Episode 156 / February 13, 2022

Rajesh Jain on selling IndiaWorld to Sify for $115M in the country’s first dotcom acquisition, founding Netcore Cloud, and his learnings over the last three decades

59 min

Episode 156 / February 13, 2022

Rajesh Jain on selling IndiaWorld to Sify for $115M in the country’s first dotcom acquisition, founding Netcore Cloud, and his learnings over the last three decades

59 min
Listen on

Do you know about the most interesting headline of all Indian business newspapers on 30 November 1999? It was India’s most prominent Internet deal at the time – a $115Mn acquisition of IndiaWorld, founded by our guest Rajesh Jain.

After this successful acquisition; Rajesh started Netcore. Yes, the same company is responsible for 75% of India’s email traffic and 50% of Asia’s email traffic through its Cloud network.

During the episode, Rajesh explains how they’ve been one of the Proficorns at Netcore, all his learnings and experiences over the last two decades, and much more.

Notes –

03:17 – Early career and failures

09:42 – Learning entrepreneurship from his father

11:32 – Starting and scaling IndiaWorld

22:04 – “More important than knowing when to enter a business, is to know when to exit a business.”

24:26 – His perspective about businesses in India

31:46 – “StarTech: Great Golden Era of Indian Entrepreneurship.”

34:33 – Building Netcore after the previous acquisition

38:45 – Pivots and growth of Netcore

43:45 – What is Proficorn, and why has Rajesh strongly advocated for it?

51:48 – 25% ownership by employees


Read the transcript here


Rajesh 00:05

This was around September, October of 1999. I got an inbound interest from a US company called, which owned the domain So, somehow they had got access to And they said, “Look, now we want to buy a real content property, so then we can take the domain and the property and do an IPO on NASDAQ in about six months time”. And that was a very attractive offering. I mean, I realized it could be a NASDAQ listed company by maybe sometime in 2000. So we had these two options, which were there on the table. And Merrill Lynch basically spoke to SBML Hemendra bhai and his team, spoke to both of them. And in the space of three weeks, our valuation went up from the 40 million stock offer that had given to $115 million, largely cash offer from DSP, Merrill Lynch. My mindset was always that I’m gonna run this business for life. Then Hemendra Bhai at that time made a statement to me which I think is something that every entrepreneur should remember. More important than knowing when to enter a business is knowing when to exit a business.


Siddhartha 01:20

Dear listeners, this is your host Siddhartha Ahluwalia, founder of 100x entrepreneur podcast which I started with my wife Nansi. Before we begin, I would like to thank our sponsors Prime Venture Partners. Prime is the first institutional investor in the category creating tech startups like Mygate, Dozee, NiYo and Planet Spark. Prime is now investing out of its fourth Fund, which is more than 100 million dollars. Today I have with me Amit Somani, Managing Partner, Prime ventures. Amit, how does prime help the portfolio post investment?


Amit 01:55

Thank you Sidhhartha. So at prime, all of the three partners Sanjay, Sripati and myself have been in the trenches. We were operators and entrepreneurs before we were VCs. So we work with the founders in many different ways, largely depending on the company and their needs. So we can help them with product, with brainstorming about business strategy, go to market, about partnerships, etc. all the way to really sort of helping get the company both to product market fit, and perhaps even find escape velocity to grow beyond that. Last but not the least, we help the company prepare and get access to subsequent rounds of financing.


Siddhartha 02:34

So listeners, let’s dive straight into this week’s podcast. Today, I have with me Rajesh Jain, founder and MD Netcore. Rajesh is also India’s first website creator who sold his news business to Sify for $115 million in the first dotcom acquisition back in 1999 in India. In this episode, we will discuss Rajesh’s journey, and the insights and ideas he has got over three decades of his career as an entrepreneur, and what founders can learn from his journey. Welcome Rajesh to the podcast.


Rajesh 03:13

Hello, Siddhartha. Glad to be with you.


Siddhartha 03:16

Rajesh, you did your masters from Columbia University, you tried many businesses, nothing worked. Then you decided to return to India. It was during this process that an idea that would later become $115 million came to you. Tell us about this journey, all the failures during this time.


Rajesh 03:38

Sure, Siddhartha. So I finished my bachelor’s from IIT Bombay. And then I went to the US, like many others for further studies. But when I went, my father told me something which I could not, of course, forget. He said, finish your masters in nine months, work for two years and then come back to India. He had done the same in the mid 60s. So he saw no reason for me to hang around any more time after that. And that’s exactly what I did. I came back to India in May 1992. And for the first two and a half years, a lot of initiatives that I tried actually didn’t work. I created along with my co founder, Sanjay Jain at that time, we created a multimedia database. We built an image processing solution. We tried some enterprise software solutions. But none of these actually got any traction and then mid to late 1994, I realized that whatever we had created had to die. It’s only when you close some doors, can you then start opening new doors.


Things were not working, I thought of myself as God’s gift to India, IIT, US education coming back. And my dreams sort of lay in tatters because nothing was working. But at that time, I was also reading a lot about the internet. My father used to always subscribe to some of the best publications, and foreign international publications, magazines, and we used to get them at home. This was, of course, the pre internet world. So you had to get the physical copies. And I’d started reading about the internet; there was some sort of discussion in the summer and late 1994. And then what I decided was that look, I’ll go and spend a couple of months in the US and try and figure out what to do next, because the current business really had to die.


