This post is intended to be a sequel to my earlier post on employee ownership. It has a similar message – but this time for my co-entrepreneurs.

Most entrepreneurs would vouch for the sacrifices they have to make in running their companies. My experiences shared in this post validate this. They draw less salaries, over work themselves, family time is always secondary to some burning challenge which needs to be addressed – and this continues for years on end.

This was my story as well. And somewhat that of Ankur Gupta as well.

Axelerant

Ankur ran a company called Axelerant India – the offshore development center of a US company. They were basically a one-large-project company www.mnn.com. Ankur had moved back from the US, after spending nearly 10 years studying and being an entrepreneur. He was now in India for 3 years and set up a small team in New Delhi doing some excellent Drupal work.

For years he and his partner (brother) were trying to enter the Indian market in the government space – bidding on large projects. There was no success coming along.

Ankur had however, successfully put in good Project Management and QA structure, at Axelerant, and this was the key reason for the success of his projects.

He found Srijan through www.indiaenvironmentportal.org.in which we had built in Drupal as well; and wanted to outsource a Drupal product that they were building to us. Our discussions over the few months turned into exploring having a common development team, and reducing our overheads and costs.

These discussions did not go through then, as we could not work out a workable structure, and his partners in US did not agree. This was in June 2009.

In March 2010 we picked up the conversation again. He had reached a dead-end in terms of running his company. He was doing well on the one long-term maintenance assignment with MNN; even trying a hand at building several web products alongside; but the scale of the business was not enabling him to move forward and build a great team.

Srijan

Srijan had been a decently successful TYPO3 company for several years, which had adopted to Drupal in 2008.

Earlier this year, Srijan was struggling a bit – in its own ways. We were about 25 people at the beginning of 2010. Had picked up projects far beyond our delivery capacity; had a tech geek as CTO; had hired a good bunch of developers, aspiring entrepreneurs, and bright fresh technology graduates.

Things seemed to be going well for us. We had more projects than we could handle – an enviable position for any small business to be in. We were converting projects in all sorts of open source areas – and building client relationships that we had always been dreaming of.

But accountability at Srijan was abysmal; projects were dragging; unhappiness index had become high in the last few months; and dependence on a few key people was very high. We had a lot at stake, and things were not going in the right direction.

I was tired and desperate to move out; and do another business (i am dying to startup some social entrepreneurial businesses); and hand-over this one to more competent people. Always a dreamer, i was not grounding this business firmly, while accommodating incompetent people including among the geeks – they were just not delivering on their job roles – i was failing to put in Project Management structures; expecting geeks in leadership positions at Srijan to do so.

Yet, because of our past work, we had some solid projects to back us – such as www.openthemagazine.com – and some good word-of-mouth going around for us.

The merger

As Ankur re-started the merger conversations that got dropped off last year. And after much deliberation, argument, discussion and heated debates with people at Srijan, Axelerant merged into Srijan. We retained the brand Srijan, as it had a created a brand value in India, and had a culture of conversations/dialogue and transparency.

The motives of the merger

It is important to put this in perspective, and not sound like a merger of desperation. We could have merged the year earlier as well, and had done decently well for ourselves over this one year. We could have chugged along for another year – or years – just as is. But there were strong driving factors for the merger:

  1. Both he and i wanted to create an environment of excellence, get access to good (often expensive) resources, find a better office location, scale our operation to reduce costs, work with agencies in the US, work with do some top-notch Drupal work, and get rid of this “cheap Indian shop” tag, which also had judgements such as these associated with it – “these Indian shops spam us stating how good their work is; but always oversell and under-deliver“.
  2. None of us was bothered with owning 100% of our company. This was not an ego-trip we were on.
  3. We both realised our incompetence in leading our companies as CEOs and were looking out for more competent people to fill our shoes.
  4. We both wanted a respite for ourselves

How are we doing now?

  1. We’re about 35 people now
  2. We have a new wonderful office in Gurgaon
  3. We’ve got better processes and tools
  4. We’ve got a good and somewhat stable Project Management and QA structure, given the collective access to funds
  5. Still have a huge dependence upon a bunch of people, but yet much less than how it used to be for us 6 months back
  6. We’re getting far larger sized projects that would have been difficult for us to win, and then deliver with our small scale earlier
  7. We’ve got tie-ups going with Drupal agencies in the US
  8. We’re delivering projects on time, finally! Phew…
  9. We’re getting back to good profitability
  10. We’re setting up our own Drupal hosting infrastructure
  11. We’re delivering projects in Drupal Performance and Scaling – areas that typically have been accessible to only western companies

Many things are going right for us now. There are many-many challenges and hurdles yet. For businesses, perhaps our size, its always a two-steps-forward-one-step-backward process, but the strides forward are perhaps longer, and the ones backward, shorter.

So what’s the message?

My message is this.

For far too long we’ve been made to believe that competition is healthy. Survival of the fittest has been taught to us as the rude reality of life. Yet, nature thrives and exists on collaboration; it behaves as Systems – each one dependent upon another – if one breaks a whole chain collapses. We’ve been taught to create our own small ego-centric sense of ownership. We’re mostly willing to have poorly managed family-run businesses, but unwilling to professionalise them – given the insecurity of losing control.

Most businesses, are just there for the heck of it. There is no distinction in the promoters vision other than to become an Infosys or a Google. There is rarely a mission statement in these, that espouses values other than some multiplier of $million. There is mostly no vision at all – no sense of value creation.

I am not suggesting that there is something wrong in having a small business which one wants to run for the next 20 years. If someone has the stamina, and choice to do it this way – that would be great! On the other hand getting acquired is not wrong, but the reasons and motives have to be more than ‘make as much money, as quickly as possible‘.

With the merger with Axelerant, i’ve realised that there is value in letting go of control; of collaborating; of dropping ego-boundaries. Whether our merger will be successful or no, is a completely different matter. Our motives to collaborate and professionalise are good. Together, we have more than any one of us could do have access to independently. Between Ankur and i, as promoters, we own a small pie of a larger cake. And we are working on sharing this pie with people at our company – should they choose to co-create this company alongwith us.

My message is for small entrepreneurs, to explore the values of merging with similar sized companies; of collaborating; of creating professionalism and professional management structures; and in the process raise the quality and brand of their companies, and create better workplaces.

Srijan is surely actively seeking further M&A opportunities with similar sized or larger companies, to help scale our open source services business model.

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