How far can you go with Rs 3,000 and a name borrowed from an eatery? $11M and counting, as Abhishek Rungta’s story shows
Abhishek Rungta began his successful IT enterprise Indus Net Technologies in Kolkata in 1997. In two decades, he has created a thriving tech ecosystem in a city that is just waking up to the digital revolution.
On a clammy September afternoon in Kolkata, when an intrepid 19-year-old stumbled upon a ‘computer fair’ in the sprawling Maidan area of the city, little did he know that his curiosity will get the better of him.
The year was 1997. A time when the Maidan in Kolkata was more popular for the number of book fairs than a computer fair. When owning a desktop was akin to owning an iPhoneX in the college dormitory. Expensive and rare.
But at 19, Abhishek Rungta had already ‘tasted blood,’ when he experienced the internet on his own computer for the first time ever.
Today nearly 21 years later, Abhishek has gone on to set up one of the most successful IT companies, Indus Net Technologies, out of Kolkata. Not only that, he has been instrumental in creating a tech ecosystem in the most unlikely cities of India by creating many more successful companies.
“I am from a Marwari family. Bachpan se pata tha ke dhanda karna hai. X kharedna hai aur Y bechana hai (I knew from childhood that I had to get into the business. Buy X and sell Y),” he tells me in one of the many offices he has in Sector V in Salt Lake area, the Electronic City equivalent of Bengaluru.
What strikes me at this first meeting, besides his ‘wall of fame’ that houses logos of his marquee clients, is that Abhishek is an excellent narrator. And what is more endearing is that he launches into the Kolkata Marwari-Hindi that is so unique to the city.
For the next hour, he has me transfixed with his story. A story that spans the rise and growth of his business journey, as much as it brings to life the rise and growth of the IT culture in the city.
Self-taught and learning still
A self-taught coder and ‘engineer’, Abhishek says he has sat on every reception sofa in Kolkata and knocked on every business door to sell his services and products. Today, Indus Net Technologies has a turnover of $ 11 million and has clocked 15 percent growth annually.
Fifty-five percent of its business is from the insurance sector. “We do their end-to-end business using our software sitting here in Kolkata,” says Abhishek. His company has designed a core system for the insurance sector that is slowly set to get deregulated. “Many startups are getting into it. They will all need a core system. If they go to buy from traditional players, they will charge millions of dollars. I can give it to them for much less,” he says.
Abhishek has also invested as an angel in around 20 startups since 2008. His many failures and a few blockbuster hits have taught him new lessons that led him to place bets on companies that have a synergy with what he does. “Instead of small rounds, I now buy a big round, even as big as 50 percent and become a co-founder,” he says emphasising that this motivates him to have more skin in the game.
What’s in a name
But I am getting ahead of the story. Before all this came to be, let’s go back to the 19-year-old Abhishek who found himself at a computer fair. “My mother had come across an advertisement for it and asked me to check it out considering I was interested in computers,” Abhishek recalls. But when he reached there he thought, “Dekhna kya hai, seedha business hi karte hai (what is there to see, let me straight away start my business here).”
Around that time, Abhishek was making a cool sum of pocket money by installing internet connections in people’s homes and training them to use browsers and emails.
At the computer fair, he asked a stall owner the procedure to apply for one. It turned out complicated, but Abhishek had a better idea and suggested why not he sublet a part of his stall to him. “He agreed to sell me half his stall for Rs 6000. But I said I’ll take it for Rs 3000, even though I did not have that amount on me,” Abhishek adds.
It was then agreed that Abhishek would get another person who could take a quarter of the stall so that the original owner could make his Rs 6000. Abhishek found a college friend who agreed instantly.
Abhishek took his quarter stall next to the wall (a clever ploy) so that he could stick posters that said: ‘I sell web designing and can make your website for Rs 3000.’ “I thought even if I get one client, I would have recovered my initial cost of the quarter stall.”
But before he opened for business, he had to have a name for it. “There was a restaurant in the area called Indus Valley Restaurant. I took the Indus of the Indus Valley, added net from the internet and added technologies too,” he tells me with much amusement. Thus, Indus Net Technologies came to be.
