There is nothing wrong in wanting to get richer. But there are many ways to get richer, and entrepreneurs must be able to choose the right one
I maintain that there is nothing wrong with a youngster who is aspiring to make a lot of money as long as it is via legal and ethical means. You cannot become a saint at 20 and you shouldn’t. What is important is for you to realise that by seeking respect from every stakeholder, you will actually become richer in wealth. That is the trick that we all have to follow. That is why, right in 1981 when we started the business, I said that we must seek resect from everyone – right from customers to investors to vendor partners to employees to government to the society at large. If we sought that kind of respect, we would not short change anyone. We would adopt the finest principles of corporate governance, be fair to our colleagues, not violate any law of the land, pay our taxes properly and create goodwill with the society. We went ahead with the thought process that if we follow these tenets, revenues, profits and market capitalisation will automatically come. We said that we will separate management from ownership of shareholding and also laid down a fundamental principle that none of our family members will take up a non-merit based role in the company. So there is nothing wrong with youngsters seeking a path to get richer; all I am saying is that there are multiple paths to get richer. And one of the paths that this company has found to be effective is to seek respect.
The people I chose to partner me in this venture were chosen because they had very similar value systems. They were part of my team at Patni. Since equity, fairness, respect, value systems, et al were paramount to my mind, I took an unprecedented decision of making them equal stakeholders in the business. I have not come across any entrepreneur who picked up people with 1-1.5 years experience and gave them 15% equity. I have not seen any other case in the history of global business. Why did I do it? I did it because I believed in equity, encouraging youngsters and having good values. Even at the national level, I do strongly believe that these values will make India a better place.
When we started Infosys in 1981, India was a very different place as compared to what it is today. First of all, there was huge friction to business in the 1980s. For example, it was very difficult to get a bank loan. When we wanted to import our first computer, we went to multinational banks seeking finance – Citibank, Bank of America… where my nephew and my friends worked. They said, “We don’t give money to you guys. We only give money to very rich people.” These were the MNC banks. The Indian banks were also sceptical. Finally, we got funded by the state financial institutions. Secondly, in those days, infrastructure was very poor. It would take us two-three years to get a telephone connection. Thirdly, there were no data communication facilities in those days. We used to sometimes fax the source code to US. Fourthly, travelling outside India required approvals from the RBI as we did not have current account convertibility. We couldn’t hire consultants from outside India in quality, brand building, et al. Those are all taken for granted today. Today, it is all about competing in the marketplace based on innovation and based on how market-worthy you really are. Therefore, there is a lot of difference between the 1980s and today, and for the better.
I maintain that there is nothing wrong with a youngster who is aspiring to make a lot of money as long as it is via legal and ethical means. You cannot become a saint at 20 and you shouldn’t. What is important is for you to realise that by seeking respect from every stakeholder, you will actually become richer in wealth. That is the trick that we all have to follow. That is why, right in 1981 when we started the business, I said that we must seek resect from everyone – right from customers to investors to vendor partners to employees to government to the society at large. If we sought that kind of respect, we would not short change anyone. We would adopt the finest principles of corporate governance, be fair to our colleagues, not violate any law of the land, pay our taxes properly and create goodwill with the society. We went ahead with the thought process that if we follow these tenets, revenues, profits and market capitalisation will automatically come. We said that we will separate management from ownership of shareholding and also laid down a fundamental principle that none of our family members will take up a non-merit based role in the company. So there is nothing wrong with youngsters seeking a path to get richer; all I am saying is that there are multiple paths to get richer. And one of the paths that this company has found to be effective is to seek respect.
The people I chose to partner me in this venture were chosen because they had very similar value systems. They were part of my team at Patni. Since equity, fairness, respect, value systems, et al were paramount to my mind, I took an unprecedented decision of making them equal stakeholders in the business. I have not come across any entrepreneur who picked up people with 1-1.5 years experience and gave them 15% equity. I have not seen any other case in the history of global business. Why did I do it? I did it because I believed in equity, encouraging youngsters and having good values. Even at the national level, I do strongly believe that these values will make India a better place.
When we started Infosys in 1981, India was a very different place as compared to what it is today. First of all, there was huge friction to business in the 1980s. For example, it was very difficult to get a bank loan. When we wanted to import our first computer, we went to multinational banks seeking finance – Citibank, Bank of America… where my nephew and my friends worked. They said, “We don’t give money to you guys. We only give money to very rich people.” These were the MNC banks. The Indian banks were also sceptical. Finally, we got funded by the state financial institutions. Secondly, in those days, infrastructure was very poor. It would take us two-three years to get a telephone connection. Thirdly, there were no data communication facilities in those days. We used to sometimes fax the source code to US. Fourthly, travelling outside India required approvals from the RBI as we did not have current account convertibility. We couldn’t hire consultants from outside India in quality, brand building, et al. Those are all taken for granted today. Today, it is all about competing in the marketplace based on innovation and based on how market-worthy you really are. Therefore, there is a lot of difference between the 1980s and today, and for the better.
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