The Wealth Wallahs

by Shreyasi Singh

  For all the money I had, Sharma recalls, my parents would have preferred me giving up my business to get a job till well into the mid-2000s, by which time he had already founded One97.

  His surprising discoveries about the power of wealth would become better defined with another incident in the first few years of his entrepreneurial journey. In 2003, Sharma had planned his first visit to Silicon Valley to see up close the technology innovations that were disrupting the internet economy — a plan thwarted by the rejection of his visa application.

  At that time, Indian IT services majors were mopping up big contracts and long-term projects in the US. Many of Sharma’s batchmates from his engineering college had been “awarded” the precious H1B visa (a non-immigrant visa that allows US employers to recruit and employ foreign professionals in specialty occupations within the US for a specified period of time) for their coveted onshore assignments, even though they earned a fraction of what he did.

  His visa rejection stung. Sharma calls it a “big setback” and it helped him realise that cash wasn’t enough to buy social status. It hit him that wealth wasn’t the cash you had or the house you owned, it was the impact you had — a lesson, he believes, people have to learn firsthand and can really only understand when they become rich.

  Wealth, he says, was nothing but an enabler to help you do what you really wanted to. People have the urge to keep discovering new wealth because it can help them impact many lives — those of their family and employees, or society at large.

  The “chosen” ones?

  First-generation entrepreneurs interviewed have had the strongest sense of self-worth and achievement, more than both professionals and second-generation or mezzanine entrepreneurs, including those who have co-grown the medium or small-sized businesses their fathers had founded into impressive corporate entities.

  Since they can link their success directly to having created opportunities that help fulfill other people’s ambitions, first-generation entrepreneurs have a strident confidence and conviction that somehow professionals and inheritors aren’t able to deploy in their narratives.

  It’s likely that the wealthy professionals’ discomfort in talking about their money stems from this as well: Their personal contributions to the successful firms they work for might be substantial but they often don’t have the power of a story and mission that first-generation entrepreneurs do.

  Contemporary literature on start-ups across the world often refers to an entrepreneur’s deeply held self-belief and conviction as “God’s Syndrome”, a formidable concoction of a sense of purpose beyond themselves, and an occasional, exaggerated notion of infallibility.

  The scope of my interviews didn’t allow for an exploration of the negative traits that come with this God’s Syndrome but in every conversation with entrepreneurs, it was apparent that they believed they played a special role — as “ideas” people, job creators and nation builders.

  They were the least bashful when it came to articulating the impact of their ideas and ventures on the industries they worked in and the employees who worked for them. Their reluctance to talk about their wealth was dramatically different from the strong sense of self-worth they drew from the companies they built and the contributions of those businesses to India’s growth trajectory.

  They also seem to have a certain awareness of the philosophical framework that Devdutt Pattanaik referred to earlier, the one that delinked success from respect.

  Nearly 72 per cent of the people surveyed on the question, ‘Do you think people respect you because of your wealth?’ said they did not believe that to be true. In my interviews as well, it was rare to find a first-generation entrepreneur willing to talk about their ambition to be rich without talking about passion, vision and a larger goal.

  Was it better to be more like life-preserving Lord Vishnu or a self-indulgent Lord Indra?

  The high of changing lives

  In April 2015, Kunal Shah, founder and CEO of Freecharge, an online mobile recharge platform, sold his five-year-old company — backed by investors such as Sequoia Capital, ru-Net, Valiant Capital and Aquila Investments — to e-commerce giant Snapdeal in a reported 2,400-crore ($360 million) deal done 30 per cent in cash and 70 per cent in stock. Along with the TaxiForSure deal in March that year, the Freecharge-Snapdeal acquisition made big headlines for being one of the largest consumer internet transactions in India so far.

  The company’s two founders, Shah and Sandeep Tandon, reportedly netted some equity in Snapdeal as well. Business newspapers might gush about these mega deals in their frenzied reportage on venture capital activity and technology start-ups but Shah insisted the numbers did nothing to capture the real excitement of building a company. ‘When you build a start-up and see lives change, it’s something else,’ he explains excitedly.

  ‘It might sound grandiose but it feels like we are giving electricity to people. Freecharge’s user data has shown that once someone learns how to transact a recharge online, they move to online shopping and NEFT transfers,’ he explains to me.

  His drive — and that of his company’s — he insists comes from the fact that they are able to participate in making transformations in a country that was on the move and was changing so rapidly.

  ‘In the process, lives of people who work for us have also changed. When team members invite me home and I see how much their lifestyles and lives have changed because of the company we started, it feels great. That is wealth,’ Shah adds.

  Feeling successful wasn’t something he got out of his investment portfolio or bank statement, he told me, because nobody who creates wealth is really chasing wealth.

  ‘What I am super proud of and what I value most is that I am able to meet some very intelligent people. Real wealth is in getting respect from both younger and seasoned entrepreneurs. I feel richer because I am invited to events where I meet some amazing people, and they’ll respond if I reach out to them or write them emails. Now, that makes me feel rich.’