On the first day, he bagged one client and on the second day, he had got two clients. “Aajkal first client ka jo tension dikhate hai log, aisa kuch nahi hai (nowadays, people make such a big fuss about getting their first client. It’s not like that at all),” Abhishek says.
The road ahead
Thus, his car was out of the garage. “Aadmi shuru kar deta hai toh rasta apne aap nikal aata hai (once you start, the road materialises on its own),” he tells me. Stating that at such times it is blissful to be ignorant. “What you don’t know, you do not fear.” However, he claims that a lack of exposure also had its downside. “I did not know what a product is or what constitutes a service. I only knew IT. There was no thought process like when you get into product, you are not exchanging time versus money, or the fact that if you create a big company it should be able to scale exponentially. You just start with what is in front of you,” he says, adding, “I have experienced both the good and bad sides of no exposure by starting from a non-IT place like Kolkata.”
Along the way, Abhishek discovered the domain hosting business. “There were no hosting providers besides BSNL at that time. Then I understood that web designing was a good business but the domain hosting business was a better one.” He went and bought hosting from an Italian company. “With my trading mindset, I realised I could buy at Rs 6000 and sell at Rs 25,000. I became one of the few people in Kolkata selling hosting and figured out the whole supply chain. Slowly, he built his own list of resellers and by 1998/99, he had 80 percent of the market share in Kolkata.
There was only one hitch. Abhishek was still young and did not have an engineering degree. “I had done my BCom from St Xavier's College in Kolkata and though I had taught myself coding, I still felt I needed a formal degree in allied tech subjects.”
He went to the UK in 1999 to do an MS in Multimedia. “In that one year that I was there, I lost my market share at a time when there was a boom in the IT sector,” he says. When he returned to India in 2000, the bust was biting. He struggled to get his company back on track for one whole year.
Watch where you go
When in the UK, Abhishek worked for a company called Open World that made websites for large groups of hotel chains. “Over there, one company came to me that was opening in Kolkata and I found that the project was for Rs 10 lakh. I thought to myself, ‘A Calcutta company is getting a website done from a UK company, then what am I doing sitting here.’”
Around this time, Abhishek had been advised by most leaders and experts that in the IT business, even if he were to become number one, he could at best take home a profit of Rs 20 lakh. “If you are okay with this kind of money then go for it. This is the size of the business,” Abhishek repeats the ill-informed advice he got.
However, when he was at Open World, its turnover had touched a million pounds. Getting this exposure emboldened him and he decided that he would focus on website designing. “At that time, I met Bhavin Turakhia (now a billionaire entrepreneur and Co-founder of Directi) online and we got chatting about domain hosting. I thought let him explore hosting, yeh toh bewakoofi kar raha hai, I will make websites. He has not had exposure to Open World, I know the potential of the market. Let him do hosting. The rest as you know is history,” Abhishek says laughing as it were at himself.
“Bhavin producticised it and made a hell of a business out of it. Big respect for him,” he adds.
Knock on every door
For Abhishek, it was a year of knocking on every door to get business. One day, while feeding his frustration, a thought struck him why not look for clients online. As a student in the UK, he had delivered a project that came to them over the internet. “For two whole days, I did not get off my seat. Those were the early days of outsourcing of digital services in the world. Elance (of Upwork) was just getting into the game. I discovered other forums. I thought, there people are putting requirements and here I am looking for clients. I decided then that I would focus on looking for clients outside India,” Abhishek says, and you almost want to cheer him on.
“That day, I closed my door to Kolkata. In a few hours, I had closed two deals worth $250 each,” Abhishek says. From there on, there was no stopping him. “I created mayhem online. In a day, I was closing 20 projects, each for $600. I put in place a supply chain that was delivering these projects.”
For this, Abhishek had to train people or scout for those who were self-learning coding and looking for work. They received many interesting projects, including one for a casino, where he and a consultant had to learn a new language and then teach it to the team to successfully complete the project.
“I experimented a lot,” he says. This included making a business out of dedicated hiring, a term that he coined and has a trademark on. “However, there are nearly 17,000 other companies that are using this term. But we do not press legal charges as we do not want our revenues to come from litigation,” he says.
