In our series of start-up stories, let us begin with our third story. This is the story of the man, who needs no introduction. He is often regarded as the father of IT sector and he is the same person who began his company with just a capital amount of 10,000. He is the man none other Nagavara Ramarao Narayana Murthy better known as Narayana Murthy, the co-founder of Infosys.
We all are aware of the fact how dimensionally big Infosys is. Can you imagine that a company so big began with just a capital investment of Rs 10,000? Yes, it is hard to ponder that but it is true and it surely has a story behind it.
Narayana Murthy- The Self Made Billionaire
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Narayana Murthy is one of the reputed Indian IT industrialist as well as co-founder of Infosys which specializes in providing services like business consulting, engineering, technology and outsourcing services. Murthy was a student of electrical engineering at National Institute of Engineering affiliated under the University of Mysore and then did his M.Tech degree at Indian Institute of Technology Kanpur.
Before he was started Infosys, Murthy worked as the chief systems programmer in Indian Institute of Management Ahmedabad and also Patni Computer Systems in Pune( Maharashtra). In the year 1981 and serving as its CEO right from the year 1981 to 2002 and also as chairman from the year 2002 to 2011. Right on June 1, 2013, Murthy was declared as Additional Director and Executive Chairman for a brief time in five years.
By the Fortune magazine, Murthy has been listed as the 12 greatest entrepreneurs of all time. He has been given the honor of being addressed as Father of Indian IT sector by the Time Magazine honoring his contribution to the industry of outsourcing in India. He has also been honored with Padma Vibhushan and Padma Shri Awards.
Narayana Murthy- The Days When He Began
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Narayana Murthy was born on 20 August 1946, in Sidlaghatta, Karnataka, in a middle-class family. His uncle was a civil servant and his father wanted him to take up the same profession. But right from that tender age, Murthy had other plans. He wanted to be an engineer as that was the trend during those days.
To fulfill his dream, he appeared for the entrance test for the India Institute of Technology (IIT) right after finishing the schooling and clearing it high rank as well as a scholarship. But things did not as expected. The amount received during scholarship was surely not enough for covering the educational expenses while his father could not afford to pay the fees.
So right on his father’s advice, he joined a local engineering college, National Institute of Engineering and he graduated from there in 1967 with a degree in Electrical Engineering. To pursue his master degree, he went to the Indian Institute of Technology in Kanpur. While he was at the IIT, he had the chance to meet with one of the famous computer scientists from the US. The talks of the scientist impressed him and motivating him to start a career in the IT sector in future.
After he passed out in 1969, he was flooded with various job offers as there were few computer science graduates in India. He had different high salaries job offers from HMT, Telco, and Air India. But Murthy, the man himself rejected all offers to take up a job in India Institute of Management (IIM) Ahmedabad, which was offered to him by an IIM’s professors about an interesting job opportunity at the Institute.
The Roads To Infosys
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While he was the Chief systems programmer at the IIM, Ahmedabad, he started on installing time-sharing computer system making India’s first as well as IIM the third business school in the world for installing time-sharing system right after Stanford and Harvard.
Murthy feels that working at IIM was hectic but it was an extremely fulfilling job. He nearly used to work 20 hours a day and had learned a lot. Still today Murthy feels that joining the IIM was surely the best decision which he had made in his professional life.
This was also the time he was dating Sudha, his future wife. Sudha was a successful lady herself and was working in Telco in Pune. She was, in fact, the first woman to work in Telco. She became good friends and fell in love with each other but Sudha’s father was deadly against it. He wanted Murthy to have a steady job which Murthy refused as he did not want to live his life as per the rules of others.
One of the funny things Sudha and Murthy used to go to dinner and movies and Murthy was then a Broke. He used to say to Sudha,
“I do not have money with me, you pay my share, will return it to you later.”
For nearly three years, Sudha kept a book of the debts which Murthy owed which nearly amounted to Rs. 4000. Sudha tore that book away when they got married.
Nearly around the early 70’s, he started his first venture as an entrepreneur- Softronics which is a software consulting firm. This firm did not flourish and it tanked so there were forced to shut it down. To sustain his life, he was left with no other option but to join Patni Computer Systems in Pune as a General Manager. But before joining the company, he decided to get married as he was going on training to the US after joining.
Luckily for him, he had a job with the regular paycheck and so his father-in-law did not have any problem with their marriage. They got married in a private ceremony at their home in Bangalore. But with lady luck in this life, his life changed.
The Birth Of Infosys
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Murthy was surely not satisfied with the job he was doing. They were living a comfortable life in Bombay with the regular paycheck but Murthy was passionate about creating good quality software.
Sudha was initially very apprehensive but decided to support him as Murthy was really dreaming about it. So Sudha gave him Rs 10,000 which she had saved for bad days to start the dream because Murthy like always had a dream with no money. With six months of preparation, Infosys was registered on 2nd July 1981. It was named Infosys Consultants Private Limited and the company was co-founded by Narayan Murthy, S.Gopalakrishnan, Nandan Nilekani, N.S. Raghavan, K.Dinesh and Ashok Arora and S.D.Shibulal. Sudha gave him three years to grow the company she desired and while she managed the house for him.
