Tried, tested and moved

Source: The Economic Times.

Dr. Madhukar Gangadi of MedPlus goes the retail way to sell medicines
It’s 9 am and Dr Madhukar Gangadi, founder & CEO, MedPlus Health Services, already needs to recharge his mobile phone. This is just the start of what will be another 14-hour day. Such is life for the person at the helm of MedPlus, India’s fastest growing chain of full-service pharmacies. In less than two years, Dr Gangadi has taken MedPlus from a concept into a major retail player with over 120 outlets spread across Andhra Pradesh and Karnataka. With a commitment to deliver 250-300 outlets more by the end of June, Dr Gangadi and his team are working overtime these days.

MedPlus as an idea was conceived while he was doing his MBA at the Wharton School of Business. He had been researching healthcare in India as part of a business plan he proposed to write for his class project and that's when Dr Gangadi uncovered an astonishing report by the World Health Organisation (WHO) which suggested that a sizeable percentage of India's medicines may be spurious. A medical man himself, he knew the dangers this posed for the Indian consumer. “This wasn't just a matter of people being cheated out of their hard earned money, the Indian consumer's health was at risk,” he says. That's when he decided that for the sake of his family — Madhukar’s father is a diabetic — and the Indian consumer, something had to be done.

Raising funds proved to be a big challenge. “I first tried doing so in the US, but people were skeptical,” says Dr Gangadi. Then, there was the ethical issue of a medical doctor getting into the pharmacy business which kept many investors away. Finally, he approached his classmates, friends and family members to raise the first $500,000 and MedPlus opened its first store in Hyderabad in February ’06. “Within two weeks more funds poured in and once we touched 100 stores several VCs were willing to invest,” he says.

Fast forward 18 months, and MedPlus has logged close to Rs 50 crore in annual sales. It now has the financial backing of a premier Indian venture capitalist, iLabs, which recently invested Rs 23 crore into MedPlus. Madhukar's infectious enthusiasm for improving access to quality healthcare has not just attracted capital, but people as well. The 900-employee strong company is run by a talented five man management team that's growing stronger by the day.

MedPlus' success in pharma retailing stems not just from its commitment to quality healthcare, but also from its operating model. "I wanted Wal-Mart pricing in a Starbucks like store. This way, we would be able to bring low prices, consistency make healthcare more accessible in India," says Dr Gangadi. In keeping with this philosophy the size of most of the company's stores is between 200-400 sq. ft. This provides MedPlus the flexibility of locating its stores where customers need them the most – near their homes, hospitals, workplaces, or shopping areas. The model also reduces MedPlus' capital requirements, speeds up store rollout and enables the company to react faster to changing market.

Developing a successful business model is only the beginning for Dr Gangadi. He knows that the success or failure of the model would largely be based on the customer’s experience. “We win or lose everyday in the shop, and I hate to lose,” he says. The company has therefore invested heavily in employee training, creating a one of a kind facility in Hyderabad in which all shop employees receive in-depth product knowledge and practical customer service training. "We take accredited pharmacists and experienced shop assistants and give them the tools they need to be part of a modern pharmacy chain,” he says. The result has been a dedicated staff of employees who are not just able to dispense medicines but also provide valuable advice to make customers better informed about their health.

After the first phase, Dr Gangadi is looking at expanding the footprint, and launching the organisation’s integrated health centre concept. Dr Gangadi believes that branding is not just about brand recognition but also about the entire customer experience, the services which MedPlus offers, the partnerships which it explores, and the quality of medicines the company sells. Footprint expansion is also critical, as it means more consumers can enjoy the benefits of high quality medicines at low prices. The company has set aggressive growth goals for itself, and believes it can end 2007 with between 700-800 outlets across India.

What really gets Madhukar excited these days, is the Integrated Health Centre. He believes that the same lack of consistency which governs the pharmacy industry is present in the highly fragmented pathology labs and clinics across the country. As a result, the company has announced its intention to broaden its services to include diagnostic labs and clinics. The company successfully recruited a number of the senior management of a major diagnostic lab chain into MedPlus to lead the pathology lab efforts, and is in discussions with doctors to staff the clinics. All this growth has its challenges, but Dr Gangadi remains confident, “We’re improving the lives of the Indian consumer – when you're motivated by a larger cause, you can achieve amazing things.”