And once I went there, I started speaking to a few people, friends, and experienced the internet firsthand. So I got this dial up pack, which connected me to the internet. And it was an amazing experience, you could sit in one place and experience basically content, web pages, new sites from many different places. They’re sitting on your computer. And that sort of opened my eyes to what are the possibilities. Around that time, there was a book also published “Competing for the future” by CK Prahlada and Gary Hamel. And as I read the book, I read it over two days. And somewhere, this whole idea of India world came into my mind as I was reading. And I still have the copy of the book with all my posts stuck there, with all the ideas on what it requires, what I would like to build out.


And those were the two months that really I started putting the blueprint together. I envisioned India world as an electronic information marketplace to bridge Indians worldwide. And a lot of this came from my own personal experiences. When I was in the US and wanting to come back. I had no information on India, newspapers would take 10 days to come. All you could do was to rely on some of the Usenet webs Usenet groups for news about India, so it was very difficult to get news and information about India. And I said, that’s the first thing to really start pitching. Because it cut distance, it eliminated geography as a barrier to doing business. And that’s how the idea of India world came up.


So I came back to India, I had to let go of some of our team, my co founder, sort of left me. And then I restarted on my own with a team of 6-7 people at that time. I just got married, so I told my wife, look, I don’t have to pay you so start working with me. She was working as our CA at that time. So it was a very different background. And that’s how India World was started and we launched in March 1995.

At that time, we were among the very first websites probably globally. It was just around the time Yahoo launched and around the same era, when eBay launched. And what I had done was I had aggregated 25 to 30 content properties, which I knew Indians would like.


So we had India today, RK Lakshman cartoons, Amar Chitra Katha, daily stock quotes, which we would update, we would get it on a floppy disk from one of the brokers and then we would upload it, news which we would do manually and so on. And it was the first internet website, first Indian Of course, internet website. It was partly free, partly paid. And I dropped the subscription part later on, because I realized Indians will not pay, they’ll share the password and login and are not going to pay. Even though it was just about $20 at that time, so we made it all free and a year and a half later, that’s how we began. That’s how India World began in 1995.


Siddhartha 08:45

And you came from a well to do family so that your family could send you to the US. What was your upbringing like?


Rajesh 08:53

So my father was a self made entrepreneur. I mean when he started his life, he had a family debt of almost a couple of lakhs that he had to repay, he had come back to India. His father had passed away in the 60s, he had four siblings to essentially take care of and get married. And I saw him firsthand as an entrepreneur. I mean, my earliest memories were where there were probably 10 of us staying in a small, sort of probably a few 100 square feet place in Chinchpokli just after I was born. My mom would carry me from one bus stop to another because it would save five paise on the bus fare if she walked a distance of a kilometer. I mean, she tells me some of these stories. I don’t have too many memories. But what I do also recollect is at the end of every month or every day, we would sit and write down the expenses in a diary at home, because we had to manage on the limited money that my father was basically earning. But my father essentially became an entrepreneur. He tried many things in his life. Some worked, some did not work. But I saw from him firsthand that failure is part of the terrain, part of the journey that is there.

So the early beginnings were not great. But by the time I had gone to IIT, of course, we were doing quite well, my father had made some very good investments. He was a civil engineer. So he had done some very good work also, and some of the entrepreneurial activities that he had done were good. So when I went to Columbia, the first semester, of course, I paid for it. Second semester, I got aid there. But it was not that there was free access to money, you have to be very careful about money, I don’t remember us taking too many vacations, we did take one international vacation. Most of our vacations used to be in Rajasthan where my father had a couple of factories set up. So even in summer, we would go there in the heat.


So sort of middle class, and then maybe upper middle class startings. But what I learned from my father was entrepreneurship, I saw him firsthand. And he instilled in me that you should work for yourself, it does not matter whether you succeed or fail, but you should work for yourself. And that was the clear sort of message I took away from him. So even though I’ve failed a lot in the first few years, and subsequently also, I have realized that this is part of the journey, not everything will work out in life, but that should not stop you from trying out new ideas, and embarking on new adventures.


Siddhartha 11:33

Awesome, quite an inspiring story of your father. Rajesh, so tell us about your journey at India world, and how you scaled it to three crores of yearly revenues by 1999.


Rajesh 11:49

So when I started, we had limited amounts of capital available, because obviously, I’d burnt out a lot of my savings from the US in the first two and a half years that things didn’t work out. So when I started, I realized that we would have to generate some revenues fairly quickly. Luckily for us, in the first year, some money came in from the subscriptions, which helped keep the US server etc going, and covered some of the basic costs. But also, we started doing website development. So we started building websites for companies, of course, I had to go and sell the idea of a website, why businesses needed a presence on the Internet. No one else was doing that in India. I remember at some places, when I went there, people thought I was trying to sell a new TV channel. Well, no one had really seen the internet.


But luckily, in August 1995, BSNL launched commercial Internet services in India. So sort of people started getting dial-up connections, they started understanding US companies that started going public around 1996-97. So that created a lot of hype also. So what happened for us was that the website development business essentially helped me get to profitability fairly quickly. In fact, in those five years, I ran India world, we had 200 sites that we managed, most of the large corporations were either created and hosted with us or at least hosted with us. And then sometime around 1997 also advertising started picking up because we had a very good NRI audience, there are a lot of businesses very keen to reach out to NRIs, especially the US people. So we had telecom companies in the US who wanted to sell those calling cards to India, we had Indian finance companies, the stock brokers who wanted to get NRI investments into India. So a lot of these businesses started generating advertising monies.


