IA www.forbesindia.com PRICE RS. 100. JULY 6, 2012 JULY 100. PRICE RS. IND INDIA

FLIPKART India’s e-commerce darling is headed for a fall e-commerce darling is headed India’s WHAT’S WRONG WHAT’S WITH THE WORLD’S MOST POWERFUL POWERFUL MOST WORLD’S THE

FORBES INDIA VOLUME 4 ISSUE 14 JULY 6, 2012 WHAT AILS Letter From The Editor

Surviving the Perfect Storm

n the last edition, I had raised a dramatic story that is bound to give the issue of how we, as a nation, you a whole new perspective on one Ineed to nurture many more fi rst- of India’s best known online fi rms. generation entrepreneurs. There is an Of course, the chances are that absolute dearth of such role models in the story could run smack into the India. Which is why Flipkart, founded popular—and almost romantic— IRONICALLY, FOR ME, by two friends from IIT-D—Sachin and perception of entrepreneurship that THE BIGGEST LESSON Binny Bansal—is the poster-boy of India’s Flipkart represents. We’ve tried not WAS THAT IF YOU internet economy. With the exception to fall prey to that temptation. PURSUE CUSTOMER- of makemytrip.com, there aren’t too In 2009, before we did our cover CENTRICITY TOO HARD, many new entrepreneurial ventures in story on SKS exposing the deep fault- INDAS THE BANSALSIA DID, the last 10 years that have created—or lines inside, it was seen as the role IT COULD WELL BE are even likely to create—billion-dollar model for a scalable microfi nance LIFE-THREATENING enterprises. Anyone who has ordered company that could help eradicate ------music or bought books from their site poverty. A few months later, SKS even once would testify to just how nifty found itself engulfed in a perfect storm their service is. And it would be fair to that it still hasn’t gotten out of. say that they’d be amongst the most So what’s eating Flipkart? I’d much popular online brands in the country. rather that you read my colleague So why on earth do we have a cover Rohin Dharmakumar’s story for that seems to suggest that things aren’t answers. There are many lessons exactly hunky-dory inside Flipkart? in starting up nestled in there. Simply because that’s the way things Ironically, for me, the biggest lesson really are. We’ve studied Flipkart for was that if you pursue customer- weeks, spoken to scores of people— centricity too hard, as the Bansals did, inside and outside the fi rm—and vetted it could well be life-threatening. Give our hypothesis carefully to bring you it a thought when you turn to page 38.

Best,

Indrajit Gupta Editor, India [email protected] @indrajitgupta

July 6, 2012 | FORBES INDIA 3 52 INDIA

Volume 4 | Issue 14 | July 6, 2012

Contents UPFRONT FEATURES

BREAKPOINT REAL ISSUE 22 Everybody Loves Bheem 34 Trading Places Producers of Chhota Bheem are cashing Rajat Gupta’s conviction shows 38 in on their superhero’s popularity among kids Uncle Sam is beginning to crack

down on white-collar crime Reuters 24 Soul Food HRD minister Kapil Sibal Abbott Nutrition is adopting a diff erent 52 Between Heaven and Earth tack in nutrition India’s dream to come up with the world’s cheapest tablet has fi zzled BRIEFING out. Now questions remain on what 74 Pharma’s Missing Link 26 A Crude Awakening INDwent wrong with the Aakash projectIACan Elias Zerhouni fi x Sanofi The drop in fuel prices will pump up and the pharma industry’s woeful a growing economy like India MY LEARNINGS innovation record at once? 58 ‘I don’t want to be consistent, IDEAS & OPINIONS I want to surprise’ ENTERPRISE 28 Profi t in the Era of Scarcity 22 Sofi tel Hotels’ Robert Gaymer-Jones 68 True Blue Success Frugality, fl exibility and inclusiveness believes that the luxury hotel world is Sameer Sain pulled Blue Foods are the principles of Jugaad 2.0 driven by personality out of debt and losses. He’s now looking for hyper-growth CURRENT EVENTS CROSS BORDER 30 Revolutionary Road 62 M&M’s American Speed Bump ZEN GARDEN PMO proposes a technocratic solution to Indian auto biggie Mahindra & 71 The Power of Vision boost private investment in infrastructure, Mahindra is embroiled in a legal LV Prasad Eye Institute’s founder but the real issues are political controversy in the US over a pick-up it Dr Gullapalli Rao is spreading has yet to release integrity along with sight 32 Right Back in Europe Fascists gain strength in the continent’s governments amidst the economic slowdown REGULARS

16 Letters to the Editor 18 Exit Interview 19 Close Range 20 World Watch

Namas Bhojani for Forbes India Namas Bhojani for Forbes 114 Thoughts SKATING ON THIN ICE Flipkart will need to rethink its strategies and become less audacious if it wants to become the of India 62 Dinesh Krishnan Cover Photograph: Lucas Jackson / Reuters 34 Mallikarjun Katakol for Forbes India Rajat Gupta with his lawyer Anand Mahindra, chairman and managing director of Mahindra & Mahindra

10 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 11 INDIA

Volume 4 | Issue 14 | July 6, 2012 Contents THECELEBRITY100

86 The New Fame Game New A-list celebrities are leveraging their fame to make early-stage investments—or launch startups themselves

94 The 100: The Full List Thanks to unscripted television and social media, 24-hour personalities dominateIND this year’s list of theIA 100 most infl uential people in entertainment

100 Turnaround Artist American Idol gave a second chance and she is now sitting pretty at the top of our Celebrity 100

104 Seth MacFarlane Gets Serious The Family Guy creator’s next project is likely to shock even his most hardened fans

110 The Franchise Saver Dwayne ‘The Rock’ Johnson has emerged as the world’s biggest action hero through feats not even Stallone or

Michael Prince for Forbes Michael Prince Schwarzenegger could pull off 78 113 The Many Paths to the Celebrity 100

THE CELEBRITY 100 , Venture Capitalist The 18-year-old idol has earned $108

million over the past two years. With WE VALUE YOUR FEEDBACK. several quiet tech startup investments, Write to us at: [email protected] he’s now trying to make similar Letters may be edited for brevity. conquests in Silicon Valley Read us online at www.forbesindia.com

12 FORBES INDIA | July 6, 2012 INDIA Founder & Editor, Network18: Group CEO, Network18: Operations Director & CTO Raghav Bahl B Sai Kumar Broadcast: Piyush Gupta President & Editorial Director, TV18: EVP - HR: Ajit Singh Vig Senthil Chengalvarayan CEO, Forbes India: Gurmeet Singh EVP - Legal: Kshipra Jatana

Editor, Forbes India: Indrajit Gupta ADVERTISING SALES Executive Editor: Charles Assisi Senior Vice Presidents: Rubeena FORBES MEDIA LLC Deputy Editor: Shishir Prasad Singh, Seshadri Iyer & Vishal Chairman & Editor-in-Chief: Srivastava Steve Forbes Design Director: Anjan Das Abhishek Shah, Alpana Gulati, Chairman, Forbes Digital: Director-Photography: Dinesh Krishnan Kumar P, Manavdeep Singh, Maulik Timothy Forbes Director-Online & Events: Thakkar, Niraj Ladia, Nitya Sharma, President & CEO: Mike Perlis Deepak Ajwani Shivkumar, Anuj Kakar, Atishay Singh, Vice Chairman: Kumar Kamble, Prashant Shirke, Christopher Forbes Senior Editor (Economy & Policy): Fardeen Sayeed, Rashmi Nath, President, ForbesLife: Robert Forbes Dinesh Narayanan Mansi Shah & Vibhor Nigam Chief Product Officer: Lewis D’Vorkin Associate Editors: Cuckoo Paul, President & Publisher, Forbes Asia: Pravin Palande & Seema Singh DISTRIBUTION William Adamopoulos Editor (Special Features & Social Editor, Forbes Asia: Tim Ferguson Forbes India Team Distribution Media): Peter Griffin Head: Sunil Nair Contributing Editor: Mitu Jayashankar Consulting Editor: Sumana Mukherjee Ashish Chakravorty, Soorendra Desai & Sanjay Elisha Views & opinions expressed in this magazine are not necessarily those of Digital18 Media Editor, Media & Entertainment: Subscriptions Manager: Rajiv Mani Limited (Digital18), its publisher and/or editors. Rohin Dharmakumar Subscription Operations: We (at Digital 18) do our best to verify the infor- Kaushal Pillai mation published, but do not take any responsi- Senior Assistant Editor: bility for the absolute accuracy of the information. Prince Mathews Thomas Digital18 does not accept responsibility for any investment or other decision taken by readers on Assistant Editor: Udit Misra INFOMEDIA18 TEAM INDthe basis of informationIA provided herein. Special Correspondent: DGM: Manoj Palsay KP Narayana Kumar Sachin Kamble, Sanjay Bhujle, Dinesh Special Correspondent & Social Devadiga, Debraj Sur, Kamal Bisht, FORBES INDIA is published by Digital18 Media Media Enabler: NS Ramnath Mayank Kumar Rai, Kirupanand S, Limited under a license agreement with Forbes Principal Correspondents: Devaraju Gowda, Mahesh GS, LLC, 60 Fifth Avenue, New York, New York 10011. “FORBES” is a trademark used under license from Anirvan Ghosh, Ashish K Mishra Rahul Mankar & Anant Shirke FORBES LLC. & Samar Srivastava ©2009 Digital18 Media Ltd • ©2009 FORBES Senior Features Writer: Advertising Operations: Sudha Rao LLC, as to material published in the U.S. Edition of Abhishek Raghunath Avinash Karkera & Prashant Rane FORBES. All Rights Reserved. Features Writer: Nilofer D’Souza ©2009 FORBES LLC, as to material published in the edition of FORBES ASIA. All Rights Reserved. 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14 FORBES INDIA | July 6, 2012 Letters To The Editor Readers Say

VEGETABLES.COM to make money may be without the pressure of Refer to The Last Frontier to share revenue with being best-mannered. I (June 22, 2012 issue). app/game makers who think customers at least There’s no doubt that leverage the FB platform, need to dine without every product/service charging a small fee thinking too much about will get e-commerced for FB authentication, the food combinations. in the near future. premium business pages If you like cream sauce, Only two questions linger: and sell analytics. go ahead with it. If you a) Till when will venture Since charging for like it, don’t care about capitalists fund these subscriptions would prove anyone else’s opinion. loss-making startups? suicidal, it is an exciting Harsh b) No e-commerce portal phase for FB to devise On the Web is profi table yet. How long unique advertising models. GREED AND THE can the gestation phase be? Sameer Khandelwal BLOOMING TALES LUST FOR POWER There’s a reason to be both On the Web Refer to Chewing on a HAVE DEVIATED sceptical and hopeful. Flower (June 8, 2012 issue). GOVERNMENTS, Harshvardhandutta DEVELOPING PROBLEMSINDThis is a sheerIA delight COMPANIES AND On the Web Refer to BRIC Hits a of an essay. Hopefully PEOPLE FROM THE Wall (June 8, 2012 issue). you will write about ESSENCE OF LIFE THINK GREEN The most important the extraordinariness ------Refer to Surrounded with thing is that the BRIC of ordinary things Solutions (June 22, 2012 countries produced and in the future too. issue). Gunter’s ideas the developed nations Sheeba are simple and basic, yet bought. Now, the developed On the Web very powerful. Greed and nations have slowed the lust for power have down on buying and the NEW LEARNINGS deviated governments, BRIC nations are left Refer to The Korean Kota companies and people wondering whom to sell (June 8, 2012 issue). I love from the essence of life. the goods and services to! this article which focusses Let us look where we and Ashok Pai on the education sector our planet are now and let On the Web and how the coaching us go back to the basics business is making and fi nd new, co-operative DINING OUT positive news in India. ways to work together, Refer to The Sharp Edge Expecting more such in peace, sharing, adding of the Knife (June 8, 2012 articles on education and up, not competing. issue). I miss the good old vocational training in India Oscar Ayala ’80s and ’90s when eating Vikash Goel On the Web out used to be casual and On the Web

FACING FACTS CORRECTIONS & CLARIFICATIONS Refer to Facebook—Too Much Hype, Too Little JUNE 22, 2012 ISSUE Substance? (June 22, 2012 On page 108 – Pictures for this story were twitter.com/Forbes_India issue). The big challenge provided by the Alaska Railroad. facebook.com/ForbesIndia for Facebook will be to JUNE 8, 2012 ISSUE linkedin.com/groups?gid=1959962 monetise mobile users. On page 93 – The Indian border is plotted plus.google.com/115075196102530859200 A couple of areas for FB incorrectly on the map. The error is regretted.

16 FORBES INDIA | July 6, 2012 Upfront/Exit Interview If You Thought Licence Raj Is Dead, Think Again

In the education ANAND SUDARSHAN execution can result in what sector, the Age: 52 years the state is today. And [the Designation: Vice chairman and managing director, Manipal Global Education state] is strangulated. You government’s good Services (MaGE). thought that Licence Raj is Education: BE in E&C, NIT Trichy and PGDM IIM, Calcutta intentions don’t dead, think again. It’s very Career: Started with Nelco, then moved to a computer retail chain called always have good Computer Point for four years; later co-founded Microland group and ran much alive in education. results, Anand Planetasia.com as its CEO and then moved to NetKraft as CEO which was sold to Adea Solutions Q What are your thoughts Sudarshan, VC & Interests: Sports watcher, reader (has collected over 4,000 books), on private equity (PE) MD of MaGE tells percussionist, music enthusiast in India and the way NILOFER D’SOUZA Q You came on board a allow them to perform. they view education? family-run organisation Whoever is investing in the that was moving towards Q You moved from the education sector should a professional structure. information technologyIND fi rst get theirIA time horizons Was it challenging? (IT) sector to the right. This is more an eight- I would not say [it was] education sector. What to-10-year play rather than challenging. I would are the key diff erences? three-to-four-year play. say my biggest enabler The IT sector is Second, substantiveness is Ranjan [Pai]. His characterised by many of success is based on ability as promotepromoter was diff erent things: Terrifi c outcome; the outcome for ttoo actually allow tthe pace, rapid changes a training institution for pprofessionalrofessional mamanagementn in technology and the skills development is the tteam—myselfeam—myself as CCEO and resultant eff ect in the number of jobs created by thethe managemenmanagementt team market place; both on the institution. I would thatthat was brougbroughth on businesses and consumer urge them to focus on this board—toboard—to eexecutexecu the behaviour. It is very a lot more. The business vision and thethereforer returns-centric. When I management should be becomebecome aaccountable.ccou moved into the [education] committed to the larger TheThe family ppromoterr sector, it was more of picture that is crucial to shouldshould havhavee the a personal choice, but success. If all managers wisdomwisdom aandn the I recognised three or think like PEs, the company sagacitysagacity ttoo leave four things: It is highly is not going to be successful. thethe teamteam aalone regulated; the governmental andand makemake them interference—well- Q Why doesn’t the accountableaccounta for meaning or otherwise—is sector attract better whatwhat hasha to be extraordinarily high, to management? delivered.delivere That is the extent that I believe The glamour quotient for Ranjan’sRanjan’ strength, it’s been more inimical the education sector is less. whichwhich I think he than facilitative. Their But I feel [in] the education getsgets fromfro his intentions, are honourable. sector, the impact a father;father to be I’m not questioning the senior-level executive has ableable tot pick the intentions; I’m saying is a lot more intense and a rightright people,p sometimes intentions lot more permanent; the

trusttrust them,t and can be honourable, but excitement is far greater. India for Forbes Jyothy Karat Upfront/Close Range

