DQ Path Breaker Award 2000

Heard of serial entrepre
neurs? Well, Ajit Balakrishnan, chairman and CEO, Rediff.com India (Nasdaq: REDF) is a shining example of one. Engaged in an Internet venture since 1995, and awfully successful at that too, Balakrishnan today stands atop a heap of accolades and achievements for giving the country its only global Internet brand. The man has guts and vision on business and commerce. He steered the company to an IPO on Nasdaq in June this year amidst the global meltdown in dot-com valuations. The IPO was oversubscribed 19 times and the stock price climbed 61% to $19.31 on the first day of trading. 

Balakrishnan founded “Rediff-on-the-Net” in December 1995, funding the company himself using profits from the advertising hotshop that he had built–Rediffusion Advertising. “The early designs were inspired by AOL. Over time, it has evolved into the ‘portal look’ in keeping with the international trends,” says Balakrishnan. He had to spend a lot of time evangelizing about the Internet even as commercial Internet access began barely three months earlier. “We had to
even convince people that there was something in India called the Internet,” reminisces
Balakrishnan.

Balakrishnan later managed to raise nearly $20 million from offshore investors including Draper International, Intel, Citicorp, General Electric and Warburg Pincus. 

Says Balakrishnan, “The major concerns in the past five years were not to be too early with services, not to spend too much before the market develops…careful pacing and controlled release of products is how we have handled the risks.”

On how he went about building his organization, he said, “Hiring talented, independent thinking, hands-on top management, being clear and unequivocal on business strategy, creating a culture of free-flowing, open discussion of issues…setting a personal example of responsibility and accountability.” He hired talented professionals who were masters at their own functions–be it editors, programmers or salespeople–but knew nothing of the Internet. He then spent time teaching them the Internet rather than hiring young enthusiasts who had no professional skills. 

The company’s sound business practices revolve around strong financial and control systems, and relentless measurement against international metrics. For example, the company targets a revenue of over $3 per 1,000 page views and a 40% increase in revenue every quarter. It also plans to put a tight control on receivables–last quarter less than 40 days, and pulling gross margins of over 50%. 

The Rediff.com Roller

1996 Web News Service
1997Chat
1998RediffMail, home pages, online booking of movie tickets, e-commerce
1999Broadband Content, US edition, marketplace, portfolio tracker, matchmaking service
2000Local language edition, instant messenger in English and Indian languages, WAP editions, cricket channel, women’s channel, international brand stores

So what do the stats say? Financial statements for quarter ended September 30, 2000 reveal net revenues increased by 53% to touch $1.34 million compared to last quarter. 

The future direction of growth for Rediff is in internationalization. Having acquired ThinkIndia.com, a portal in the US, Rediff.com is now looking at making appropriate acquisitions in the UK, Middle-East and Far-East by early next year. It plans to provide access across various devices–extending beyond PCs–and various language sites apart from English, Hindi, Gujrati and Tamil, which have already been launched.

A small-town boy from Kannur in Kerala, Balakrishnan was catapulted into the world of big business after his graduation in Physics and a business degree from IIM Calcutta. Embarking upon a
career with a small advertising agency, eschewing the multinational career offers that came
so easily to an IIM graduate, Balakrishnan proved his originality. He went on to found Rediffusion Advertising, a creative hotshop along with two other friends from the industry, Arun Nanda and Mohammed Khan. The agency won many awards in the advertising industry in 1974, its very first year. A moment of triumph, unerased from his memory. He moved with the times and plunged into the infotech industry co-founding PSI Data Systems. 

Balakrishnan’s sense of timing is infallible. He entered and exited businesses with razor sharp precision. He sensed the advent of the Internet at the right time. In 1995, he brought alive the first Web server in India (www.rediff.co.in). Another moment of pride for Balakrishnan came when the first trade for Rediff flickered on the Nasdaq trading terminal in June. 

At 52, Balakrishnan is an enormous success story of an Indian professional entrepreneur. Among his role models are Gandhiji, Kennedy, Steve Case and Sarnoff, all institution builders who changed the way people live. He works ferociously hard putting in 16 hours a day at the office for even seven days of the week. Talk of leisure for the CEO of a Nasdaq-listed company! The Balakrishnan “family” is a threesome–his wife, himself and a basset hound. An avid reader of business, technology and science, he is also passionate about portrait painting. Balakrishnan’s long-term plans center around public service: his ultimate definition of success as opposed to the banal yardstick of wealth. His only maxim in life: keep the faith. Balakrishnan, the serial entrepreneur, fervently hopes to build an Indian brand respected throughout the world. And he is very well on the way. 

Easwaradas Satyan 
in Mumbai

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