The third thing which happened very well for us was that in 1997, I think I made perhaps the most important shift in what we were doing. So the earlier model in India world was, one brand. India world and everything under it. So we had various sections, News, Sports, recipes, we had like 30-40 different sections. And then my wife and I were on a trip to Rajasthan. We used to go to a temple every year. And I remember we were driving back from Nakoda ji in Rajasthan to Jodhpur. And on the way we started thinking that, while these names are good, Can we somehow come up with Indian names. Because people had to go to the extra click, like if I want to access the cricket section on India world, I’ll have to come to and then click on and go to cricket. And on that trip, I remember we came up with like some 25 names, Samachar, khoj , khel, Bawarchi. So all the verticals which were doing well, we said let’s create an Indian name for it. For finance, we registered those and then we started selling, spinning out each of these with its own identity.


So we launched as an Indian search engine, as opposed to Yahoo, where you would get global results, like for cricket coverage, a live ball by ball coverage, again that was not there earlier, Cricinfo was also started, it was doing it at the same time. But we have Indianized it a lot in terms of the statistics that we had at that time, and so on. Bawarchi, which had all the recipes, Indian recipes, one new recipe a day. And most important, the best site, which really worked for us was So I realized that unlike, say Rediff, and others who had launched, who had a whole bunch of editors internally, whom they paid for, writing the news and so on. I said, I don’t want to do that. So we use technology to solve the problem.


So we wrote a crawler. One of my software engineers took about a week to write a crawler, where we crawled maybe 40, to 50 Indian sites, which already had an internet presence at that time, news sites and magazine sites. And we picked up the top headlines from all of them and put them all on a single page. So Samachar was just one page with 100 links, or more, every five items per publication, updated every 30 minutes. And that became the start page. For most Indians outside of India, it was bookmarked to come to the office and then go to Morning before they went. And that was really the big engine for growth for us, because now I had to sink one property, which became the magnet and from there now I could get them to my other properties, it got advertising going, it also got website development business going, because now I could bundle the website development with advertising on my properties. So it started creating a good profit path for us. And because we were profitable, I could also be very choosy in talking to investors, we had a lot of inbound interest also, I never managed to raise money until I sold, but I could afford to say no to investors, I would tell them the valuation upfront. And basically, if they said no, then to the next person, I would actually increase that number, not decrease it.


So the profits really ensured that I was under no pressure for doing silly things, or getting investors who would basically take up a lot of my time at that time, I could just focus on customers, advertisers, I would have the conversations, of course, with investors. And another good thing was that every time I did the investor meetings, because they had good teams, they would tell me what was wrong with my business. So then I said, Okay, those are the things I need to get fixed before the next two, three months, and which I would then do. So that kept making my business better and better. And that’s really what helped India world, I think the focus on content, the focus on our audience, the focus on creating a sustainable, profitable business, helped us lay the foundation for the exit, which finally happened in late 1999.


Siddhartha 18:12

And can you tell us about the exit, was it inbound? Was it you with a banker looking for an acquirer for the company?


Rajesh 18:22

Yeah, so I had an investment banker for about a year before 1999 also, because we were always trying to raise money. So we got it because we were the best known Indian site. So there was always interest. But I’ll tell you a small story. I was at a US investors office, probably in 1998. And, I remember, we were a very small team, when I sold, we were all of 20 people. So it was always me who had to go and do these meetings alone. So they said, Hey, you know what, you have got a basic business plan, but you don’t have five year projections for the business. So my answer was that look, I run this business like life and death. Okay, I will do whatever it takes for us to succeed. You tell me what numbers you want in the fifth year to invest. And I will fill in years 1,2,3 and 4. The meeting ended in five minutes, they never invested. But that was the type of person I was.


So what happened in 1999 Is that a lot of money started coming into the Indian internet. Also, a lot of companies raised money. A lot of advertising started happening. And I realized that because we didn’t have that much capital, I could not spend any money on advertising. I could not spend time on building the senior leadership team also in the business. So I had hired at that time Merrill Lynch, DSP Merrill Lynch, for raising capital. And incidentally, what had happened was that DSP had just done an IPO, Merrill Lynch, the spml had done an IPO for Sify. So Satyam Infoway, had become the first Indian internet company to IPO on NASDAQ, I mean, really landmark thing, they had built a very good business and connectivity, there was some content. But Ram Raj, who led the business was very, very forward looking in his vision. And he got the company listed on NASDAQ, which gave them a lot of access to capital. And DSP knew them. But in this case, they were representing me. So they managed to connect us together.


Then the second thing which happened, this was around September, October of 1999, I got an inbound interest from a US company called, which owned the domain So somehow, they had got access to And they said, Look, now we want to buy a real content property. So then we can take the domain and the property and do an IPO on NASDAQ in about six months time. And that was a very attractive offering. I mean, I realized I could be a NASDAQ listed company by maybe sometime in 2000. So we had these two options, which were there on the table. And Merrill Lynch basically spoke to bd spml, Himendra bhai, and his team spoke to both of them. And in the space of three weeks, our valuation went up from the $40 million stock offer that had given, to $115 million, largely cash offer from DSP, Merrill Lynch.