MANOJ PRADHAN Age: 42 Profi le: Global Emerging Markets Economist at Morgan Stanley Career: He has served on the faculty of the economics departments at the State University of New York (Stony Brook) and the George Washington University in Washington DC from 1998 to 2004 Education: PhD in Macroeconomics from the George Washington University and a Masters in Finance from the London Business School Interests: Music, photography India Should Not Take Growth For Granted Q What is worrying about India? problem that emerging markets have is Manoj Pradhan, People talk about India’s current account their complacency. India has one of the emerging market defi cit but just the fact that there is a best demographics in the entire emerging economist at Morgan defi cit doesn’t bother me. It is why you market space, so I’m not worried aboutIND IA have a defi cit that is more important. the long-term growth of the country. Stanley, talks to India’s current account defi cit comes PRAVIN PALANDE and from its fi scal defi cit. The fi scal defi cit of Q How are institutional investors puts India and its India is wide when compared to other looking at India at this point in time? economies in the same context and that The general tendency amongst investors economic situation is worrying. Most of that fi scal defi cit has is that they feel some of the innocence has in a global context gone into fostering greater consumption been lost. Even in 2008 and 2009, [it was] and that is not what India needs. thought that it was a temporary lapse in growth. The belief is that the long-term Q How did fi scal defi cit aff ect emerging market story is intact. It has just the Indian growth story? become a lot softer than most people had The issue is that the fi scal defi cit that expected. So if you think about growth in has been incurred in India fostered India, whether it is going to be 8 percent consumption and not investments. or 7 percent, mostly they want to wait and While the government defi cit has watch. They want to see how the next increased, consumption increased and two years play out before re-establishing investments have come down. Over a their confi dence in the Indian economy. period of time it has become abundantly clear to policymakers that what India Q What is your view of the new really needs is investments and much emerging markets or African countries of that is in the infrastructure sector. that are growing at a faster rate? It is diffi cult to fi nd a country [that has] a Q But what about the long-term high growth rate and investment potential India story. Is it on track? at the same time. You can see smaller What is happening in India is a real useful countries growing very rapidly, but these wake-up call. The general message from markets are very diffi cult to invest in. You international investors says that if you have to be present on the ground there and don’t get your story right, you can stagnate. take advantage of those resources and then What it means is that India should not you can leverage that growth effi ciently. But

Vikas Khot take growth for granted. The biggest that is not possible for equity investors.

July 6, 2012 | FORBES INDIA 19 Upfront/World Watch A Whole Load of Garbage

The amount of solid waste generated by global cities is growing each year. Not managing it effi ciently now could lead to environmental and social problems INDIA

CHINA Economic growth might be teetering across the world, RUSSIA NOW but the amount of garbage generated by global cities NOW MSW generated per day—520 is only going up. Together, urban centres generate 1.3 Solid waste per person per day— MSW generated per day—100 1.02 kg billion tonnes of solid waste a year and it is set to grow Solid waste per person per day— to 2.2 billion tonnes by 2025, according to projections by 0.93 kg 2025 the World Bank. Most of the waste is sent to landfi lls, or 2025 worse, to open dumps, raising concerns about air pollution, MSW per day—120 MSW generated per day—1,398 Solid waste per person per day— Solid waste per person per day— social unrest, impact on poverty and so on. Managing 1.25 kg 1.7 kg A country with abundant land, China surpassed the US as the solid waste has costs—$205.4 billion at present—and Russia's primary mode of waste world’s largest waste generator in it’s growing. It is set to touch $375.5 billion by 2025. disposal has always been landfi lls. 2004. In 2030, China is likely to Following the fall of the USSR, produce twice as much municipal there have been legislations solid waste as the United States. towards more eco-friendly options, but 80 percent of waste still goes to landfi lls.

UNITED GERMANY STATES NOW BRAZIL INDIA NOW MSW generated per day—128 NOW NOW Solid waste per person per day— MSW* generated per day**—624 MSW generated per day—110 2.11 kg Solid waste per person per day - MSW generated per day—149 Solid waste per person per day— 2.58 kg Solid waste per person per day— 0.34 kg 2025 1.03 kg 2025 2025 MSW generated per day—126 2025 Solid waste per person per day— MSW generated per day—702 MSW generated per day—276 2.05 kg Solid waste per person per MSW generated per day—330 Solid waste per person per day— For a country that is known to day—2.3 kg Solid waste per person per 0.7 kg be effi cient, and religious about The world’s largest economy was day—1.6 kg Rapid urbanisation combined garbage disposal, German cities also the biggest generator of solid Brazil is one of the fastest ur- with development will double the produce huge solid waste per per- waste, before giving up its posi- banising countries in the world. solid waste generation. Urban son. But it's also one of the coun- tion to China. Over the last few By 2025, over 90 percent of the centres generate disproportion- tries that is projected to generate years, however, it has managed population will live in urban areas, ately high waste, sometimes less both in absolute terms and in to increase its recycling rate and compared to 75 percent now. creating unrest around the way relation to population. send less to landfi lls. they are disposed.

Sameer Pawar Sameer *Municipal Solid Waste **In 1,000 tonnes Source: What A Waste: A Global Review of Solid Waste Management, World Bank, 2012 Compiled by NS Ramnath

20 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 21 Upfront/Breakpoint

he residents of Dholakpur are superhero. It had to be someone from from merchandising and licensing. a resilient lot. They regularly mythology but also someone who was Unoffi cial estimates say Bheem rakes T brave demons, robbers, secular,” he says. And so Bheem was in Rs 15 crore for Green Gold. evil wrestlers and various other born. Within eight months of Bheem’s What’s the reason behind calamities, big and small. They have debut on TV, Bheem comics, DVDs Bheem’s popularity? “Kids like a timid, but benevolent king in Raja and apparel hit the streets. Green superheroes, they think he’s their Indraverma and a beautiful princess Gold had a simple logic. Children personal superman. You either in Indumati. And of course, they have were not going to obsess about their need humour or super-powers to Bheem because of whom they emerge favourite character if they didn’t make kids love you. And Bheem unscathed from various assaults. see him everywhere they went. does that,” says Piyush Pandey, Bheem is the nine-year-old Siblings Rahul, 7 and Asha Bharti, executive chairman and national protagonist of Pogo TV’s wildly 5, from Mumbai own Bheem bed- creative director, Ogilvy & Mather. successful animated show Chhota covers, comics, shirts, shorts et al. Another aspect to Bheem’s success Bheem that runs for four to six hours Their mother Shubha says, “It’s is the way the broadcasting model every day. Created by Rajiv Chilaka’s tiring. I have to keep an eye out for works in India. It’s no secret that Green Gold Animation, 130 episodes anything new. God forbid, if they the animation quality in Bheem is have already been shot and on an see some other kid with a Bheem nowhere as good as animated shows average one new episode is releasedIND IAin the West. “The broadcasting model every week. The show has beaten TODAY, BHEEM’S FACE POPS here is largely ad-supported,” says Disney’s Doraemon to emerge as the UP ON APPAREL, COMICS Krishna Desai, director, content, number one show on kids channels AND WILL START POPPING UP South Asia, Turner International in India, consistently averaging a ON FANS, UMBRELLAS AND India. “There’s hardly any revenue TV rating of over 1. The animated BISCUITS AS WELL from subscription. We can’t create movie, Chhota Bheem and the Curse ------GE level of content. What you are left of Damyaan, released in May 2012, to capitalise on is the fact that your has grossed close to Rs 5 crores. T-shirt fi rst, they throw tantrums.” target audience will have a churn of Launched in 2008, Bheem is Twenty stores across the country four to fi ve years only. This way you easily the most popular and bankable sell Bheem clothing, school kits, keep getting new kids who will come character to come out of the Green stationery, apparel and accessories. back and watch the movies,” he says. Gold stable. Run by Chilaka, 38, who Twelve of those stores are franchisees The churn is both an asset and holds a master’s degree in computer and the rest are company-owned a liability for Bheem. There is a science from the University of and operated. Pepsi uses Bheem to possibility that fi ve years from now, Missouri, Green Gold is one of the sell Notty, its energy drink for kids. kids won’t like Bheem. “Right now few animation houses in India that Usha Fans will be using Bheem to Chhota Bheem is riding on the peak has tasted success of this sort. You launch a new range shortly and of its popularity. The peak will be cannot miss Bheem today. He is at John’s Umbrellas has started using there for two to three years more,” every spot that kids frequent. His face Bheem as its mascot for rainwear. says Chilaka. But does that mean pops up on apparel, school products, Talks are on for Bheem biscuits and goodbye to Bheem and with that comics and will start popping up on even ladoos which are a source of to Green Gold as well? Hardly. fans, umbrellas and biscuits as well. strength for Bheem. Ladoos could Green Gold has built quite a large Everybody Chilaka knew he had to expand the be to this generation of Indian kids distribution chain and controls most brand beyond TV if he wanted to be a what Popeye and spinach were for of it. “We distribute merchandise to serious player in the Indian animation millions of kids in an earlier time. multi-brand outlets including Reliance Loves Bheem circuit. But he needed a compelling Chilaka thinks that Bheem could be Retail. Indian retail is disorganised. character to sell. He couldn’t do that India’s equivalent to Mickey Mouse. When most of it is organised, we By ABHISHEK RAGHUNATH with Krishna Balram. “We couldn’t “How many kids today have seen won’t have to start from scratch put Krishna on shorts and baniyans. a Mickey Mouse cartoon? Hardly then,” says Chilaka. “If we assume A younger version of a mythological character has captured the hearts of kids The merchandise model wasn’t any. But all of them buy Mickey that some new company comes out across the country and its producers are now cashing in on his popularity workable with that show.” He had to products. That’s what will happen of nowhere and has a big hit we will create a new character. “India wasn’t with Bheem as well.” Forty percent support them with our merchandising ready to accept a completely new of Bheem’s revenues are derived and licensing expertise.”

22 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 23 Upfront/Breakpoint Soul Food Abbott Nutrition is taking the organic road to wellness

By SEEMA SINGH

ife is a tragedy of nutrition, India,” says John C Landgraf, executive vice said German health educator president, global nutrition. He says by this Land nutritionist Arnold Ehret. year-end, the Bangalore centre will be the More than a century later, almost in second largest for Abbott and in fi ve years, tragicomic response to Ehret’s musing, India would be the third largest market. the packaged nutrition market has Their competitive advantage, according exploded. It’s worth $500 billion, to Robert H Miller, divisional vice according to the Global Nutrition president of Global R&D, is that Abbott Group which PepsiCo set up in 2010. is a healthcare company as opposed to And it’s growing their nearest competition which is in steadily as people are food business. “They have a broad-based living longer, though not approach to the whole continuum, whereas necessarily healthier. ourIND partnership is with theIA practitioners.” Which is why recent While its competitors look more acquisitions in the food at wellness, Abbott wants to focus on industry, including supporting chronic disease management. Nestle’s purchase For instance, in cancer, many times of Pfi zer’s nutrition patients die not because of the disease business for $11.9 billion but because their body, for loss of muscle and Danone snapping mass and other failings, can’t fi ght back up Wockhardt’s for or tolerate the existing therapies. $355 million, show the Syngene collaboration off ers Abbott a food industry wants to lean model with ample fl exibility and speed become ‘nutritious’, and to market. If its Singapore R&D centre took in an inorganic way. But 15-18 months to produce new products, the Abbott Labs, which has Bangalore centre is expected to give results been present in India for within eight to 12 months, starting with 100 years, has preferred fi ve products in meal accompaniments, an organic route. particularly in diabetes. Abbott plans

LOOKING FORWARD John In June, Abbott to use the clinical research capabilities C Landgraf, executive vice Nutrition set up a research and of Syngene to make products that suit president, global nutrition, Abbott Nutrition, feels, in development centre under a fi ve-year the Indian palette as well as the body. fi ve years, India will be the contract arrangement with Syngene, a Being a light asset, says Miller, will third largest market for the company subsidiary of Biocon. It’s in contrast to come in handy if the company has to what Abbott did when it needed to grow do any course correction. Interested its India pharmaceutical business—it as it is in traditional Indian foods such acquired Piramal Healthcare’s formulations as fenugreek, it doesn’t have much business for $3.8 billion in 2010. So why scientifi c data on them. “We may have adopt a diff erent tack in nutrition? to do much more in sensory and fl avour “We had looked at Pfi zer and Wockhardt than we ever anticipated,” he says. [nutrition businesses] and did not fi nd After all, that remains the holy grail of them compelling. We decided to build nutrition: How do you make nutritional competence in R&D and manufacturing in food that people really like to eat?

24 FORBES INDIA | July 6, 2012 Upfront/Briefing A Crude Awakening

While falling oil prices are good for a growing economy like spur growth. They will reduce India, the drop in coal prices may not help power producers our import bill, which jumped 40 percent to $120 billion in 2011-12, By CUCKOO PAUL and give skyrocketing oil subsidies a break. The oil subsidy in FY12 was close to Rs 70,000 crore, putting severe strain on the fi scal. The picture is slightly diff erent for coal, even though the reasons for softening prices are similar. Indian power producers are in a fi nancial hole because they were unable to pass on the cost of higher coal prices to the consumer. It is ironic that entrepreneurs like GM INDRao, Gautam Adani andIA the Tatas, who invested billions of dollars to put up these projects in a power- starved country, have their backs to the wall as the projects have failed to generate returns. Standing alongside them are banks and fi nancial institutions that have large exposures to the power companies. Thermal coal touched $142 ower energy costs are always America and a 10 percent increase in per tonne (for Newcastle 5,500 good news for growing production from the Organization of kcals—Australia is one of the largest L economies. And international the Petroleum Exporting Countries exporters of coal) in January 2011. It oil and coal prices have come down (OPEC). Shale gas and associated is now trading at $87 per tonne. But signifi cantly in the past few months. oil, now being produced in the US, Indian investors in the power sector The price of a barrel of Brent has changed the balance of global are not out of the woods. “Falling crude, to which two-thirds of the oil fl ows. The oil cartel met this fuel prices are negated by steep world’s oil varieties are benchmarked, week and decided to maintain depreciation in the Indian rupee,” says has tumbled from about $120 output at current levels and not cut Ashok Khurana, director general of to under $100, falling almost as it as demanded by Iran. So, prices the Association of Power Producers. quickly as it did in late 2008. are likely to remain soft for now. In its latest report on coal, Fitch The reason is simple—since March, The Indian government is the Ratings says the current low-price the world has been producing more biggest benefi ciary of the drop in environment is likely to persist oil than it’s consuming. Global oil fuel costs. Since diesel—the biggest into 2013, forcing high-cost coal consumption has been declining petroleum fuel sold in India—is producers in Australia and the since the end of 2011, falling to 88.5 already sold below commercial price, US to cut production and review million barrels per day at the end of pump prices are unlikely to go down. expansion projects. This could set April, from 90.4 million barrels per The impact of softening crude prices back companies like GVK, Adani and day in December. At the same time, on the world’s fourth largest importer Lanco that are in the process of raising production has risen for more than a will be much more at a macro-level. billions of dollars to develop coal

Reuters year, boosted by new fi nds in North Falling fuel prices are sure to mines in Australia and elsewhere.

