Secret Diary Of An Entrepreneur

"We Wanted To Be A Small Company, Only Competition Wasn't Going To Let Us"

Secret Diary of Sanjeev Bikhchandani Part-2

Photograph by Vishal Koul

I went to the IT Asia exhibition in Delhi every year just to keep updated about the latest technologies. There were 100-odd stalls. One of the stalls had “www” written on it. It was 1996. That was an interesting sequence…I wondered what it could mean. I went up to the stall and asked: what’s this www? “World Wide Web”, I was told. I learnt about emails. The guy at the stall wanted to give me a demo. What did I need the demo for? I didn’t know anyone who had email…it would be like having the only telephone in the world! “Whom would I talk to?” I said, walking away. What he said next was more up my alley…he said one can access information via the internet, sitting at home. I didn’t care about access but I wanted to be one of the sites that people used to access information. I would need a server…all the servers were in the US!

I called up my brother in the US. “Have you heard of the internet?” I asked. He laughed! Of course, he had. He had gone to all the right places – IIT Kanpur, IIM Ahmedabad, Stanford for PhD. Back then, I thought I would follow his path. I qualified for IIT, but I wouldn’t have gotten the best department with my rank…so I chose economics…

I told him I needed a server! It cost $25 per month…I had no money to pay him, but he played his part. We rehashed the appointment ads from 29 different newspapers and got two data entry operators to key them into our structured databases.

Arun was a brilliant programmer, freelancing from home. He would build the website…cash was never my friend. I never had any. So, I offered him 7% of the company. He agreed. While this was happening, Surabhi had quit Nestle…this time the onus was on me to keep the monthly cheques coming…

Chandan Mitra had offered me the job of consulting editor at The Pioneer. It was for their careers supplement. I took it up because I could come in the afternoon – mornings and nights were for the enterprise. It was so tiring to keep two things going…I don’t know how I managed 18-hour workdays. I guess being in your thirties helps. I would wake up at 5 AM, drop my daughter off at the bus stop at 6, work for two hours and reach the office at 10:30 AM. I would leave for The Pioneer at 2 PM, come back at 7 PM and work on till midnight. It was strenuous…I needed someone to take care of operations whilst I was at my other job. So, I asked Saroja, my junior. Again, I offered her a stake – 9%. It wasn’t worth much at the time, but she didn’t seem to mind.

We launched Naukri on 2 April, 1997. The number of times I have been asked why Naukri? Isn’t it too downmarket? Naukri = Job. Simple!  I am glad I stuck to my guns. It makes us stand out from the crowd. 

The internet user base at that time was a mere 14,000. That’s all! We didn’t charge for the first six months. An auto components firm from Pune was the first to pay us listing money. “I know you put the ads we published in the newspaper on your site. I have five other job openings that we haven’t published in the newspaper. Would you be willing to put them up?” I was bursting with joy, hearing those words. When he asked for the cost, I said Rs.350 per listing. That was the first number that popped up in my head! That’s what we had charged for the trademark report. For an annual subscription with unlimited listings, Rs.6,000 seemed like a fair price. 

Internet was the buzzword those days…we got a lot of coverage, we were focused on a space everyone could relate to…Being in the press got us the traffic we wanted without spending any money…the base might have been 14,000 but a lot of people were coming back for information. At the end of the first year, we earned Rs.235,000. We finished the second year with Rs.1,800,000, a 7x jump. That jump made me exit all other businesses and focus on Naukri. In the third year, we made Rs.3,600,000!

We started getting calls from investors...this was in 1999. I was completely baffled! No one had wanted to invest in us till then. Starting out we had to struggle to get an OD of Rs.30,000. Now, investors were competing with each other. An American VC offered me $2 million for a 25% stake! What would we do with all that money? He had grand plans…we were to invest in the brand, then raise $4 million at 4x the valuation and list on Nasdaq a year later…Here, I was working on a dial-up modem, updating listings at 2 AM because that’s when the speed was the fastest, and he was talking about revamping the board. There was just me and Surabhi. A Nasdaq listing? I told him I couldn’t list in Paharganj if I wanted to. 

We wanted to be a small company…only competition wasn’t going to let us…JobsAhead had just raised money from ChrysCapital. Just the budget for their launch was 2x our annual revenue. They announced their launch at the India-Pakistan cricket tournament in Sharjah, they couldn’t have got a more high profile launch. Overnight, the game had changed. We now needed to raise capital!

We were blindsided. We approached a couple of investors, got two term sheets – one from ICICI Ventures and the other from an American VC. We went with ICICI even though they offered a lower valuation, simply because I thought they would have a better understanding of how things work in India. I didn’t really need the added pressure of listing at the Nasdaq in one or two years.

This is the second of a three-part series. You can read the third part here.