So it is amazing. I mean, those three weeks, you see the price, or the value of your business going up every day. And I was still hesitant on selling the business, to be frank, essentially, because this is something we’ve built, my wife and I had worked five years, sort of pretty much no vacations, where one of us had to be around. So I had to travel a lot internationally, also for conferences plus for potential investor meetings. And that period, really, was quite astonishing, because I have always wanted to think of a build to last company. And I didn’t have that phrase in mind at that time, but my mindset was always that I’m gonna run this business for life. Then Hemendra Bhai at that time, made a statement to me, which I think is something which every entrepreneur should remember, more important than knowing when to enter a business is knowing when to exit a business. He said, Rajesh, look, you are a creator, you have a lot of ideas. This kind of value that you are getting, you may not get easily for a long time. So how much ever you love the business, don’t get too emotionally attached to it, you are an entrepreneur, remember that. And that really persuaded me to consider the offer very seriously. We also had a very good relationship with Ram Raj at Sify, Satyam Infoway, but my idea was not to sell and exit and go away, it was basically that I needed more help to build the business out bigger. And that was the reason for the sale. In November 1999, of course, it was $115 million, it was seen on the front page for everyone, 499 crores at that time. And that really opened people’s eyes in India to the power and potential of the internet.


Siddhartha 23:31

And it was almost like 85% Cash acquisition at that point in time.


Rajesh 23:38

Yeah, it was initially set up as an all cash deal, but later because the markets fell in six months, because the payments were in two phases. And the markets fell, sify then paid me a small part of the about 10% of the amount later on in, in stocks. sify stocks. But you’ve to remember one thing, people look at the $115 million that they paid for India world, their stock, after the deal was announced that same night, went up by $700 million and kept rising on subsequent days, which enables them to do a secondary offering diluting very little, which then got them the additional money that they needed to pay us. It was an amazing deal for Sify also, at that time.


Siddhartha 24:25

Got it, and I think we have never seen such a time again, like that, where, especially in mergers and acquisitions, that a company doing less than a million dollars of revenue gets acquired, an Indian company for 100 plus million dollars. What do you think, what are the environmental factors contributing to that? And have you seen any such factors coming again, together in the Indian context, in the last 23 years?


Rajesh 24:59

Yes, so 1998-99 was the peak of the era. In fact, a couple of months after I did my deal was the landmark deal between Time Warner and America Online (AOL) in February of 2000. So that was the period where everyone really believed that the Internet would be the next big transformational thing in the world. So that was the era of the peak internet period at that time. So capital was freely available. A lot of businesses were getting started, they were growing very rapidly, no one worried about profits at that time at all. We have a lot of excitement that this is the sort of next big thing that’s there in the world. And no one wanted to miss out on those opportunities. So in a way, the timing was very fortunate for me, had I waited for six months, I think it’d probably have been a very different story. Because I think after March, April, the markets had started sliding down. And then we had the two, three years of a very difficult time period, which happened.


But this always happens with any new technology, you have the sort of hype cycle, you have the big jump, which happens, and then it sort of settles down to something more sensible and normal. And I remember sometime in the early 2000s, Wharton Professor Jitendra Singh, telling me that Rajesh, the real value creations happen from the second order and third order derivatives, really which take place. So what you’re seeing on the internet is one thing, but the next generations which happen will create even greater value. And that is exactly what happened. Because you look at Google, Facebook, etc, they all came out from after the 2000 period after the sort of first internet era. I think in India, we are seeing something very similar play out in the last year and a half or so.


Three things have really come together very well, because of Jio, we now have a large number of Internet users available. So that’s, I think, very cheap internet access. So now people are spending time on the internet. The second is the ease of payments, which has come in because of UPI. The third is logistics, which has been set up earlier. Even if you want to order things, it’ll be very hard to get delivery outside of probably 50 places, 50 cities and towns in India. And then of course, the fourth accelerant which happened which was not sort of intended, but it happened was the pandemic, it really forced everyone to go digital.


So, in India, what’s happening now is that you have at least about 50 to 100 million people on the internet who are transacting who have the ability to spend reasonable amounts of money. So I always look at India as there are 10 million Indians who have the lifestyle of Singaporeans or whatever $50-60,000 and 100 million Indians probably of middle income like Poland then have a billion Indians who are of course very poor, probably like Africa or wherever, have $1,000 per capita income. Now, at least for the top 50-100 million, there is plenty, that’s a pretty large reasonable sized market, it’s almost will be about $2 trillion in spending capacity. And after a certain point of time, there’s a lot of disposable income also that people have available.


So, that is what has driven the growth in India and I think there are two growth cycles that we are seeing in India in parallel. One is the whole b2c opportunity, which is there and everything below it. So b2c is of course, you may see just the Nykas and the Policy Bazaars which are there. But in everything there is the underlying logistics which need to be rescued, especially for physical goods delivery for the b2c companies. That I think is very, very important. The fact that now everyone is available. So Zomato can create a marketplace of both, delivery people and buyers and restaurants in a way it’s a three way marketplace, three way connecting what they’re doing. And then you also have in India a parallel track which is happening, which is of SaaS companies. So b2b says companies like Zoho, FreshWorks, NetCore also and many others who are building in India now for global markets. So this is a great leveler.