26 FORBES INDIA | July 6, 2012 Upfront/Ideas & Opinions

‘indovation’ for a while but it seemed without compromising on quality. more like an output of an approach as The authors believe these principles opposed to the mechanism,” says Radjou, are, and will be, followed by two categories who, as a consultant, had noticed that at of companies: Multinationals like GE, the senior management level there was 3M, Philips, GM, etc which are in India sensitivity about the shift in innovation and are innovating here, not in terms of and economic growth in the market place, ‘reverse innovation’ but acquiring the though nobody was labelling it yet. mindset of frugality and fl exibility and The authors coming from three diff erent taking it back to their global centres. professional backgrounds—consultancy, Then there are Indian companies which academics and ethnography—decided are going global and can take these best to call it Jugaad and formalised the practices to other locations. They are processes and principles in their book. applying them in the local context. That If you’re familiar with the frugal, is, communicate the philosophy of Jugaad follow-the-heart entrepreneurship and let the local managers implement that grassroots entrepreneurs often them. By not ‘scaling’ them, they are epitomise, you may call the formalised avoiding the mistakes that multinationals version Jugaad 2.0. Its principlesIND are: made in going global, saysIA Radjou. The Frugality, fl exibility, and inclusiveness. next battleground, according to him, is Tata Nano, according to the authors, going to be among MNCs who’ll have to exemplifi es these principles. Yes, despite unlearn some of the top-down mechanisms the cases of fl aming cars and tepid sales. and try to espouse this new bottom- “Applying these principles at scale is up approach. Indian companies in this not easy and that’s why Nano is a good regard have a clean slate as they don’t example. Today, Tata Motors is saying have to unlearn anything, he believes. that Nano 1.0 was not very successful, but But one could argue why only MNCs,

Sameer Pawar Sameer we can apply the learning to Nano 2.0,” even some of the large Indian IT services says Prabhu. As an academic at Judge companies that have industrialised their Business School at Cambridge University, business processes need to unlearn the UK, he has watched structured innovation structured approach. The pendulum, which BUSINESSES AND Profi t in the systems fail to respond to volatility caused has swung too far towards processes, needs GOVERNMENTS ARE by globalisation; how it misses out on to swing back to people-centric approach, ALREADY SEEKING the ingenuity that lies in the rest of the which is what IT service essentially is. METRICS BY WHICH TO Era of Scarcity organisation, and even outside of it. What is central here is the belief of MEASURE JUGAAD In practice, it’s not easy because Jugaad the top management in these principles ------Jugaad 2.0 is ou’ve probably heard about you’re probably missing the point that the 2.0 is not about products, but about so that they enable their employees to about acquiring the Mitticool, the clay refrigerator authors of Jugaad Innovation are making mindset. Some companies and executives fail, says Simone Ahuja. She says it with mindset of frugality Yfrom Gujarat, and Revolo, the through a raft of well-executed ideas, from are giving it a serious shot. PepsiCo chief a lot of conviction. While producing her plug-in system from KPIT Cummins Brazil to China, from Argentina to India. executive Indra Nooyi has done something recent television series Indique—Big Ideas and fl exibility that gives the benefi ts of a hybrid car. As the era of scarcity, of economic bold. At the company’s Gurgaon centre, she from Emerging India, her team lost a set By SEEMA SINGH It’s likely you’ve learnt that Embrace, and natural resources, is upon us, the old has created new metrics and benchmarks of fi les containing expensive graphics. the infant warmer that originated from structured way of innovation needs to be for cost effi ciency globally and is asking, ‘If The US research and production team Stanford’s class of Entrepreneurial Design propped up by a new fl exible, frugal model. emerging markets can do more with less, threw up their hands, whereas the Indian for Extreme Aff ordability, is now sold in In comparing and contrasting the Western can other centres do this as well?’ If she team managed to restore 90 percent of it. India and elsewhere for one hundredth and Eastern approaches to innovation, what seems to be struggling with it, it is because “It was not perfect, but a good solution of the cost of incubators sold in Western was clear to the authors—Navi Radjou, turning a ship around that fast is hard; that worked, without any extra cost.” markets. It’s also likely that you may have Jaideep Prabhu and Simone Ahuja—was this is a long-term game, says Radjou. That was Jugaad for Ahuja. And ranked these as low-cost solutions that that the former was showing signs of Danone, having tasted the benefi ts of it’s apparent the trio will revisit smack more of improvisation than patent- strain and the latter had something going frugality in running a micro dairy product the subject soon. Businesses and toting innovation that modern businesses right for it, though not quite perfectly. facility in Bangladesh, is seeking similar governments are already seeking metrics From Left: Simone Ahuja, Jaideep Prabhu, Navi Radjou have built their edifi ces on. In that case, “We played around with the word reduction in operating costs elsewhere by which to measure Jugaad.

28 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 29 Upfront/Current Events

65 other arms—security men who Shahi used to a hold a 45-minute from the time the fi rst projects were guard the host’s gate—rough up meeting at 1 pm every Friday with started. “They are stuck for various Revolutionary the invitee,” Chatterjee wrote just UMPPs on the agenda. reasons. Some are unable to get in an article in the Business The meeting was attended by land while others are not getting Standard newspaper of June 8. representatives of the environment environment clearances,” he said. Road The note from the Prime Minister’s ministry, state governments, bankers, An easier way would be single Offi ce (PMO) calls the experience of etc. Decisions were taken quickly window clearance, something that has public private partnerships in some and hurdles sorted out immediately. been talked about for several years, DELAYED Private players are reluctant sectors such as oil and gas exploration Since Shahi was second only to the but never implemented. A senior to invest in building port and power projects because sometimes it takes “quite disheartening.” It now proposes minister of power, he could call up the bureaucrat says that it is unlikely to years to get clearances that ministries secure permissions highest offi cials in other ministries ever happen because it would mean before inviting private parties to bid. and state governments to get things departments giving up some of their Acknowledging that government moving. That ensured the scheme powers to the single-window entity. departments often do not have the took off the ground quickly and Feedback’s Chatterjee has another resources to run around securing three projects were auctioned away solution—hiving off the department consents, the note says each ministry within a year of it being announced. of statistics from the ministry of should create SPVs whose job would Clearly, the driving force of a senior programme implementation and be to collect approvals. “In a way,IND the government offi cial, who constantlyIA statistics and bringing it under the SPV would be hand-holding project reviewed progress, was crucial to its Planning Commission. The rest proposals, bringing them to a certain success. Will that be possible when a could be converted to a ministry level of maturity and then pushing of infrastructure which will be them into the bidding pipeline.” responsible for all infrastructure The concept is appealing and has ONE BIG HURDLE FOR projects in the country. Many been tried out in the past, though PRIVATE INVESTMENT countries such as Japan, France with limited success. Six years IN BUILDING ROADS and Israel have a single ministry for ago, the power ministry designed AND PORTS IS infrastructure, he points out. Though the Ultra Mega Power Projects THE NUMEROUS it sounds viable, it still means many (UMPPs) scheme under which CLEARANCES THAT departments giving up powers, the Power Finance Corporation HAVE TO BE SECURED something they loathe doing. (PFC) created and managed shell ------The PMO note says that the companies that secured clearances SPV approach would move the and acquired land and coal mines similar system is envisaged for several responsibility of obtaining clearances before being sold off to private ministries? Besides, the economic, from the private party to the companies to build and operate. political and social contexts have government. “In some ways, the “Pre-construction risk mitigation changed dramatically in the past ‘sovereign’, which is the source of indiatodayimages is extremely crucial and government few years. Buying land was not as clearances, also becomes responsible can do it in the best possible way,” diffi cult as it is today. The concern of for timely issue of clearances.” PMO proposes a n early May, Pulok Chatterjee, plants is the numerous clearances says RV Shahi, chairman of Energy environmental degradation is also far That would not happen without technocratic solution to principal secretary to the that have to be secured before Infratech, a power sector consultant. higher now. And the government has determined political eff orts to sort Iprime minister, circulated a laying the fi rst brick. Sometimes, Shahi, a former secretary in the not been able to come up with a clear out fundamental issues such as land boost private investment in note to all infrastructure ministries. gathering approvals takes years. ministry of power and the architect of policy on either of these critical issues. acquisition. Shahi, who was chairman infrastructure, but the real The subject of the note was the The note illustrated the setting up the UMPP scheme, says that projects PFC is struggling to get the of Mumbai-based private power utility issues are political setting up of special purpose of a power project: 58 clearances also get better valuations when all remaining UMPPs off the ground. BSES (now Reliance Infrastructure), vehicles (SPVs) for accelerating were required (actually it is 65). clearances are bundled before auction. Only four of the originally identifi ed says when he was invited to become the power secretary, the then cabinet By DINESH NARAYANAN investment in infrastructure and Vinayak Chatterjee, chairman He says it becomes very diffi cult 16 projects have been awarded. Nine oil and gas exploration. SPVs of Feedback Infrastructure, a fi rm for private parties to even get other SPVs were formed and none secretary TR Prasad told him, “We are usually companies set up that provides technical services appointments with government of them have been able to collect do not know what you will be able to execute specifi c projects. and consultancy to infrastructure offi cials responsible for granting all the clearances, a top PFC offi cial to do here. But we want you here One of the biggest hurdles to developers, calls the situation approvals. But a senior government told Forbes India on condition of because it shows the government getting private parties to invest in Kafk aesque. “While one arm of the offi cial can easily expedite the anonymity. He said the situation on is serious in its attempt.” That building roads, ports and power sovereign invites and welcomes, process, he says. As power secretary, the ground has changed dramatically intent is missing at present.

30 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 31 Upfront/Current Events

the socialists, who hold 48 seats. If curriculum this year. Statues and a lot of individual misery but little Fascists gain strength elections were held today, plaques of Miklós Horthy, Hungary’s macroeconomic pain ahead if the in the continent’s Jobbik would poll second: The leader in the 1930s and 1940s, are fascists continue to gain strength. Right Back latest polls show the party has 18 also popping up around Hungary The economy is already such a governments amidst the percent support. now, despite the fact that he was a mess, he says, that there’s economic slowdown Led by 33-year-old Gabor Vona notorious anti-Semite, and as head not much more the Fascists and backed by a highly professional of state in 1944, sent 400,000 could do to make it worse. By BENNETT VOYLES in Europe social media machine (top headline Hungarian Jews to Auschwitz. “If any of the current crop of on the English language Facebook And just two weeks ago, a high- far-Right parties were to gain hey’re baaaack! page this week, “Vona urges fi ght ranking Fidesz member visited decisive power in a European Sixty-seven years after against EU which colonises and Transylvania, in Romania, and country (and there are some ultra- TWorld War II, the ultra- enslaves Hungarians”), Jobbik bowed his head at a memorial for conservative nationalist governments Right is on the march again. Like sees itself as making Hungary free Nazi sympathiser József Nyírö, already in place) the economic impact stock monsters in a cheap horror for Hungarians—that is, as long as one of the rehabilitated writers. would fall mainly on immigrant movie franchise, once-marginal you’re not Roma (gypsy) or Jewish. Perhaps even more ominous to groups and other minorities (women, fascist groups are now gaining Dangerously for minorities, Tucker than the government’s new gays etc),” he writes in an email. real political power in Europe. Jobbik’s perspective is far from Hard-line anti-immigrant parties alien to the average Hungarian.IND IA have done well for years in Dutch “Racism/anti-Semitism is such and French elections, but in southern an integral part of Hungarian and eastern Europe, out-and-out culture that it’s seen as natural, if fascists are now winning seats. not necessarily good,” writes Jim Despite campaigning under a Tucker, an American translator of fl ag that looks a lot like a golden Hungarian working in Budapest. swastika, the ultra-Right Golden Although its marketing approach Dawn party won 17 seats in the may be up to the minute, the Jobbik 300-seat Greek legislature in party is, like Golden Dawn, not shy May. Members also have the same about its fascist roots. At the swearing- penchant for outrageous behaviour in of parliament in 2010, Vona as the original Nazis. A number of showed up in the black vest of his members have been arrested for banned paramilitary club, the Magyar beating up immigrants, and on June Garda (Hungarian Guard), whose 7, one Golden Dawn MP—the party’s uniforms have a similar look and spokesman—even assaulted two insignia as those worn by Hungarian female MPs on a live TV discussion fascists in the 1930s and 1940s. programme, throwing a glass of Although Jobbik still has little Laszlo Balogh / Reuters GETTING LOUDER Supporters of the Hungarian radical Right-wing party Jobbik celebrate the 55th anniversary water at a far-left legislator and after direct power, its infl uence has helped of Hungary’s revolt against Soviet rule in downtown Budapest on October 23, 2011 a Communist MP on the programme tilt Hungarian politics sharply right, protested, punched and slapped her as Fidesz, the ruling party, tries to line is his sense that middle class What worries Lewis-Baker more in the face three or four times. co-opt some of its positions. It’s public opinion is also changing. is not so much the growth of the partly a political gambit, Tucker “Middle-class voters who wouldn’t ultra-Right in democracies as the HUNGARY TILTS RIGHT argues, as “nominally centre-Right have touched this stuff with a 10-foot possibility that austerity measures Golden Dawn’s hold on power is still Fidesz, seeing its weak ratings, is pole years ago are now acquiescing undermine the ballot box altogether. uncertain. As no government was poaching voters from far-Right in this historical personality-cult, or “[T]he real problem will come if able to coalesce after last month’s Jobbik by aping the latter’s platform.” even joining in its chorus,” he says. Spain and/or Greece revert/s under vote, new elections are being held on The Hungarian economy may the constant pressure of neo-liberal June 17. But in Hungary, it looks like still be a mess, but when it comes A BIGGER WORRY austerity-alone measures to some tomorrow belongs to the Jobbik party. to bringing back the bad old days Economically, David Lewis-Baker, a form of military dictatorship once Since 2010, Jobbik has held 46 culturally, Fidesz has delivered. professor emeritus of history at the again, since that will pose a much Karoly Arvai / ReutersKaroly seats in the 386-seat parliament, Three anti-Semitic writers have been University of Warwick and expert on more serious threat to the EU project THE NEW OLD FACE A portrait of German dictator Adolf Hitler is seen pasted over an election poster of the Hungarian far-Right party Jobbik in Budapest, in this March 25, 2010 fi le picture making it the third largest party, after reintroduced in the national school the economics of fascist regimes, sees and liberal democracy in Europe.”