Little wonder then he plans to expand nationally and take on bigger rivals like Apollo Pharmacies as well as emerging retailers such as Fortis Health World and Medicine Shoppe.

Homing in on success

Source: The Economic Times.
It’s hard to imagine a company being rooted in the maxim, ‘There is no such thing as a safe business venture’. But that was exactly what five professionals chose as their guiding principle, when they decided to turn entrepreneur.

With this agenda in mind they decided that they would take the riskier road of setting up an IT products company rather than the safer alternative of venturing into the IT services domain. What perhaps made this decision even more fraught with risk was the fact that they were focusing on an extremely specialised and niche area, that of geographical information systems (GIS). Perhaps, the only advantage they had was that they did not need to start from the scratch. All five founding members at SatNav — managing director Amit Prasad, co-founder A Rajendra Adepu, deputy general manager (corporate group) Arpitha S Rao, associate vice-president (corporate communication & strategy) Pallavi Taori and co-founder & business head (BIM solutions) S Selvamuthiah — were all part of Satyam Navigation, a company incubated by Satyam in 2000 under its technology entrepreneurship programme. And when in 2004, Satyam decided to exit the business the five of them decided to take over the fledgling company and branch out on their own. Says Mr Prasad, “It was our passion and commitment that inspired us to float an independent venture. None of us wanted to abandon the GIS products as we had spent a lot of time and energy conceptualising and developing them.”

Despite operating in what can be called a tricky terrain the company has managed to hold its own and is slowly but surely making a name for itself. In the last three years, the company has successfully developed a slew of products, which have given it both recognition and a strong base. Its flagship product, A-mantra, is a flexible web-based business infrastructure management system. It provides managers with a complete view of the company’s infrastructure, irrespective of its size and can help bring down infrastructure cost by 4% as small teams can manage large facilities with this product. “A-mantra helps integrate data from ERP and other in-house applications to generate a range of customised reports,” Mr Prasad explains.

But the product that the company is really excited about is a navigation device called SatGuide, which is said to be the nation’s first satellite-based navigation device. The device has a mapping software with detailed maps of six cities and an all India road network map. It also has an inbuilt database of 24 categories like hotels, airport and shopping malls. Mr Prasad believes that if all goes well by the end of the year the product will have similar databases for 72 cities. At an organisational level too the company has been making strides. Started with an initial investment of Rs 25 crore and five members, SatNav today has over 75 people working on various products in navigation systems, business infrastructure management system and intelligent transport system. It has also added a new promoter Ajay Prasad, an NRI based in the US. The company though is cautious when it comes to adding to the headcount. For unlike a services company, which can start billing customers from day one it takes product companies much longer to do the same.

So what about the future? SatNav is bullish about the future both because its flagship product SatGuide has been received warmly in the marketplace and the fact that the GIS space is likely to see a lot more action in the coming years. The company also expects that global positioning system (GPS), a network of 24 US military satellites, will penetrate every market. Says Mr Prasad, “Our devices are GPS-enabled so that one can calculate the position dynamically using the radio waves emitted by these satellites. We are also looking at building business models around our directions portal — roadsofindia.com. This will help us tap the potential of the GPS market.”

The company is already looking to capitalise on this trend with work on a vehicle tracking system, which is expected to hit the market next year, already underway. Mr Prasad says the company is not looking for marketing tie-ups, but he says it is open to partnering with leading companies in this space. He says, “Our aim is to join hands with leading players in the GIS segment for technology or equity partnerships, which will help our company grow.”

Given that it is still a growing company, (revenues last year were Rs 3.2 crore) the company has thus far been mainly focusing on India. However, given that this year the company expects a five-fold jump in revenue it is now looking at entering other markets like Singapore and the Middle East as well. So what next, we wonder. Given that the growth plans in the It products space is set are they now back to being professionals rather than entrepreneurs. The founders are quick to dispel any such notion pointing to their latest diversification.