In the year 1982, they moved together to Pune and they bought a small house on loan. The company’s registered office was N.S. Raghavan house at Dadar, Mumbai but basically the front room of Narayan’s House was basically used as their office. Sudha was their Clerk-cum-Cook-Cum- programmer. To support the household, Sudha had also taken a job at Walchand Group of Industries as a Senior Systems Analyst. Infosys got its first client- Data Basics Corporation from the States in the year 1983. Again it was time for some shift and this time, it was Narayan who moved without his wife as their son had infantile eczema which is an allergy to vaccinations.
Nandan Nilekani along with his wife Rohini also moved to Bangalore as they did not have a place to stay, they stayed with Murthy right at their home. The rest of the team also moved to Bangalore and the work began with full force.
The Initial Days Of Infosys
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Infosys began to grow with time soon and there were certain ground rules which were laid at that time. The founders were confident about the fact that none of their wives would get involved in running the company. They would take care of the family and children.
Moreover, none of the founders would work with the company after 65 years of age giving way to younger talents at Infosys helping them to rise to top positions. Moreover, they said that none of the children would get involved in the brand as well.
Things speed up very quickly. The initial years were not smooth as most of the founders were forced into writing codes. Their dream was to make a strong impact right on the American market. In fact, Sudha was helping them write software programs while Rohini was taking care of Murthy’s son. This surely proved to be a lot of struggle.
In fact, there were days when even after eight years of trying to build a company, they got nowhere but their friends who had studied with them had cars and houses. Despite everything, they made sure that all their partners and families made time for small picnics.
The Challenges Faced
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Infosys indulged into the Joint Venture with Kurt Salmon Associates, the very first of its types. Gopalakrishnan was surely the public face of this JV in America. The joint venture collapsed soon in the year 1989 causing a huge dent in the company. The scenario even worsened when one of their founders- Ashok Arora sold his shares right back to the partners and moved out.
With no clue of what to do and how to go ahead, the company was in bad state. It was Narayana’s confidence and courage which surely helped them out. Narayan was determined with Infosys. He told all the partners that if they wished to leave they can and he is willing to buy back all the shares from them but he will keep the company running and all the other partners decided to stay instead.
So the company decided to buck up and face all the challenges. They divided all the tasks as Narayana had an eye for talent for choosing the right labor and took care of the management. Nandan took care of the sales while Kris and Shibu handled the technical end. Raghavan handled the people and Dinesh was handling the quality.
With the fast pace, they grew and the company went to open their first international office in Boston, the US in no time. What helped then most was liberalization of the Indian economy in the 90’s! After that, there was no looking back.
Murthy And The Rise Of Infosys
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The image was everything for a brand which Murthy believed. So he decided to create the image for Infosys as well. He also created hugely and world-class campuses and also on building the bigger company’s headquarters in India. This helped them to show their global customers that they were in global office. Murthy never believed in playing dirty and brought in a “no compromise policy” and started doing ethical business.
In the year 1993, Infosys acquired the ISO 9001/TickIT certification taking the big leap and went public. After the IPO, the company also decided to share a portion of their equity right with the employees. This, in turn, gave the employees a sense of ownership right as well.
After this in the next two years, the company opened global development centers in Fremont, Toronto and opened their first European office in the UK. This was not enough as in the year 1999; the company grew by manifolds when its revenues touched value worth $100 million. They got listed on NASDAQ. Infosys was at a time among the 20 biggest companies in term of market capitalization on NASDAQ.
Well, now Infosys was expanding worldwide building offices in different parts of the world like Germany, Sweden, Belgium, Australia and other development centers in the US. They also launched Business Consulting Services.
In the year 2002, the company with revenue worth $500 million, Murthy decided to move back and Nandan Nilekani was declared the CEO while Narayana became the Chairman and the Chief Mentor.
In the year 2005, the company has grown drastically from 6,000 crores and 50,000 employees to become the second largest software exporter crossing a $6 billion with 125,000 employee base.
From then onwards, the company has grown drastically from over ₹6,000 crores (in assets, including surplus cash) and 50,000 employees in 2005, to becoming India’s second largest software exporter and then crossing a $6 Billion revenue mark and 125,000 employee base.
The recent CEO and MD of the firm are Dr. Vishal Sikka with the revenue worth Rs. 50,000 crores announcing a fund $250 million “Innovate India Fund” to support Indian start-ups. There are more than 950 clients which are spread across 50 countries. It is to the present day, the sixth largest publicly traded company in India with total employees of more than 187,976 employees.
Right from its inception, the company has made the various range of acquisition which includes Expert Information Services ($23 million), McCamish Systems ($38 million), Portland Group (AUD 37 million), Lodestone Management Consultants ($345 million), etc. More recently, the company has also acquired Panaya, Inc, and Skava as well.
The Key Takeaway
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Murthy is a very simple man and believes in the simplicity of life. They still live in their house where they lived before Infosys became a success. One of the few things about Murthy will surely surprise you. He still cleans his own plate and clean two bathrooms in the house every day.
Well, we can learn a lot of things from this entrepreneur. The simplicity of this life is praiseworthy and he is the best example which shows that no matter how rich you become, you must stick to your roots and do what you have been planning to do in the best way possible.
As he had said,