32 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 33 Features/Real Issue TRADING PLACES

INDIA

34 FORBES INDIA | July 6, 2012 Rajat Gupta’s epending on the currently pending. “We are very perspective, the pleased with the guilty verdict in conviction highlights conviction of Rajat K the Gupta case, and are continuing the US government’s D Gupta for insider trading to build other equally strong insider eff orts to crack down by a federal court in Manhattan is trading cases. Corporate America can on white-collar crime either a Faustian morality tale of expect insider trading investigations caution, or the Orwellian story of and prosecutions to continue to be a By SUJATA SRINIVASAN a man victimised by Big Brother. top priority for the SEC’s Division of Opinions aside, it’s a stunning Enforcement,” says Sanjay Wadhwa, fall from the greatest heights in who is heading the SEC’s civil case corporate America for the 63-year- against Gupta. That trial is currently old former head of McKinsey & scheduled for October 1 of this year. Co, and ex-director on the boards The writing on the wall is of Goldman Sachs, Procter & clear: Wall Street, be afraid. To Gamble, and AMR Corp, parent really get the point across, the FBI company of American Airlines. decided to rope in a movie star. Gupta’s conviction is part of the US In February of this year, Michael government’s extensive crackdown Douglas made a free public service on white-collar off ences—the number announcement for the agency. of investigations has steadily risen Looking piercingly at the camera, since the fi nancial crisis and the INDhe says: “In the movieIA Wall Street subsequent economic downturn. I played Gordon Gekko, a greedy Since 2008, securities and corporate executive who cheated commodities fraud investigations to profi t while innocent investors jumped by 52 percent, and the lost their savings. The movie was Federal Bureau of Investigation (FBI) fi ction, but the problem is real. Our has more than 1,800 investigations economy is increasingly dependent currently pending. The number of on the success and integrity of the FBI agents hired to work on these fi nancial markets. If a deal looks too investigations has increased by 61 good to be true, it probably is.” percent. There are now approximately The Big Three—FBI, SEC and 91 additional agents since 2008. the Department of Justice—are In April of this year, while increasingly collaborating to take addressing the Miami Chamber of down the bad guys and gals. Preet Commerce, FBI director Robert Bharara, who led the current Justice S Mueller said that in 2010, the Department’s criminal case against agency began embedding agents Gupta, said in a press release dated at the Securities and Exchange June 15: “Having fallen from respected Commission (SEC). “This allows us insider to convicted inside trader, to see tips about securities fraud as Mr Gupta has now exchanged the they come into the SEC’s complaint lofty board room for the prospect centre…to identify fraud trends more of a lowly jail cell. Almost two years quickly and to push intelligence ago, we said that insider trading is to our fi eld offi ces,” Mueller said, rampant, and today’s conviction puts according to the FBI website. that claim into stark relief. It bears The crackdowns have moved at repeating that, in coordination with a rapid pace. Bloomberg reported our extraordinary partners at the FBI, that to date, the US government has we will continue to pursue those who brought cases against 68 traders violate the securities laws, regardless and their sources. Nobody has been of status, wealth, or infl uence.”

acquitted so far and six cases are But it’s uncertain whether these Lucas Jackson / Reuters

July 6, 2012 | FORBES INDIA 35 Features/Real Issue

Lynn Stout, professor at Cornell collar defence lawyer at Buchanan Law School, says the problem is not ROGUE TRADERS Ingersoll & Rooney PC in New York. expert networks themselves but the A few high profi le people who were He is not associated with the case. found guilty of insider trading ethics of people within the networks. Gupta’s conviction has put the “Interconnections are common spotlight on another area of concern. and often useful in business. What IVAN BOESKY “We have greatly over-criminalised needs to be re-examined is whether The inspiration behind Gordon Gekko’s corporate behaviour, but also lots of the law and the business world character in Wall Street$ was guilty of trad- other actions,” says Mark A Calabria, ing on illegal tips. Boesky cooperated with does enough to ensure that the the SEC and implicated many of his former director, Financial Regulation Studies people who have interconnections colleagues, allowing him to score a plea deal at the Cato Institute. Like other free that included a three-year jail sentence and act with integrity,” she says. a $100 million fi ne. market economists, he believes that Thomas Lee Hazen, professor insider trading is a relatively small at the University of North Carolina MICHAEL MILKEN problem. “Most of the information (Chapel Hill) School of Law, said that The ‘junk bond king’ and major contributor to eventually fi nds its way to the market centuries ago, corporate confl icts of the 1980s savings and loan crisis was later anyway. Our corporate tax code, for $indicted on insider trading fraud, thanks to interest were strictly prohibited in information provided by Ivan Boesky. He paid instance, is a far bigger distortion England and under such a regime, a $200 million fi ne and was released from than insider trading,” he says. expert networks would not haveIND prison after less than twoIA years. Pater Tenebrarum, an independent been allowed. But as industry and the JEFFREY SKILLING analyst in Vienna, Austria, says the corporate sector took form—especially crackdowns are one of the symptoms in the US—it became clear that the The Enron CEO, apart from other things, of what he calls “a negative social was convicted of insider trading for dumping

Reuters former strict English rule would not the stock more than two months before bank- mood” following the housing bubble WOEBEGONE A courtroom sketch shows Gupta hugging his family members after the verdict in his insider trading case at the Manhattan Federal Court in New York work. The law thus developed to ruptcy was declared. He was sentenced to 45 and the fi nancial crisis in the US. allow interlocking relationships and years in prison and fi ned $45 million.$ “This also happened in the 1930s. crackdowns will have market- capital markets are increasingly their prosecutions to create greater the consequential confl icts of interest, There were numerous Congressional ARTHUR SAMBERG changing deterrent eff ects. favouring wealthy investors and public awareness that this is not but at the same time imposing higher inquiries after the bubble of the “Preet Bharara is very aggressively there’s a sense that the game is run tolerated,” he says. “Individuals like standards of conduct and fairness The hedge fund chairman paid $28 million 1920s broke. This has two major going after people, but Rudy Giuliani to the benefi t of insiders. “These Gupta and other board members on those who have dual or multiple to the SEC in 2010 to settle fraud charges reasons: One, bubbles do attract after he was alleged to have asked a former [former New York State prosecuting prosecutions would restore public must realise that they owe a duty positions that could create a confl ict. Microsoft employee to provide him inside fraud, which often is unmasked attorney and later mayor] did the trust in capital markets,” he says. to the corporation not to disclose “The problem is not necessarily information on the company on which he when the bubble bursts. The other, same thing 20 years ago. He got Some believe part of the non-public information. Extracting the existence of expert networks made $15 million. negative social mood—and this is people sentenced to substantial jail problem lies in huge rewards. secrets from the corporate mechanism but rather the lack of controls and probably far more relevant to insider time and that didn’t have a signifi cant “What I fear is that individuals and trading on it is just like stealing; information barriers to protect trading prosecutions—demands that deterrent eff ect,” says Charles will continue to get tempted by the we have to prosecute such people.” against misuse of information and WHILE IN INDIA... someone be punished when a great $■ Krakoff , managing partner at Koios big profi ts—the rewards we saw in But there’s a downside other improper advantages that The Securities and Exchange Board many people lose money. The insider Associates LLC in Massachusetts. the Galleon case are enormous,” to the crackdowns. may result from these interlocking of India (SEBI) recently amended its laws trading laws are very vague, which whereby insider trading violations could He also points out that despite says James D Cox, professor “We don’t want to have information relationships,” Hazen says. no longer be settled through the consent means that it is not too diffi cult for the crackdowns, some just walk of law at Duke University. fl ows to the board be compromised These concerns exist within an order mechanism. Earlier, the consent order prosecutors to fashion a case,” he says. allowed violators to pay a penalty to the away with a slap on the wrist. JP He points to the fact that although by any fear that outside directors like environment that is increasingly regulator and settle charges. Robert P Murphy of the Ludwig Morgan Chase, Goldman Sachs and human behaviour is not easy to Gupta would trade on that information suspicious of capitalists. “As a result von Mises Institute in Alabama, ■ Citigroup all agreed to a fi nancial change, prosecutions will put the and jeopardise the corporation’s of the global economic chaos that For instance, in January 2011, Anil Amba- which advances the Austrian school of ni, along with others in his company, paid Rs settlement with the SEC over brakes on wrongdoings. “Studies interests,” Cox points out. That’s at pervades our lives, Wall Street and 50 crore to SEBI as settlement charges for economic thought, wrote a blog on the charges of defrauding investors. have shown that somewhere between the heart of concerns surrounding those that have had tremendous alleged violations of foreign investment and Rajaratnam verdict for the institute on unfair trade rules by his group companies. “They paid fi nes but no one 40 percent and 60 percent of price the so called “expert networks.” fi nancial success are perceived as May 16, 2011. Though he agrees that admitted their guilt. None of them movement occurs before the public In Gupta’s case, he was a being part of an evil empire. It is ■ SEBI’s amendment may however aff ect his the behaviour of both Rajaratnam and were prosecuted like what the announcement of an event—such director on the boards of top-listed unfortunate that such fi nancial brother Mukesh who has been charged with Gupta would probably be criminal insider trading allegations. SEBI had issued Feds did to Arthur Andersen in the as unexpected earnings. What this corporations on Wall Street and an bias may have played a role in this a show cause notice to RIL in 2010. The even in a laissez-faire world, he says in Enron case. The government put indicates is that people don’t do a advisor-cum-investor at Galleon verdict in a case where there was no company had hedged its sale position in the a free society, there would be no laws the fi rm out of business,” he says. very good job in preserving company Group, one of the biggest hedge funds direct proof of the crimes charged. derivative segment before the sale of shares against insider trading. Central to this of Reliance Petrochemicals. The estimated Even so, Krakoff thinks the secrets. The SEC and Department whose head, Raj Rajaratnam, was I would expect that an appeal is penalty amount stands at Rs 1,500 crore. thinking is the eff ectiveness of private investigations are necessary because of Justice are wisely increasing convicted for insider trading last year. likely,” says Barry Slotnick, a white- contracts concerning confi dentiality.

36 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 37 COVER STORY

Sachin Bansal (left) CAN and Binny Bansal FLIPKART INDIA DELIVER? India’s top e-commerce website is betting big that “customer delight” will lead it to success. But costs and management issues could play spoilsport

By ROHIN DHARMAKUMAR

et’s put it this way. Sachin Bansal and day—or 6.5 million items annually. Nearly 5,000 Binny Bansal have audacity and balls. people, including contractors, work for them. Their If you think of these as virtues, what closest competitors make do with 700-800 people. you get are friends who grew up But if you’re the kind who think of audacity and together, studied at the prestigious balls as the foundation on which hubris and L Indian Institute of Technology, Delhi foolhardiness are built, then Sachin and Binny (IIT-D), are now around 30, and in fi ve years built Bansal’s Flipkart begins to look like an entity Flipkart, India’s largest e-commerce company. skating on thin ice. What lends credence to this This fi nancial year, they expect to show investors view is that it is shared by General Atlantic Rs 2,500 crore in revenues, a 400 percent growth Partners, the world’s 12th largest private equity over last year’s numbers. They sell 17,500 items each fi rm with over $17 billion in investments. Namas Bhojani for Forbes India Namas Bhojani for Forbes

38 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 39 COVER STORY

The view was cemented late last year when Sachin and Binny travelled to New York with a single point agenda: Convince General Atlantic Partners’ investment committee to invest $150-200 million into Flipkart at an overall valuation of somewhere between $750 million to $1 billion. After three rounds of meetings with multiple committees, including ones with Martin Escobari, a managing director at the fi rm specialising in online commerce, and William Ford, the CEO, they all declined. Why? They couldn’t understand all of Flipkart’s accounting strategies or its INDIA numbers. How much, for instance, was it using shareholder’s equity to fund operating losses? Just what was the true cost of ‘returns’ for the company? More importantly, they fi gured that at the pace at which Flipkart was building infrastructure and adding people, it would need at least $2 billion in annual sales to just break even. Getting to that number, they argued, would take an awfully long time given where Flipkart was back then. Though it remains unstated, Flipkart’s goal is to be the Amazon of India. But that may be a chimera. Amazon relied on the funds from its 1997 initial public off ering (IPO) to tide through the aftermath of the dotcom crash that took out most of its rivals. Without competition, it could aff ord to lose money on building infrastructure. It would take $2.8 billion in losses over six years before it declared its fi rst quarterly profi t in January 2002. When faced with these posers,

Sachin and Binny didn’t have answers. (L-R) Ravi Vora, VP They took the fl ight back home to marketing; Karandeep Singh, CFO; Sujeet Kumar, Delhi. Disappointed, they had no president, operations; Mekin Maheshwari, option but to go back to their existing president, engineering