So you have two things which are happening. One is India emerging as a great market. And second is Indian companies earlier, which used to be in the services side like the IT services was the first thing, but now they can create products for global companies. Again, that has happened because a critical mass of engineering talent, outsource centers in India, very good education systems, at least for the top of the pyramid, that’s there. All of this, combined with the fact that there is capital available in abundance. So in 2021, we had 100 million dollars come into India on average every day, I mean, we’ve never seen this kind of stuff. So even if you wanted to be an entrepreneur, it was very difficult to raise capital. And now this an irreversible cycle, this is not going to go away at all, because you have capital coming in, you have plenty of venture capital, you have entrepreneurs, first generation who even if they fail, they will become second generation entrepreneurs, you have exits also now starting to happen. So even if companies are 70-80%, owned by investors, 20 to 30%, wealth creation is happening for founders and employees who are based within India. And what are they going to do, they’re going to either create new companies or invest in other startups.


You have incubators coming up, you have 18-20 year olds with aspirations, you have Shark Tank now in India, which is putting the belief in middle class India, that, look, if I have an idea, I can make it big. And that’s what entrepreneurship is all about, you will have all these people figuring out the problems which are there in the country, and coming up with solutions. Our entire belief till probably five years ago was that we needed the government to solve our problems. Entrepreneurs are India’s future, they are really going to go out there. And that whole cycle of capital availability, exits, failure, leading to not disillusionment but okay, let’s get on to the next new thing. All of this is now underway in India. So I think this wave, unlike the 1999, 2000 wave, where it lasted for a very short time, is really substantial and irreversible. And this is really what’s going to make the future of India because the government in India cannot solve problems. So whether it’s education, health care, etc, I think if you just let entrepreneurs in India loose, they will fix things


Siddhartha 31:41

That’s a very powerful thought,Rajesh. And you believe the next 10 years thereby right, are going to create massive amounts of value for India through entrepreneurs, then all that has been created in the last 25 years?


Rajesh 31:59

Oh, absolutely. Because each of these is very large as an opportunity. And as this happens, remember one more thing, India also the growth rates will start increasing as we go forward. So what is happening is, every time there is a doubling, of per capita income, which will take maybe five, seven years, if you’re depending on what you’re growing at nominal growth rate of say, 14% will double it in five years. The second, the next doubling, which takes place, the disposable income is much greater, because you have basic life needs taken care of. So the 100 million audience, which is there today, will become 200 million 300 million. It’s exactly what played out in China, from mid 2005 onwards once they crossed a certain threshold. So a lot of this is going to start playing out in India. You will have, of course, big winners and you’ll have big losers also. But I don’t think that should disillusion us, that’s the nature of entrepreneurship.


There’s creation and there is destruction, as Schumpeter basically said creative destruction. This is the way the world works. But this is also the way innovation happens. I mean, you look at today, so many companies, and it’s not just in say consumer tech or in enterprise tech. It’s basically what I call star tech. Whether it is FinTech, agri tech, insurtech, every vertical EduTech, Health Tech, every area now there are entrepreneurs coming in with innovations, with ideas, with stars in their eyes, which obviously should be working to try and find solutions to problems. And only the best, of course, will survive. But once this cycle is started, this is what is irreversible. This is really the great golden era of Indian entrepreneurship, and I don’t think we are going to stop, you don’t have to be a large company to be driving innovation. In fact, that’s how disruption is going to work. So whether it is even electric vehicles, whether it is battery technology, whether it is quantum tech, whether it is web three technologies. I mean, I was talking to an entrepreneur a few days ago, and he had a very interesting point. He said for the first time, Indian entrepreneurs living in India, there’s a level playing field to innovate in the web 3 world. It’s early days, we can build great companies out of India. And then he added a caveat. As long as the government does not mess around with regulations. That’s always the worry.


Siddhartha 34:32

And Rajesh after your acquisition, how did you keep yourself relevant? How did you form Netcore firstly, after the acquisition, and secondly, since you were one of the very few handful of entrepreneurs who had sold their companies for hundreds of millions, you could have built Netcore in a much shorter span of time to where it is today, you had that kind of an optionality with VCs reaching out to you, will love to know about that.


Rajesh 35:10

So the day after I sold India world, my wife made a statement, which of course, again, one of the most memorable statements, which you cannot ever forget. And she said, look, I mean, I was 32 years old when I sold India world. It was a completely unexpected outcome. We had not started the business for making money, it was just out of a passion and solving a problem. She said to me, if you think about the money you have made, or you have in the bank, you will never do anything again in life. You have to think of ourselves as custodians of God’s money on Earth, forget about the past, you are an entrepreneur, start again, and go back to what you like doing. It is building new ideas. It was almost exactly what Hemendra Bhai said earlier on. Now, Netcore, I had just started as a company a little bit before I sold. We were doing Linux based mail servers for companies, I’d spun it out from India World, because it got very confusing, portals business on one side and a tech business on the other side. So it’s rather than defend why it should be in one company I separated out.


