Building Infosys to Rolling out Aadhaar

In this episode of the #INSIGHTSPodcast series, we have Nandan Nilekani, Co-founder of Infosys and the man who put in place India’s Aadhaar identification system. He tells us about how his time at IIT-Bombay honed his skills, growing Infosys, working on the UIDAI project, and why the ‘thinker-doer’ approach works.

We continue with our #INSIGHTSPodcast, and on this edition have with us one of India’s biggest business legends, Nandan Nilekani, Co-founder of Infosys, its current Non-Executive Chairman and the brain behind Aadhaar while serving as the Chairman of Unique Identification Authority of India. He is a Padma Bhushan awardee and was listed by TIMEmagazine among the 100 most influential people in the world in 2006 and 2009. In this episode, Nandan shares experiences from both, his business days and from his more recent journey of public service.

Nandan starts by giving a glimpse into his formative years — of growing up in Bengaluru and then Dharwad, and making it to IIT-Bombay without access to any coaching classes. He credits his IIT days with the social skills and confidence that helped him take risk and build a large company like Infosys. While at the college, he dabbled in the many social activities and played a key role in organising IIT-Bombay’s cultural fest, ‘Mood Indigo’.

Talking about his early days, from meeting Narayan Murthy while interviewing for Patni Computer Systems to co-founding Infosys in 1981, building India’s first software campus in Bangalore in 1992 and going public in 1993, Nandan says the vision to build a globally competitive technology company out of India and the planning for scale by focusing on building an aspirational brand for employees and setting audacious goals for growth helped scale the way Infosys did.

“When we were a $3–5 million company, we talked about becoming a $100 million company. When we were approaching $100 million in revenue, we asked what it takes to reach a billion dollars in revenue.”

Nandan talks about how having a five-year blue sky plan, three-year strategic plan and one-year operating plan helped ensure the right mixof nimbleness of a startup and the professionalism of a large corporate. More on the entrepreneurial journey at Infosys, and reimagining it as a cloud service, in the podcast.

Thinking and doing

Talking about his next entrepreneurial stint as employee #1 at UIDAI, Nandan elaborates on the unique experience of building a team that was an amalgamation of stalwart bureaucrats from the public sector and top tech talent from the private sector, working together to successfully roll out Aadhaar. Citing the famous “thinker-doer” approach, Nandan mentions how his experience in thinking and executing roles in both public and private work settings made him uniquely positioned to achieve UIDAI’s mandate.

Opening up on the personal front, Nandan says that his curiosity to learn new things, being open to learning from others in an attempt to constantly stay relevant, desire to do something new, and willingness to live with uncertainty are all part of the core beliefs that define his value system.

Be frugal with time

Nandan talks about how the dual approach of being execution- obsessed while being able to step back and think big picture is something that’s helpful for founders to think clearly.

On scaling as a founder, Nandan has a simple tip:

“Being frugal with your time is important. I am generous with my money, but frugal with my time. Money, you can give it away and make it again. Time is a perishable resource.”

Talking about the present-day startup ecosystem, Nandan is excited and hopes to see the next generation of Kotak, HDFC, TCS, and Infosys emerge to create jobs for millions, and leverage India’s growing $2 trillion economy. He hopes to see leaders spread their power, by delegating, empowering, and sharing the glory.

Tune in to listen to Nandan Nilekani as he speaks about the startup ecosystem, leadership, and the future for India.

— Shrrinesh Bala & Anand Daniel

Accel shares such interesting entrepreneurial stories, with informative nuggets to run and scale your startup. Follow the links below and subscribe to our #Accel #INSIGHTSPodcast Series using the following links: iTunes, Google Podcast, Stitcher, Twitter, @Accel_India, and the RSS feed.

Below, we’ve shared an edited transcript of the conversation with Nandan.

Episode Transcript

Anand: Thanks for doing this, Nandan. Many people know your story, from Infosys days and afterwards. But would like to start from your early days, where you grew up and what were the formative years of your life before IIT?