investors: Tiger Global, their long India Namas Bhojani for Forbes

40 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 41 COVER STORY

inventory. Book distributors talk of and Accel to sell their business Sachin Bansal, who by then was Flipkart buying books from every to Flipkart. From an investor’s clearly the company’s brains and CEO, SACHIN BINNY SUJEET MEKIN KARANDEEP RAVI APARNA ANKIT ANUJ PRADEEP CHAITANYA VAIBHAV MANISH single title in their catalogue. They perspective, it made no sense to demanded the company be valued BANSAL BANSAL KUMAR MAHESHWARI SINGH VORA BALLAKUR NAGORI CHAUDHARY YADAV ADAPA GUPTA KUMAR were surprised, because many of fund two companies competing in at Rs 16 crore. Venture capitalists CEO COO PRESIDENT, PRESIDENT, CFO VP, VP, HR VP, RETAIL VP, DIRECTOR, SR. MANAGER, VP, AVP, those titles hadn’t sold in years. similar spaces. The Bansals were balked at the fi gure. Much dithering OPERATIONS ENGINEERING MARKETING OPERATIONS FLIPKART PAYMENTS PRODUCTS MOBILES LOGISTICS A category-wide 30-day returns told much the same thing and later, Accel invested nearly $1 million NA NA BINNY SACHIN BANSAL BINNY BANSAL SACHIN BINNY BANSAL SUJEET SUJEET ANUJ MEKIN SACHIN ANKIT policy and aggressive inventory had no option but to acquiesce. (Rs 4 crore then) in the company, BANSAL BANSAL KUMAR KUMAR CHAUDHARY MAHESHWARI BANSAL NAGORI SEPT 2007 SEPT 2007 DEC 2008 SEP 2009 JAN 2012 MARCH 2011 MAY 2012 MARCH 2010 NOV 2010 MAY 2011 OCT 2011 AUG 2011 acquisition put more pressure In a few months, practically all of but in two equal tranches. Accel’s Rs on the system to handle returns. IIT DELHI, IIT DELHI, IIT DELHI, IIT DELHI, IIT DELHI, IIT DELHI, IIT DELHI, IIT DELHI, Letsbuy’s 350 employees were quietly 2 crore into Flipkart’s bank account 2004, JWALA 2004 2003, JWALA 2004, JWALA 2005 2004, JWALA 2004, JWALA 2004 At least three industry sources let go and its infrastructure, including was a personal victory for Sachin. Designation Reports To Joining Date Notes claim the company has attempted the warehouses, dismantled. Accel The funds were deployed to return 30-40 percent of books and Tiger Global, however, salvaged immediately and the results they had bought a year ago to a all of the cash investments in Letsbuy were spectacular. Monthly sales time sugar daddy, and Accel Partners. the option to pay cash on delivery realised effi ciencies could come few distributors when the norm and got additional stock in Flipkart. skyrocketed and with them, Hedge fund Tiger Global and (CoD) if they didn’t have credit only if deliveries from warehouses in the business is 10-15 percent. “This was a great business Sachin’s expectations. He started Accel too had been looking forward cards or were uncomfortable using were streamlined. But to do that, In mobile phones too, where decision and we stand by it. Tiger to look at Accel’s $1 million as to the deal, because that would them online, heavily discounted inventories ought to be in stock. most of its peers prefer close INDhad nothing to do with it,” saysIA chump change and initiated signifi cantly increase the value prices, free delivery and later, Meanwhile, thanks to CoD, fi ckle back-to-back arrangements with Karandeep Singh, Flipkart’s CFO. conversations with others as well. of their own Flipkart stakes. no-questions-asked returns. customers often changed their distributors, Flipkart prefers to hold Even as many were evaluating Sources say even the term sheet the It was a model they’d imported minds at the time of delivery, in its own stock. Some distributors ll of this, in turn, raises a and debating, Lee Fixel, a managing Bansals carried with them to New from their multiple visits to China, turn leading to growing returns. are now complaining of delays in question: “Who owns Flipkart?” director with Tiger Global, a deep York was drafted by Tiger Global. a country which they thought had That posed an altogether payments. Flipkart maintains these A People privy to the fi nancials say pocketed and canny hedge fund, Now that Sachin and Binny problems similar to India: Large unexpected question. How do you delays are because the software Tiger Global is the largest shareholder swooped in to invest $10 million at a were on the back foot, they were population, poor transportation, fund the delivery and logistics it uses to maintain fi nancial told Flipkart was, at best, worth low penetration of modern retail, business? The solution: Flipkart records are being updated. not more than $500-600 million. unreliable third-party logistics and Logistics, an initiative that started “FLIPKART TODAY IS AN INVESTOR-OWNED And that $100 million was the n February 9, 2012, everybody, best Tiger Global and Accel could insiders included, was taken AND INVESTOR-DRIVEN ORGANISATION,” put on the table right now. O aback when Sachin Bansal SAYS TAPAN KUMAR DAS WHO WAS THE Flipkart refused to comment on any TODAY, WITH OVER 60 PERCENT OF announced Flipkart’s acquisition of COMPANY’S VP, FINANCE, UNTIL APRIL 2011 of its investment deals or discussions. FLIPKART’S 4,800 EMPLOYEES SPREAD Letsbuy.com. A rival e-commerce ------ACROSS 40 CITIES, FLIPKART LOGISTICS website, it sold consumer electronics. hen Flipkart was founded in IS THE TAIL THAT WAGS THE DOG He said it would allow Flipkart build 2007, it was on the back of a ------a dominant share in the space. W fanatical promise. Whatever be Since the time it started in the company and owns at least 40 valuation of Rs 220 crore. The speed the cost, delight customers. Starting operations in 2009, Letsbuy deployed percent on a fully diluted basis. Add at which it happened blindsided with books, a market it upended heavily discounted prices and to this Accel’s stake and you’re left everybody, including Accel, which in little time, Flipkart started to few credit card transactions. Chinese off as a pilot in December 2010 to extensive product catalogues as wondering how much the co-founders until then had invested only 50 off er CDs & DVDs, mobile phones, e-commerce vendors had gotten handle the company’s in-house strategies to acquire market share. Sachin and Binny Bansal actually own. percent of what it had originally consumer electronics and more around the problem by creating orders, but would grow over time By January 2011, it had enough “Flipkart today is an investor-owned committed to. Left with no choice, it recently, healthcare and beauty infrastructure around each problem. to become a platform that could heft to convince Helion Venture and investor-driven organisation,” was forced to invest the remaining products. Their fanaticism won Flipkart thought that was the way off er warehousing, packaging, Partners, Accel Partners and Tiger says Tapan Kumar Das who was amount at a much higher valuation over two million sceptical Indians. to go. Instead, they were gobsmacked delivery and CoD to any company Global to invest $6 million. the company’s vice-president, before getting relegated to the To get them to Flipkart, though, by even worse ones. With CoD, for a fee. (Flipkart denies it But it burnt nearly all of it in less fi nance, for a year until April 2011. backseat. This, because it didn’t have the Bansals invested venture capital cash fl ows are controlled by courier was ever a consideration). than a year. By the end of the year, it It’s interesting how things got the muscle to write cheques of the funds into infrastructure that companies. It takes weeks to reconcile Today, with over 60 percent of started knocking on investor doors here. Towards the latter part of 2009 kind a hedge fund could. It chose not could support customer service, accounts and they charge fat fees as Flipkart’s 4,800 employees spread for a fresh round of funds. Nobody when monthly sales were in the to participate in Flipkart’s second and last mile delivery, warehousing well. To get around this, the Bansals across 40 cities, Flipkart Logistics is uttered a peep. Instead, co-founders region of Rs 1 lakh, Abhishek Goyal, third rounds of investment, leading to and technology. They spoilt their started their own courier fi rm. the tail that wags the dog. The food Hitesh Dhingra and Amanpreet an associate at Accel Partners, noticed a further dilution of its original stake. customers silly by off ering them But as the division grew, they that sustains this growing entity is Bajaj were told by Tiger Global Flipkart and put it on the fi rm’s radar. At Tiger Global, the 29-year-old

42 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 43 COVER STORY

INDIA

HOME BOUND Most of the people that the Bansals hired and trusted were their friends from their IIM-D hostel, Jwalamukhi

of China, down 35 percent), Yandex “THE BIGGEST THING TIGER GLOBAL (the Google of Russia, down 49 BRINGS TO FLIPKART IS INDEPENDENCE percent), DangDang (the Amazon of China, down 79 percent) and Gushan AND BELIEF IN THE MANAGEMENT,” Environmental Energy (Chinese SAYS BINNY BANSAL biodiesel producer, down 96 percent). ------Some of its investees have turned out to be much worse. Trading in China’s Longtop Financial Fixel was closer to the Bansals in So, it prefers to let local venture Technologies was suspended by age and outlook. “Our philosophy capitalists spot promising companies the New York Stock Exchange was to fi nd investors who don’t by making the fi rst investment, (NYSE) after an accounting fraud. want to run the business and the before opening its purse strings. This is not to suggest Tiger Global biggest thing Tiger brings to Flipkart Some call it investing in regulatory makes only risky investments. It has is independence and belief in the arbitrage, because it allows Tiger invested large amounts in high- management,” says Binny Bansal. Global to acquire stakes, understand profi le companies like Facebook, Tiger Global was started in 2001 the real metrics of private LinkedIn, Apple and Google. by Charles ‘Chase’ Coleman as one of companies, and then sell them to But when companies have to the numerous “baby Tigers” founded the public through an IPO just deal with confl icts of interest, by the alumni of Julian Robertson, before that advantage disappears. it is usually the board that asks legendary investor and founder of There are precedents to this where hard questions. According to hedge fund Tiger Management. Its Tiger Global investments “pop” Flipkart’s offi cial fi lings, the only investment sweet spot is the phase on the day of the IPO, only to fall other person on its board—other between the fi rst venture funding back to more realistic levels. These than the Bansals, Accel’s nominee

Dileep Prakash for Forbes India for Forbes Dileep Prakash for a startup and it going public. include Youku.com (the YouTube Subrata Mitra and Tiger’s Fixel—

44 FORBES INDIA | July 6, 2012 COVER STORY

was Rajesh Magow, CFO of online Soon after Vipul Bathwal came upon one was to bash him up!” travel company MakeMyTrip.com. on board, he identifi ed mobiles It was in this testosterone and But Tiger Global owned nearly a as a category and launched it in allegiance-driven community fi fth of MakeMyTrip when Magow July 2010. This was the company’s that Kumar found his true calling. was inducted into the board. Magow fi rst big category expansion Though from the unglamorous civil chose not to respond to a request for after books and CDs/DVDs. engineering stream, he was politically an interview. Sachin Bansal declined Within the fi rst quarter, sales active on the IIT-D campus. Working to talk as well about the composition rocketed to around 30-40 percent tirelessly behind the scenes, often or function of Flipkart’s board. It of Flipkart’s overall revenue over tea, cigarettes and alcohol or is “a private matter,” he said. without marketing support. long sessions of card games, Kumar Sitting in Delhi, Sujeet Kumar, would broker deals and negotiate he schisms at Flipkart run the head of Flipkart’s operations, allegiances to further Jwala’s deep and off er lessons on how nervously studied the rapidly causes. As opposed to him, Sachin T not to expand a well-funded growing mobile category and its was an introvert who preferred to startup. In December 2009, after its implications on power equations at spend most of his time within his second round of funding that got the fi rm. Kumar was a year senior room. Which is perhaps why soon Flipkart Rs 50 crore, Sachin and to both Bansals at IIT-Delhi and after starting Flipkart, Kumar was Binny embarked on a series of hires more importantly, a fellow-resident one of Sachin’s fi rst key hires. Flipkart’s logistics were a natural INDfoil for Kumar, playingIA to his inherent skills with numbers and people TOGETHER WITH THE BANSALS, “management”. As he scaled Flipkart’s [THE GANG FROM IIT-D’S JWALA HOSTEL] back end operations, Sachin’s trust BANDED TOGETHER AS A SECRETIVE in him grew. Soon, Kumar started BUNCH. “THEY WOULD TALK AND to get in newer people like Maneesh SHARE INFORMATION ONLY WITH Mittal and Anuj Chaudhary into the EACH OTHER,” SAYS DAS team, all from his network at Jwala. “Sujeet built his operations team ------with people he trusted. That was at a time when Flipkart was very small. So, it was easier for him to get people to man key functions like fi nance, of Jwalamukhi hostel with Sachin. he knew from Jwala,” says Binny. category management, marketing “Jwala”, as it was called, was Together with the Bansals, they and human resources (HR). one of the 10 student hostels on the banded together as a secretive Vasudha Mangalam came in IIT-D campus. Unlike many other bunch that decided which way from a technology company to IITs where students changed hostels things went. “They would talk and eventually lead HR. Vipul Bathwal, during their four-year engineering share information only with each a 2008 IIM Ahmedabad graduate, stay, IIT-D insisted they stay in the other. There was no openness came on board to identify newer same one. This helped forge close in the system,” recalls Das. That categories. Satyarth Priyedarshi, a networks and deep bonds that often perhaps explains why Flipkart former head of merchandising for the lasted a lifetime between residents. did not have a formal stock option Borders bookstore chain in Dubai, Allegiance to a particular hostel programme till late 2010 when it was roped in to head buying and meant friendships with others from commissioned ESOP Direct, an merchandising. Tapan Kumar Das, a rival hostel was frowned upon. Indian specialist fi rm, to design the erstwhile fi nance head at venture- “We hated the sight of anyone from the fi rst version. Only a handful of funded salon chain YLG, joined as Niligiri [one of the hostels],” says a loyalists were given stocks till then. VP, fi nance, along with Anupama person from the same batch as the An ex-employee recalls asking Sharma, a Stanford Business School Bansals, and an erstwhile resident Sachin about consulting with a graduate who would lead marketing. of Jwala. “The fi rst thought that professor from IIM Ahmedabad Within a year, all fi ve quit. crossed our minds when we came known for his expertise in helping

46 FORBES INDIA | July 6, 2012 COVER STORY

startups scale successfully. “Those another “Jwala” alumnus, had hired Sachin asks me during an as part of the run-up to an IPO next than books (where discounting FLIPKART’S FOUR STAGES IIM guys will just steal our a fi nance person into his division interview in which Binny and CFO year. But it will raise questions the has wiped most margins to single ideas!” was Sachin’s response. without so much as informing him. Karandeep Singh were present. Bansals have been ducking until digits) or electronics (6-8 percent). It was this mindset that eventually Then there was Mittal, an “Yes,” I tell him. now, starting from the ones raised Ironically, the current market contributed to Bathwal’s fall. Sujeet aggressive and abrasive “Jwala” “Hmm!!! Usko toh dekh lenge by General Atlantic Partners. leader in apparel is Myntra, Kumar detested the outsider and alumnus, with a take-no-prisoners [We’ll deal with him],” he says Flipkart also has to fi ght off which has Accel and Tiger Global the thought of being sidelined was approach. “Five to 7 percent of the to Binny, before being pacifi ed aggressive competition from the as investors. terrifying. So, Kumar started digging book sales were based on cash. I by Singh to let matters rest. likes of Infi beam.com, Finally, there are the ‘softer’ issues to fi nd Bathwal’s Achilles heel. He wanted to know from Mittal why Homeshop18.com (owned by around culture. After stymieing the struck pay dirt when he stumbled vendors wouldn’t accept cheques. n IPO will be an unnecessary Network 18, Forbes India’s fi rst set of professionals who joined on the fact that in his eagerness to But I got no answer. It’s possible evil for us. Today, there is publisher), Snapdeal.com and in 2010, Flipkart has gone back and grow the category, Bathwal had Sachin and Binny didn’t know about “Aso much of private capital Indiaplaza.com. In books, for hired a second set of people, in most aggressively bought large inventories these deals though,” says Das. available that we’d like to stay instance, Flipkart has over the cases even more experienced and of mobile phones from distributors. Mittal, we were told, was on a private for as long as possible, like last few months started raising senior than their earlier hires. How much inventory to hold is one sabbatical when a request for his Facebook,” says Binny Bansal. But prices across the board. These include Karandeep of the toughest questions retailers version of the story was placed. Two truth is, Flipkart started evaluating Which is why, it will be Singh, earlier a vice-president deal with. Having thin stocks carries weeks later, Mittal was taken off the its options way back in 2010 byIND fi rst interesting to watch how the IAat Sapient India, as CFO; Ravi with it the risk of turning down rolls. No reasons were provided. Vora from Heinz India as head of orders; too much of it and there’s the Das adds he also found a marketing; and Aparna Ballakur, risk of unsold goods. But Bathwal mismatch between Flipkart’s who formerly headed human reasoned he was better off with larger sales receipts and bank balances “IF CONSUMERS BUY ONLY FOR CHEAPER resources at Yahoo! India. SLEEVES SHAKY inventories because Flipkart’s stated in his early days. Ernst & Young’s PRICES, FREE DELIVERY, FREE RETURNS Singh is now implementing ROLLED UP GROWTH mission was to delight customers. 2011 annual audit report of AND FREE COD… THEN THE QUESTION IS, Oracle Financials, the fi rst major Instead, he found himself staring at Flipkart’s accounts had also raised WILL ANYONE EVER MAKE MONEY?” ASKS enterprise software Flipkart has 2007-2009 2010-2011 large inventories—a problem Flipkart at least two “qualifi cations”. KANWAL SINGH OF HELION PARTNERS chosen not to code from scratch. was intimately familiar with as well. Qualifi cations in audit parlance Why now? “This is a big investment Very few people, no venture funding. Venture funding in, the Bansals But with this information on refer to notes or comments made ------and we had to reach a stage where Sachin and Binny work round the become more confi dent, at times clock to create a trusted brand. even arrogant. A lot of new faces hand, Kumar called Bathwal on the by an auditor indicating their it could be justifi ed,” says Binny. are brought on board to scale operations. Logistics becomes phone and told him “You have a dead displeasure with something in a Meanwhile Ballakur will Getting people to buy books a major focus & investment area. stock situation.” Bathwal protested. company’s books. In Flipkart’s case, studying the regulatory environment hypothesis that puts serving need to walk the fi ne line between online for the fi rst time, from an unknown company “We can return it to the vendors.” the qualifi cations were around the in the US, Mauritius and Singapore. customers over everything else bringing in a more professional Secretive and political culture A few days later, Sachin and Binny company’s internal control and Listing in India was out of the holds up. On the other hand, and open work culture while drives off most key hires. COURSE The funding requirements Bansal called him for a meeting. reporting systems. It is not known if question, given SEBI’s regulations Flipkart’s competitors too cannot retaining the good aspects from CORRECTION keep increasing. “Sujeet is now going to head all our those qualifi cations, or others, were around generating profi ts fi rst. endlessly burn the same fuel it the old. Why did Flipkart wait categories and doesn’t want you to present with the next year’s accounts. The appointment of does, venture money, to buy so long? “We’ve been looking 2011-2012 report to him. I’m sorry, but he is my “Back then the company MakeMyTrip CFO Magow to market share. since 2009, but just didn’t IPO OR senior from IIT-Delhi,” said Sachin. was growing so rapidly that it’s Flipkart’s board is probably the “If consumers buy only for fi nd the right person,” says More venture funding, more A week later Bathwal put in his possible there may have been best indicator of how its IPO cheaper prices, free delivery, Sachin. pressure from investors to scale up. BUST Second set of key hires made, this papers. It was much the same thing some lag between the two,” says will pan out. Magow was the free returns and free CoD… “It’s typically an investor who time even more senior. Letsbuy is acquired, probably under investor with the others. The Bansals trusted Sachin in Flipkart’s defence. architect of MakeMyTrip’s US then the question is, will anyone puts pressure on start-ups to pressure. Operations and staff 2013 only their investors and a handful of Das says he resigned in April IPO using a holding company ever make money? I don’t think professionalise or scale. It’s a tough strength balloon in size. Serious eff ort to expand investor set fails. US IPO enabled by Singapore colleagues from their IIT days. The 2011 before having to put his name structure based out of Mauritius. anyone has a good answer to transition,” says Priya Chetty- holding company. Will be the others were dispensable outsiders. on Flipkart’s balance sheet for Last year, Flipkart fl oated a that,” says Kanwal Singh of Rajagopal, of global executive litmus test for the Indian Keeping 350 Letsbuy employees e-commerce sector. Das says he was frustrated after the year gone by. “If I had to put company in Singapore, Flipkart Helion Partners. recruitment fi rm Stanton Chase. in limbo only to let them go being stonewalled every single time up with so much of pain around Private Limited, which spent Rs Flipkart is also moving fast to What the Bansals need to add creates very bad image in the market. Unable or unwilling to Most tech IPOs have fallen below he tried to get clarity on the fi nances. fi nance, I might as well have done 323 crore earlier this March to launch apparels and has hired now is humility and, perhaps, create an independent board that issue price. The global economy can stand up to investors. General lies in tatters. Critical questions In spite of heading the function, it for my own company than as an acquire shares in Flipkart India senior people to spearhead the dilute their audacity and ballsy Atlantic failure sets tongues about accounting standards he was unable to fi nd accurate employee for Flipkart,” he says. Pvt Ltd, a subsidiary company eff ort. This category is crucial for ways to stay afl oat. wagging in VC circles. and profi tability must be tackled. numbers on sales volumes. In one “Are you going to put Das’ name incorporated only in September Flipkart because at 30-40 percent, Additional reporting by Shishir Prasad Achievements Challenges Sameer Pawar Sameer instance he found Anuj Chaudhary, next to all these allegations?” 2011. It’s hard not to consider that it has much higher gross margins & Pravin Palande

