Sowing seeds of growth

Sowing seeds of growth

T Muralidharan put the failure of his first venture, a seeds company, behind him to start a human resource solutions firm that's now worth over Rs 30 cr.

Management schools teach you managerial ability not entrepreneurship,” says T Muralidharan, an alumnus of Indian Institute of Management, Ahmedabad (IIM-A) and now the chairman of one of India’s largest talent acquisition and management companies.

That may sound like a pretty strong dismissal, but it comes from years of hard-nosed experience—leaving the comforts of a cushy job to become an entrepreneur; failure as an entrepreneur in his first venture and later success in the human resources industry.

 Muralidharan joined IIM-A after graduating from the Indian Institute of Technology, Chennai. His first job, in 1981, was with the National Organic Chemical Industries (Nocil) as a marketing development officer in Mumbai. Starting salary was Rs 1,100. Six years down the line he was earning Rs 10,000 a month.

 T Muralidharan

T Muralidharan

Education: B Tech (Chemical Engg), IIT Chennai, MBA, IIM Ahmedabad
Last job: Marketing Development Officer, Nocil
No. of years as employee: 7 years
Age at starting business: 31 years
Initial investment: Rs 50,000
Sources of fund: Own and partner’s saving (Rs 25,000 each)
Company: TMI, an HR solutions firm
Turnover: Rs 32 crore (2006-7)
No. of employees: 350

A chance comment by a friend set Muralidharan on the entrepreneurial path. “My IIM batchmate Turab Lakdawala, who was then working for Hindustan Lever, threw up an idea to be a partner in a seeds business that he planned to start,” he says.

But why seeds? “One, Lakdawala had a background in agriculture and his job with Lever involved selling seeds. Two, it called for minimal investment,” he adds. However, it was not before his friend quit his job that Muralidharan actually got involved. This was in 1987. “It was not difficult to convince my wife because she was party to the meeting. However, my parents and relatives thought that I had gone crazy.”

After an exploratory visit to Hyderabad—the seeds capital of the country then—they set up shop despite opposition from friends. “In fact, my boss at Nocil told me that they were losing money in seeds but we thought that they were just seeing us as competition and were trying to dissuade us,” says Muralidharan.

When he shifted to Hyderabad, his wife was the only earning member with a salary of Rs 4,000. But very soon, he was offered a consultancy by a Mumbai-based firm, which paid him Rs 10,000 for a nine-day job every month. This was shared equally between the partners.

“Since the cost of living in Hyderabad was lower than in Mumbai, we could maintain our lifestyle. Anyway, I strongly believe that one’s lifestyle should follow one’s income and not vice-versa.” They rented a space for Rs 300 a month for their new company TM Inputs and began operations.

Their friends’ advice, unfortunately, proved true. “Three years in the seeds business taught us a lot. First, I was unfit because I had zero knowledge of the subject. Turab did his best but could not match the wits of the traders in the business,” recalls Muralidharan. “Every year we would make a business plan in which we showed profits and each year we ended up with a loss.”

They sent out mailers and Muralidharan toured Karnataka in July 1987 to sell stock. “After travelling for 20 days I could not sell even a kilogram of seeds, not even on a consignment basis (pay when the farmer sells). I came back complete -ly demoralised and fell ill.”

At around the same time, Muralidharan, along with a journalist friend, began creating corporate brochures. The first brochure they produced was for Satyam Computer Services. “Satyam, in 15 years, has grown at a great pace. In the same period, we grew to be merely 0.1% of their size,” says Muralidharan.

Choose Well: Never start a business that is not aligned to your strength

Fund It: Never under-finance a venture

Plan Judiciously: Factor in the details while making your plans

Network: Partnerships are important, whether the company is doing well or not

Limit Expenses: Don’t let lifestyle drive your income

After futile attempts to keep the seeds business afloat, they finally wound up. “We had lost around Rs 10 lakh by then and I am not even including the opportunity cost,” says Muralidharan. Then came the idea of a recruitment agency. “It was purely a case of serendipity. Around the time we were thinking of closing down our seeds business, my wife’s friend used our office premises to do some headhunting. He made a fair amount of money.”

And that’s how Talent Management International (TMI) was born. Between 1991 and 1997, the company grew gradually and opened branches in Chennai, Mumbai and Bangalore.

The initial years in the new business were not without struggle though. “Being a Hyderabad-based organisation was a locational disad -vantage as getting the Mumbai and Delhi clients to believe that we could deliver recruitment solutions from Hyderabad was a challenge,” admits Muralidharan. However, gradually business started picking up and more and more corporates became clients.

TMI got a push when Muralidharan’s brother Sreedhar joined in 1997 and expanded the business to six cities, over 100 customers and 2 lakh relationships. “Sreedhar had better networking skills—the primary requirement in the recruitment business—than me,” explains Muralidharan.

Another push came when TMI became a member agency (part of the network) of the Bernard Hodes Global Network, the world’s leading employer branding company.

In 2000, TMI floated a subsidiary called C&K Management to create a knowledge portal. The project was partly funded by venture capitalists. However, the dotcom bubble burst leading to yet another disaster. “By September 2000 we were facing bankruptcy. In these years, we learnt to survive with the support of friends and a set of dedicated people,” says Muralidharan. Gradually, the venture picked up again and now creates courses for global IT companies.

Talking of the future Muralidharan says, “We want to be India’s largest employment intermediary for freshers. By the end of 2007, we want be present in 25 towns and scale it up to 400 district headquarters by 2010.”

So was the decision to quit his job in the first place a bad one? “The decision to quit my first job was an impulsive one. But I don’t complain now because had it not been for the failure in the seeds business, TMI would not have been born.”