Scale & sustainability
Abhishek's company scaled from 10 people to almost 300. “I did not even realise how fast this happened.” Abhishek says though he did not know the word then, he had achieved what is now called product-market fit. “And we were also doing what is now called SaaS (software as a service) where we were getting a recurring revenue. At that time, all my competitors were struggling for cash. Our cash flow was solid. We brought in new technologies like Java, mobile applications, TopNet, and others. We kept scaling and built stronger teams.”
Abhishek’s diversification was large and most of his clients were SMEs. He continues to run training academies in the city that can produce industry-ready skilled talent.
His core philosophy, Abhishek says, was to build a sustainable company.
“I was not building a company to sell off nor was I building a company to take funding. I did not even know koi invest bhi karta hai. Itna pata tha ke yeh banaya hai toh 100 saal chalna chahiye (I did not know that there are investors who put money in companies. All I knew was I have to build a company that lasts a 100 years).”
He, however, adds that the Marwari mindset of building a company for the next generation of the family may not necessarily work in the world of technology. “Nonetheless, that’s what I knew. Sustainability is ingrained in our psyche,” he adds. But Abhishek has also been quick to pick up that scale is equally important. “For scale, you need to have the ability to see the future, and I think God has gifted me that.”
It is this ability to see ahead that got him interested in startups. But before that, he broke his vow of not working for Indian clients and was able to bring in big banks as his clients. They asked him, ‘Kolkata mein IT hota hai?’ “I told them yes. Come and see how we are transforming the insurance companies globally. I had nothing to lose. They came, they saw and were shocked.”
The only drawback that Kolkata has is that good talent leaves the city in search of better opportunities. “They are not confident that they will get a good job here,” he adds.
Putting money where mouth is
It was around 2008 that Abhishek got interested in startups. He knew Pallav Nadhani of Fusion Charts from his early days and together with him started an angel fund called Seeders. However, the two have been putting money in their personal capacity in startups and Abhishek says he must have invested in around 15 to 20 startups. “Out of which 10 shut shop. And there were a few that I missed putting money in which became big,” he adds.
Right now, Abhishek is building other solid companies in Kolkata and strengthening the tech ecosystem here. He acquired a digital marketing company Techshu, which was his competitor in Kolkata.
“The Techshu founder is an outstanding entrepreneur. They were not doing too well, so I acquired them and handed my digital marketing business to them. Right now, they are profitable with $600,000 annual run rate, and are now capturing the UK market,” he says.
Another company that Abhishek built -- his bet on the future -- Energy Tech Ventures, is a joint venture between his company and a company that was into energy audits. The new company was incubated by Startup Bootcamp, Australia.
“We have created a product that sits on top of building management systems and gives actionable insights. It helps save energy in apartment buildings, tech parks, shopping complexes etc and guarantees 5X return on investments. Plus, it also gives predictive maintenance advice,” says Abhishek. They have signed a large partner in the Middle East and Australia.
Abhishek feels that these companies will incubate other companies and this is how the ecosystem will be created.
“My simple logic is you should see an impact. Because of our work, big banks and large enterprises have confidence that Kolkata can also do IT,” he adds.
The next phase
The next evolution in Abhishek’s business journey is to focus on joint ventures and build products for SaaS companies.
“We may acquire companies that are in difficult situations but have a good client base. We want to become a company that can build other companies,” he says.
“We have changed our space and clients base and now concentrate only on large enterprises,” Abhishek informs me. This was necessitated after he found ex-employees hijacking the smaller clients. Nearly, 10 to 12 smaller companies have come up in the same space after breaking out of Indus Net Technologies.
“In the game of David and Goliath, it is best to come back as David if you want to win,” he says.
Abhishek's company now competes with large IT companies like HCL and TCS for clients. This shift from a smaller client base to large enterprises was managed without a drop in their revenue number. “We were literally doing a blood transfusion without letting the patient’s heartbeat stop.”
Today, his company has built strong processes such that each and every penny and hour is tracked. He claims that the internal MIS infrastructure that they have built is so strong that he can convert a company that is showing five to 10 percent margin into a 25 percent margin company using his IT system.
For Abhishek all this learning has been evolutionary. “Thus, it took me more time,” he adds. But it seems to have paid off. The boy who took the wall side of a stall in his first-ever exhibition, has in the past 21 years learnt never to have his back against the wall.