My Proficorn Way (Part 20)

Tracking Cashflow

I am not much of a finance person – except for one thing. Tracking cashflow. Because if there is one sure way a business dies, it is because of a lack of cash.

I cannot read financial statements and haven’t bothered to learn how to analyse balance sheets and P&L statements. But what I always track is the cashflow. Cash is the oxygen of every business. Without cash, you cannot pay salaries or vendors. And that creates a negative spiral from which it can be very difficult to recover.

It is possible to be profitable and yet have cash challenges if you do not get your payments on time. In India, this is especially difficult because of four issues. First, customers take their own sweet time to pay – 90-120-150 day payment cycles are not uncommon. Second, salaries, rents and even some vendors expect to be paid on time. Third, statutory payments to the government have to be made on schedule. Fourth, because rule of law doesn’t exist in India (justice delayed is justice denied), higher write-offs are a reality of life.

What this means is that the business needs some working capital. That can either come from past profits or one has to raise it externally. Growth also requires deploying additional capital since there is a gap between money coming in (later) and money going out (early).

That is why in IndiaWorld I was very keen to make the business cashflow positive as soon as possible. In the early days, subscriptions and website development fees sustained the business until advertising took off. We kept a sharp eye on our cashflows to ensure we never would get squeezed for cash.

I had learnt these lessons in my childhood – writing a daily cash diary for my mother. Each month, my father would give her a certain amount for household expenses. At the end of each day, she and I would sit and write down all the day’s expenses under different headings and calculate the amount left for the month. This way, there would be no surprises until the next cash inflow came when my father got paid at the start of the following month.

No proficorn can be built without attention to cashflows from the early days. And once there is a cash buffer available, keep it safe in liquid investments so it is always accessible. Take the risks in business, but not with your hard-earned cash.

Will be continued soon.

My Proficorn Way (Part 19)


One of the good things that the lockdown has done is to make us Indians punctual! There is zero travel time so no traffic excuses. All one has to do is to click a link to join a meeting from home – so it becomes harder to be late. “My previous meeting ran over” can only work so many times.

Punctuality has been part of my DNA since I can remember. I don’t know when it began. Maybe it was because I grew up listening to BBC World Service radio – and news on the hour wouldn’t wait for me to switch on the radio!

I find my early attention on punctuality quite surprising since I haven’t worn a watch since I was 12 years old. (I had an old Favre Leuba wrist watch in school, and I lost it on a picnic to Gorai Beach – it fell out of my shirt pocket and got washed away with the waves. I was so upset with myself then that I decided not to buy another watch.) I soon learnt to estimate time quite accurately and realised that I didn’t need it – even in the pre-mobile era.

Punctuality is a personality trait. You are either punctual or not. There is no halfway house. And it is not difficult – one has to factor in a little buffer for meetings. You cannot expect others to be punctual if you are not. Of course, there are some unavoidable situations – in which case the host needs to be informed, even if it is a matter of a minute or two delay.

In business and in life, punctuality helps. It can be seen as a proxy for reliability and willingness to keep commitments – if you cannot be on time, what is the guarantee that you will honour a contract. This may be a bit of exaggeration, but given that many people neglect being on time, it becomes easy to stand out.

Starting meetings on time is the right thing to do – else you penalise people who are punctual. The “let’s give the others a few minutes” line is ridiculous – what it actually means is “it was stupid of you to come on time because the later-comers will decide when the meeting starts.” This attitude can easily spread to other aspects.

An entrepreneur needs many things to be successful – punctuality is one of them.

Tomorrow: My Proficorn Way (Part 20)

My Proficorn Way (Part 18)

Entry and Exit

An entrepreneur has a good sense when to enter a business. What is not so clear is when to exit.

I faced such a decision in late 1999. I had unsuccessfully tried to raise venture capital many times over the preceding few years. And then, suddenly, almost against the run of play, I had two acquisition offers on the table. I had been looking to just raise some capital so I could keep running my “forever business.” But now I faced the prospect of selling. The offers were good – way beyond what I could ever have imagined. But giving up my entire business for money? I had not considered that eventuality.

I had toiled hard for a few years growing IndiaWorld. Even vacation time was filled with thinking about what to do next. And there was so much to do. I never imagined myself doing anything else.

I had hired DSP Merrill Lynch as my investment banker to help me raise some capital so I could better compete in the marketplace. We were profitable, but the game in 1999 seemed to be shifting from passion and profits to capital and cash-burn. I was going to have to adapt. Profits were too small for me to make the large investments the business was inevitably going to need down the line.