I was very good at ideas. But I was never very good at converting those ideas into a real sales system, and building a business out of it. In India World we didn’t have to do too much selling because it was a very good portal. We were early and word of mouth really helped drive that. So I spent almost no money on marketing or advertising at that time, but here, a lot of ideas I’d built India world’s first blog search engine and IMAP aggregator for RSS and a lot of such ideas, or thin clients, for reducing the cost of computing. But none of those ideas sort of got traction. And I realized in 2005-6 around that time that look, I am the biggest bottleneck in Netcore. And we were doing barely one crore revenue, we were not growing at all. I said, I need to now think not of the ideas, but how do I go to market? How do I convert them into real businesses, just because I have some money which I can afford to spend does not mean I keep sort of trying out things and failing.


And that is where I started professionalizing the team in Netcore. I brought in a COO first, Girish Nair, then CEO in 2007, Abhijit Saxena was the first CEO. And the charter really for them was that look, if you have to think long term, what will it take for us to build Netcore right? How do you build a sales system? How do you build the discipline of weekly reviews, and so on, in Netcore? A lot of those things then started helping out. It started its growth journey from 2007 onwards. So we started in the enterprise, SMS space, and then email space. And then of course, it’s pivoted multiple times, some ideas have worked, some have not worked. But for me, what was very important was the external people who came in to lead netcore, who really helped build it out. And they put in place the structure, the operations, the processes, well I’d never seen a large company, I mean, there was only one company I’d worked for in the US, it was 9x. And it was very large, I worked in their small Science and Technology Center. So I had no experience of working in large places, India world was all of 20 people. And it’s very hard to imagine today, we are 750 people, I never thought we’d be this big once Upon a Time.


Siddhartha 38:43

And you brought in external management, right? What are the various pivots that netcore went through? And today, if you can share in terms of revenue, size of Netcore, the geographies you have clients in your offices, and how it has compounded over the years.


Rajesh 39:05

So, in Netcore, we started essentially around 2007-8 with enterprise SMS. And then email marketing, because we had the Linux mail server business, some of the customers were coming to us and saying that you guys email very well. We want to send out a lot of emails to our customers who have got email IDs for our marketing campaigns, so how do we create a platform for that? That’s what started our journey in both of these directions. We had tried a few b2c things, but they didn’t work out. So we decided not to do any b2c things now. Now, with these two, they started from 2007 onwards the journey for the first growth era of Netcore. In 2014, a colleague of mine, Veer, came up to me and said, Rajesh, I’ve been hearing about this word Martech quite a bit, and we need to look at this. I said, Okay, I’d never heard that word before. So I said, What is it? And he explained to me what marketing technology was, what Martech was.


And there was a conference in the US in August of that year, which then both of us attended the first martech conference, which was there. And that really opened our eyes to the world beyond just sending emails and SMS, that marketers can actually do proper customer journeys, engagement, they can automate a lot of these messages that they’re sending, or they can personalize these messages, which are going out. And that then started our second era of growth in Netcore, which then came back, we started investing in building out the marketing automation platform. And of course, now, if I cut to today, augmented by a couple of acquisitions, it’s a full stack marktech story. So we have the communications layer, we have the engagement layer, or we have what we call the customer experience layer, in terms of nudges, etc, plus omni channel personalization, and so on.


So that’s sort of like the product track. The second sort of theme was, of course, Netcore is somewhat different from other SaaS companies, because we built it out first in India. And we never built it as a SaaS company. Even though all the solutions were in the cloud. We never thought of ourselves as being a SaaS company until probably three years ago. So then what happened was that we started in India, then we took our solutions to emerging markets, basically markets like India. And remember, because we were bootstrapped, we didn’t have external capital. We also had to make sure that we are profitable, and which we would invest back into product development and then market expansion. So then we took a couple of years to get things right, then we got good success in emerging markets. And then a couple of years ago, we said that, okay, if these things work in India and emerging markets, maybe they can work in the developed markets also.


And again, my thinking changed when we attended SaaStr, the premier SaaS conference in February 2019. And that opened our eyes to the world of SaaS, it is a very different world, how you do selling, how you do marketing. The terminology of SDR, ABM, content marketing, inbound, otherwise, it was all people based selling, we knew companies in India we knew whom to sell to, and it was all from person to person selling, the idea of remote selling was quite alien to us. But one thing about Netcore is we are very quick learners, once we realize we are not doing something, then we will channelize our energies into fixing that problem. And that has really helped us in the last three years. Build a business today, with 750 people, which is $85 million in revenue. So it’s among one of the largest SaaS companies in India. We are definitely I think the largest digital marketing or digital experience company across emerging markets.


And I think with very good growth now, the ability to grow with a full stack solution, I think one very good bet we made was on building out the full stack, rather than spilling out one part of it. So we have native sort of integration too because anyway, what do marketers want, they want two primary things. They want omni-channel personalization for their customer engagement, and they want a unified view of customers. These are the two critical building blocks for them as they look at engagement with their customers. And that’s what was Netcore’s focus in the last few years in which we’ve built up.


Siddhartha 43:45

And why did you choose to build a proficon? You are a very big advocate of proficon, what is this word and why this approach? And that also comes to my mind, the next question is, the patient approach of building it in 25 years, venture capital companies are built in 7-10 years.


