Srini Raju came back from the United States to join Satyam Computer Services as a partner and he was the chief operating officer from 1992 to 2000. He was also the first chief executive officer of Cognizant Technology Solutions from 1994 to 1996.
In 2000, he left Satyam to become a venture capitalist. He founded iLabs Capital to help start new ventures. iLabs now funds 13 companies, many of them leaders in their respective market segments. He is also a founding member Indian Institute of Information Technology.
He recounts the long successful journey he has undertaken so far.
From the US to Satyam
I was working in the US when I got an opportunity to be associated with Satyam. I never wanted to be a senior employee in a big company; it was not my ambition at all. I wanted to work, make enough money to support my family, that's all.
I had always wanted to start something on my own. I wanted the freedom to do what I wanted to do in my company which I didn't have as a junior or middle level employee. I had this urge in me to own a business but didn't have the capital with me.
Ramalinga Raju steps in
It was (Satyam chairman) Ramalinga Raju who asked me, 'Do you want to come back to India and join our team?' He was also in the US but came back to India to start Satyam. So, I decided to join him. And became a partner in Satyam.
Although we were a group of people, each of us used to run a company each. Ramalinga Raju ran Satyam Spinning Mills, Rama Raju ran Satyam Constructions and I had Satyam Computer Services.
When Satyam Computer Services became a sizeable company, we thought it needed bigger management, and Ramalinga Raju being the leader of all of us came into its operations. He was also the Chairman of the company.
Success of Satyam
If you want to be big, you have to dream big. You can run a small company and be happy. An entrepreneur doesn't have to always own a big company.
In our case, we never benchmarked ourselves with our peers; we benchmarked ourselves with Tata Consultancy Services which was much bigger than us at that time.
We started comparing ourselves with Infosys when they became a sizeable operation; they started ten years before us. We have recruited people from TCS but not a single person from Infosys because we look at them as our competitors.
All of us were very committed to the company, and we had a very stable senior management, and that was the reason why we grew.
First CEO of Cognizant Technology Solutions
In 1994 Cognizant Technology Solutions was started as a joint venture of Dun & Bradstreet (76%) with Satyam Software (24%). And I became the CEO of the company taking care of, both, Satyam Computer and Cognizant.
Three days a week, I was in Hyderabad with Satyam and three days in Chennai for Cognizant.
After three-and-a-half years, Dun & Bradstreet had an option to buy us out and they bought us out. That was how Cognizant became independent. They have done very well, and I am really proud of the company.
All the guys who are there right now, the entire team, are the people I brought into the organisation. In Satyam also, we have the same team even today. Only I am missing from the team!
New role as a venture capitalist
For nearly ten years, I was travelling a lot and doing the same work. In software services, it is a 24-hour job. As I travelled, one day a thought hit me, 'Why don't I help the next generation entrepreneurs, just like Ramalinga Raju helped me start Satyam Computer Services?'
He supported me and made somebody out of me. I thought I would do the same thing to the next generation. As I had capital with me, I could start a business.
I will not call what I am doing now 'social responsibility;' there's a commercial angle to it too. Of course, we support interesting businesses even if they don't bring in money. But you cannot support interesting ventures alone because I am running a business as a venture capitalist.
Combining interests and business as a VC
Throughout my career, I have tried to combine my interests and the moneymaking aspect of business. Yes, there will be a little bit of conflict in you when you try to combine both. That is why you have other partners who try to make you look at things in a balanced way.
Sometimes, they do ask me, 'Srini, are you making the decision based on your interest or based on the return on investment?' Sometimes, I do tell them, 'this project interests me'
If I want to only make money, I would put money only in the ventures that make money, but I like interesting projects too. I do that without letting it affect my business.
The way I do is, we put 90% of our money where there are good returns and you can put your money at least in 5 per cent of the areas where you feel can make a difference. It is like picking up something that did not exist before.
DQ Entertainment is today one of the largest studios in the world and when Tapaas Chakravarti (chief executive officer, DQ Entertainment) came with the proposal, if I had had my doubts, it would not have happened. Yes, it is not as profitable as IT services. But we thought we should do something beyond IT; we should support people who are not engineers but have artistic skills.
One feels satisfied because one created certain things that were not there. I feel good if we can create employment in more sectors in the market.
But does that mean I will put all my money into such projects? No.
As a VC, we are focusing on the tech sector, media and entertainment, consumer driven products and services. We get into areas which we know well, not into new areas where we don't have the expertise to judge.
Role as an entrepreneur and a VC
I enjoyed taking risks and I enjoyed my role as an entrepreneur at that stage of my career. But if I were to be there now, I would not enjoy it too much. It has become monotonous for me.
My new role as a VC has given me enormous opportunities to do many things. I am not constrained by my customers. Nobody is calling me in the evening to ask why his delivery has been delayed (I was the COO in Satyam)! Today, I get a lot of time to think and act.
If you don't care for your returns, this is an easy job! If you invest in good companies, certain returns are assured.
I don't have any ambitions of starting a new company. That is over in my life. Will I do something else? Yes, I have involved myself in building an educational institution, a university. I will spend more and more time there.
I come from a poor background. I had to struggle to succeed and then I was involved in making my companies succeed and make money. When you reach a certain stage in your life, you start looking back. That is when what is ahead of you is shorter than what is behind you.
Then, you think, 'What should I do meaningfully the rest of my life?' Some decide to travel and see the world, some write a book, some continue to make money till they die, but I wanted to give something back to the society that gave me a good education.
I studied with the help of scholarships from the government throughout my studies. At REC, Warangal, I might have spent only Rs 10,000 in the entire five years I spent there. Today, that is the amount you spend on your kid's education every month.
Then, I went to the US for higher studies, again on a scholarship. I was at IIT-Madras for a year on scholarship. Our education system has been very supportive. That is why I want to start a good university for the benefit of students.
Reservation for higher education
If the government is running an institution, it belongs to the society and they can have reservation there. But the creamy layer should not have reservation. Reservation should be given only for one generation.
Reservation was given for social backwardness and financial backwardness, and, today, financial backwardness exists in all sections of society, irrespective of the caste or religion people belong to. It is not only socially backward people who are poor. And not all socially backward people are financially poor.
When you give one family the benefit again and again, you are hurting others and also denying another person a chance to succeed in life. I have seen half a dozen IAS (Indian Administrative Service) officers in a family and every generation makes use of reservation. So, there is a class within a class right now.
Job quotas in the private sector
I feel we, as an industry, have a responsibility to the society. Initially when we were creating jobs, we were happy doing just that -- creating jobs. You cannot have a society where only a few people in the society are benefiting from it. Then, the others will be very unhappy.
So, we have to voluntarily take affirmative action. I would be very happy if all the Indian private companies say they are affirmative companies. An affirmative company will make an active effort to ensure that all sections of society are with them.
I believe that there is capability in every individual and we have to harness it. What we need is an inclusive society.