  The badge of hard work

  In Lamont’s Money, Morals, and Manners: The Culture of the French and American Upper-Middle Class, that was referred to earlier, there is an interesting section on the differences in the two societies about how morality is structured. ‘In general, the French less frequently take a strong work orientation to be a template of moral character…they also tend to deduce moral purity from involvement in the humanist tradition, whether it is Catholic or Socialist in inspiration.’

  In contrast, American morality is more defined in terms of work ethics, humility, conspicuous honesty and straightforwardness.

  Again, the Indian wealthy has an uncanny affinity with the American upper-middle class ethos, as laid out by Lamont. Striking in its absence in my interviewees for the book, was religiosity or the notion of divine gratitude when people spoke about their wealth.

  In its place, instead, was a strong sense of self-belief and faith in the possibilities and rewards of hard work. In contradiction to the notion of a silver spoon, it was the first-generation entrepreneurs and professionals, more than second-generation entrepreneurs, who had a greater sense of the forces of time having aligned beneficially for them. Yet, even amongst them, few articulated it in terms of feeling “blessed”. Even where people understood they were fortunate to be in the right place at the right time, they saw the situation as a confluence of market forces, demographics and a moment in history that was ripe for growth. The terms “ovarian lottery” and “lucky sperm” were mentioned more times than the word God in the interviews I did.

  There is, instead, a near-devotional reverence for the guild of hard work, especially amongst first-generation entrepreneurs above the age of forty five. While younger first-generation entrepreneurs might stress on the power of an idea, or the possibilities of disruption, more as a cause for their success, older entrepreneurs are more likely to talk about hard work, grit and determination. ‘India is a land of equal opportunity; by dint of hard work and good ideas, you can buil
d a successful life. Mine is a modest example, that it is possible to build a fortune and a legacy in a generation,’ Nirmal Jain of IIFL Holdings told me.

  For the mezzanine generation of entrepreneurs, hard work was considered a much-prized currency as well. Second-generation entrepreneurs, even those co-creating and co-scripting a substantial scale-up in their family businesses, have a strangely complicated relationship to their family wealth.

  Because they don’t enjoy as much moral ownership of the business as a first-generation founder does, hard work becomes the tool by which they both begin to feel more ownership and validate the privileges people perceive they enjoy.

  Holostik India’s Ankit Gupta, an alumnus of Harvard Business School, joined the company founded by his father, UK Gupta, in 2007, after a management degree from the University of California, Los Angeles. At the time, their consolidated businesses had a turnover of 40 crore ($6 million). Today, apart from their core business of anti-counterfeiting solutions, they are also in real estate, packaging, chemicals and warehousing. They have become active angel investors as well.

  They closed 2015 with about 250 crore ($37 million) in turnover. ‘We have grown six times in seven years, which feels good, of course. At the back of your mind, you always know what you started with and what you’re helping create. Not only a sense of accomplishment, a sense of ownership begins to slowly seep in when you have worked hard for it.’

  Gupta, who has been busy with an organisational change initiative to professionalise his family business, says that effort and energy becomes the main filter for personal satisfaction. ‘As entrepreneurs, you invest for the future be it in terms of money or effort. I know the true returns of what I did two years back won’t show for another year but that is the forward-looking vision you set and work towards. Also knowing that you are giving in your 150 percent makes it most satisfying,’ he says.

  Starting a business in India is one of the toughest and most challenging journeys. We remain one of the most hostile countries in the world when it comes to ease of doing business and negotiating the obstacles. When you run the business yourself, firefight through the emergencies that crop up, the fruits of the business or the wealth earned take on a different meaning. Seeing what it takes to run the business, these entrepreneurs say, dramatically changed what money meant, and how they viewed it.

  ‘There is a huge difference in how you see the wealth you create or the little wealth you saw your parents have as a child. I used to wonder why my father never spent any money on himself. Today, I am like him. Before any big material purchase, I ask myself, how am I going to recover this? When you know how hard it is to make money, you spend it with much more caution,’ says Aakash Educational’s Chaudhry.

  The piggy-bank model

  Aditya Gupta’s father started Sharda Exports, a small carpet manufacturing unit, in Meerut in 1983. Gupta joined the business after an engineering degree from the University of Roorkee in 1991. It then had annual sales of less than 40 lakh ($60,000). Today, the company has a flourishing real estate and exports business as well as two retail furniture brands — The Furniture Republic and The Rug Republic. The group turnover today, Gupta says, is “several hundred crores.”

  Unlike the dramatic stories of first-generation technology entrepreneurs profiled earlier, and the huge explosion of wealth they have witnessed, Gupta says his wealth is more organic. He calls it the “piggy-bank” model of wealth creation — adding moderate amounts of wealth, week by week and year by year.

  In that sense, Gupta represents both the mezzanine generation that was referred to earlier, and an old-economy business without the razzmatazz of the new-economy technology ventures that dominate mainstream media space. Not surprisingly, both weigh heavy on how he sees his wealth, and the opportunities it affords him.

