Building a Bootstrapped Unicorn from India: Rajesh Jain, Founder of Netcore Cloud (Part 3)

Sramana Mitra: Now you have cash. What happens next?

Rajesh Jain: So, the morning after the deal, it’s all over the Indian business newspapers. My wife Bhavna looks at me gloating as my photo is there on the front pages. Then she tells me, “If you are going to think about the money we have in the bank and what you have done, you will never do anything again in life. What’s done is over. Forget about it. Nothing should change in our lives. Go back to what you’ve always liked – creating new things and being an entrepreneur.”

Then starts the next phase of my journey. I followed her advice, of course, we’ve worked together now for thirty years. I spent a couple of years with Satyam InfoWay from 1999 to 2001. Then started a period where I basically again went back to what I was doing before IndiaWorld – I tried different ideas. From 2000-2008, I tried several ideas.

I had one company which I spun off from IndiaWorld called Netcore. When we were doing IndiaWorld and developing websites for Indian companies, they would start getting emails from people. At that time, Microsoft Exchange was very expensive in India. One of the problem statements which came up was to set up their internal mail systems, so that they can distribute the mail and reply to the people abroad who were writing to them. So, we started doing Linux mail servers in Netcore.

Sramana Mitra: Okay.

Rajesh Jain: Between 2000-2007, that business barely grew. It’s at about $200,000 revenue. Meanwhile, I tried a lot of different ideas. I tried to do a thin client, thick server solution using a hundred dollar computer. It came on the cover of Newsweek, but of course we couldn’t sell it in India.

I tried to create an internet-in-a-box SME solution for small and mid-sized businesses. Many of these ideas didn’t really pan out. In 2007, I realized that the real problem is me. I can come up with very interesting ideas, but I don’t have the ability to convert them into a proper business. So I thought I have to get a CEO to run the Netcore business and who can take some of these ideas and actually monetize them. The excitement was always there of creating new things. Finally, it has to become a business.

The seven to eight years were sort of the failed years. Then in 2007, I brought in an external CEO. We were still very small at that time, maybe under a million dollars in revenue.

Jumping a little bit ahead to 2007-8, we started doing SMS services for enterprises. We also started doing email marketing services. There was a mobile revolution, and SMS was being used by companies. They needed a tech platform like what like Twilio does today. Of course, there were other companies at that time which were doing that. That started getting in some revenue. 

In today’s terms, you would call them SaaS platforms.

Sramana Mitra: Applications, not platforms.

Rajesh Jain: Yes, applications. What Twilio or SendGrid offer today, we had done that for Indian companies. That actually turned out to be a very good, steady source of growth for us. It still is over the next 17 years.

Sramana Mitra: Tell me more about the CEO that you brought into Netcore. Who was that? Why was this the choice? And how did you navigate that journey? Because, at this point, you are a successful entrepreneur. You can call your experiments in the six to seven years prior failures, but you’ve had a very big, celebrated exit. At that time in India, it was a very rare kind of success story.

So for that profile of a person to bring in an external CEO is a very difficult job. The person who was coming in must have also had lots of reservations about coming to work for you. Tell me more about that transition.

Rajesh Jain: You’re absolutely right. So, in June 2007, Rajat Barjatia, a very close friend of mine, sat me down and said, “Rajesh, look, you’re good with ideas, but this is no way to run a business. What you need is to bring in someone who can really take your ideas and commercialize them. There is one person I know and I’d like you to meet – Abhijit Saxena.”

Abhijit came from a very different background to me. He was at the digital arm of Zee, one of India’s largest satellite TV broadcasting companies. He was building out their digital business.

Rajat asked me to meet with him and see whether I like him. So I never did a formal search process. There was this one referral, and I had a couple of conversations. We met two, three times. We both liked each other.

I thought that Abhijit was very different from me. He brought in a sales discipline that I lacked. When people would come to me and tell me their numbers. I would say, “OK, you tried your best.” There was no discipline of targets or anything like that.

It was a big decision bringing in a CEO, but I realized that if Netcore had to be built up further,  I was more of a bottleneck rather than an aid in helping Netcore grow. The other decision which I made was that in a company, there can only be one leader.

Even though I had sort of the majority ownership and some ESOPs at that time, the leader had to be Abhijit Saxena and not me. If people had a back channel to me, it would undermine the CEO. You can’t have two leaders. It’ll all fall apart. Even if I had differences of opinion, I would voice them privately to him, but I would say that the final decision is yours.

I think that’s really what has worked very well for me. Netcore has had three CEOs through these last seventeen years. But it wasn’t an easy decision. Today, when I meet with founders, this is one question which pretty much many of them are asking, “What is the right time to bring in a CEO?” My answer is that you have to evaluate what you are good at and what you are not.

Sramana Mitra: That’s right.

Rajesh Jain: That’s right. You have to ask yourself every year, “Are you helping or hindering the growth of the company?” The company is bigger than you as the individual. You have responsibilities towards the employees and investors. I’m a very good zero to one person, but that one to ten needed someone else.

Sramana Mitra: Your role was what? Executive chairman?

Rajesh Jain: Yeah, sort of like an executive chairman. I looked at new ideas. I would go out and talk to customers. Then another interesting development happened in my life. Around 2009-10, I got interested in the political side of things. One of the questions that would often come up in conversations with friends and other people was, “Why are Indians in America so rich? Why are Indians in India so poor? Why are some countries rich and why are most countries like India poor?” It basically came down to the rules and the type of governments in a country. Tthose were the bottlenecks, essentially problems.

Then I said, “What is it that I can do to help or contribute to changing the government in India?” In 2009 general election, I worked on the periphery for the Bharatiya Janata Party (BJP). They were in opposition at that time and they lost the 2009 election. In 2011, I got a chance to meet Narendra Modi, the current Prime Minister. My point to him was that I want to help, but I will work from the outside. I will put up my own money. I will make my own team. For me, it was another startup. I had the freedom and I had the capability. That’s what I liked doing.

So, I put together a team which did work in media data analytics and a volunteering platform for the BJP, but from the outside. So, I set up a hundred person team over those years. It took me a little away from Netcore, which I think in a way also helped because I was not interfering. It’s very hard to just stay quiet in one room, but it helped, I think.

This segment is part 3 in the series : Building a Bootstrapped Unicorn from India: Rajesh Jain, Founder of Netcore Cloud
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