48 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 49 Features/Real Issue

LOST CAUSE Human Resource Development Minister Kapil Sibal displays the low-cost BETWEEN computing device during its unveiling in New Delhi on July 22, 2010 HEAVEN and EARTH The disastrous Aakash project has expunged India’s dream of developing the world’s cheapest computing device. And questions remain unanswered INDBy SEEMA SINGH IA

magine for a moment you’re a how to go about it or why; and then try company with subsidiaries in the scientist looking at a stubborn your damndest best for a stab at glory. UK and India won the contract, problem—in this case, a mass In any case, as long as the problem produced a prototype built to spec, Iof a few hundred million is cracked, who gives a damn? and Kapil Sibal, the minister in charge poor, uneducated people. To lift them With the benefi t of hindsight, it is of MHRD, unveiled Aakash, the out of poverty, friends who study now obvious the Ministry of Human world’s cheapest computing device. economics tell you the fi rst thing Resource Development (MHRD) To put it mildly, the prototype was you ought to do is off er them access chose the pig-headed option. What a disaster. Some phones in the market to aff ordable education. And that if else explains the fact that almost two worked faster than this contraption. you can, you’ll achieve three things. years ago, the ministry announced The battery couldn’t last two hours Create a better world; create an it is in the middle of developing if a user tried to play video fi les on incredibly compelling business; and a low-cost computing device for it. The touch screen, well, wasn’t perhaps get a stab at immortality. students that would cost just $35? “touchy” enough. And things got ugly There are two ways to go about the And that when complete, a global between IIT Jodhpur and DataWind. problem. The fi rst, you reckon you tender for fi ve million units of the Sibal fi nally stepped in and in early ought to think through the problem. device would be fl oated? The blitz April this year announced that an That means look at the world around that accompanied the announcement upgraded version of the device you, tinker with ideas, fi gure what had the world in a tizzy. will be made available by May. works best, and build a cost-eff ective A little less than a year later, in As this story goes to press, we’re solution that eventually helps February 2011, the Indian Institute of in the middle of June. Aakash-2 achieve the objectives stated above. Technology (IIT), Jodhpur, which had is still being tested by C-DAC The second is a pig-headed one. taken upon itself the onus to decide in Thiruvananthapuram; IIT Look at how others around the world what specifi cations this animal would Bombay has been appointed the are attempting to crack the problem; run on, put out a global tender to build new nodal institution to drive the call in the global media; tell them a the fi rst 10,000 units. In return for project and offi cials there claim tablet-like device with a touch screen these services, the institution received 100,000 units will be supplied for can be built and sold at $35; another Rs 47 crore from the government. pilot tests by October this year.

Reuters matter altogether you’ve got no clue DataWind, a 12-year-old Canadian On its part, DataWind claims the

52 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 53 Features/Real Issue TRACKING But N Balakrishnan, associate done without using any IP that came problem with the vision: The Chinese AAKASH director at IISc, and Ashok from the government-funded project. have already cracked the price barrier. Jhunjhunwala, electrical engineering And for all practical purposes, are professor at IIT Madras, say they ven if one were to be charitable close to commoditising the market. don’t remember participating in Eand dispense with these Clinging on to an unrealistic price 2005 any such project. On the contrary, questions, it is impossible to ignore and the ‘Made in India’ tag have Trigger for a cheap sources we spoke to say all of India’s the fact that Aakash isn’t a device ensured the project was stillborn six computing device comes November best engineering institutes declined that can be used to study on. “The years ago. What got lost out was an from the launch of One 2006 to participate in the project because educational experience has to be opportunity to rally resources and Laptop Per Child (OLPC) Government release says they thought it an unviable idea. captured and ought to be central build a well engineered device. project, set up to provide affordable educational several institutes will Then like a bolt out of the blue, to the design of the entire software devices participate in developing in January 2009, Sinha announced platform for the device. I see no such n contrast to this fi asco is the “very low cost and low power consuming access the launch of the $10 computer in eff ort. Running a few apps that can IMinistry of Rural Development devices” to address the Tirupati. It was met with all-around show YouTube and a few fi le formats (MoRD). For the Socio Economic January challenges of providing sniggers because what it looked like does not make an educational device. and Caste Census 2011, it needed 2009 broadband for every Indian was a pen drive with a screen and no There is no integration of a core tablets in large numbers. It turned NK Sinha, joint features worth talking about. Sinha idea into the device,” says V Vinay, a to defence equipment maker secretary, HRD ministry, April told us then that some students and former computer science professor Bharat Electronics, which had lost launches a so-called $10 2009 INDIAcomputer in Tirupati faculty members had been working from IISc who recently founded the original race to DataWind. It is made clear that all on it for over two years, they had LimberLink Technologies to enhance It developed the device in four intellectual property applied for patents and that “… and improve engineering curriculum. months and delivered 640,000 July created under the project will remain jointly-owned

Courtesy: PIB everything need not be told.” A device that enables ‘studying’ is tablets in six months to the MoRD, 2010 and copyrighted by the HRD UNREALISTIC EXPECTATIONS NK Sinha, joint secretary, Ministry of Human Resource Development, proposed built diff erently from one designed three times the number of tablets that the ministry develop a laptop at $10 Ministry of Human ministry, the coordinating Fact is, until now, everything for ‘reading’. You can read a novel. sold in the Indian consumer market Resource Development institutes and the 100,000 units have already been it was to make sure technology hasn’t been told and questions But when it comes to studying, say in 2011. But company offi cials fear (MHRD) announces that community of experts which a $35 dollar device is created it remain unanswered. supplied to the institute. Nobody and resources could be delivered physics, a student ought to be able to that the unsustainable pricing being being developed. When seems to have a clue what the truth to schools in the least developed ● What happened to the intellectual read on the device, make notes on it demanded by Sinha will keep serious complete, a global February is. What we know is this: Similar countries. He wasn’t hung up on property (IP) the $10 laptop project and work out answers to a problem. manufacturers away from taking tender for 5 million units computing devices with superior the $100 number. He knew that was supposed to generate? “Aakash is a disaster,” says a newly a serious jab at building tablets. will be floated 2011 capabilities are being brought out of costs could go up by $30-40 or even ● After the fi rst meeting of the project retired vice chancellor of one of the They say when the proposal was First tender for 10,000 devices floated by IIT, Chinese factories by the thousands; $100. For various reasons though, a coordinators, it was made clear largest technological universities originally fl oated, several startups October Jodhpur. The lowest bidder India seems to have lost the plot; and laptop at $100 was the number that “all IP created under the Mission in the country. “Without taking a had queued up before Sinha. While 2011 is Datawind, a 12-year-old what could have been an incredibly stuck in the minds of people across would remain as jointly owned long-term view of the end use of the on the one hand he encouraged Canadian company Kapil Sibal unveils compelling story is now a stillborn. the world—including NK Sinha, and copyrighted by the MHRD, device…it will remain ineff ective.” them to come up with prototypes, prototype as Aakash, the joint secretary at the MHRD. the coordinating institutes and Ashok S Kolaskar, former vice on the other he discouraged them world’s cheapest November he race to build the world’s While the OLPC project has community of experts which create chancellor of Pune University and saying the IITs were developing computing device 2011 Tcheapest computing device gone through many ups and downs the IP.” But six years down the line, KIIT University in Bhubaneswar, calls the devices at a price point of $32. The ministry writes to all started when the One Laptop Per including funders backing out, NK all IIT Jodhpur can show is that the content that is being digitised by Every time a startup approached April vice chancellors, college Child (OLPC) project was announced Sinha proposed the MHRD develop it zeroed in on the specifi cations, the MHRD “19th century textbooks him, it was asked to deliver in “two 2012 principals and institute in 2005. Headed by Nicholas a laptop at $10—one-tenth of the fl oated a tender and selected the in audio and video format.” months”. “He had a huge stack of heads to ascertain demand Kapil Sibal says the for the tablet Negroponte, best known as the price the OLPC had proposed. lowest bidder on behalf of the If the project has to take any shape, tablets in his room. He’d reel out upgraded version, founder of MIT’s Media Labs, it was a On the back of this proposal, in government. What happened in then the obsession with pricing will component prices from Taiwan Aakash 2, will be non-profi t entity and funded by global November 2006, a government release the interim and why wasn’t any have to be given up. But it remains without revealing much,” says a senior launched in May May majors like AMD, Google and Nortel said several institutions, including the IP generated by the institute? sacrosanct. “The price point is the professional who interacted with him. 2012 ● among others. The central theme to Indian Institute of Science (IISc) and How did DataWind, with far fewer biggest deal,” says a member of the For startups like AllGo Embedded June Wish Tel is registered with this idea was to build a laptop that IIT Madras, would develop “a very resources at its disposal than all of standing committee on National Systems, a six-year old company 2012 the Registrar of Companies would cost no more than $100. low-cost and low power-consuming the might at the ministry’s disposal, Mission on Education through founded by ex-IISc students, some with Milind Shah as the Aakash 2 is being tested But Negroponte was not a pig- access device to address the challenges manage to create a tablet that retails Information, Communication and “enablement” from the ministry founder. He says he was by the Centre for associated with the HRD headed man. He was clear that while of providing broadband connectivity in the market under the brand name Technology (ICT). “It’s one man’s (an indication of commitment to Development of ministry when the device keeping costs low was important, it for every Indian, preferably free of UbiSlate at a price point much higher vision,” says Suneet Singh Tuli, chief procure) would have helped. But Advanced Computing was still a concept wasn’t the central objective. Instead, cost for educational purposes.” than $35? DataWind’s CEO says it was executive of DataWind. The only they say Sinha insists vendors cannot

