Sometimes failure can be a good thing. In the case of Kiran Mazumdar-Shaw, it lead her to pioneer a new industry, build a world class company and set her on path of great success. Not bad, for someone who calls herself an accidental entrepreneur. “It was just fate that got me to start my business. It was the failure to get a job as a brew master that saw me start a biotech company. It was not a career path I chose myself,” she says.
Mazumdar-Shaw came back to India after completing her studies from Australia in 1975 to pursue a brewing career. But companies were unwilling to take a bet on her since brewing was considered to be the turf of men. After two years of trying to fit in, she gave up and was headed for a career overseas when a chance meeting with an Irish entrepreneur who wanted her to set up a company to manufacture enzymes in India, set her on the journey of being an entrepreneur. Wanting to start her own business as a 25-year old woman came with its own set of challenges, but she was well-prepared to face them. “In a way, the challenges I faced when I set off to become a brew master had prepared me for the hardships I would face as an entrepreneur,” she shares.
Biocon was incorporated on November 29th, 1978 with an investment of 10,000. Mazumdar-Shaw says that her initial days were set in a completely different scenario and it didn’t help that she had very few co-aspirants. “There were not too many women who wanted to pursue even a career, forget being an entrepreneur. The environment for a woman to run a business was very tough those days even though there were a lot of schemes and incentives to support women entrepreneurs,” she says. To illustrate how restrictive the scenario was for women, Mazumdar-Shaw narrates the story of when she approached Karnataka State Financial Corporation (KSFC) for a loan; the institution told her that since they had clubbed women entrepreneurs with the physically challenged and the backward class, she could apply for a loan under that category. But, Mazumdar-Shaw flatly denied. “On principal, I refused to apply for the loan and told them neither am I physically challenged or nor do I belong to a backward class. I told them to process my application under the general category,” she recalls.
Raising a credit line from a bank was almost impossible. They would ask for collateral or at least wanted her father to sign a bank guarantee on her behalf since she was not married. She had no collateral to offer and told them that her father had nothing to do with her business, so they would have to base their decisions on her credentials. Most banks weren’t willing to take that leap of faith. Finally, a manager from Canara Bank took that risk and she managed to secure a credit line.
Adding to this, there was the challenge of recruiting people. Nobody wanted to work for a woman and the fact that she was operating out of a garage didn’t impress prospective recruits either. Her first two employees were tractor mechanics who were about to retire. But that didn’t deter her. She taught them initial enzyme processing. She eventually got her initial team in place, some of whom are still with her.
Never give up
According to her, most young entrepreneurs quit easily these days. “Entrepreneurship is a gruelling journey. Most entrepreneurs give up at the first couple of pitfalls. That’s giving up too easily. It is an endurance test and you must endure. I have gone through a number of pitfalls in the early days of business and I managed to scale up because I didn’t give up,” she says. She further adds that scaling up is every entrepreneurs’ initial goal. “Scaling up is the first big hurdle that an entrepreneur has to overcome. It is their biggest challenge,” she says.
Mazumdar-Shaw says resisting the temptation to exit early is equally important as well. “As an entrepreneur you start with modest investments. So, after 5 years someone offers you 10 crore, the temptation to sell out or exit is always there because the offer may seem substantial compared to what you started out with. But in the context of what value you can create in 10 years, the 10 crore offer may be miniscule,” she elucidates. Scaling up, she says, unleashes the true potential of the business if one understands the value creation ability of a business and sets their sights much further up. For that, according to her, finding the right product market fit is critical. “You may have the perfect technology but if you don’t have the market, then it will be a big disaster,” she reasons. She further emphatically adds, “Your commercial milestone must be your first invoice. If you can get somebody not only to pay for the product but also say that they will place the second order, then you have arrived.” She believes that entrepreneurship is taking an idea to the market. “When customers start to pay for your idea or product, that’s when you are successful. That’s how you build your entrepreneurial track record,” she opines.
