These business family scions are blazing their own trails
Sunny Sen and Suveen Sinha May 16, 2015
The Nasscom conference in Hyderabad looked really interesting. The only roadblock was the Class XI accounts exam that same day. It didn't take Devita Saraf much time to make up her mind. Back from school in her South Mumbai home, she spoke to her father Rajkumar and mother Vijayrani. The mother, a post-graduate from the Delhi School of Economics, was not sure. But the father, a Marwari businessman who set up and runs Zenith Computers, told Devita to go ahead and book her tickets.
"I think of exams as an insult to my intelligence," says Devita. Her intelligence comes certified - she is a member of the international high IQ society, Mensa. Yet, Saraf has subjected herself to a stern examination. Appointed Zenith's director of marketing at age 21, she chose, after just three years, to set up Vu Technologies that makes luxury television sets.
With that started a process in which she gets judged every day: is Vu the passing fad of an heiress or proof that children of business families can build successful businesses of their own? Increasingly, the answer may be the latter. It is nearly 10 years since Vu began and its revenue has crossed Rs 100 crore in a niche area, with double digit profitability, with a team of 120, with just Rs 40 crore burned so far.
As further proof of concept, children of other business houses have begun to do their own thing. Bharti Group's founder and head Sunil Mittal's son Kavin runs Hike, an instant messaging app whose 35-million user base in India is second only to Whatsapp's. And Tara Singh Vachani, Max Group founder Analjit Singh's daughter, has started Antara Senior Living, a Rs 500 crore project in Dehradun for retired, wealthy people.
In India, according to various estimates, 70 to 80 per cent of all companies are family-owned. So those who opt out of the beaten track stand out and become case studies. Here we present three, though there would be many more out there.
"The trend of giving new businesses to incubate is new, but gaining popularity. It gives these people the opportunity of entrepreneurship, and at the same time reduces risk in the flagship business," says Mitali Bose, Regional Practice Leader, South and Southeast Asia, Pacific & Africa, at Hay Group.
The fathers of all three are very much active. Comparisons, therefore, are inevitable. "If the father is around, it is always a challenge," says Indraneel R. Chaudhury, Partner, Private and Entrepreneurial Client Services at PwC.
Taking a Hike
In 2010 Kavin Mittal started to spend two weeks every month in London, where he was running a start-up called Appspark, and one week in San Francisco, where he hunted for technology brains. He did this for six months, right until the end of that year, and then decided to park himself in Delhi, home to Bharti Enterprises' headquarters, because Bharti's venture with Japan's telecom and Internet multinational SoftBank had begun to take shape. Mittal closed down Appspark to run Bharti-SoftBank, which owns coupon app Hoppr and gaming outfit Tiny Moguls, other than Hike.
It helped being the son of Sunil Mittal, who had already taken Bharti into, other than the flagship telecom business, real estate, retail, insurance and infrastructure. He was also in preliminary talks with SoftBank, which was eyeing the India opportunity. "When I heard we were talking to SoftBank, I grabbed the opportunity," says Kavin.
Soon after the father and son caught a plane to Tokyo. Over dinner with Masayoshi Son, the head of SoftBank who is regarded as one of Internet's shrewdest treasure hunters, the contours of the joint venture were discussed. Hike was launched in 2012 after more than a year's work.
It nearly shut down - twice. The first time because the platform did not support the growth in user base and the site crashed. A new platform had to be created. On the second occasion, it had to be redesigned because the earlier version did not do well on basic phones that don't quality for the 'smart' tag.
At present, Kavin is working on a plan to integrate it with the coupon and gaming businesses. Eventually he would like Hike to be a path that leads to multiple services. In that sense, it would be a technology company like Google, where Kavin had interned while in graduation.
But will Kavin match what father Sunil did, which is, to build a global company based in India? He says it is too early to make comparisons.
Today, he says, 24 hours in a day are not enough. He doesn't wear tailored suits like his father and dresses in jeans and T-shirt to work, with a casual shirt thrown over -- all its buttons open. It's a good thing he does not work for Devita Saraf.
Out to Vu them with luxury
If you work for Saraf, you ought to take a good look at yourself in the mirror before leaving for work. If you turn up wearing jeans or sleeveless, you pay a fine of Rs 500. If you show up with a stubble, go shave and come. If you are late, take the day off.
"I am a luxury technology company. If I have people coming in jeans and slogan T-shirts you are not going to buy my product. When you act anti-establishment just to look cool, you are just fitting in," says Saraf.
There may be another reason, though. Although Vu is a start-up, its veins are full of the same corporate blood as Zenith, whose promoter family, the Sarafs, owns all of Vu's equity.
The advantages are obvious, not the least of which that Saraf lives with her parents and has no need to worry about her next meal. Vu's office in Andheri East, Mumbai spans three floors, in a building that bears its name - not so usual for a start-up.
