Growth Mindset – Conversation on Personal & Business Growth with Rajul Garg

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Rajul Garg is the co-founder of GlobalLogic and Sunstone Business School. He co-founded GlobalLogic which was sold for $420M in 2013 to Apax partners in the largest deal of the year in India.

Rajul built the GlobalLogic operation ground up in India and then expanded it through global acquisitions, until 2008.

Rajul has consulted with top-tier venture capital firms such as Sequoia Capital and Aavishkaar, where he has got exposed to the education sector. Earlier, right out of college, Rajul founded Pine Labs, a leader in the Indian market in credit card transactions. Rajul is a graduate from IIT Delhi.

In this interview, Rajul talks about his own entrepreneurial journey, growth challenges and tips on personal and business growth.

Having a well-knit team that can stay together and keep innovating is one of the keys to drive growth

Tell us about yourself and your entrepreneurial journey

I was doing some part-time software development work in college and that became by first start-up as I graduated in 1998. It was called Pine Labs. While the start happened easily, the going was anything but smooth. For a couple of years, it continued in a survival mode and while services were good to make ends meet for 4-5 motley bachelor’s, there was no real value creation.

I got introduced to what I would call value-creation 2 years later when I started GlobalLogic, with some friends. Pine Labs became a subsidiary, later spun off independently in 2003 with a new CEO. While it continues to grow from there on, I exited in 2008 by selling to an incoming investor. It seems to have taken off in recent years as I see Pine Labs credit card terminals every year.

I feel great seeing that. GlobalLogic started as a product company in the B2B space, raised venture money in Year 1 (2000) and promptly got in trouble all through 2001 before it re-invented itself as an outsourced product company in 2002. It saw explosive growth from their on, and when I left my management role in early 2009, it had over 6,000 people. I exited when the company got acquired by a PE player in 2013 and continues to operate and grow since.

I started Sunstone after a stint with the venture in 2011 and we have seen steady growth over almost 4 years. Starting from a modest 25 student batch, we are now among the largest such programs in the country. I am excited about our prospects.

What is your opinion on starting v/s growing a business (as 80-90% of business fail within 18 months)?

I feel taking a quantum leap in growth is always very challenging and involves risk, belief, hard work and some degree of good fortune. Starting a venture is a quantum leap in itself. However, every quantum leap in growth is also equally challenging. Let’s define it as a 10x growth. Making the first 10 Lakhs is challenging when you start. Taking it to 10x, i.e. 1 Crore is also very challenging. Taking it to 10 Crore and then to 100 Crore  and so in is also challenging.

I feel many businesses are not able to unlock this next level of growth. I wouldn’t call it the failure if you are running a small but sustainable business but in many areas, it’s not possible. It’s possible in services or boutique businesses, but for many others, they need to achieve growth even to survive. When professionals quit their jobs and have a high opportunity cost, it does not make financial sense to them if they are not able to achieve a certain scale.

How would you define growth (personal and business)?

I would define business growth as 10x growth. You can use whatever metric you want – revenue, valuation, the number of users, size of the network, or quantification of the problem being solved. If you are seeing a clear path to achieve 10x in a few years and you see hurdles but not insurmountable ones, I would say you are in a growing business.

Personal growth is harder to define since it is personal. Some people can define it as growth in fortunes, some in skills, leadership abilities, exposure or knowledge etc. For me, it would be growth in overcoming your fears. If you have greater ability to back yourself over time, I would call that personal growth.

What challenges did you face while growing GlobalLogic and Sunstone and how you overcame them?

GlobalLogic and Sunstone are both very different businesses.

GlobalLogic was a B2B services business and these tend to be a lot about great execution. One has to execute day in and day out, manage capital, keep customers happy, execute on sales, manage people and so on. The value proposition of offshore services was relatively clear, so the key challenges were also around execution.

With Sunstone, we went too innovative. We got into a new market, not something that clearly existed. The very need that we saw – that there was no high-quality option for working professionals also made it hard to market. Think of it like – if you are bringing a new vegetable in the market, how hard would it be to explain to people, versus just selling potatoes. So the big challenge has been and continues to be – market building, market awareness, and brand building. Very different from anything I had done before.

The commonality between the two businesses is though that the way to overcome challenges is to build a good team. I feel in both the cases, I have had fantastic teams that have constantly experimented and solved complex problems.

What do you think are the pillars on which any business growth is dependent?

I think there are 2 pillars from what I see now:

Business model: The way you serve your customer and make money in the process. Sometimes it’s defined by unit economics, sometimes by other metrics. In most cases where I see businesses are not growing, the business model does not lend itself to grow. One has to be constantly keep looking at the business model, fine tuning it and even pivoting till one finds the right formula for 10x growth.

Right people: When I am faced with challenges, I try to find the right people to solve them. Having a well-knit team that can stay together and keep innovating is a major pillar in executing.

What tips would you suggest for growing a business on limited resources?

To me, limited resources are only a constraint in the mind. There are resources available out there and there are plenty of entrepreneurs who have leveraged that.

Ability to excite other people to join your vision is the key. It helps finding management, investors, and even customers. If an entrepreneur is constantly struggling for resources, then either the business itself is not very exciting or the entrepreneur is not being able to tell the story properly. Help is available in both cases through mentors today – only reaching out is required.

How can we have a growth mindset towards our career and business?

This is truly the key question since everything is about mindset. I feel everything else can be acquired –mentorship, skills, people and so on. It’s the same quality that pushes sports people to excel or top actors to get their performances exactly right. It’s truly a million dollar question.

Role models help. Reading autobiographies helps. Listening / Reading / Watching / interacting with people who have this growth mindset helps. It’s a constant process of discovery rather than an end in itself.

 

 

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