I was confused. It was then that Hemendra Kothari, DSMPL’s Chairman, gave me advice that I have given many others. He sat me down one day and said, “Rajesh, in a business, even more important than knowing when to enter is to know when to exit. The valuation that you are getting today – it will be difficult to get the same again for a long time. You have many ideas. Sell this business and build others. You will have the freedom to do many other things in life if you do this deal.”

Those words of Hemendra bhai – “know when to exit” – turned out to be prophetic. A few months later, the stock markets tanked and a long dotcom winter began. Even though I didn’t know it then, it was his wisdom that saved IndiaWorld and perhaps my future.

So, for proficorns, there will be a moment when they may have to decide – continue to build, or sell and move on. At these times, one will have to keep the emotional aspect aside and remember those words from Hemendra bhai, “Even more important than knowing when to enter is to know when to exit.”

Tomorrow: My Proficorn Way (Part 19)

My Proficorn Way (Part 17)


During the IndiaWorld days when we were a small company, I used to often think about my day job as fire-fighting. I would wake up every morning and make a list of the 10-15 things that needed to get done for the day. And then, reality would hit! Something or the other would come up during the course of the day, and before I realised it, the day was over. Looking back at my list, I would find that I had barely done a handful of the tasks that I wanted to – and another dozen or so new tasks would get added to the list! That’s the feeling one has to like as an entrepreneur. Over time, I have come to realise that the ToDos list is an infinite one. It will never be over. The important ones will bubble to the top and get done.

But to make that happen, the entrepreneur needs “me-time”. It is time when you are alone and with yourself. No people, no meetings, no phone calls, no emails, no Whatsapp. Just you. Solitude. So, you can focus on the flow that’s coming, reflect on the meetings that have happened and the ideas that came, tap into the inner sixth sense to know when there is a new idea that is germinating or something bad that needs to be stopped.

In the past few years, the me-time bubble has become harder to come up. There are so many distractions that beckon. There is always that next urgent task that needs to be done. And before you realise it, life has become a clickstream of such tasks which while useful will not give the elevation needed for take-off.

That is why it is important to create contiguous time and a comfortable space for me-time. You have to get comfortable with yourself and solitude. Let the mind wander. I typically sit in a chair with my notebook and let the ideas flow. I think better when I write. For you, it may be walking or exercising or anything else. Whatever it is, each day needs a me-time slot. Because there is no one else in your company who can do this better – connect the dots, feel the new opportunities, think of the future. Your me-time may not ensure success, but lack of it can definitely stunt or kill the proficorn.

Tomorrow: My Proficorn Way (Part 18)

My Proficorn Way (Part 16)

An Advisory Board

When one is running a business on a day-to-day basis, it is easy to lose sight of the forest for the trees. Each day brings with it new challenges to be solved. One is deeply involved in every aspect of the business. Failure often becomes personal – because one is the engine driver in a train wreck. It becomes hard to hold people accountable – because everyone is in it together. You as the leader are part of every decision, so the responsibility for failure is yours. This is especially true in the early stages of a venture.

When Netcore was struggling to grow, I decided that I needed an outside-in view. I wanted a couple of people who could provide a view at a higher-level, and question me and the team. (Since I had no external investors, we did not have a formal Board.) It was then that I decided to set up what I later called the Advisory Board. It started with one member, and has since grown to 6 members. They have no fiduciary responsibility. We all meet once a quarter for 4-5 hours where the management team presents the quarter’s performance and the plans. It has worked very well in bringing discussion and debate which did not exist earlier.

The Advisory Board is now intimately familiar with the business and the team. They bring in their own experience to give us suggestions on what to do – this is something I lack since my only external work experience was 30 years ago! There is a good mix of expertise in our Advisory Board – management, strategy, financial and marketing.

As for the team, they present the numbers and plan as if we were a listed entity – because one day we will be. This creates a discipline of ensuring targets are given – and hopefully met. For the management team, there is not just an oversight (other than me) but also insight (on what can be done better). These quarterly meetings for the past decade have been a major factor in Netcore’s growth.

I would strongly recommend an Advisory Board for every entrepreneur at an early stage. Get a few people you respect and who have diverse industry knowledge. And then make it a discipline to do the quarterly reviews. This additional layer will go a long way in identifying mistakes early and reducing the prospects of failure.

Tomorrow: My Proficorn Way (Part 17)

My Proficorn Way (Part 15)

The Sub-broker Moment

During the IndiaWorld days (around 1997-98), we figured out a way to make IPO application forms available for NRIs. We did this through smart software which auto-incremented the application number in the PDF form. Thus, NRIs could now easily get access to the IPO forms without those being physically couriered to them. We charged about Rs 15K for the service to securities firms for this service.