Rajesh 44:08

So I’ll take the second one first, thenI’ll come to the proficon. So I think I have to write off the first 10 years of Netcore when I was leading it, I think I was the problem there. So really Netcore if I look at it that way, the growth journey is about 15 years old. Now, what happened about proficon was about a couple of years ago in one of our internal advisory board meetings, someone said that look, everyone talks about unicorn, Netcore has a very interesting model, you are profitable, you are growing, you have been bootstrapped. Okay, you have not raised external capital. How can you tell your story better to the world? And it just struck me that okay, we can call ourselves a proficon. So the word sort of just came to me. And I said it that time and people like today, that’s a nice word. And then when I started talking about it to other people, I realized that that’s one word which sticks to people: unicon, proficon.


And I define proficon, as a company which is private, profitable, promoter bootstrapped, and highly valuable. Highly valuable, I would say is at least say over $100 million, because you have a lot of private companies who are not sort of valued. And then I realized that okay, India world was a proficon, I had not raised capital. Netcore is also a proficon now. And when I started thinking about it, I said, there’s a very different approach I have taken in both of these companies to build a business, a very simple point, if you are not taking an external capital, there are only two sources of capital available, either I as a promoter, keep putting in money, or I have to be profitable, there are limits to how much money I will put in, I have to therefore drive the company to profitability very quickly, which was the mindset, I had in India world and have the same mindset in Netcore. Because we’ve not raised any external capital and Netcore, either, yet.


So that’s where I started writing a whole series of blog posts around my approach, where I wrote a few and then I sent it out to people internally, and they said, hey, this is very good. Give us more. So a lot of time is in the lockdown period. So I started writing, then, a publisher approached me saying that can you make this into a book? So I said, Okay, first, let me finish all my writing, and then I’ll think about a book. And now I’ve finished it, I finished the manuscript for the book. Also, all these are on my blog, a lot of their writings are there on my blog. And then I realized there are other proficons, if you look at Easemytrip, when they did the IPO, they had not raised any external capital. And even for the IPO, it was the secondary offering, the promoters sold it. And these are stories which I’ve featured in my book. Also, there’s Route mobile, and also similar Ferns and Petals. There was Rizwan Kota’s company CitiusTech, which got a billion dollar plus exit bearings for his services, healthcare products and services business.


So I realized this is not as alien, if you look at India today, there are companies like Zoho, Zerodha, Wingify, there are quite a few companies who have chosen to go down the path of profits first, but with growth also, so you’re not compromising on growth. But you’re not bringing on board investors, but building highly valuable companies. And that mindset is very different, because you can now afford to take for example, you can take the long term view on doing business, you are not beholden to investors and their desire for specific returns in the short term. In terms of even, decision making is much faster, because you can basically, whether it’s acquisitions, whether it is investment calls that you have to make, you know all of that, it’s just a couple of people in the room can make the call.


So I think my belief is that entrepreneurs should seriously think about building a proficon, so without raising capital, it may not be possible in every possible industry. But can I bootstrap this business? More importantly, how can I get a faster path to profitability? I mean, for me, this is one thing which my father had, again, drilled into me. And his point was that, whatever you do in life, don’t take on debt. Don’t take other people’s money, because you sleep much easier at night without worrying about what you owe other people.


Siddhartha 48:46

So I was asking, Rajesh, how can you be so patient when you see companies which have started later than you like FreshWorks, for example, at the time of the IPO, they were a $13 billion company with $400 million in revenue, doesn’t it tickle the urge to build faster?


Rajesh 49:10

Now, we are definitely more aggressive than we were, earlier we thought that 20-25% growth rates were very good, we were answerable only to ourselves. Okay, so now when I look back, maybe we should have been much more aggressive in our international expansion earlier. Absolutely. We should have been more aggressive in possibly looking at acquisitions earlier. And we are now trying to take corrective measures on that. So, what we are doing is now we are looking, because we have a fairly good cash position, savings through the years that we have, looking at acquisitions aggressively. We are looking at investing in growth also aggressively. So, in Netcore we have two parts to our business. There’s a platform part of the business where we have email and marketing and then we have the SMS part of the business. So could Netcore have become much larger and grown much faster? Absolutely. I somehow don’t like to look at the past and say here is what we are, we have made some mistakes in the past. But if I dwell on those mistakes, I will just put myself in a sad situation.


As an entrepreneur, I have to be optimistic. I am creating for the world two to three years hence. And we learned, I think we were late to the SaaS understanding, which FreshWorks and others had done much before. But I think we can definitely catch up. When I look at today, if I compare, I mean, of course, we don’t have an external valuation. But I think when we look at valuations of companies, we also should look at what is the value creation for founders and employees. Because otherwise, like in FreshWorks, more than 90% of the ownership is with investors. So today, if the company is valued, let’s say at 6 billion or 7 billion, founders value is a 10th of that. Now, the valuation may be high, but because otherwise you’re working 90% Time for basically creating value for investors. So on that score, I think we have done incredibly well. I mean, I have an estimate of what we are worth, but I have to get it, someone has to tell us, that look, this is right. Otherwise, it’s just me and my imagination.


I think on that count, we have done incredibly well. Now, we are profitable, and our growth is pretty good on the platform side of the business, we are accelerating. Also on the mobility side, a lot of innovations are happening there. And I think the US has a huge market opportunity. So I fully agree with you. Yes, could I have made some of these decisions we are on and gotten our growth faster. Absolutely. But this is where we are. We have to play catch up, which I think we will do. Okay, there’s a lot more aggression in our team now to look much more aggressively at growth, at acquisitions. Hopefully an IPO in the next 12 months or so, which again, gives us currency and also liquidity also for employees or currency for acquisitions, liquidity for employees. Netcore is 25% owned by employees, which is one of the highest percentages that any company has today in the country. So there’ll be enormous wealth creation for past and present employees.