Nandan: I was born in Bangalore, one of those rare people who were born in Bangalore, right here in Vani Vilas Hospital. I did my early schooling in Bangalore. I went to Bishop Cotton Boys School and then I moved to Dharwad which is a smaller town. I did my rest of the schooling and early college there. But the big break was when I got admission to IIT Bombay. I went to IIT Bombay at the age of 18.

Anand: How did you prepare for IIT Bombay from Dharwad?

Nandan: Actually, that’s a big thing. Those days, it was very urban centric. People in big cities would go to Agarwal Class and we didn’t have access to all that. But I was fortunate that I had a number of cousins who had gotten into IIT. So, I had their question books. I had a bunch of friends in Dharwad who would hand me down question books and practice them. We had a sort of study group who did this and we did pretty well. One guy went to IIT Kanpur, one to IIT Delhi, so we didn’t do badly. And that’s how I went from Dharwad to IIT

Anand: And how was that transition?

Nandan: It was difficult in a sense, it was a new world. A lot of my social skills and confidence, I think I gained from IIT. dealing with so many diverse smart people. Taking part in social activities. I was the General Secretary of IIT Bombay. Organizing Mood Indigo, all these things built your skills. And when I look back at my IIT friends, the guys who are the most successful are not necessarily the guys with the highest grades. They were the guys who had built all round skills and they knew how to navigate. So, I think navigation skills is what I learnt.

Anand: And from your Dharwad days, any life skills that you picked?

Nandan: I think it was an interesting experience for me. At the age of 12, I moved from my parent’s house to my Uncle’s house. I learnt a fair amount of independence because I was on my own in some sense & I think that gave me a lot of independence & self confidence.

Anand: So, from there to starting Infosys. Walk us through that journey?

Nandan: It was a coincidence. The usual thing in those days was you go to do an MBA, go to an IIM or go abroad and do something else. So, I was on that route. For some reason, I could not take the CAT or whatever it was called those days. I started doing my applications, but I didn’t really pursue it. Then I heard about this company which was in the business of selling mini computers. So, in 1977 IBM had left India and it was the time of the rise of the mini computer. There was an agency in Bombay called Patni which was the agent for Data General and I heard about all of these online computers that were available for Software guys. In 1979, I walked into the room of Mr. Narayan Murthy and he asked me a few questions and he gave me a job. So, I worked with him and a few others at Patni for a couple of years. And the leadership of Narayan Murthy, we felt the need to create a professional Software company. So, all of us left and started Infosys in 1981. 7 of us.

Anand: So, that’s not a typical. It’s not common to have seven founders.

Nandan: Well, it was the services business and it worked really well.

Anand: How did you split the roles?

Nandan: Initially, Mr. Murthy stayed back in India and all of us worked in client locations in the US. In the first 10 years, we did multiple roles. From 1981 to 1991. Around the late 80s, early 90s, there were a lot of changes in our environment. The first thing was economic liberalisation. The second was technology enabled remote development. The first earth station came up in the late 80s. In Bangalore, it came up in Sona Towers on Millers Road and Texas Instruments really set up that place and it meant you could sit in India and work on a computer abroad using satellite connections. And then Software Technology Park was set up, a very successful Govt. of India programme and the second earth station came up in Electronics City. So, it made is feasible to do development across the world. Third thing was that the currency became easier, foreign exchange became easier, then the STP park gave tax benefits and then clients started coming here. Jack Welch came to India in the late 80s and he was very impressed with the talent. He said, lets source software from here. Everything worked and that’s when we built India’s first software campus on a 5 acre site in EC in 1992 and then we went public in India in 1993. At that time, we were still 3 to 5 million dollar revenue company. Then we were able to set our sights higher and go for scale.

Anand: 10 years before going public is a long time. 12 years. Talk us through the days of bootstrapping?

Nandan: In that era, doing business in India was difficult. A phone connection would take 2 years. It was not a market friendly environment, it was pre liberalization, infrastructure was very poor. It was a currency starved environment, so we had to go to the Central Bank for money for every trip we made abroad. There was no concept of winner takes all and J curve and all that. And there was no capital ecosystem, there was no angel investors, no VCs, no PE guys, the banks won’t lend. So, you really had to be very radical. We all had faith in ourselves and faith in the business. The vision was to build a globally competitive technology company out of India and serve the world.

