Girish, an IIMA grad started NetAmbit in 2002. Now it is a 4000 People Company. Girish was at IWSB campus as part of “My Journey” series to share lessons and learning from his entrepreneurial journey so far. The interactive session with aspiring entrepreneurial leaders was full of questions, questions and more questions from the youngsters. They got a message, “Be eager to welcome new situations, challenges and experiences, to learn and discover what more you can be”

Distribution companies in any vertical are usually larger than the manufacturers, like Wal-Mart is bigger than Unilever. Worldwide there are a few large companies that follow similar business model even in financial space, eg. Brown and Brown (UK).

Indian financial market is of the size of thirty thousand crore. The market is growing at the rate of 30% annually. While penetration levels are just 4%, still the market is 30 thousand crore market. The potential and opportunities are huge. There have been many ‘manufacturers’ of financial instruments, hawked through a few distribution systems (agents, banks). But consumers needed independent credible and trustworthy consultants and advisors who can compare multiple products available and advise them. That is where NetAmbit moved in.

NetAmbit sees itself as equivalent of a food bazaar of financial markets – sells life insurance, general insurance, mutual funds, corporate FDs, Loans, Credit Cards etc. Eighty percent of market in India lives in smaller towns – tier 3 and 4. Seventy six percent of NetAmbit sales come tier 2 and 3 cities. Now NetAmbit has offices with over 6000 workstations and 4000 field agents.

FORBES June 18, story named NetAmbit as the king of ‘non-affinity’ market for their rigorous process driven approach to customer acquisition.

Where did the Journey begin?

Girish wanted to be an entrepreneur, because he wanted to be secure and successful. Only after going to IIMA, he realized entrepreneurship gives opportunity to contribute to the society. He wanted to build a business that will sustain on its own. “Make yourself such a way that you are redundant…,” which charged Girish.

Girish went on to work for Escorts and Godrej for six years, with a yearning to be an entrepreneur. He was in Bangalore, when parents suggested him to take the next step in his life, getting married. Since, Girish harboured ambition to be an entrepreneur, he always thought of marrying a girl who will be working in a govt or PSU, as she can provide the stability whenever he jumps into his entrepreneurial journey. He did jump in, by moving to Delhi from Bangalore. To the surprise of many a family member, he quit his job twenty days before his wedding!! His family and wife have been very supportive. “Family support is the most important to be successful as an entrepreneur,” Girish avers.

Girish, started with one Lakh as his only investment. “Dotcom was crazy in those days. Unfortunately, the valuation was all about clicks and page views, without the existence of brick and mortar, or revenues to back up.” Girish thought of it as a great opportunity, “We thought of providing offline model to hook on to the online models…” So NetAmbit was seen as Offline services for Online businesses!! NetAmbit is all that surrounds the Net!!

“Since I did start with 1 lakh, only way was to earn our bread and butter… the journey began.”

Dotcom economy busted, we had to reorient… We moved into telecom, started looking for distributing telephone connections to SMEs. This business was short-lived, before NetAmbit oriented towards financial markets.

Today, Bessemer’s best performing investment is NetAmbit. Best capital efficiency in their Indian portfolio…

Q. Were you not fearful about failures when you started…

Failures… Lots of them!

One may fear going to the town if it is raining like today, as you may fear traffic jam… what they hell, get out and experience… why fear?

Every morning I have a long list of issues… but I enjoy trying to solve them…I will talk more about failures later.

Q. How does a Consumer behave?

– Consumer wants more at one place, with a lot of advice and help thrown in. So a bazaar type of operations is a better placed one.
– Net-based? 6.5 crore people use internet in India, only buying rail tickets has gained acceptance, everything else is low; that is where the future is, that is at least 15 years away. HDFC does only 10L on the net out of 300 Crore sales of insurance product in a month
– In any industry, various methods of doing business co-exists, but models would differ in cost efficiency, interaction with customer. India is a land of opportunities. 6000 cities of this country is ready for products. If Tata sky/Dish tv is sold today, tomorrow insurance, loans etc will definitely be. Look at SKS micro finance / Grameen bank how they have moved into explore successfully new models at the bottom of the pyramid.

Most of personal loans are sold, not bought – very few walk into a bank and ask for it…

Net Ambit goes to mass market. We do not go to High Networth Individuals (HNI). We need to evolve a model that will have vast potential. We are exploring. Any model that is scalable and cost efficient will make a killing in the future. Opportunities are immense, growth possibilities and challenges are internal to any corporate. If at all there has been a failure, it is because of internal issues – growing faster, not being open, less adaptable, mostly related to the person(s) who are heralding the business… there are immense examples of these in the recent past.

Q. Who were your competitors and what was the market like when you started?
When we started, only competitor was BAJAJ FINANCE…

Q. What is the critical factor in early days of operations?
Cost consciousness is the most important… Need to be very careful in the early days of any business. In fact, it is important at any given point of time. I have known an international bank that prided itself in their early days in India of giving Cappuccino to every guest who visited their branches. Unfortunately, they had to close down their entire operations for reasons of viability!!

Q. How did you manage to get early customers and retain them?
You need to look out for the next customer. There is no formula. Look for the needs of people and figure out.

FORBES article on NETAMBIT… called the kings of non-affinity – June 18, 2010 article. Mckinsey was impressed by our success on this front.

Q. Affinity and Non-affinity marketing?
Affinity – Selling to those who have affinity towards you. Once a customer is acquired, you will move to affinity team that takes care of the customer. It is a relationship building. Once you create the bond and trust, affinity increases. He will keep coming back and also bring a few more of his friends.

