Info Edge's Sanjeev Bikhchandani on the role customer insights and capital efficiency play in building a business
In the latest episode of Prime Venture Partners Podcast, Sanjeev Bikhchandani, Co-Founder and Vice Chairman of Info Edge, shares insights on fund raising, customer focus, capital efficiency, and international competition.
Recently named one of the recipients of the Padma Shri award, Sanjeev Bikhchandani is the Co-Founder and Vice Chairman of Info Edge, the parent company of Naukri.com. Info Edge also owns websites like Jeevansathi.com, 99acres.com, Brijj.com, Naukrigulf.com, Shiksha.com, Quadrangle, and Firstnaukri.com.
“When you don’t have a choice, and you don’t have options, you do it the way you got to do it,” Sanjeev says.
Naukri started by taking jobs from newspapers from all over the country and posting them in their own words on the website; no money, no venture capitalists.
In 2000, Sanjeev Bikchandani raised Rs 7.29 crore, which accounted for about $1.7 million then, even lesser now, for Naukri, and kickstarted the business with capital efficiency. Apart from Info Edge, he also co-founded Ashoka University in Haryana.
This is an inspiring example in the times of COVID for entrepreneurs struggling with money.
In the latest episode of Prime Venture Partners Podcast, a series that brings together impactful moments from the lives of entrepreneurs and investors playing a key role in building digital India, Sanjeev Bikhchandani discusses raising funds, customer insights, capital efficiency, and international competition with Amit Somani, Managing Partner, Prime Venture Partners.
Don’t let money beat you
Amidst the changed period and access to capital, Sanjeev recommends entrepreneurs be wise with their spending and treat it like the last money they will ever have. His advice, amidst the COVID-19 crisis, is that founders conserve cash and focus on revenue, cash flow, and the customer.
"Focus a lot on innovation, customer satisfaction, building IP, and building a network effect so you can’t be beaten by money," he says.
Customer insight is key
The idea of Naukri came to Sanjeev when he was working in the marketing department of HMM, now called GlaxoSmithKline, in 1989-90. He noticed that everybody would start reading the office copy of Business India from the back because it had 35-40 pages of appointment ads.
He found this behaviour strange as he thought people bought magazines to read the articles. "But here [were people] just reading ads, and then discussing [them] and talking about jobs all the time. And they were in the best job they [could] be."
This made him realise that jobs were a high interest category information; this insight led to the launch of Naukri.
"You get an idea of unsolved problems from just observing customers, talking to them...you know, what we call deep customer insight,” he says.
On obtaining natural traffic, he further explains, “If you hit the hot button, half your success is ensured; you don’t have to spend money to get traffic. So I would say look for customer insight, talk to customers, meet customers, observe customers. Maybe you’re a customer yourself; maybe it’s your own pain point you’re solving.”
Speaking about international competition, he says that while it is important to keep an eye on competitors, entrepreneurs should keep 80 percent of their focus on customers.
“If your innovation is customer-led, as opposed to competitor-led, hopefully you will produce something that your customer will actually want. Your focus should be on customers, what they are saying, what signals they are giving you, and what they are asking for because that innovation will satisfy the customer better and he will stay with you even if it means a higher price,” he adds.
Crowdsourcing customer feedback in real time
The circle of Naukri was strengthened by crowdsourcing customer feedback in real time, a wonderful hack every entrepreneur can apply.
"We were getting continuous feedback from clients, from customers, from the salespeople, saying this is what happened today. And that gave us a repository of ideas. And if the same idea was coming from eight,10,12 different people consistently, we would go out and execute it,” he says.
Building moats and defensibility
Naukri manages to get the most traffic because they have an effective network.
Sanjeev explains how their network effect was getting the most jobs and, in turn, driving the most traffic. By getting customer insights right, they were able to adopt the right pricing strategy. They priced job listings really low and gathered free jobs from newspapers.
“So we’ve got the most jobs, therefore we get the most traffic; we get the most traffic, therefore we get the most response. We get the most response, therefore we get the most clients; we get the most clients, therefore we get the most jobs,” he says.
Drawing from his rich experience, Sanjeev offers one piece of advice to all young entrepreneurs. “Focus on the customer. Get the customer’s money, the investor’s money will come. The customer’s money is more important than the investor’s money,” Sanjeev says.
To hear more, listen to the podcast here
Edited by Teja Lele