  In his tastefully designed corporate office in an industrial zone in Noida, he said to me, ‘I do feel like I deserve what I have because it’s come from having toiled year after year. When you’ve worked hard over decades, not only are you more likely to be attached to your wealth but you’re more conservative as well. That determines, to some extent, the amount of risk you want to take. Because we haven’t depended on one massive stroke of luck, even our plans for the future aren’t boom-or-bust ideas. Naturally, there is more aversion to risk, or more attachment to the wealth, if you’d like to call it that. The fear of losing wealth can be bigger than the joy of making it.’

  He reckons that most people with wealth are like him because apart from the past seven years or so — where some people have had very condensed start-to-exit business journeys — most other companies, even in the IT services, were organically built and therefore took longer to establish and generate substantial personal wealth from.

  ‘The quick-rich model of extreme start-ups was an aberration, and one that didn’t quite capture the reality of wealth and how it shapes perceptions,’ feels Gupta.

  I found that more than even the quantum of the corpus built, the pace at which the wealth is created does sharply determine and influence attitudes, including how “attached” people feel to the wealth. Company owners who have been running their businesses for decades say that the bruising journey that building a business in India calls for does make them feel more deserving of the wealth they have amassed. The tenacity, perseverance and determination required also makes the wealth earned more valuable.

  ‘For people who began businesses with real risk and no outside capital, such as old-economy, manufacturing business like ours, getting to a base level of wealth was important from a survival point of view,’ explains a first-generation garments manufacturer in Mumbai.

  ‘Attitude towards the importance of wealth till a base level is reached is very different from that of people who had reached this base level of wealth before starting their business, such as senior professionals turning into entrepreneurs,’ he explained to me.

  Many other professionals I spoke to ascribed to this view as well. ‘When you build something up over thirty five years of hard work and a disciplined life, you do value that money more. It’s not like that money has suddenly bounced from the sky in a single event that we see with some younger businesses now,’ added HDFC’s Keki Mistry.

  The only free calendar slot I found in the two-week period in August last year that I was trying to meet Freecharge’s Kunal Shah, for whom the skies had opened up and rained wealth, was an evening peak-hour drive from his office in Mumbai’s Bandra Kurla Complex to the domestic airport.

  Shah spoke with a speed and energy that one wishes could rub off on the gridlocked roads of our cities during peak hour. This time, however, I was thankful for the slow, messy traffic because time with Shah had been so tough to coordinate in the manic post-acquisition period when he was shuttling between Bengaluru, Delhi and Mumbai several times in a week. Also, my rushed but insightful conversation with him struck me to be strangely symbolic of his company’s manic growth.

  This was barely a few weeks after his company’s mega transaction with Snapdeal that had led to a substantial infusion of personal wealth but Shah seemed unfazed, almost bored, to talk about this enormous life-changing event.

  As an entrepreneur, he explained to me, one became used to bouts of massive euphoria as well as lows, often during the same day. ‘This volatile mix of emotions forced one to develop a thick skin, and while that is useful in helping manage the lows, it, unfortunately, also proofs one against being excited about the highs,’ the 37-year-old entrepreneur explained. ‘I was recently telling Ronnie Screwvala, someone I respect a lot, that I almost felt no emotion and that nothing seems to have changed. He said it was probably because this happened too early in my life.’

  Shah said that he had noticed that when one spent a longer time to build something, they did feel like they deserved it more. It was understandable that with the pains they had taken to build the business, they wouldn’t want to go back to the days of struggle.

  For entrepreneurs such as him, he
added, who had been backed by venture capital money, and had seen massive personal upsides in less than five years from starting out, the notion of gratitude was very different.

  ‘When you spend twenty years on building something, it takes the life out of you. I recognise that for someone such as Ronnie (Screwvala) who led UTV for twenty years before finally stepping down in 2014, it must feel much more hard earned,’ concluded Shah in his no-holds-barred way.

  Chapter 6

  Dividends of thrift

  Even before she learnt the lessons of wealth, Infibeam’s Neeru Sharma learnt how to save. Sharma grew up in a middle-class family in Faridabad. Her father’s fledgling auto lamps business suffered huge losses when she was in school. Her homemaker mother stepped in to manage the industrial unit so Sharma’s father could go back to a job and bring in a stable income to keep their household running.

  Those memories stayed with her. She saw how the lack of funds had forced her parents to make life choices they might not have otherwise made as her father had always nursed entrepreneurial ambitions. Having lived through several phases of a cash crunch as her parents breathed life into an ailing business, Sharma’s sole agenda when she began working in 2001 at Tata Consultancy Services after her engineering degree was to save as much money as she could.

  Sharma recalls how she and her brother, also an engineer, would spend money very, very cautiously when they began to earn. Both opted for as many on-site, international assignments as possible because these stints gave them a chance to save up.

  In a few years, the siblings had collected enough to help their parents buy a new house before starting her family. That was a big milestone. The urge to save eased up a little. After 2005, things changed even more. Sharma had a successful tenure at Alcatel, which she followed up with a management degree from Carnegie Mellon — a top-ranking business school in the US after her marriage. Her earnings rose sharply as did her confidence during her stint with e-commerce giant Amazon after the management degree. This was her “new normal” and it helped chip away at some of the anxieties around money. Still, the early lessons were deeply imbibed. ‘Saving is part of my ethos now. Even today, I am not really a spender,’ she says.