In an exclusive conversation on his entrepreneurial journey with BestMediaInfo.com, the former President of Bennett, Coleman explains his new venture
BestMediaInfo Bureau | Delhi | July 26, 2016
Two former Presidents of Bennett, Coleman & Co. Ltd (BCCL) – Arunabh Das Sharma who recently resigned to begin his entrepreneurial journey at 48, and Ravi Dhariwal who retired sometime back – have set up Sagacito Technologies, a software-as-a-service (SaaS) company providing enterprise level technology products. And it has kicked off its operations with one of a kind deal in Indian start-up history, having signed on Star India, a media conglomerate with $2 billion revenue, as its anchor client.
Not only that, Star has made a commitment of $10 million against a minority stake in the company and its services over five years. The Indian arm of Rupert Murdoch’s 21st Century Fox has acquired 10 per cent equity against $1 million while it will release $8.2 million against services over the next five years.
Sagacito claims to be one of the first Indian companies aiming to build enterprise level technology products. The company will operate from Delhi while its technology leadership will be based in Silicon Valley, USA. The company started operations last month and will have a 30-35 member team. Most of the people are from outside the media industry with strong technology and product management expertise.
Explaining the proposition, Das Sharma said, “The name Sagacito evolves from the Latin phrase Sagacitas which essentially means intelligence, and the reason we chose this name is because what we are trying to do is to augment the intelligence that already exists in businesses. The two most important parts of any business is profit margin and market share and we wanted to create a tool based on the emerging data science stream to augment both.”
“Over the last few years we have seen technology solving many problems with evolution of smartphones, cloud computing and improving connectivity. I started looking at how to combine everything including the trend to solve one big problem of the industry – predictability. We are building our entire company to solve predictive analytics and predictive marketing complexities. We are starting with media which has a very high need for profit maximisation and will later expand to other industries including airlines, FMCG, hotel & hospitality and logistics,” he added.
Both Das Sharma and Dhariwal have a strong background in revenue generation. When asked about the transition from sales to tech start-up, Sharma said, “If you trace my career you will find that I have done sales for only five years. Most of my career has involved strategy, P&L management and use of technology, etc. Even in last five years, heading Response at BCCL was more than just sales. It was literally like running an organisation heading editorial, IT, finance and operations.”
The Star factor
By investing in Sagacito, Star India has ensured the services of two highly rated Indian media executives along with Silicon Valley based technical brains to help them achieve the operating profit target of $500 million by 2018 and $1 billion by 2020.
However, Sharma downplayed the purely Star angle when asked how would Star benefit from Sagacito. “Any business across various industries would benefit in the same way. Better predictability, better margin optimisation and better market share acquisition is the need of any business and any other company will have the same benefit like Star,” said Das Sharma.
Given Star India is also a minority stakeholder in Sagacito, the question arises if Sagacito will have the liberty to sign on direct competitors. Das Sharma answered, “We have certain conditions and restrictions but those are very reasonable. I don’t see any issue when it comes to signing on any direct competition of Star India. The question is when I would be ready to or like to sign on a competing client that is willing to work with us.”
At least for the first year of operation, Sagacito will focus on Star India’s requirements. Sharma said, “We have to build a specific product by working with them very closely and post that we will see which industries have immediate need of our product and expertise. We have identified certain industries like aviation, FMCG, hotel & hospitality and logistics.”
However, Sagacito by virtue is useful for industries with a very frequent transaction and hence would refrain from consumer durables industry as they have a completely different go to market. “We will go into areas that have similar characteristics where inventory holding is not very high, frequent transactions are happening and inventory is perishable,” added Das Sharma.
Sagacito may not necessarily have first mover advantage but that does not bother Das Sharma who said that management concepts like first mover and USP that one studied in business schools have been debunked at least 20 years ago. “What I believe is that we have a very differentiated strategy and the fact that a company like Star India chose to back us without anything means they have seen something in us. At the end of the day credible credentials are very important but remember that people don’t sign cheques basis credibility alone. They have to see something in the idea or product along with the credentials.”
“We have a set of people who are absolutely at the top of the league when it comes to technology, business understanding, process understanding, contacts, etc. We may not be the first mover but I think we will be a very strong player. We are not a bunch of 22-year-olds without experience which is also not a bad thing looking at Facebook but having solid business experience is also a good thing. In fact, some of the most successful companies were started by the people in their 50s, be it McDonald or KFC. So, in all, it is a start-up doing a lot of things right with an anchor customer with over $2 billion revenue, a solid business plan, great set of specialists, very strong technology back-up and to top it all, a five-year contract for our services,” added Das Sharma.