Non-affinity is to bring more and more first timers…We have been very successful in this space with our constant follow ups. We are highly systems driven. Every interaction is captured. Data handling and mining is very strong. This is the secret of success of any company. How well you follow through every enquiry. To what extent you go to satisfy the queries and facilitate the customer make the informed decision.

Q. How does your Non-Affinity marketing work?
Visit our office to see how we do. Seek time and visit us. We will be glad to get you guys spend a day at our office(s)

Q. As you scale up, what are the challenges you faced in building people and organization?

Name of the game is keeping people together…

When you build teams, it is very important to hire the right people. Take time in hiring. Reduce the probability of hiring a person who is not a proper fit, culturally.

1. We look for entrepreneurial, high on energy, ethical, humble, risk takers…at higher level. Humility is a keenly sought after value.
2. Trust once your hire, for their abilities and support their decision-making. Back up their failures or rough patch.
3. Look for people with high ‘Internal locus of control’ at any level

Q. Challenges around scaling up – Which cities, where and when, how do you decide ?

1. We look for Market size of the city,
2. If we decide, we do a Hub and spoke model..
3. Decentralize the decision-making and operations, yet keep a close watch to mentor

Q. Initial selection of products and diversification; future plans and challenges

Initially life insurance was just opening up

Future is very promising….market doubling every three years, growing @ 30%
We foresee 7000 people in 2011, going public in 2012, 1000Cr in next 4-5 years… 250crores in 2011.

Challenges are all internal. It is all about how you keep the culture intact and value systems. How do you bind diversity with one single culture. Appreciating the value system and facilitating them to buy in and relate. It is people driven, how you keep them motivated. How fast you hire, efficiently and train them. Whom to hire and when to hire… It may go to 40000 people, I will not be surprised. We need to constantly train on new products and innovation… train and retain is the challenge…. As market leaders, poaching is always lurking around..

How do you handle the hierarchy formation is the key. Ours is almost flat and a very open organization. We need to make sure that bureaucratic thinking does not come seep in.

Q Speaking about Selling

In India, most of the times we fail in how we sell; Sales experience at the front level is very important.

FMCG companies have mastered it. They send every new recruit as a junior sales officer. I got Rs 150 bugs a day – stayed in Rs.50/- a day hotel, though I could have afforded an expensive one. They make sure you understand the market. Even now, I go and meet two customers every month. That is part of our way of doing things..

In sales, people monitor output only unfortunately.. Very few are bothered about input – how much of effort has gone in the acquisition. That is very important. Document each interaction. Break it down and monitor – Number of calls, responses,

We look for a HR person, who has business understanding. He or she needs to understand sales and marketing front end, to identify the people who will do well in our culture and organization.

Q. How do you approach a client? Since you were the first to enter this market, you might have had to invest in educating the customer..

First we understand a client. If he is not well-informed about the market, we start with only one product

Our non-affinity is all about direct marketing. We reach out to over 80 Lakh new customers every month. FORBES called us king of non-affinity. Our processes are very strong therefore our conversions are very high. It is the process culture.

Q. Name of the game in India is distribution. It is the king. Own these channels…
Owning distribution channels is the key to success. Manufacturer’s distribution will always have great cost inefficiency. Neutral distribution channels with customer friendly services will always be cost efficient and can do many things that will hook the customer. You can see what happens in a Food Bazar…

Q. Strategy Vs Execution –

Started inside out – first Delhi then Meerut. But also look at outside in. So it is both ways. You design on paper and start executing. Then you realize how the assumptions have been not to the mark. Make corrections and keep exploring and learning.

Q. How do you cope with failure? How do you continue to be excited?

Do not hesitate to fail. Never be scared of failures, experiment. Take it as a learning opportunity, and do not make the same mistake. Critically analyze failures. Do not lose by operational inefficiency. Do not worry about experimenting new ideas. Challenges are everywhere…

If you are doing new things, you will fail. You should welcome this exploration. If you have stopped failing, what does it mean? It simply means that you are not doing anything new.

Remaining positive is the biggest thing in life. Dhoni is a good example of this orientation. Tendulkar and Kambli, difference between the two has been all about ‘learning from failures.

Q. How often your decisions were data driven and how much was intuition?
When it is futuristic, many a times it is intuition. You have not had experiences or precedence.. Operational decisions are data driven.. People and futuristic is usually intuition. Yes intuition plays a very important role.

We need to add in such a pace that we should be able to service the customer. Their genuine claims are serviced promptly. We will grow as much as we can serve the customers very efficiently. No pointing in growing faster than what we can service.

Q. Building trust among investors?
They trust your business. They look for history, plan, model… Yet, PEOPLE is the most important. They bet on it.

Q. How do you build NetAmbit as a brand?
How does the small town person believe in NetAmbit? They are buying big brands now from NetAmbit, so that is where we are. As Net Ambit becomes stronger, people will start trusting NetAMbit. That is the way the world market has been growing.. Experiences will help one build the brand…

Lot of creating awareness, educating the buyers..

Q. You have not ventured into Equity distribution, why?
Since the market has not been large, small markets do not go for it… we will move very soon..

Q. What is success?
Successful! When a person is happy about self and your peer group starts respecting you, then you can tell to yourself that it is comfortable..

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Girish and Satya go back to almost a decade of knowing each other. Girish recalled coming to Career Launcher’s Sant Nagar office in 2001 and seeing crowd there and wondering how to take care of building a culture in an organization…and listening to Satya saying, “you just need to communicate and communicate, the values that are close to our heart.” Girish shared that he simply follows those words he heard that day.

Though, I have heard about Girish, I met him only today. From 2001-2005, I was heading middle-east operations and was hardly in India. Today once more I realized how much I missed the developments and interactions during that period in CL, India operations.

Thanks Girish for visiting IWSB and sharing your insights. Will be in touch.