Then, in August 1998, RBI launched the Resurgent India Bonds (RIB) to shore up foreign reserves. I quickly realised that this was going to be big – NRIs would apply to invest in huge numbers. And if we continued to just offer the Rs 15,000 service fee each from about 5-7 securities firms who had a digital presence. A lakh or so was good money at that time – all for a few tweaks in the software.

It was then I got an idea. What if we could get a cut of the money invested – this could increase our revenues substantially. Was that even possible? Yes, if our contribution was tracked. And how would that be possible? One of our customers gave me the idea – become a sub-broker. In essence, every form could carry a special code allocated to us which allowed the brokerage to track which forms came through us. I loved the idea. I decided to share the risk in return for the upside.

And it worked! We generated almost Rs 10 lakh in revenue from the sub-brokerage fees. A simple idea, that increased our revenues 10X.

Later in life, I would refer to this as the “sub-broker moment.”  A few months before the RIB issue, I would have laughed if someone had said that IndiaWorld would become a sub-broker. And yet here we were! A proficorn is always looking for incremental innovations – small tweaks and pivots which open up new opportunities. That is how new worlds open up.

In Netcore, we had started in 1998 as a mail server company. We stayed that way for many years, even though we tried many new ideas – all of which failed. But the spirit of searching for pivots did not go away. We had corporate relationships for mail servers. When SMS started growing, we became an SMS aggregator. And then an email marketing company. And later, a martech automation provider. This “sub-broker” mindset of doing something better and spotting an opening to grow is what has led to 10+ years of continuous profitability. In every business, there is always something which can be done better. The proficorn entrepreneur is always seeking that out.

Will be continued soon.

My Proficorn Way (Part 14)

Dealing with Failure

Everyone who says that learning through failure is how they succeeded is wrong. If that there were the case, failing first and fast would become the alternative to a business school education!

No entrepreneur sets out to fail. And yet, most do. Every entrepreneur believes they have a 70-80% chance of succeeding, and yet 99.99% of new ventures fail.  That is the reality of the world. It is easy to say that one has learnt a lot through failure. What else can you say? And it also sounds good. And yet, failure is the hardest experience for an entrepreneur to live through. It is gut-wrenching and emotionally debilitating. Each day seems like an eternity. It is a tunnel without any light anywhere.

I have had plenty of failures in my life. I never set to fail so I could “learn.” Each venture that I started had a dream, a vision, a rainbow that I could see. I kept imagining how the world would be a better place with what I was doing. And yet, many mistakes later, those same dreams would be destroyed. I had to face the reality that I had failed. And it is never easy – never mind all the previous failures.

Entrepreneurs live on hope and breathe optimism. As such, they are somewhat removed from reality – the same ability that gets them to see what others don’t also creates a distance when it is about coming to grasp with failure. As such, most ventures linger in a zombie zone for many more months than they should because the eternally optimistic entrepreneur always believes tomorrow will be the big day when everything will magically turn around.

The first step to dealing with failure is recognising it. Bad businesses need to be shut down and the entrepreneur needs to move on. Only when one door is closed can new doors be opened. Failure is not a business school or a ladder to success; it is part of an entrepreneur’s journey. Failure is the most likely and default outcome for a venture. What needs to be explained is success, not failure.

Proficorn entrepreneurs go to work each day to reduce the risk of failure. They also recognise earlier than others when something is not working and stop it. Without the willingness to fail, there cannot be success – because the journey would never begin.

Tomorrow: My Proficorn Way (Part 15)

My Proficorn Way (Part 13)

Never Compromise Integrity

When I was running IndiaWorld in the late 1990s, there was an occasion in the early stages when I was asked for a kickback in return for giving me business. It was a lucrative deal. And all I had to do was to agree to give some money back in cash once I got the order. The offer came at a time when we were struggling for growth. It all seemed so easy to say Yes, generate some cash using fake invoices, and pay the individual. No one else would ever know. IndiaWorld would benefit and I would have more revenues to build the business faster.

The advice I got from a few close family members and friends was mixed. Those in favour had arguments like “if you don’t do it, someone else will – only you will be the loser”, “take the money and do something good with it” and “it’s not really a big deal – every business does it in India because that is the norm.” Those against said “you must build a business the right way”, “you cannot compromise your ethics for success” and “you only compromise integrity once – after that, you are one of them.”

In a highly competitive market, the additional revenues could help us invest in new initiatives. Getting that brand as a customer would have given IndiaWorld strong validation and helped me get more business from others. It was a moment of truth for me.

I said No, and walked away. My parents had always emphasised honesty – whatever be the case. That was a core value. I could not let it go. My wife gave me the courage to make the right decision at a time when I was weakening. I also knew there is never “just this one time.” I realised that if I did it once, I would do it again. That was not what I wanted to become. I wanted to succeed on the merits of what we offered and what we were building – even though it would take longer.