The year 1998 was quite transformational for Mazumdar-Shaw — personally and business wise. Not only did she get married, it was the year she decided that Biocon would enter pharmaceuticals and transform the business model. The enzymes business was not growing as fast as they had expected. The company had already developed a lot of technology and IP around enzymes which they wanted to leverage and apply in bio-pharma. So they chose products like statins, insulin, immuno-suppressants or monoclonal antibodies which help them leverage the existing technology they had. Mazumdar-Shaw says that it is calculated risks like these taken over the years that have helped Biocon grow. “I have taken bold bets when required. I am still the biggest risk-taker in the company. You cannot stay on the beaten path and be a successful entrepreneur. But once you believe in something you should stick to it and not let the sceptics or critics bother you.” She reveals that particularly in the past 10 years, there has been a lot of flak and doubts about how Biocon was run, saying that the company hasn’t performed as well as its contemporaries. But Mazumdar-Shaw shrugs them all off. “I keep telling people not to compare Biocon with other pharma companies because we are a bio-pharma company,” she explains. She recalls when people questioned her spending practices. “People would ask why am I wasting so much on R&D and I would tell them I am not wasting money. I am investing money in R&D and these bets will pay off in the long term.” Her faith wasn’t misplaced as she proudly states that those bets are starting to pay off now. “We are the only company in the country that is pursuing a global opportunity in biosimilars,” she adds.
Mazumdar-Shaw had to earn her wisdom the hard way though. “I never really had a mentor and I had to find out a lot of things by myself since I was pioneering a sector; things like whether an enzyme would sell or not. The only person I could bounce off my ideas was my partner in Ireland with regard to technology,” For business, it was Narayanan Vaghul from ICICI who she met later on. “I considered him as a mentor since I could talk to him about the business,” she says. Vaghul was also the one who gave Mazumdar-Shaw a break when she needed to scale up and conventional financiers were reluctant to fund a novel idea. “I approached Vaghul and he told me he was looking for such novel ideas to back since ICICI was starting a venture fund,” she recalls.
While entrepreneurship is full of calculated bets and overcoming challenges, the journey can be lonely. Mazumdar-Shaw says it doesn’t have to be. “I have always created a team of like-minded people moving towards a common goal. You can’t build a company alone. My success has been due to the fact that I have empowered and encouraged people to solve problems,” she emphasises.
Mazumdar-Shaw believes that family support is very important as being an entrepreneur is not exactly a walk in the park. In her case, her late father was her biggest cheerleader and after him, the role was taken over by her husband, John Shaw. In fact, she classifies her father as her biggest advocate especially during the times she was struggling to find a job. “He would keep telling me not to listen to anyone who says this is not a job for a woman; that I knew more about brewing than most men in the industry and that it is the company’s loss if they don’t hire me,” she recollects. Though he could not support Mazumdar-Shaw monetarily when she started her business, he remained her biggest moral support pushing her to move ahead and grow the business.
His successor, Mazumdar-Shaw's husband has not only been her biggest supporter but also sold his house in Chelsea when Biocon decided to foray into pharma; they had to buy out Unilever’s stake since the company didn’t want to enter the business. According to Mazumdar-Shaw, her husband still says it was the wisest and best investment he has made apart from marrying her.
Among all the support she got from the men in her life, Mazumdar-Shaw gets her fiery independent streak from her mother who even now at the age of 85 runs her own profitable laundry business. “She WhatsApp's her income tax payment receipt every year and is very proud of the fact that she pays taxes. She even divides the profit equally between my brothers and me and we get fixed deposits on our birthday. She has always been a confident and independent woman,” smiles Mazumdar-Shaw.
While her nearly four decade journey as an entrepreneur has had its fair share of memorable moments, the one that stands out in her mind is when Biocon went public. Seeing the company’s valuation zoom to a billion dollars at the press of a button at the stock exchange was ecstatic, says Mazumdar-Shaw. “It was a ‘Eureka’ moment for me because until that moment, I hadn’t realised the value we had created and worked so hard for. It was a big thrill for me,” she remembers with a touch of nostalgia.
Mazumdar-Shaw feels that this is a wonderful time for being an entrepreneur with so much capital chasing businesses. “We need more entrepreneurs because they are job creators and the need of the hour is to create more jobs in the country.” She feels there is no better time than now especially for women to pursue their entrepreneurial dreams and ambitions. “These are exciting times because the gender barriers are collapsing and my message to all the aspiring entrepreneurs is to go ahead and just do it because you are not going to have it any better.” From someone who has been there and done that, there can be no better advice.