As part of TiE Pune quarter on “Scaling your Business,” on 16th May we had TiE Charter Member & Founder & MD Indigo Paints Pvt Ltd Hemant Jalan share the inside story on his life and the phenomenal growth of Indigo Paints. Indigo Paints was started in 2000 by Hemant in Jharkhand, and in recent years has been growing at an astounding 40% year on year, to an annual sales value of Rs 600 Cr today. With Dhoni as their brand Ambassador, Indigo Paints is going from strength to strength and an IPO is on the cards for 2020.
So how did it all happen? And was it plain sailing? We learned a lot about the highs and lows of entrepreneurship and distill 10 lessons here for you:
1) Remember the true purpose of Education
Hemant had a sterling record for education. From IIT Kanpur, he went to Stanford for his Ph.D, which he chose to drop after he had completed his Masters. He subsequently completed his MBA from Chicago Booth before heading back to India. Hemant recalls the words of his Professor at Stanford, “It is not the knowledge you gain by studying at the best places – it’s the way we teach you to sharpen your most important axe: the brain.” He has never forgotten that and told us all to think about education as being all about learning and sharpening tools.
2) The Past does not define you
After coming back to India the day after finishing his MBA, Hemant started working in his father’s loss-making business. He turned this around successfully, but in the nineties made a few decisions that ultimately led to the downfall of the business, leaving it in bigger losses with significant bank loans. This was an extremely hard phase. “In the USA, they may embrace failure, but in India it is nothing but shame. It was the hardest time for me and the family.” However, he did not give up. And look where he is today.
3) Change is needed
After the turmoil in Patna, Hemant needed to earn cash to keep his family going and pay off the debtors. So he took a job in one of the Southern-most parts of India, Tuticorin with Sterlite Industries and worked at it for three years. It gave him the cash flow that was needed and time away to realise that he hated taking orders and was itching to go back into entrepreneurship, despite his previous experience.
4) Be curious to spot opportunities
After quitting his job, Hemant moved to Pune with his family. He had no idea what he was going to do. He still had a small manufacturing unit making Calcium Chloride in Jharkhand, and one day, while visiting it, he noticed a group of men outside wearing white Dhotis and kurtas. He was curious as to who they were. His manager mentioned that they were cement paint manufacturers that bought the calcium chloride to put into their paints – and that they were making great margins. Hemant was sure that if they could do it, he could too! So he invested a few lakhs in some basic materials and tried it out. It was successful and Indigo Paints was born.
Another breakthrough came when Hemant was sitting in the offices of Sudarshan Chemicals in Pune, and leafing through their pigment charts. He stumbled across some gold, silver and metallic colours, which he really liked. When he asked them what they were used for, he was told they were used for things other than paint. He persisted and asked if they could be used in paints. They shrugged their shoulders and said probably. This was the start of their innovative strategy of doing something different – Be Surprised!
5) Watch the spend to watch the growth
Hemant was careful of staying profitable by cutting costs as much as possible. He knew that his competitors had huge dealer networks. In order to build his, all his team, including himself would go by train everywhere. This often meant journeys of 24-36 hours, but it was worth it, as it also saved a night’s accommodation in a hotel! Hemant made a point of getting the dealers interested in his products so they were mini-ambassadors for him in tier two and three cities
6) Catch them Young
Hemant has always hired freshers. He says it is much easier to train them and they provide good value for money if you incentivise them in the right way. And if they are happy, they will stay which will bring down attrition for the company. It took 9 years to scale the business to 10 Cr and their staff is the main reason for their success.
7) Don’t judge. Build Loyalty
The best decisions are often made on the spur of the moment. In a conference of sales staff in the early days, Hemant was asked a question by an unassuming fresher. They had been setting targets and the average was Rs25L. This fresher asked, “Sir, what will you give me if I hit 1Cr target?” Hemant, without blinking, asked him, “What do you want?” The fresher replied excitedly, “A Hero Honda motorcycle.” Hemant immediately wrote down the commitment on a napkin and handed it to him. Over the next months he watched the progress of this young fellow and he was soon up to 1cr! Without telling him, Hemant bought the bike and presented it to him at the next Sales conference. The fresher was overcome and wept with joy. The fresher went on to beat targets and around him, others were also inspired to do so. That was the birth of Hemant’s legendary incentive scheme that runs until today and is the reason for the minimal attrition at Indigo Paints.
8) Be Honest
We all have some things in our books that may not be completely straight. Often they are minor things that we just overlooked. When Sequoia came to Indigo paints, looking to invest, Hemant was upfront with them about everything. He did not want to risk anything spoiling the deal later on. Honesty is always the best policy.
9) Dare to be different – time and again!
When you are fighting giants like Asian Paints and Berger, it is hard to show the world your USP. This is where innovation comes in. Hemant realised that he would need something that would help the Indian consumer remember him. His competitors had Bollywood film stars as their brand ambassadors. However, much of his market was South India, that too in the smaller
cities. He needed someone that would appeal in all parts of the country so that ruled cinema out. There was only 1 choice: it struck him that cricket is something everyone loves and hence approached MS Dhoni who was equally loved across the country. And signing him on as a Brand Ambassador has done the trick, multiplying sales everywhere.
10) Thinking Big and Acting small leads to Becoming Big
Right from the beginning, Hemant had an itch to become the number one player in paints. When he said this at his first sales conference, everyone laughed. They continued on, going to the city after city with the paints. When he said it five years later, people still laughed, but the network was expanding as was the product range. When Sequoia came knocking in 2015, they smiled. They wanted to see this attitude. Now when Hemant says this at his sales conferences, his staff nod vigorously and smile. No one knows what the future holds, but his staff knows with an IPO on the cards for next year, nothing is impossible. Hemant is an active member of TiE Pune and has been a mentor on the Nurture programme, as well as running strategy sessions within TiECON Pune. Like all the Charter Members, he is looking to give back and help others succeed. We’re thankful to have him as part of the TiE community and look forward to watching the Indigo Paints story – to be surprised!