Anand: In the first 10 years, what did you go through as a founder?

Nandan: A lot of that time, I spent in the US. I was doing Sales, a lot of the market facing role plus I was also doing projects. Self taught.

Anand: And then Jack Welch came?

Nandan: No, he came looking at India for his products and later on he was so impressed with the capability that he also started sourcing from here.

Anand: Technology leadership is one thing, you have talked in other places about setting audacious goals

Nandan: The big shift happened in the early nineties. We were facing existential crisis because suddenly, big companies were coming to India. And our talent pool would not stay with us because they would have the choice of working for some large global brand. And we realized, unless we were also an aspirational brand, we couldn’t attract people. So, we had to think big, we had to think brand, we had to think infrastructure, we had to think scale and that required us to change the way we operated. So, we had to professionalize ourselves. So, we went from a company being run by a bunch of founders to a company that hired great talent like Mohandas Pai for finance, Hema Ravichander for HR, built in systems, strategy, budgeting, performance management and training. So, that shift from an entrepreneurial organization to a company designed for scale and realizing that our roles had to change, that was actually a huge thing. Part of that was future planning, say what do we want to be 3 years from now? What do we want to be 5 years from now? Setting audacious goals and using audacious goals to unlock the way we did things. When we were 3 to 5 million dollar company, we talked about being a 100 M dollar company. When we were approaching 100M dollar in revenue, we said what does it mean to be a billion dollars in revenue. It took us 3 to 5 years to go from 5 M to 100M

Anand: When you say planning to scale

Nandan: Our plan for scaling is not an afterthought. You had to think scale & I apply that into many of the things that I do. Think large scale and that’s a mind game. You have to think and plan. How many customers will I have? How many consumers in case of B2C? How will I reach them? What is the unit economics to reach them? What is the infrastructure required to reach them? What kind of marketing, sales and distribution do you need? Think of your business from every point of view. If I got to reach that scale in 5 years, what do I do now? Get back to today’s decisions with a view of the future. Make some hard calls, maybe it’s reshuffling priorities, maybe its changing business plans, You are doing that from a mind game. We had 3 horizons, we had one year plans which were focussed on budgets, revenue, margins, and at the other end, we had a sort of 5 year, blue sky thinking, where will we be in 5 years? Where will the economy be? Where will technology be and therefore what do we do to get there? And then 3 year much more detailed plan. 5 year blue sky plan, 3 year strategic plan and 1 year operating plan. A colleague of mine Sanjay Purohit was the head of Corporate Strategy and Planning at that time. He actually did the detailing.

Anand: So, that was the 10 to 100 phase. Any major changes that happened after you went public?

Nandan: Going public was important because we built infrastructure. Building India’s first software campus. It was a signal to our customers that we are here to stay. People came and visited us, they were amazed at the infrastructure we had. Murthy believed a lot in education. So, first the Bangalore campus and then the Mysore campus. Also the belief that the right people can be trained to do anything.

Anand: How was the competitive landscape?

Nandan: The market was huge, so the challenge was how do we get customers and how do we retain employees? That’s why we put a lot of effort in being the best companies to work for putting in a lot of training or infrastructure. The fact that we built our own brand for the market. We are a B2B business, so building that brand and showcasing that to the large businesses of the world that we are a strong partner was very important.

Anand: It’s also happening now with the product companies?

Nandan: There are product companies and services companies. Today, they are merging into platform or service companies. And the cloud is changing everything. So, for Infosys today, it’s about taking everything and reimagining them as cloud services. Cloud is changing the way we think about service delivery.

Anand: When did you decide it was time to move on from Infosys?