A proficorn is built when the foundation is right. One of the core values that can never be compromised whatever be the circumstance is integrity. Because you compromise integrity only once. After that, you are one of them.

Tomorrow: My Proficorn Way (Part 14)

My Proficorn Way (Part 12)

Forever Mindset

When I look back, there is one clear distinction between my successes and failures. Whenever I have tried to keep short-term objectives (like I did in Nayi Disha), I have failed. The times when I have focused on the long future, I have done well.

Setting goals only a year or two in the future is very tempting. But the consequence is that the decisions will then also suffer from short-termism. There is no grand plan to create something big, no journey that is the draw. It is all about “let’s get this done and move on.” That rarely works.

In Nayi Disha, I had goals that I set for a year at a time. Create a movement to change India’s Constitution. Failed. Replace Mumbai’s Municipal Corporation Act to make the city free. Failed. Make Dhan Vapasi happen by forming a government of Independents. Failed. Each had a timeline of a year and failed. Had I stuck to one thing for the long-term (for example, changing minds on what can make Indians free and rich), I would have perhaps accomplished something. In reality, after 3 years of effort, I had nothing to show for it.

The same was true early in my career when I ran through a succession of ideas – and each failed. A multimedia database. Reselling software from US companies. An image processing solution. All in less than three years.

But when I started IndiaWorld, I had no finish line. The Internet revolution had just begun. I had many ideas. But the broad premise stayed the same through the five years until it was acquired – to create an electronic marketplace connecting Indians worldwide.

I did have a name to describe this mindset until I read Simon Sinek’s book “The Infinite Game.” Writes Sinek:

Finite games are played by known players. They have fixed rules. And there is an agreed-upon objective that, when reached, ends the game. Football, for example, is a finite game. The players all wear uniforms and are easily identifiable. There is a set of rules, and referees are there to enforce those rules. All the players have agreed to play by those rules and they accept penalties when they break the rules. Everyone agrees that whichever team has scored more points by the end of the set time period will be declared the winner, the game will end and everyone will go home. In finite games, there is always a beginning, a middle and an end.

Infinite games, in contrast, are played by known and unknown players. There are no exact or agreed-upon rules. Though there may be conventions or laws that govern how the players conduct themselves, within those broad boundaries, the players can operate however they want. And if they choose to break with convention, they can. The manner in which each player chooses to play is entirely up to them. And they can change how they play the game at any time, for any reason.

Infinite games have infinite time horizons. And because there is no finish line, no practical end to the game, there is no such thing as “winning” an infinite game. In an infinite game, the primary objective is to keep playing, to perpetuate the game.

The world of business and entrepreneurship is an infinite game. This “forever business” mindset is what helps proficorns succeed.

Tomorrow: My Proficorn Way (Part 13)

My Proficorn Way (Part 11)

No Two Bad In a Row

Rory Sutherland of Ogilvy (and author of Alchemy: The Surprising Power of Ideas That Don’t Make Sense) tells this wonderful story in an EconTalk with Russ Roberts:

There’s a guy, I may not mention him in the book, called Francis Fulford, and his family have occupied the same, I think, it’s 10,000 acres in Devonshire that was given to them in something like 1240. And he’s inherited this, and the family still owns it, and they still own the house there by direct descent over about 800 years. And they asked him how on earth he’d managed this achievement. And he points up to the ancestral portraits and says–he’s a very sweary man, so I can’t report him verbatim. He said, ‘Well, if I go back to my ancestors, we’ve had loads of idiots. We’ve had drunken idiots, we’ve had gambling idiots, philandering idiots, idiots who get in prison for treason,’ he said, ‘But we’ve never had two in a row.’

When one hires to fill in senior positions, it is of course important to hire the right person. You will never know until a few months into the job whether that person is right or not. If there is a mismatch, best to let the person go quickly. But then make sure the mistake is not repeated. Because recovering from a succession of mistakes is very difficult, as Sutherland’s story illustrates.

I have made hiring mistakes. But generally, I have not had ‘two bad in a row.’ And that’s the key for a proficorn to succeed. The wrong person can be like termite – weakening the foundation of the business or the group being led. The damage won’t be visible initially, but the group and the sub-culture will be weakened. It will require another person a lot of effort to fix that, but it’s doable. However, two successive mistakes will be disastrous.

The converse is also true. For big success, the business needs a succession of good people at the leadership level. Netcore has grown under three excellent CEOs in a row. They are the ones who ensured the proficorn foundation which has stayed strong even in unexpected situations like Covid.

Tomorrow: My Proficorn Way (Part 12)