7-sided cube

In developing software for corporates, Rajesh Varrier ran into reams of daunting data. He tapped the tedium of analysing it, and with six partners, rolled out activecubes.

R. Sree Ram        Print Edition: June 11, 2009

When a man’s reading list has a clear tilt towards business biographies, you can practically predict the birth of an entrepreneur. So it was with Rajesh Varrier, who stepped out of college to plunge headlong in the pursuit of his dream.

With a freshly-minted degree in computer engineering from Mumbai’s Watumull Institute of Technology, in 1992, Varrier decided to start a software development company with a couple of friends. They convinced a large retail chain in Pune that they could build a billing software for it. But Varrier & Co. soon realised that their idea was pre-programmed to crash— they didn’t have the resources, space, program developers or even the licence to start or run a company. The key learning: without the basics like people or capital, one can get an order, but it’s virtually impossible to deliver.

It was only after a decade-anda-half of learning, if not mastering, the ropes of his particular field—at Karvy Consultants, Patni Computers, as a consultant for Compaq and Nike in the US, and finally, in India with Infosys—that Varrier was able to bring his college dream to fruition. Activecubes, an analytics services firm, was born in 2007.

While assisting clients to develop customised software, Varrier had to understand both the business domain and program-relevant software. In doing so, he observed that big organisations collected a huge amount of data about customers, product sales, suppliers, production processes and service delivery. There was a clear opportunity for firms that could help sift through these vast data banks to glean the kernels of marketing wisdom. These firms could provide real business intelligence, insights derived by analysing the reams of data to help clients position products better, connect with customers and get ahead of the competition. “If we can help a marketing manager or the head of sales to find his sweet spot, we are in business,” says Varrier. “Having been in the field, we knew that business intelligence and analytics was a growing space,” he adds.

Tips for start-ups
Entrepreneurship is not an idea alone. It’s also about the right mix of people and capital.
You have to be in it for the long haul, as employees and wellwishers invest in you. If you are not sure, do not go down this path.
You need to have zeal and passion. Even if the idea fails or the money dries up, the passion to build the firm will help you find a way out.
Spend more time on learning the business. Do not rely completely on outsiders or employees for skills.
Try to recruit locals in the respective business locations as they are wellversed in the culture and will bring in more business.

Varrier also realised his job kept him so busy that the only way he could become an entrepreneur was if he quit and spent time developing the idea. So, in 2006, he left Infosys and in the six months that he spent honing and refining his idea, he called his friend Kiran Ventrapragada. With over a decade of IT experience in telecom and retail firms across Europe, Ventrapragada too was looking for a change and agreed to join Varrier. He was in Germany at the time, but happily packed his bags and came to Bengaluru.

Though the fledgling entrepreneurs knew they had a good idea, their first challenge was setting up an office. Given the real estate prices in Bengaluru, office space would have bitten off an unhealthy chunk of their limited capital. That’s when they learnt of the incubation facility at STPI (Software Technology Parks of India), a government-sponsored organisation set up by the Department of Communications and Information Technology. In December 2006, Varrier and Ventrapragada made a presentation to the STPI. “We acquired facilities like phones, high-speed Internet, audio/video conferencing at a subsidised price and a pay-as-you-use model,” says Varrier. It suited their start-up perfectly. Together, they started activecubes in January 2007.

They rented a five-seat space—paying Rs 25,000 per month, and a similar amount for their single employee, Satyan—and began to build a team, the next big challenge. They decided that all the members of the team should be co-founders invested in the business idea. This would distribute the initial risks while ensuring commitment at the top level. They looked for people with complementary skill sets who were willing to share the uncertainties of a start-up. Varrier scouted among friends and former colleagues. “Most people I met were excited about the idea, but backed out when it came to taking a financial risk,” he says.

It took the duo eight months and a great deal of effort before they had what they considered a perfect team. After Ventrapragada, Prabhu K. Gutta, who had experience in building Matrix Laboratories, a company valued at a billion dollars, came on board. Next was Anand Sam, who had worked with Varrier at Infosys. For a US-based partner— necessary for the major target market— Varrier spoke to an old friend, Ajay Pulpa, who had worked for IBM. In a remarkable coincidence, Pulpa had just quit his job to be on his own and agreed to sign on. He was followed by Anand G.C.P. and K. Ramachandran, both colleagues from Infosys.

Given Ramachandran’s 21-year experience in IT services, he now heads the company’s analytics practice. Ventrapragada’s and Sam’s strong technology background placed them squarely in that section. An IIM Bangalore alumnus, Anand, having headed marketing for a large business unit at Infosys, was regarded as the best fit for sales and marketing. “We pooled together a seed capital of around Rs 5 crore through the savings of each of the seven members, our friends and families,” says Varrier. The business partners now run different business verticals.

In the months it took for the dream team to coalesce, activecubes had already acquired clients and doubled its office space in the STPI. In the third month of operation, Varrier hired a consultant in Australia, who got activecubes its first client by pitching the duo’s strengths in building software solutions for corporations. By early 2008, activecubes had grown out of incubation and rented a 4,500-sq-ft office space in Bengaluru. Large global companies like breweries major Fortune Foster’s Group Ltd and financial services company ABnote Group (Australasia) were among their clients. “I wouldn’t put a number to the turnover, but we are booking our revenues in millions,” says Varrier.

Now, activecubes has over 40 employees and offices in the US, Australia and India. It’s a big change for the young college dreamer and the reliable IT employee, but it was this very career that gave him exposure to small, medium and Fortune 500 companies. Since he specialised in enterprise-wide applications, he learnt the business and best practices across different segments.

The key to building a successful company, says Varrier, is to have people with the right skill sets and the passion to keep going. Partnering is clearly important in his world view—even the company name came from a brainstorming session in which the majority view was accepted. The cube, as in the basic component of business intelligence function rather than the roll of a dice, is critical for this success.

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