Siddhartha 52:34

Rajesh, in one of your blogs, you said that writing is a way for you to organize your thinking. Can you describe your writing schedule to us and your publishing schedule? And how do you bring that kind of discipline?


Rajesh 52:46

Sure. So writing has been a part of me for a very long time. It probably started in 1996 or so. I was approached by Valentine D’souza, who used to work at Express computer, to write a fortnightly column in the express computer at that time. I had never written much before that. So other than writing for a school magazine here and there or in IIT, nothing much. He said, I’m gonna give you a whole page, we need to educate people on the internet, about the Internet, what is it? I mean, a whole page I think was like two and a half tabloid size about two to 3000 words, and every two weeks. So that’s how I fell in love with writing. As I would write those columns, more and more once you start writing one or two columns, and you’re always looking for new ideas on what I am going to write next. So you always then start making a list of topics on what you’re going to write in the future and so on.


And I think around 1999, this whole blog revolution started taking off. And I remember Dave winer, was a big inspiration. He used to write every day, some links and some writings, and I said, Why can’t I do that? So that is how I started writing every day. I said something new every day. Because my thinking was that if it’s every day, it becomes like a newspaper becomes a utility for the reader also. But I also made one more decision that I’ll write for myself. So if I think too much about the reader, then I will not be candid with my thinking, I will try to hold back. I will become too conscious. I will wait for perfection in what I write. I said forget about all of that. I’ll write for myself, I’ll write every day. And that’s how it started. So from 1999 to 2012, I wrote every day, was my first blog. It’s still live, I mean, live in the sense it’s there. And I loved it. But in 2012, I stopped because I started doing some work on the political side, which I did for almost six, six and a half years. So at that time, I didn’t want to write anything which would, I could not be candid about what I was doing. And I did not want to become a news item. I was working for Modi and the BJP at that time. And then I tried to create a movement for prosperity post 2014 elections.


And then when the pandemic started, I’d shut down my political work, the prosperity stuff that I was doing, and I was back to Netcore in early 2019, full time. And in 2020, April 1st, I decided to restart my blogging with the same basic principles that I will write every day. So that’s how I do. It’s now at, so eponymous with my name, there’s a lot of stuff which is out there on my blog. And so what I do is I there’s about 500 words of original, semi original thinking every day, and I pick up a topic, I will break it up into 400-500 word chunks as I write, I typically write on Saturdays and Sundays, because then I get three to four hours of contiguous time in the morning, early morning. So the mind is clear, the best time for me to write. It takes me about half an hour to write one post for one day. And I cover three themes, marketing, entrepreneurship, and India. So there’s always a list of at least five topics on each category that I have available for me to write on for the future. I write in a sort of one go, and then I made sure I set up the WordPress publishing schedule. So there’s one new post a day.


Last year, I also added one more post in the evening. So this one goes out in the morning, this another one in the evening, from my reading, because I realized that if I’m writing, I also need to do a reading, I need to do a lot of reading, they have to go hand in hand with the thinking, reading and writing. It’s a cycle, you need to do all of these three to come up with ideas. And I don’t wait, like I said, for perfection. I write because I’m writing for myself, and then when better ideas come I’ll write more on that same thing. And that’s how the ideas evolve over time. So then I started a section on my blog called things from the reading. So I post three interesting links every day on my blog, because it’s every day, I need to make sure I have the discipline of constantly reading. Otherwise, it’s just me lost in my own thoughts. And I found this to be the best thing. ideas come when I’m writing, because when I talk to people, when I’m talking to people, I can send them links from what I’ve written on the blog.


And there are quite a few people who will find me because of some of the writings on my blog also, which I think is very nice. I’m not very much of a social media person. So I have a very limited LinkedIn and Twitter presence. Because I like to write these well thought out, or at least I think it’s a well thought sort of post. And I believe that I think every entrepreneur should write. It’s not just short witty posts on Twitter or LinkedIn. I think it should be deep thinking about the future. How is it that your mental models are, I mean, open source your ideas, because when you give you will get back 10 times more than you’re giving. Because now you want to reach out to someone, you want to talk to someone, you can actually send them links saying, hey, you know this, what I think. From there come the ideas for presentations and new ideas and ideas build on themselves. So like when I write on a new theme, I have to also look at what other people have written. And I use it to also learn about new topics, like I’m trying to learn about web 3 now. So what is the best way? Write a blog series on some of my ideas, intersecting with web three. And I think it’s what people don’t do enough. I think that longish essays, I think, are what really move the thinking forward in a very big way.


Siddhartha 58:51

Thank you so much, Rajesh, I would have loved to continue our podcast and there’s so much to explore in your journey. But for our listeners, we are already at 50 minutes plus. It’s just been incredible walking in your shoes. I could almost imagine being in your shoes at each phase of your life. Thank you so much for being part of the podcast. Really appreciate you sharing.


Rajesh 59:21

Thank you Siddhartha. Thank you very much for that great conversation. Thank you for your wonderful questions.



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