The group has entered into a strategic partnership with the Centre for British Teachers Education Trust of UK for managing its pre-school and daycare chain, Sunshine. Under the new education venture, SatNav Preschool, the group is planning to set up 100 centres at an investment of Rs 25 crore by 2009. Says Mr Prasad, “We have also floated the country’s first maintenance, repair and overhaul (MRO) project, HAMCO, and we are looking at setting up a facility soon. Our aim is to become a billion dollar group by 2012.”

Surviving the dotcom meltdown

Source: The Economic Times.

Nazara walked right through and scripted a success story in the mobile content space
He set out to build an online venture at the worst possible time — right in the middle of the dotcom meltdown. However, his passion for technology and determination to succeed was such that he just soldiered with a firm belief that that his idea was a winner. Nitish Mittersain, 27, CEO and promoter of Nazara Technologies, hasn’t looked back since then. Today, not only is Nazara alive and kicking but it also has a clutch of private equity players jockeying hard to partner the firm in its second round of funding.

The early going was never easy for young Nitish, who was still a student at Sydenham College when he turned entrepreneur. “There was this negative hype about dotcom companies and it was inconceivable to raise funds for the venture,” he recalls. Few believed that his business model was unsustainable and therefore extremely reluctant to partner with him. None of this deterred Nitish, who still managed to raise Rs 20 lakh from a few willing investors, including his father, to incorporate Nazara Technologies.

The first area that the company forayed into was online gaming, through a gaming portal nazara.com. A natural choice given that he was and remains an avid gamer. However, that was just the beginning and Nitish was still on the look out for the big idea which could stand the test of time. He soon spotted one in the form of the wireless space. He made his move quickly and Nazara entered the wireless entertainment sector, which was on an upswing. In the early years Nitish consciously chose to maintain a low profile, both for the company and himself, and focused all his energies on trying to ensure that the company stayed afloat. He recalls that in those times it was all about minimising costs and keeping an eye on the bottomline.

His vision would soon pay off in that both the wireless sector took off and content was fast becoming king. Recalls Nitish, “Fiscal prudence paid off. We spent next three years building relationship with wireless customers while keeping our costs low.” Soon the company could boast of a respectable performance in what was a difficult space. Nazara had made modest profits for five years and simultaneously built up good relations with most of the major telecom operators.

Given the boom in the wireless sector and the company’s unique position in that space investors began to want a piece of the action. The company got its first round of funding of Rs 7 crore from Sequoia Capital in 2005 which picked up 25% equity stake thereby pegging the enterprise value at close to Rs 30 crore. And after that there was no looking back. “We have managed to log 400% growth since the first round of funding and considering that mobile content space is still in its infancy, we see a great potential for years ahead,” says a visibly proud Nitish.

Today, Nazara is a leading mobile content and application developer providing products to mobile operators globally. The company exclusively licenses well known brands like Sachin Tendulkar, Sehwag, Dhoni and Archie Comics among many others, and develops mobile content based on these brands in keeping with their image.

This branded content is then distributed worldwide through mobile operators and aggregators. However, this is just the beginning as far as Nitish is concerned and he is now trying to take the company to the next level and therefore looking at additional funding. Nazara is now close to raising approximately Rs 32 crore in its second round of funding and expects to make an announcement in April. A new model (B2C) is to be launched for direct acquisition of customers by June 2007, which will complement its current on deck business with carriers.

Once the money comes in the aim to more than double the existing revenue. Having logged revenues of Rs 15 crore for the year ended on March 2007, Nazara Technologies is now aiming to close the current fiscal at Rs 35 crore. Accompanying the revenue growth will be a doubling of the employee strength and expansion into new geographies as well. Nitish believes that given the wide penetration of mobile service in the country and the availability of cheap handsets which can support diverse VAS content there will be a greater and greater demand for diversified content with regional focus as there are many vibrant cultures.