54 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 55 Features/Real Issue

buy and supply directly. For the SUCCESSFUL BID product to meet his standards, it’s Mannmohan Handa, general manager of got to be assembled locally, which export manufacturing, in turn drives prices higher. Bharat Electronics Larger manufacturers like HCL Infosystems are watching the drama unfold, albeit from a distance. Earlier this year, it launched a tablet called MyEdu. Though it says it was “never in the race” for Aakash, sources say it backed out during pre-bid discussions due to the ministry’s insistence on keeping prices low. “The idea [of Aakash] was really great; it created HOW BHARAT a lot of buzz in the market and a ELECTRONICS

lot of confusion in the minds of India for Forbes Mallikarjun Katakol people as users do look for a brand, DID IT support and quality,” says Anand n his satirical novel The First $20 Ekambaram of HCL Infosystems. hen the Ministry of Rural Develop- IMillion Is Always The Hardest, Despite several email and phone ment (MoRD) was getting ready a spoof on Silicon Valley of the late W for its door-to-door survey for the requests, Sinha was not available 1990s, technology and culture writer Socio Economic and Caste Census 2011, it INDIA for comment. However, academics was looking for ways to reduce cost and Po Bronson took pot shots at the associated with the project stand enhance data authenticity. It took inspira- concept of a sub-$300 PC. The plot by him and argue that the volumes tion from the Ministry of Human Resource revolves around a plan to build a Development (MHRD)—its quest for low- a project of this kind can generate cost tablets had been hitting the headlines. low cost device. Much like Aakash, will make up for the low price point MoRD approached Bharat Eletronics (BEL), the protagonist in the book Andy Sinha is insisting on. But vendors which had lost the MHRD tender. Once the Casper sets the rule for his team: The who signed on to provide laptops need and specs were decided, orders came PC has to hit the stores at $300. in quickly, on June 10. By December 2011, at Rs 15,000 each under the chief BEL delivered 600,000 7-inch tablets to The book was published in minister’s ‘one laptop per student’ MoRD, and an additional 40,000 units in 1995 when PC prices hovered programme in Tamil Nadu, which January 2012. It cost $72, whereas the around $2500. “There was nothing MHRD was seeking a price tag of $35. aims to distribute 6.8 million That was a record of sorts, recalls Man- magical about that fi gure [$300], machines over fi ve years, are nmohan Handa, general manager of export no technological reason for sticking already fi nding the going tough manufacturing. Handa was pleased with his to that price,” writes Bronson. But team, which worked even on holidays, and and have written to the state in three shifts, almost like a “relay race”. “It conventional wisdom suggested that government that they may was not a typical public sector working; [it for a consumer product to reach a fi nd it diffi cult to sustain their was a] totally private sector environment.” critical mass of homes, its price had to commitments, says Vishal Handa’s unit also makes electronic match other small home appliances. voting machines, but for these tablets, it Tripathi, an analyst with accelerated the processes, applying all When a colleague suggests to research fi rm Gartner. techniques of lean manufacturing, e-pro- Casper that the goal looks hopeless, “My fear is not so much the curement and e-testing. Several BEL agen- he blurts: “Stop thinking about the cies worked closely to provide application money we waste on these pursuits; software support for data enumeration, big picture. Just work on one part the Indian government is not secure data storage, secure data access at a time.” But the outcomes of the known for fi scal prudence in any and transmission. Additionally, it provides prototype sound eerily similar to foldable solar charging stations and an case,” says LimberLink’s Vinay. He extra battery pack that lasts eight hours. Aakash. Emagi (electronic magic) worries about the damage it can Handa says this project has opened a new as it was called, never looked and do to children. “Instead of giving vista for BEL. Will it bid for Aakash-2? That felt right. And something always them the learning they deserve, depends on the top management, but the seemed to go wrong with it. Did bid should add to the company’s bottom they get a phony experience as line—near-zero profi ts aren’t attractive. somebody say prescient? education, which will be tragic.” With additional reporting by Rohin Dharmakumar

56 FORBES INDIA | July 6, 2012 Features/My Learnings I DON’T WANT TO BE CONSISTENT, I WANT TO SURPRISE INDIA The luxury hotel world is driven by personality, says Robert Gaymer-Jones. He is building that through passion, service and a touch of local fl avours

started in the hotel business decided which hotel would fi t the at the very bottom as an new positioning of Sofi tel. At this apprentice chef and rose point, people had doubts whether Ithrough to become GM. I our strategy [of Sofi tel as a separate felt it was important to understand company, of reducing our network all parts of the business. The only of hotels and our play in the luxury place I haven’t worked at is HR. hotels sector] would be successful. I was brought in [as chief operating But we were consistent on what offi cer of Sofi tel in Paris in 2007] to our direction was going to be. reposition the company. The brand Fortunately, I had a boss who was all over the place. Accor, the was supportive of our strategy. mother brand [which is a French He showed that we were aligned company], is renowned in the budget to fi ght the fi ghts necessary to let sector of hotels; they make a lot of the guys at Sofi tel do what they’re money in that segment. I convinced supposed to do. It wasn’t brutal, but Accor to move Sofi tel into the luxury there’s a confi dence thing. A strategy segment. It was a challenge to put works as long as you don’t waver. The Sofi tel on the map in the luxury level. people who questioned our strategy We created an independent company are now our biggest fans. However, within Accor and got autonomy to there was a negative impact as some ROBERT GAYMER-JONES make the decisions. For this, we had of the hotels were not right for and come up with two new brands, intimidating people with numbers. during the global fi nancial crisis. Designation: CEO, Sofi tel Luxury Hotels to sell the vision of where we wanted Sofi tel’s strategy. We had to change So and Legend. The tipping point That vision aligned everybody to We made a decision not to cut back on The Challenge: To make Sofi tel to take the company. We were pulling the perceptions of clients who felt that a luxury brand was fi nancial profi tability. When we the direction we wanted to go. The amenities. Since 2009, we have won hotels out of a multi-brand structure Sofi tel would not be able to reach the How He Did It: Gaymer-Jones got started to make more money with 120 company realised that we were several globally recognised awards. and putting them into an independent level of luxury we were talking about. the freedom he needed to design a strategy hotels than with [the earlier tally of] strong in our strategy, that we to reposition Sofi tel by making it an company called Sofi tel and a We had to change both internal and independent company, then committed 206, it showed that the company was weren’t going to waver—and we t Sofi tel, I’m surrounded by management company called Solux. external negative perceptions, and at to that strategy, trusting his plan and a valuable asset to the organisation. had a lot of chances to move away A some very talented people. My the team he’d built

Sunil Raju for Forbes India Sunil Raju for Forbes We then went hotel by hotel and the same time reposition the brand We created a vision without from the strategy! Particularly team creates the look and feel of the

58 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 59 Features/My Learnings

hotels, while I bring in a little Anglo- You cannot know everything takes time to agree. Once everybody Saxon directness of getting things about India sitting in Paris. agrees, it’s amazing how involved done. The mixture works really well. Because we’ve focussed so much everyone is. I speak with the owners As an international company, there on design, women have started [Sofi tel’s partners in each location] are some things that are important noticing the small things that we have and I speak with my boss. But I’ve such as design and gastronomy, and done, accessorising the bedroom, never had a situation where I don’t blending it into the local culture. So, etc. So, we became popular among know what to do. The way it works, we’ve created this cultural adaptation, female business travellers. It just at least in our team, is that once we’ve with me joining the company and happened by chance, and we like it. gone through the debate and we working with my French colleagues to We focussed on French cooking agree, we just do it. If it’s a mistake, create something that is quite unique. blended with local cuisine. We’ve all are responsible and that’s the It’s not too French, not too Anglo- identifi ed one of the best chefs in kind of vision I’d like to create. Saxon, but it resonates with the guests India— Shaukat Ali Qureshi. And It takes passion from the GM in each country where we have hotels. we have a chef who’s Australian, but to get your people to show true What we’ve done is create a obviously does not know Oriental passion for what they do; to be cultural exchange in design, training, cooking. Making sure you have creative; to use your heart to make style and service. Whether it’s the right chef, the right designer decisions versus using your head. Mumbai or Bangkok or Paris, you and the right cultural training In our business, amazing things try to adapt to the location. Not just are all as important as the actual are happening all around us. Amazing in design, but in gastronomy, food, investment itself. Otherwise, levels of service are happening. What wine and training. We don’t allow it becomes wooden dollars. INDwe don’t do is talk enoughIA about it. ourselves to be stereotyped; we The more you talk about those sort want to make sure we adjust to the think right now for you to be of things, the more people genuinely cultural diversity of the location. Isuccessful in the hotel business, relate to doing that kind of service. I think the luxury hotel world is you have to have a personality that can And then you see people who did not give that level of service before being A STRATEGY WORKS AS LONG AS YOU DON’T able to read what the guests want. WAVER. THE PEOPLE WHO QUESTIONED OUR e sometimes choose our STRATEGY ARE NOW OUR BIGGEST FANS Wown locations, and not ------necessarily where everyone is. We felt that the BKC [Bandra-Kurla less about strong brands and more engage people—fellow workers, clients Complex in Mumbai] was the right about personality. The idea of a etc. There is expertise everywhere. location because it is in the middle of brand being consistent…I don’t want My job is to rope in the expertise the diamond trading area. Plus, there to be consistent, I want to surprise required to make decisions that are are lots of embassies and schools here. you positively. [A guest] should right for the company. The thing is We feel this area has a lot of potential. think, this is not what I expected. to ask the question, how can we make Once the hotels are in the right We focus more on the senses— this work? I walk the departments— location, the opportunity to develop a smell, sight and touch. We give each through the kitchen, the laundry—I new client base signifi cantly improves. of our designers a blank canvas. just chat with the ladies there. I We own 40 percent of this hotel [in Isabelle Miaja, who’s the designer learn as much from them as they do Mumbai]. It tells the investment here [Mumbai], came to us with her from me. Nobody likes to be micro- community that you’re putting your own designs from a blank sheet of managed; the GM is here to support own money and not just using other paper and we interpreted it from the people and the organisation. people’s money to run hotels. an operational point of view. Our I turn to my team. They’re the ones In 2012, we’re opening seven designers are not restricted by what who validate, through discussion, hotels. By the time we get to they should and should not do. what works and what doesn’t. Once 2015, we’d like to have 150 Even though we use famous we all agree on the direction we hotels and that’s a really nice designers, we have them want to take, we all feel committed size for a hotel company. working with local designers. and go in the same direction. It just (As told to Bharat Bhagnani)

60 FORBES INDIA | July 6, 2012 Features/Cross Border AMERICAN M&M’s SPEED BUMP The Indian auto biggie wanted to launch its trucks in the USA. But now it is embroiled want to build a globally renowned Perez says he spent the in a legal spat in the country brand in our niche area of sport and money because M&M led him utility vehicles. When you have that to believe that it was ready with By ASHISH K MISHRA mission, you have to be global, and the product and so he had got you just have to be in the US.” the network ready for it. He also n January has been a co-accused with M&M in says that M&M took away trade 1, 1959, the a legal suit. And he himself has been BATTLE STATIONS secrets. He alleges that they also government sued twice—both legal suits mention On June 4 this year, the latest round tried to buy him out. He wants Oof Fulgencio M&M as one of the reasons why Perez in this battle began. Five automobile M&M to compensate for this. Batista fell and Fidel Castro has been dragged to the courts. dealers in the US fi led a suit againstIND M&M rubbishes all this. IA seized power in Cuba. M&M in the district court of Georgia. “Mahindra spent almost $100 million RRumours started doing the THE ISSUE They accuse the company of fraud to reengineer the Scorpio for the rrounds that all children The entire dispute can be summarised and conspiracy, and claim damages of US markets. Mahindra received wwould be taken against their thus: M&M wanted to launch a $60 million. What makes it signifi cant $9.5 million from Global Vehicles, pparents’ wishes and sent to pick-up truck based on the Scorpio is that Pawan Goenka, president of primarily consisting of $8.5 mmilitary schools or to Soviet platform in the US. It chose Global M&M’s automotive & farm equipment million appointment fee to become an lalabourb camps. America’s Central Vehicles to distribute its trucks; John sector, will be testifying under oath exclusive distributor for the US. Yet, InIntelligencet Agency launched Perez was the head of Global Vehicles in a US court in the near future. Global Vehicles allegedly collected $30 OpOperatione Pedro Pan. From at the time (the company ceased M&M is clear in its defence million from the dealers. We do not DeDecemberc 1960 to October 1962, operations in 2011). While M&M was and cites an earlier judgement of a know what has happened to the rest of momorer than 14,000 Cuban children getting the necessary certifi cations, Missouri court where it was a co- the money,” says the email from M&M. arriarrivedv alone in the United States Perez signed on dealers, 347 of them, accused. “While the ruling speaks for M&M admits it tried to buy out and wwere relocated in 30 states. and collected signing fees. But the itself, the court noted that Mahindra Global Vehicles, but only because it JoJohn Perez was one of trucks never came and when the had no contractual relationship with realised that this company was in deep ththee PPedro Pan boys. dealers wanted their money back they any of Global Vehicles’ dealers. Also, fi nancial trouble. “Global Vehicles He was 12 when he came to the found Global Vehicles didn’t have it. Global Vehicles has been sued by lost its credit lines in 2009 and which USUS.. FFrom then on he has been trying Perez says his entire operation a number of other dealers because raised doubts [about] its ability to to ppursueu the American Dream, trying was predicated on the launch of the those dealers correctly recognised pay for any vehicles, had they been hihiss hhand at various entrepreneurial trucks and the money was spent that Global Vehicles was the party ready for export. Global Vehicles was veventures.ntu In 2006 he started Global on getting the network ready for responsible for taking the money pressuring M&M to buy them out in vehivehicles,c a car distribution company, that. Because M&M did not launch, and making false promises,” says an order to save the venture. Mahindra to hhelpe Indian auto major Mahindra it suckered him and the dealers. email response from the company. considered doing so but before it & MMahindra (M&M) launch its M&M says the launch was subject to M&M says the dealers’ fi nancial could access diligence information Global Vehicles broke off negotiations pipick-upck truck in the US. But more certifi cation (called homologation) relationship was with Global Vehicles John Perez rerecently,ce he has been giving Anand from the US authorities, which did not and Perez had no business spending and sued,” says the M&M email. AnandAnand MahindraMahindra MaMahindra, M&M’s chairman and come. The dealers want someone— their money before he gave them the M&M SAYS PEREZ HAD mamanaging director, sleepless nights. either Perez or M&M—to pay. product. “Under Generally Accepted M&M DREAMS OF AMERICA PEREZ SAYS HE SPENT Since 2010, Perez and M&M have Anand Mahindra would really Accounting Principles, Global Vehicles How did it all get to this stage? NO BUSINESS SPENDING bebeene locked in a legal tussle that has like all of this to go away. For years should have treated these amounts as Go back to 2003. Just a year after THE MONEY BECAUSE DEALERS' MONEY virtually derailed the $15.4 billion (by he has wanted to make M&M’s deposits and been prepared to refund its launch, the Scorpio had become M&M LED HIM TO BELIEVE BEFORE HE GAVE THEM revenue) company’s plans to launch automotive products a success in the them to the dealers in the event we M&M’s best-selling product, adding THAT IT WAS READY WITH THE PRODUCT a pick-up truck in the USA. Perez US. In an interview to Business Times were unable to certify vehicles for sale almost Rs 600 crore to the company’s THE PRODUCT

------has fought one arbitration case. He on January 4, 2010, he said: “We Dreamstime.com John Perez: Anand Mahindra: Amit Verma; in the United States,” says the email. revenues. Its shares outperformed ------

