Passion matters, not IQ or certificates

Article By 

V P Nandakumar

MD & CEO Manappuram Finance Ltd

Says leading businessman V.P. Nandakumar, as he shares some tips for budding entrepreneurs

It has been estimated that one fifth of the world’s youth are in India. Their aspirations are vastly different from that of their parents and they are not worried about basic needs unlike their forbears. This gives them the courage to take risks and it is not just a government or corporate job that many of them are after nowadays but they want to be entrepreneurs and job givers.

Most successful businessmen do not have an IIT or IIM background. Their entrepreneurial mindset was shaped by the challenges they had faced in their early life. In fact, many of the big names are college dropouts.

What then goes into the making of a successful businessman? Which are the qualities that lift them to the dizzy heights of success?

If you ask me, there is only one prerequisite: a deep desire to build a business and the passion to do whatever it takes to execute the plan.

If we look at a few successful businessmen from our part of the world, we can see that they did not learn their strategies from biz schools or management institutes. I remember Mr K M Mammen of MRF telling us during a management association meet how his granddad, Mr K M Mammen Mappillai, was against pumping in money earned from their plantation business in Kerala into their tyre business in Chennai. At best, there can be a seed fund to be leveraged on, was his advice. Similarly, leading businessman Yousuf Ali once recalled how he learned the intricacies of logistics during his initial days in the Gulf when he personally delivered goods in a career vehicle to his clients. Indra Nooyi has talked about her mother teaching her and her sister to dream big and write those dreams down. All these are home-grown strategies and not picked up from institutes or books.

In my childhood, we had soda manufacturers in our state. But they did not think beyond making a living. But Pepsi and Coke made a fortune out of it. Fried chicken is what our neighbourhood thattukada (makeshift restaurant) also sells but see how KFC has turned it into an exotic product. What makes the difference is the vision.

We should value money but at the same time, we should have a grand vision. When I started out in 1986, my capital was Rs 5 lakh. I had two employees, both ex-servicemen. When I used to tell them that we will go on to open 100 branches or 200 branches or 1,000 branches, they didn’t understand what I meant. So, how did the journey towards our current net worth of Rs 10,000 crore and a business of over Rs 30,000 crore happen?

I am not a finance graduate. Neither have I studied accounts. When I thought of listing the company in the stock market, way back in the early nineties, no one had any clue about it. But we needed capital and therefore, we eventually got there to become the first gold loan NBFC to do so.

It doesn’t matter what business you do but what is important is how you execute the plan. The gold loan wave that we triggered is what is still sweeping the credit ecosystem. The schemes that we gave shape to have gone on to become the industry’s schemes. Of course, there is risk when you do something new but the passion to reach the goal overshadows the doubts.

Sometimes, I think about what would have happened if I didn’t venture into gold loans. Suppose I had opted for agri-business, I would have probably come up with half a dozen drinks from coconut water. You don’t need great knowledge or high IQ to make a mark. The desire to realise your objective will make one try different paths till the right one suggests itself.

It is, however, crucial to be passionate about the idea that one pursues. There will be failures but you analyse the reasons and proceed further. During the Covid-19 phase and the resultant lull in the market, there was a dip in the revenue of our micro finance venture Asirvad. But I am confident that we will recoup and list the company at an impressive valuation in the near future. The confidence is not based on any calculation on a piece of paper but a broad vision.

The story of Manappuram Finance began in Valapad village, which has now developed into a bustling town. The location doesn’t matter. We have offices elsewhere but Valapad remains our nerve centre. I don’t agree with the view that businesses have to function from big cities to survive and succeed.

The first year is crucial for any start-up and many will taste failure during that phase. If a venture fails, your family and people around you will ask questions and point fingers. Why can’t you look for a job, they will ask and give unsolicited advice not to waste the rest of your money. On the other hand, if someone becomes successful, they will say that the person has become greedy!

In management, they talk of three kinds of ‘sights’. Hindsight about what went right or wrong, insight into the various processes and the third and more hard-to-come-by quality called foresight on where one is headed.

Research is a crucial factor in business but it is the entrepreneur’s mind that becomes its laboratory. The research will make the person try 10 things before zeroing in on the right way to the destination. This is where perseverance plays a big part.

Setbacks are a part of business. In the early days, I was looking for funding but banks were not forthcoming. Then the ICICI agreed to disburse a Rs 100 crore assignment and they encouraged me to open more branches. But later they said they were not getting the go-ahead from the RBI. So, there was a crisis.

Around that time, the hire purchase association had their meeting in Singapore. Most of them were vehicle financiers and as a person who did what was then an alternative business model, I got an opportunity to speak there about the gold loan business. After the session, someone tapped on my shoulder and invited me for coffee. He was a representative of Fullerton, the investment arm of the Singapore government. They had plans to invest in India and he became interested in my business model. They studied it for six months and even came down to Valapad before extending us a facility of Rs 500 crore.

In business, there is a need to reinvent yourself all the time. For instance, we now have an ambitious growth plan for our jewellery chain, which faced some challenges earlier on. We already have nine showrooms and a manufacturing unit in Bangalore. Another manufacturing unit is in the pipeline in Kolkata while more branches are in the works. We will plug the loopholes but we will not let go of the core idea. Because, the real analysis is not in the board room or excel sheets but in one’s mind.

Pic Courtesy: google/ images are subject to copyright