Nandan: I was CEO from 2002 to 2007. Then, I became the Co-Chairman. I was always interested in public service. An opportunity came when the Govt. asked me to join them. After the 2009 election which was the second term of the UPA. When they approached me, it was for the job of HRD Minister. They wanted some out of the box thinking. But afterwards, they thought how can someone without political experience do this? It almost came down to the wire, the day of the Cabinet announcement. They wanted something to do with the Planning Commision. Finally, we converged on the ID project. In my book, Imagining India, I had talked about the need for a Digital ID. So, I had a sense that this was a very powerful idea. So, why not take this? It’s a technology enabled, so why not play to my strengths? It’s time bound, I can measure success. It’s not vague. It’s something strategic. I was 54 years old when I retired. Infosys was very generous as I was doing something for the country. It was a challenge, I was going from Pvt. Sector to Public. From Bangalore to Delhi, From running a company of 100K people to running a startup. I was employee №1 of the UIDAI. It was like doing a startup at 54 and in the Govt.

Anand: How did you go about doing it?

Nandan: Just like any other startup, thought how do we create a great team? I had to create a team that was an amalgamation of Govt. talent and tech talent. I approached a friend of mine, KP Krishnan who is now the Secretary of Skill Development and is like an encyclopedia of the Govt. He knows who joined where and what are their strengths. He gave me a lot of references. So, Ram Sewak Sharma who was employee No 2. Was an IAS officer from the Jharkhand cadre. IIT Kanpur, MS in Computer Science from the Univ of California, did programming as a hobby on the weekends. Absolutely brilliant, today he is the Chairman of TRAI. Very unusual guy because he could take risks, Bureaucrats often are risk averse. He was my ally and frankly the credit of getting it done goes to him. I managed the environment, he’s the guy who got it done. I had a lady Ganga who retired as the Deputy CAG. She was our CFO. I got a guy called Srikar who is currently Head of Commercial Tax in Karnataka as my PS. I deliberately made sure that I had a great team from the Govt. because I did not know anything about the Govt. I did not know how to move a file. On the Pvt. side, Srikant Nadhamuni, I had worked with him at e-gov — he came as the head of Technology. Pramod Varma who had worked with me at Infosys and had gone to an Infosys spin off. Great architect, he came on board and became architect. Sanjay Jain came from Google & Vivek Raghavan, an IIT Delhi Phd guy and serial entrepreneur. Brilliant guy, he landed up. So, I had this team of amazing bureaucrats, rock solid, high integrity, performance driven. And I had this team of great technology guys who had built world class systems, And then I had to blend these two groups together to create one unified group to get the mission, to get ID done. That was the hard part because they were two different cultures, both have their strengths, both have their weaknesses and set such an audacious goal that people didn’t have too many differences. We deliberately kept the administrative political team in Delhi and the tech team in Bangalore. In Delhi, we ran the whole business side of it, the Govt’ side of it. We used to do reviews every 2 weeks in Bangalore for the tech side. Bringing these two groups together and blending it to what;s possible was a huge part of the success of Aadhar. It’s all about getting the startup team, getting the right talent,

Anand: Can you talk to us about the thinker-doer approach?

Nandan: I like to think I am in a unique spot and I am grateful that life gave me that opportunity. Think of it as a 4 by 4 matrix. Public and Private sector on one axis & Thinking and Doing on another. A thinker in the public sector say is an economist. A thinker in the private sector is a management prof. A Doer in Pvt sector is a CEO. A Doer in the Public sector is a Minister. Normally, people are in one of these four compartments. I have had the unique opportunity to be in all 4 quadrants. Doer in Private sector in Infosys, Doer in Public sector as leading UAIDI, leading something that impacts a billion people. There is also the thinker part, my conversations with Tom Friedman led to the “World is Flat”, that was actually a defining idea in 2005. The presentation I did in 2015 over the whatsapp movement. Which basically changed people’s thinking of how financial technology was getting disrupted. These are all thinker elements of the private sector. And in the public sector, I have done two books on trade, Imagining India & Rebooting India. That’s more how society development changes. Because I have played in all 4 quadrants, I think I have a more holistic understanding of things and how to get things done in a company and in Govt. That’s a been a good opportunity. When I look at a new thing, I can look at it from all these angles. UID was a project which already existed in the system. So, I didn’t start that, its was already there.