In her three years as the director of marketing at Zenith, Saraf worked closely with Microsoft and Intel. She visited the MIT Media Lab with them, and Intel's innovation lab, as well as Apple's innovation lab. She saw the New Product Development approach using human factors.
In her interactions with customers, Saraf realised that young and affluent Indians wanted a better lifestyle. So she thought of using the New Product Development approach to create products, while bringing in the best of other industries like hospitality, fashion and entertainment in the product owning experience. "As a woman, what I understand very naturally is shopping. But the whole electronics industry was male-oriented and dull."
And so one morning while coming to office with her father in their car, cheek-to-jowl with other cars on the Bandra flyover, Saraf told him about marrying high technology with luxury in a TV set. He asked her if she would like to take charge of the new venture as the CEO.
She was just 24 years old at the time and took time to say yes. About three seconds.
Apart from the quick recruitment of the CEO, there were other benefits that Vu enjoyed from the beginning. The infrastructure was already in place, as were the processes. It was like starting a business in Singapore or Sweden, and not in a country that keeps slipping on the ease of doing business index.
Right now all of Saraf's time and energy is for Vu televisions. However, once she crosses Rs 500 crore in revenue, she would like to take a deep breath and wonder what to do next. There is a sliver of a chance the answer may be cars.
"We are going more and more high end. If you look at my 85-inch television, it costs Rs 9 lakh, which we have sold out already," she says. That is more than the price of many cars.
However, she won't make just any car. It will not be made on the specifications of a normal car. "I hate reverse parking. The wheels move only about 45 degrees or something. In a trolley, they move 360. Why can't the wheels of a car move 360? Basic stuff."
She will approach the business of making cars - if she ever does - with a blank canvas. "The fundamentals of building a car are 100 years old, when there were horses on the streets. These people make fancy engines, why can't they rethink the way they make cars?"
The rethinking can be endless, and great fun. Why does the driver need to sit on one side, and not in the middle? Why have a front passenger seat in a luxury sedan like Mercedes? No one ever sits in it. Why not put a laptop table there? You get the drift.
Reimagining things can be done in different ways. Tara Singh Vachani did it by imagining a colony where old, retired people could live without having to worry about the daily chores. If they were rich enough to pay for the house and the services.
Max Gets Real
Just as Kavin Mittal chose to do something that would fuel utilisation of father Sunil's telecom network, his friend Tara Singh Vachanis Antara Senior Living in Dehradun has resonance with one of father Analjit Singh's large businesses: healthcare.
Vachani was on a trip to Hong Kong in May 2010 when she had a conversation with the CEO of Shama, which offers high-end senior living in China. Singh realised that in India the needs were similar. She came back and discussed it with her father the idea that became Antara. It offers services that include housekeeping, laundry, car services, meals, and round-the-clock medical facilities. Her father liked the combination of hospitality and healthcare.
Dehradun appeared to be the perfect location. It has a large population of retired people. It is also a city the Singh family is familiar with. Analjit studied at the Doon School. Vachani's grand parents lived there and she visited it several times as a child. In 2012, they bought the plot.
Despite being blessed by Analjit, the idea had to go through the board. "It took us two years to do the research and prepare the plan and to be able to show that it was a viable and sensible business for Max India. We presented it to the board in 2012 and were put through the washer-dryer before being granted the approvals," says Vachani.
She now spends at least one day every week at the project which is expected to become liveable in 2017, and will be followed by other similar projects by Antara. These apartments are being marketed to retired CEOs and other senior executives, bureaucrats and ambassadors.
The project has 217 apartments. The smallest of them is built over 1,500 square feet and is priced at Rs 1.5 crore. Over the last one year there has been a lot of customisation depending on the services the buyers opt for. For example, a full service apartment would have a monthly charge of Rs 78,000. A customised package, which sacrifices some of the services of the full service apartment, can be had for Rs 49,900.
Vachani wants to provide facilities like a five-star hotel, so the staff is no less. "Our head of operations is from the Oberoi Group. The entire line of control is from the top three hotel chains," she says. She also wants her top three people to go the US for training in senior living.
Vachani is busy looking for properties to build more senior housing projects -- one is planned on the outskirts of Delhi. She is not in a rush, though. The plan is to have another five or six properties in the next 10 years.
Antara is a 100 per cent subsidiary of Max India, and has enjoyed the privileges that come with being part of a large, established group.
"The family will support your initiatives, and the support could be much more than just financial... It can use network support or the family's brand name for that," says Kavil Ramachandran, Professor at Indian School of Business, and an expert in family businesses. The family's network has definitely paid off. More than half of Antara is sold.
Footnote: An earlier version of this story erroneously referred to the Antara project as Vaana
(Follow the authors on Twitter: @SunnySen; @suveensinha)