Luck. It’s a thought that keeps coming back while hearing the story of how Sanjeev Bikhchandani built Naukri.com into the country’s largest web-based employment site, ahead of even Monster.com’s India offering which got stronger when it took over JobsAhead.com or print-giant Times of India’s employment site. Or is it that entrepreneurs like Bikhchandani recognise opportunity while the rest of think it’s just happenstance.
We’re at the recently-opened Piccadelhi in Connaught Place’s Plaza cinema complex, styled to resemble the London locale right down to the park-style benches and bus in the middle of the restaurant and doormen with the red coats and bearskin hats made famous by the Buckingham Palace guards, but it’s too noisy to hear a long story which Bikhchandani is primed to tell.
So we walk down to DV8, which is what that the 1970s hangout disco, the Cellar (which later became El Arab) has now morphed into. Lunch is quickly ordered. No booze since neither of us can down two in the afternoon without feeling groggy; it’s a very hot chicken goulash soup with some crispy veggies for starters and grilled fish for both of us.
Bikhchandani’s story, or the salient parts of it, are, of course, pretty well-known by now since parts have appeared in various newspapers including this one as well as in a case study prepared by a professor at the IIM Ahmedabad. For the record, Bikhchandani quit a lucrative management job at Glaxo Smithkline (where he earned “Rs 8,000 a month with prospects”) to start off his own jobs venture since he saw colleagues queuing up all the time to look at the appointments section of Business India magazine – “you’re always looking at a job, even when you’re not looking for one”.
He started off his company doing the odd market surveys and feasibility report, but the company was too broke to pay him, so the house was looked after by his wife who worked with Nestle [Get Quote]. He taught management over weekends at various places like the Times School of Marketing, management school IMT and at the IMS coaching classes – to earn around Rs 2,000 a month, “enough for booze and cigarettes since I didn’t want to be a fully-kept man”, he says with the practiced air of a well-told story.
In between, for four years, he got a job as a consulting editor of The Pioneer and ran their careers supplements, something made possible through chance meetings with the editor Chandan Mitra – later, as Chandan bought the paper, Bikhchandani helped him restructure operations to cut costs.
In 1990, or thereabouts, the department of telecom came out with ads launching a video text service and wanted content providers. Bikhchandani got staffers to reword job ads from various newspapers to create a jobs database – a lawyer told him there were no IPR issues as long as the words were different! – and had a readymade database.
However, the DoT project never took off. In 1996, at a visit to IT Asia at Pragati Maidan, Bikhchandani saw a stall with a “www” sign and got his first exposure to the net and what it could do. The forgotten database suddenly looked useful, so staffers began combing 29 newspapers to build it up – the recession of the mid-1990s, in any case, resulted in staffers having nothing to do. His brother was given a 5 per cent stake in Naukri for offering to pay $25 a month to a web-hosting firm, the “best programmer in the world”.
Anil Lall was given 8-9 per cent for learning net-programming and doing it, and another friend V N Saroja was given 9 per cent for running the company. ‘By now I’d given away around a fourth of the company, but a fourth of zero is still zero!’
The model worked, and while VCs began calling, Bikhchandani turned them down, till in 2000, JobsAhead launched and advertised in the Sharjah cricket tournament with an ad budget greater than Naukri’s turnover. Naukri gave ICICI [Get Quote] Ventures 15 per cent for Rs 7.3 crore (rs 73 million), just before the dotcom bust. Last year’s turnover at Naukri, all from fresh ads (not from rewording of print ads!), was Rs 45 crore (Rs 450 million) with a profit of Rs 8.4 crore (Rs 84 million).
What’s the way forward? Sure, running a company of 775 people across 30 offices is a nightmare, but how is Google’s Googlebase or Yahoo! Hotjobs affecting Naukri?
Bikhchandani’s now thinking smart, and you realise his success has a lot less to do with luck. He will, he says, put out all his 80,000 job ads on aggregators such as Google and Yahoo! (this will give his clients a larger response level). Isn’t Naukri dead then? Not really, he argues, since his search algorithm will be a lot more robust than the “single box searches of the US”.
Once you aggregate various databases, like Google will do, you can’t do searches with very detailed criterion – like a job in Delhi in a FMCG firm as a general manager for someone with over nine years of experience, for instance. In the last year itself, Naukri’s changed its search algorithm 20 times to take into account changing needs of the client base.
Bikhchandani’s on a roll now, with strategic advice coming forth faster than I can handle. Business Standard, he says, should have a separate desk for its web edition, reword the news got from various agencies like PTI and Reuters (basically, once you put out 50-100 stories an hour, you get huge traffic) and run Google ads along the side to get revenue.
He says the media war in Mumbai needs to be re-targetted and newcomers like Hindustan Times and DNA (along with others like Mid-Day and The Indian Express) need to offer combined ads to clients since this will equal the Times of India’s reach (his Lintas days recall that clients pay for reach first, and worry about costs later) and will force the Times to lower ad tariffs and so hit its ability to take on the market so aggressively – better to target the Times’ market he says than to compete for just the non-Times segment!
We wind up with Bikhchandani saying he admires the Google Consumer Surplus model. Groping into the past, I vaguely recall Consumer Surplus is the extra you’d have been willing to pay for something, but how’s Google getting this? By getting advertisers to bid for keyword searches – if a florist pays for a keyword, everytime someone searches for flowers, this florists’ name comes up first. I leave a bit groggy, not quite sure how this fits into Naukri’s business model. It does though, I’m sure.