So, I do I do it? Generally, I have a very less fear of failure. When you have that and when you are welcoming of change, then its easier to do more things. Then, I am not stuck in my status quo. I can move from my comfort zone and do something else. I had a corner office, a golf course next to it. But the desire to do something new of impact and willing to live with uncertainty and ambiguity of a complete change in my environment The fact that I am curious and willing to learn new things is good, but where this has failed is when I stood for elections. I lost. I thought that I was capable of adapting to various things, but I was not able to adapt to politics. Because the skills that are required in politics were not my skills. And while I wanted to try new things, you should look at your basic fundamental strengths and play to it. Don’t play to your weaknesses.

Anand: What are the common mistakes you see founders make?

Nandan: Of course, if you are founder, you have to be a doer. I am a big fan of execution at scale and speed and meticulousness and all that. But execution without a strategic plan is also not a good thing. The thinking comes in the strategic framework of where to go and how you want to go there and converting that to the steps to executing that. That’s how the thinker-doer helps. Being able to visualise and endgame or some audacious goal and being able to execute that into a sequence of activities and also being able to prioritize them saying this should be done now comes instinctively. That ability is important. I spend a lot of time thinking, visualize the future, You shou;d absolutely be execution focused, but not just execution focused. Step back, think and also look at what is the end game look like, where do I want to be? Whether I want to be a billion dollar company or whether I want to have half a billion people on aadhar in 5 years, whatever my goal is — don’t deviate from that and have laser like focus. So, how is every activity that I am going to do help me achieve that goal. I might do a lot of tactical things today, but this thing that I did today will lead me to that goal.

Anand: You are a very clear thinker. How do you do that?

Nandan: Being frugal with your time is important. I am generous with my money, but frugal with my time. Money, you can give it away and make it again. Time is a perishable resource.

Anand: What has helped you grow as a founder? Any resource or mentor?

Nandan: I am always open to learning from other people. Narayana Murthy was a terrific mentor. I have learnt from Sam Pitroda on the public front. Business and political leaders from around the world. I have seen them at close quarters. I always look at how they conduct themselves. How they prioritize, how do they look at a problem? I learn by observing people, mentorship is continuous.

I have a fear of being irrelevant and because of that, I have to keep learning. I can’t rest on my laurels, because I did something 10 years back. My dear friend, Tom Friedman is around my age and he still writes 2 columns a week, he writes a book every 2 -3 years. If I have to meet a startup founder or the CEO of a Fortune 100 company or the President of a country, they should see value in meeting me,

Anand: You are open to learning from anyone and are open and humble about it.

Nandan: Founders should be egoless. Your ego should come from your achievement. Building a decacorn or something like that, ego should not come from interaction. You should be willing to learn and not think that you have all the answers. A great founder is one who is building for the long term. The biggest thing in this game is deferred gratification. Wanting to build an institution for the future. My friend Uday has been at it and his ambition is to create an organization like Goldman Sachs or JP Morgan.

Anand: Do you spend time with startups today? What do you think of the Indian startup ecosystem?

Nandan: They are very good. Very sophisticated, have a good understanding of the new world. Not necessarily everyone thinks as long terms as I would have liked. But institution building is also about bringing in other great leaders, spreading the power. Some of them do not seem to be doing that, effectively one man shows. To me, you can’t scale with that. In great companies, the leaders learn how to delegate, how to empower, the leaders share the glory. Then you can build an institution.

Anand: Any message for the founders listening in? Anything on India?

Nandan: It’s very exciting. I didn’t engage with the start world till 2014. My passion is, out of all the 100s and 1000s of startups I see, I want to see the next generation of Kotak Bank, HDFC, the next Infosys, the next TCS. Real solid companies that are big in their chosen sector, have billions of dollars of revenue that create jobs which are really market leaders. India is a 2 trillion dollar economy going to 5–6 trillion in the next 10 to 12 years. I think India’s digitization is unique with Jio and Aadhar, India stack, data empowerment. All these things are nowhere in the world. So, marrying the technological strength with the billion users and their consumption is an amazing opportunity.

Anand & Nandan: Thank You!