model is just an excel sheet.
Despite the darkness and gloom that he experienced, Alok went on to start his next venture, Games2Win. “Whatever happens, happens for the good,” he says.
“Having infinite patience to sell is a critical lesson for startup entrepreneurs,” Alok insists. “A lot of backbreaking work, patience and persistence is required when you are trying to sell something,” he says, drawing on his years of driving sales through endless meetings and sending out thousands of faxes in the pre-Internet days.
“Lots of people in the world make high-quality goods, but it’s the superior marketer and presenter who bags the order,” Alok explains. Constantly visiting retail stores gave him insights on consumer psychology, eg. the willingness of parents to pay as much for baby’s socks as their own socks.
New ideas have to be inherently helpful and delightful, and should be marketed with panache and style. Alok used customised ringtones and shortcodes to win a deal with Sony Entertainment Television for SMS-based customer activation.
Sales is a “cruel tradeoff between ego and ambition,” as it involves unapologetically seeking business, handling rejection, having endless patience to get meetings with decision-makers, and even putting up with some amount of humiliation.
At the same time, entrepreneurs should be firm and know when to say no to unreasonable demands, and to have dignity by not begging or pleading for a deal. BSNL asked Mobile2Win for a discount in revenue share for the India Idol programme, but Alok stayed firm; they eventually came on board.
Sales is important for everyone, not just entrepreneurs but also artists, professionals, students, and homemakers. Success is reflected in repeat sales. Salespeople have conviction, a twinkle in the eye, storytelling and conversational skills, and the ability to cast a spell on the buyer, Alok explains.
They need to listen well and be observant, and have a well-rounded personality. Alok connected well with clients who shared hobbies and a love for family. Sales skills can be sharpened with training, rehearsals, and learning from experts. Alok learnt from speakers like author Aswhin Sanghi, and carefully put together a pitch for Citibank with well-designed and even theatrical team roles.
Customers, clients and partners also value conversations with interesting people. “Reading voraciously, immersing yourself in passions that interest you outside of work, such as sports, art, music, literature go a long way in building a personality that becomes magnetic and sales friendly,” Alok advises.
Thus, it helps to be original, interesting and genuine. “The more vibrant your personality, the more people will like to meet you, and that will get more business,” he predicts.
Luck and the spiritual side
During darker times, praying to the forces of the universe helps, says Alok. Persistence and tolerance are important, but prayer can open up new attitudes, energy and opportunities. His prayer for a way out of his suffocating family business gave him goosebumps when it was eventually answered.
“Sometimes, luck and providence come directly to your doorstep,” Alok explains. The techie Gopala Krishna approached Alok to develop a website for his socks business, but he instead decided to use the opportunity to launch his adver-gaming venture, Games2Win. It is important to be proactive and grab such opportunities when they arise, Alok explains.
“Just keep doing good work and the angels will come,” he adds. Miracles can happen at unexpected times, as was the case when Intel approached Contests2Win to offer the first banner ad and opened the door to credible sustainable revenue streams.
The book ends by explaining how an entrepreneur’s achievements may exceed earlier expectations. “What I have learned well is that all that the entrepreneur must do is keep building the business hour by hour, day by day, year by year,” Alok sums up. Enthusiasm, drive, commitment and patience pave the way to the success of a dream.
Innovations unleashed by entrepreneurs can change the world, and entrepreneurship has no finish line. “Entrepreneurs don’t retire. They have too much fun doing what they do to give up,” Alok signs off.
(Edited by Saheli Sen Gupta)