Soft start, sharp growth

Wonder years:

Divyank Turakhia, 26 Education: Graduation Age at starting business: 16 years No of years as entrepreneur: 10 years Initial investment: Rs 25,000 Source of funding: Loan from parents Company: Directi Group Turnover: Rs 1,400 crore No of employees: 500

At an age when most boys are busy tapping technology for pleasure or are tuning in to its job prospects, Divyank Turakhia had founded his own software company. Ten years on, the 26-year-old—along with his 29-year-old brother, Bhavin—heads Directi, a Rs 1,400 crore group, which offers tech-based services to over a million customers in 200 countries. The prodigious rise has been powered by Turakhia’s passion for computers. “I loved computers so much that while other kids played cricket or football, I spent my lunch breaks and after-school hours in the computer lab,” says Turakhia. Little wonder then that at 13 he was selling computer projects to other schoolchildren. At 14, he had honed his entrepreneurial skills enough to offer Internet consultancy to corporates. “My focus areas were helping firms set up their Websites, Internet gateways, Intranets, e-mail accounts, and assist with any product or software they couldn’t manage themselves,” says Turakhia, who earned “more disposable money than the richest kid on the block” through his freelance work. Meanwhile, Bhavin was trying his hand at selling computers and offering end-user Internet services. The siblings’ efforts culminated in late 1998 when they decided to set up their own firm at Andheri, Mumbai. Bhavin was 19 at the time, Divyank, 16. Directi was about to be born.

Strategic growth:

“We started our first product line by borrowing Rs 25,000 from our parents,” says Turakhia, who was in Class XII at the time. “The network of clients that I had built during the two years of freelancing helped me promote the company,” he says. The result? Within one month of starting Directi, they had returned the loan to their parents. Three months after the launch, the team had expanded to 10 people, all fresh engineering graduates. A year on, the company registered a profit of Rs 1 lakh.

Owning a company didn’t mean he was spared formal education. His parents insisted on graduation and “I opted for commerce,” says the man who believes formal education doesn’t facilitate growth at one’s own pace. His parents were occasionally worried, but as he found his feet, they relaxed.

“We focused on businesses that allowed us to have a positive cash flow from the very first month. As we started to build cash reserves, we added products with longer gestation periods,” says Turakhia. They worked on mass market services that were indigenously developed and global in nature. The idea was to build growthintensive intellectual property and stay away from capital-intensive infrastructure projects or services requiring customisation. “This meant that if our products were successful, the margins would be very high as development costs would remain the same whether we had a 100, 1,000 or a million clients,” says Turakhia.

The strategy worked. Directi soon obtained accreditation from ICANN or the Internet Corporation for Assigned Names and Numbers, and started offering business automation solutions for Web serviceproviders, traffic monetisation solutions, online advertising and mail solutions, among other products. Directi’s business units also began providing a range of services, including Web hosting, domain registration, dedicated servers and site building to a growing global clientele.

Challenges:

Rapid growth meant building a bigger team, which proved to be a forbidding exercise. “Finding good people was our biggest challenge and will continue to be so as we grow. Without the best people, you can’t build the best company. In fact, I try to spend a significant portion of my time on improving human resources,” says Turakhia, who channelises a large amount of resources to ensure that every employee has the necessary tools and freedom to take independent decisions. “When a majority of people in a company take decisions proactively, the growth rate increases significantly,” he adds.

Besides this, the main challenge has been marketing the products that are typically conceptualised, designed and executed in India to global clients.

Widening the web:

Directi has grown in a short span of 10 years from a two-member unit to a 500-strong group with multiple offices in China and the UAE and a presence across the world. “In a couple of months, we will grow to 1,500 and shift to a sevenstoreyed building at Andheri,” says Turakhia. Each business unit, he claims, has grown exponentially in revenues and head-count, while each of their start-ups now ranks among the top 10 businesses worldwide in its respective segment. In fact, Directi has featured on the Deloitte & Touche list of the fastest growing tech companies in Asia and India for three years, adds Turakhia.

Earlier this year, the Ashmore Group, a leading global investment firm, invested in Skenzo, one of Directi’s business units. “This is the first external investment as the business was already making good money and didn’t need any capital. We got Ashmore on board as we wanted a partner with the expertise, experience and track record necessary for our aggressive growth plans for this unit,” says Turakhia.

“We have an infinite number of new business and product development ideas. The goal is to continue increasing them. Also, till now, we have grown organically, but now we are in the process of evaluating M&A transactions both inside and outside the country to ensure inorganic growth,” he says. Each Directi business has to be number one in the world in the respective industry space, he asserts.

For someone who started at 16 and is a success at 26, it may not be too unrealistic an ambition.