Dialogue with N. R. Narayana Murthy, co-founder Infosys
Whenever The Chilli talks to successful entrepreneurs around the globe with a view to profiling them as role models, the underlying messages tend to be the same whether they are in North America, Europe, or Asia. They make many upfront sacrifices for deferred rewards, and often have no idea how successful they are going to be when starting out. In all cases they have a strong desire to do something different, make a major impact or to create something new.
Mr. N.R. Narayana Murthy, co-founder of Infosys – India’s second largest software and services exporter which now employs over 91,000 employees in more than 40 offices and development centres in India, China, Australia, the Czech Republic, Poland, the UK, Canada and Japan – not only forms an excellent role model, but personifies and embodies all those noble qualities of a successful entrepreneur.
In its emergence since the 1990s economic reforms, India has become synonymous with outsourced IT and engineering. Today’s big companies which have become powerhouses on the global stage had a starting point somewhere as start-ups with visionary entrepreneurs behind them. To get a feel for this, The Chilli is pleased to have had the opportunity to talk exclusively with Mr. N. R. Narayana Murthy. We asked him to re-capture the start-up spirit in the early days, and to provide his own tips for start-ups today. In addition, we obtained his opinion on the opportunities for UK entrepreneurs.
N.R. Narayan Murthy
In addition to the overview published on this page, we are also making available the full audio podcast of his thoughts on these key topics to subscribers of The Chilli RED. [Note: if you are logged in as a subscriber (see top left corner of this page to view your login status) then you will be able to listen to the interview by pressing the play button at the bottom of this article.]
Background
Mr. Murthy is non-executive chairman of the board and chief mentor of Infosys Technologies Limited, an IT consulting and software services provider, headquartered at Bangalore, India. He founded Infosys in 1981 along with six other software professionals and served as the CEO of Infosys for 21 years before handing over the reins of the company to co-founder, Mr. Nandan M. Nilekani, in March 2002. Under his leadership, Infosys was listed on NASDAQ in 1999. He serves as an independent director on the boards of several global companies including Unilever and HSBC Holdings. He is the chairman of the Asia Business Council, and member of the advisory boards and councils of several educational institutions including Wharton, Cornell, INSEAD, Stanford, Tokyo University, SMU - Singapore, IIIT-Bangalore and ESSEC, Paris.
Over the years, he has received numerous awards and honours. The Economist ranked him 8th in the list of the 15 most-admired global leaders in 2005. In 2004, TIME magazine identified him as one of the 10 global leaders who are helping shape the future of technology, and in 2006, the magazine voted him as one of the Asian heroes who have brought about revolutionary changes in Asia in the last 60 years.
The start-up spirit
N.R. Narayana Murthy started Infosys Technologies with six others in 1981, with US$ 250. When asked about the mood during the start-up days, he talks about how in those days India was a closed, inward looking country plagued by a bureaucratic licensing quagmire and where there was a tremendous ‘friction’ towards the business community.
He contrasts the conditions then with those now – and in particular, how India was an unfriendly environment for start-ups looking to operate globally. For example, he talks about it taking 40 visits to the capital city Delhi just to get a licence to import a computer, and each visit would take at least 2.5 days by train. Each time the license was about to be issued, it took so long that the computer specification in the market changed, with higher disk storage capacity and processing power; this meant they had to repeat the lengthy process and re-do the paperwork to obtain a new license.
Banks would rarely give loans, and it would take 10-15 days for approval from the Reserve Bank of India just to travel overseas. He also recounts how it would take 3-4 years just to get a phone line. He contrasts it with the conditions now, where you have a choice of 2-3 companies selling you a phone at knockdown prices, and you also don’t need licensing for many business activities.
He says that while they encountered these difficulties, entrepreneurship is all about a passion that drives you to overcome those hurdles. Mr. Murthy comments, “An entrepreneur doesn’t have resources. An entrepreneur doesn’t get support from the environment. We were very positive in those days – we saw every bottleneck as an obstacle race, as a chance to show we were smart and perseverant and we were optimistic.”
Narayana Murthy’s socialist leanings in his formative years and his experiences in France drove him to prove that he could demonstrate that entrepreneurship could find a place in India. “I saw it as a big risk, but I also saw it as a rare opportunity to prove a point to myself, because I was disappointed as a leftist, and I just wanted to prove that I could be an entrepreneur, that I could create wealth, legally and ethically. I wanted to prove that entrepreneurship is a way forward in a country like India.”
Tips for start-ups, and opportunities for UK entrepreneurs
The Chilli asked Mr. Murthy what his tips would be for start-ups
today, whether they are in Europe, the USA or India. He is very enthusiastic
about the opportunities for entrepreneurs today, and particularly UK start-ups.
One of the factors that he believes UK start-ups have going for them is that they are in Europe, and that brings huge credibility on the world stage. He says it is “much easier to be an entrepreneur in the UK.” He adds, “The issues today are not infrastructure, or bureaucracy. The issue today is the market, competition, and how smart you are.”
While the comment about infrastructure and bureaucracy might be targeted at Indian companies, the point about market and competition is very important wherever you are thinking of starting in the world. In the audio podcast, Mr. Murthy explains the important points about what happens once you come out with a business idea, and how you can take it to market, and the kind of start-up team you need. He also talks about the importance for today’s high-growth high-tech start-up companies of branding, and the need to build brand value in order to be able to charge a premium on your prices.
For UK start-ups, he explains the different trade-offs between scaleability, resources and access to a large talent pool, versus the needs of a high-risk, high-reward product development company, which allows for differentiation.
If you are logged in to your account (see top left corner of this page for your status) then you will see a link below to play the audio podcast of our interview with Mr. Murthy, talking about the start-up spirit and the opportunities for start-ups today and his tips.
If you cannot see the play button below, please login to your account with The Chilli RED. If you are not a paid subscriber to The Chilli RED, then it only takes a few minutes to subscribe – click here.
In the next part of our interview with Mr. Murthy, to be published before the end of 2008, we will be taking about his views on what he would do differently if he was starting out again, and in a further instalment we talk to him about his mentoring activities.
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