62 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 63 Features/Cross Border

in Romania, a former Communist THE DEALERS THE NUB OF THE ROAD country, Perez, along with a bunch THE MAIN HEART OF THE The unlucky 347; 144 of them THE CASE AHEAD CONTROVERSY of investors, bought Automobil CHARACTERS were part of Perez’s still-born Romanesc (ARO). This company Romanian plan and signed up ➤ M&M says its US plans are on ➤ Mahindra & Mahindra made a cheap SUV. The new venture ANAND with GV after Perez’s promises hold. It has no certifi ed vehicle appoints Global Vehicles (GV) was named Cross Lander. In just one MAHINDRA to make good earlier losses. for launch in the US (the previous in 2006 to distribute its low-cost year it lined up 144 dealers in the certifi cation expired). The 57 -year-old pick-up truck in the US based US, who paid about $70,000 each in ➤ The crucial court case between chairman and MD of on the Scorpio platform. franchisee rights to sell the vehicle. the dealers and M&M likely to the $15.4 bln M&M come up for hearing later this year. ➤ Gets $8.5 mln fee from Perez brought in a few vehicles and group saw its entry into US ➤ Pawan Goenka likely to depose GV in 2007 for exclusive rights. worked hard to get the homologation as a big strategic move to PRODUCT DELAYS: M&M under oath before the district court ➤ GV gets 347 dealers on board. done. But they never made it to the US improve competitiveness in of Georgia. market. Perez claims the authorities its home market. announces launch of trucks by ➤ The M&M pick-up truck never in Romania were very corrupt; he 2009; later delayed to Dec 2010. appears in US showrooms. “The best time is when everyone is Terminates contract citing a was unable to operate the factory. advocating against it. The erstwhile clause in the agreement. Late in 2005, Perez abandoned the behemoths of the US auto industry in 2006 at a meeting in Paris. says a former Global Vehicles are in the midst of restructuring, so venture. At the time, several articles Despite all the promises by M&M CONTRACT EXTENSIONS: offi cial who requested anonymity. there are good dealerships avail- Between Aug 2009 to June 2010, were written in Romania and the US able. There could be no better time and Global Vehicles, the pick-upIND IANow homologation (where an M&M extends the agreement with the Sensex by a huge margin. Anand calling Perez a ‘crook’, ‘fraudster’ and a for a challenger.” – In an interview truck couldn’t make it in 2008. M&M automobile product of one country GV thrice signalling its intent to ‘dishonest businessman’. He was sued to Forbes Asia, April 12, 2009. is certifi ed to operate in another), Mahindra’s American Dream began made another promise that the launch the pick-up truck. soon after. According to Perez, Pravin by the Romanian government in 2006. vehicle would be ready for delivery takes two-and-a-half to three years Shah, who was then heading M&M’s in 2009 but didn’t live up to it. In LACK OF FINANCIAL in the US. Its two critical aspects ARRANGEMENTS: M&M rejects international business, called him PLANNING WITH PEREZ PAWAN 2009, Arun Jaura, then the R&D are safety clearance and a pollution GV’s order for pick-ups in ’09 to discuss a possible partnership. But Perez’s track record did not GOENKA head, quit M&M to join Eaton, an norm certifi cate. We know that by saying it does not meet fi nancial Perez came to India, saw M&M’s deter M&M. After a few meetings in The 57-year-old auto component manufacturer. That requirements for large orders. In 2008, M&M had received a Nitrogen operations and went back impressed. 2004 and 2005, the contract between CEO of M&M’s surely must have aff ected the plans Aug, contract with GV ends, but Oxide clearance, which means that The parameters that M&M used Mahindra and Perez was signed in aautomotive division but there are more unexplained issues. is extended. In Dec’10, GV’s order the car’s engine has been cleared. to select Perez aren’t clear. There’s January 2006. For this venture he negotiated the deal with for trucks rejected again. But the safety and the fi nal pollution little evidence to suggest that he had formed a new entity, Global Vehicles. Global Vehicles and met US THE KNOWN UNKNOWNS Perez threatens to sue. certifi cates were still to be procured. dealers several times to expertise in launching emerging Mahindra’s plan was to launch There are two possible reasons for CERTIFICATION: M&M truck Perez believes that M&M had promise them that the truck market brands in the US; nor was two diesel pick-up trucks (a two-door the delay. The fi rst is the defl ated gets emission certifi cation, the clearances but did not launch. was on its way. it the largest distributor of sports version and a four-door version) and market for SUVs in the US. Rebecca much later than expected. M&M did not clarify this point but utility vehicles (SUVs) in the US. an SUV in the US by 2008. Perez says Lindland, director of research at Forbes India has seen the fi nal EPA LEGAL WRANGLES: GV sues that once the contract was signed, IHS Automotive, a consultancy M&M in 2010, but Missouri (pollution norm) certifi cate which THAT MAN PEREZ he again began soliciting dealers to JOHN PEREZ and forecasting fi rm, describes it Court dismisses lawsuit; says it M&M received in February 2011. So, Perez is an intrepid entrepreneur, invest in the venture. “All the dealers The 65-year-old as a perfect storm for M&M. If you has no jurisdiction over M&M. it is entirely possible that it could but not a very successful one. To who were with me in the Romania Cuban entrepreneur look at the mid SUV segment in US dealers sue M&M and GV in not get the clearances when Global make matters interesting, he has a project, all 144 of them, I put them saw an opportunity the North American market alone, in June ’12 for fraud, conspiracy Vehicles was still its distributor. history of promising dealers in the in the Mahindra project without to bring in low- in 2005 this segment saw volumes and misrepresentation. The vexing issue here is, why did US foreign vehicles which eventually taking a single dime,” he says. By cost, fuel-effi cient of 1.3 million units. In 2009, it M&M offi cials, such as Goenka, keep never reach American shores! 2008 he had lined up 347 dealers. vehiclesve into the had reduced to 2,17,000 units. making public statements that the In the 1990s Perez fl oated a But the pick-up truck never came. large US market. “This segment had crashed. pick-up truck was ready when they Florida-based company to bring In 2010, M&M cancelled its Previously bought a Romanian And Mahindra is an unknown in launching a pick-up truck. did not have the clearances? Was it plant to manufacture cheap Romanian cars into the US. Dealers contract with Global Vehicles. The brand competing in a niche which But if one believes that M&M is a simply a case of marketing hype? SUVs and sell them in the US; were solicited, but the cars never contract had a clause which said that plan failed. was under tremendous fi re at the company that takes the long view and All these questions will be raised came. It was a major bust and several that if the pick-up trucks don’t get time and everybody was buying such market volatility does not aff ect in the latest suit. Whatever the “One day before I die, I would dealers lost their money. Perez blamed launched in the US in four years, the want an answer from Mahindra. crossovers. It really was a recipe its plans, then could it be something answers, this case is a clear warning the whole thing on the attitude of the contract would be terminated. Perez Because I have done nothing for disaster,” says Lindland. else? “At the time we were wondering to all Indian companies that are Romanian government, but didn’t now believes that M&M was up to no wrong to them.”— An interview According to this logic, it did what was happening. But my sense trying to globalise. They should give up. In September 2003, taking good because this clause wasn’t in the to Forbes India, June 14, 2012 not make business sense for M&M is that Mahindra underestimated choose their partners well and keep

advantage of the privatisation wave original contract and was introduced to sink another $100 million or so the diffi culties of homologation,” to their stated commitments. Goenka: Vikas Khot; Pawan Shah: Fotocorp; Dreamstime.com; Pravin John Perez: Pawar Icons: Sameer

64 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 65 Features/Enterprise TRUE BLUE Sameer Sain pulled Blue Foods out of debt and losses. He’s SUCCESS now looking for hypergrowth By BHARAT BHAGNANI

hen Sameer Sain expanded swiftly to 13 brands and outcome. Sain sent in Jaspal Singh spun off the 15 cities across India. But the rapid Sabharwal and Amit Manocha, who private equity (PE) expansion took its toll: By 2008, it both worked with Coca-Cola for over business from had Rs 96 crore of debt on revenue a decade before joining Blue Foods. W “The business was in such fi nancial Kishore Biyani’s Future Group in of Rs 85 crore. It had Rs 40 crore of 2009, few would have expected accumulated losses. The monthly distress that the previous owners that the fi rm he founded would,IND attrition rate across the Blue FoodsIA had nothing to lose,” says Sain. just three years later, be running franchise was around 37 percent. In these three months (it the biggest fi ne dining restaurant The business was poorly managed actually stretched to six), Everstone chain (by number of restaurants) and massively undercapitalised. realised that the restaurant chain in the country, serving more than That’s when Sain, who was still had no stable processes, resulting 550,000 people every month. with FCH, got a look into the deal. in huge variations in quality and To see Sain’s handiwork one When the off er for Blue Foods came customer dissatisfaction. only has to step into Mumbai’s in, Everstone was already thinking of Yet it was clear to him that it was High Street Phoenix, among the entering into the consumption space. essentially a plethora of good brands top-rated malls in the country. In “We did not know anything which were poorly managed. So, Sain a 50-metre stretch, one can see about the restaurant business bit the bullet and put in Rs 150 crore Copper Chimney, Spaghetti Kitchen, when the Blue Foods proposal to buy out all the partners completely. Noodle Bar, Bombay Blue and the fi rst came to us,” says Sain. But he Sabharwal now came in as ice-cream chain Gelato Italiano. All knew one thing: As urbanisation CEO and Manocha as CFO. They these restaurants are run by the same spreads to smaller towns, markets started by laying off 1,000 people. parent company—Blue Foods, which will open up for his restaurants. “That was a painful decision but it Sain’s Everstone Capital now owns. Today, the fortunes of this had to be done to save the company “India has three religions: once cash-strapped company have and today we employ more people Bollywood, cricket and eating,” improved dramatically. Blue Foods than when we took over,” says Sain. says Sain, and Blue Foods’ success has revenues of Rs 200 crore. It is now They shut down unprofi table certainly bears that out. making a net profi t and is debt-free. restaurants and strengthened The 41-year-old Sain is an MBA “Hypergrowth comes next,” Sain adds. the back-end supply chain. from Cornell in the US. After 11 years It currently has 150 restaurants The model on which most at Goldman Sachs, he partnered under diff erent brands, which include restaurant chains work is that with Kishore Biyani to form 75 locations of Gelato Italiano, they have a central kitchen where Future Capital Holdings (FCH). which are small-format stores. the food gets semi-cooked and is He founded Everstone Capital, the Sain’s fi rst challenge in attempting then delivered to the individual BLUE FOODS’ RESCUER PE arm of FCH, in 2006. In 2009, this turnaround was to stabilise the restaurants with small kitchens where Everstone Capital founder Sameer Sain he parted ways with Biyani and processes at an operational level. To the fi nal preparation happens. bought out Everstone. With this deal see if this was possible, he put down Before Everstone took over the came all its assets and liabilities, a condition: His own management business, most restaurants also had one of them being Blue Foods. team would run the show for three a full-fl edged kitchen, adding to Blue Foods, founded by Sunil months and the fi nal decision to ineffi ciencies and disparity in taste. Kapur and Sanjay Chona in 2000, had invest would be taken based on the So, a central kitchen was set up Getty Images

68 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 69 Features/Enterprise

Cuisine Asia also raised Rs 100 crore by divesting a part of its stake to Verlinvest, a Belgian investment company. (Everstone refused to share the valuation details.) Of this, Rs 25 crore is to be put into Blue foods while the rest was used to fi nance the acquisition of Pind Balluchi. Sain already has the biggest fi ne dining restaurant chain. He now wants to make Cuisine Asia the biggest and most profi table restaurant chain in India. While it has competition from other quick-service restaurants like McDonald’s, Pizza Hut and BLUE CHIP BRANDS Despite mismanagement, Sain saw potential in chains like Bombay Blue Domino’s, there are hardly any fi ne dining competitors except Anjan so that the food would be consistent beverages and some snacks. When Chatterjee’s Speciality Restaurants. across restaurants. For example, Blue Foods brought the brand to It owns restaurant brands such as makhni sauce is the base sauce that India it expanded the food menu, INDMainland China, SweetIA Bengal, goes into butter chicken, paneer as food is an essential component of Sigree, Machaan and Oh! Calcutta. makhni and dal makhni. In Mughlai any off ering. It set in place a central Speciality, which had a revenue and North Indian cuisine, these dishes bakery to supply these outlets. of Rs 130 crore in 2010, has 82 account for about 20-35 percent Sain is quite confi dent that Blue restaurants across 21 cities in the of the revenue. The Blue Foods Foods has created the infrastructure country and is backed by the private kitchen has standardised this sauce, needed to go for further growth. equity fi rm SAIF Partners. It recently which now comes in semi-processed “We are like Starbucks when they’d came out with a successful IPO that form from the central kitchen. opened their 150th store. From valued the company at Rs 720 crore. Also, to have a central kitchen you have to have at least 30 outlets SAIN NOW WANTS TO MAKE CUISINE ASIA around it to justify the cost. So, isolated restaurants had to be THE BIGGEST AND MOST PROFITABLE shut, for the time being at least. RESTAURANT CHAIN IN INDIA Once Sabharwal and Manocha ------zeroed in on the restaurants to keep, they focussed next on getting a scale point of view, we won’t Given that Cuisine Asia scaled the individual brand architectures have the problem,” he says. up to 180 restaurants from just 82 in right. Each brand was given a Cuisine Asia, the parent company only four years, do Sain and his team diff erent positioning to cater to he created to buy out Blue Foods, know something about the market diff erent consumer segments. recently acquired Pind Balluchi, that others don’t? “Every growth is For instance, Spaghetti Kitchen a 30-restaurant chain that serves possible; profi table growth is more would cater to executives who did authentic Punjabi food. important,” says Anjan Chatterjee, not mind paying a little extra for the This takes Cuisine Asia and who went through his own expansion ambience and the experience. Copper Everstone’s tally of restaurants to strains. “Now I know what not to do, Chimney would have a more family- 180. (Cuisine Asia now owns 85 rather than what to do,” he says. oriented ambience. Bombay Blue percent of Blue Foods. Sunil Kapur, But for now, Everstone has shown would target a young customer base. who was retained on the board, that private equity investors can Even global formats were modifi ed picked up a 15 percent stake in the create jobs and economic value if to suit the Indian market. Globally, company and has exclusive rights they can think and operate like an Coff ee Bean and Tea Leaf serves to the Copper Chimney brand.) entrepreneur in the Indian market.

70 FORBES INDIA | July 6, 2012 Features/Zen Garden THE POWER OF VISION Half of LV Prasad Eye Institute’s 15 million patients receive state-of-the-art treatment free of charge. Founder Dr Gullapalli Rao says he’s spreading integrity along with sight

INDIA Photographs: Vikas Khot

hen KR Narayanan, since he turned 55. Gopalkrishna DR GULLAPALLI N RAO then President of Gandhi reportedly told Dr Rao to Profi le: Founder of the not-for-profi t India, developed do him a favour and agree to do LV Prasad Eye Institute a cataract, his the operation himself. “I am doing He Says: W • Never depend on ‘soft funds’ like secretary Gopalkrishna Gandhi you a favour by not operating on grants and donations for operating asked for Dr Gullapalli N Rao. Dr Rao him,” Dr Rao famously quipped. expenses. dutifully examined the fi rst citizen of Today, I am in Hyderabad to meet • Never keep refunds to patients India and recommended surgery. He this unusual man, who is wearing pending. No pending payments. Pay salaries on time. suggested that his colleague do the a quaint bow tie, has a Mont Blanc • Deliver on each and every promise. operation as he had stopped operating pen in his pocket, but is wearing

July 6, 2012 | FORBES INDIA 71 Features/Zen Garden

a worn-out brown leather belt who he was meant to be. He saw Seetharamaya, a man of small means. that has done its tour of duty. pervasive contrasts everywhere, The students slept at his home Dr Rao founded the LV Prasad even within his family and learned after doing their evening work, and Eye Institute in 1986. He had recently to make reasoned choices in life. His their teacher would dutifully wake returned to India after teaching at grandfather was an ardent freedom them up for early morning lessons the University of Rochester in the fi ghter who gave away his wealth, before they headed out, barefoot, United States. A chance encounter while his uncle lived a life defi ned for school. Seetharamaya taught his with fi lmmaker LV Prasad gave him by a compulsive need to consume. students English and Mathematics, the initial funding he needed to start Dr Rao saw this as an ever-present but also instilled in Dr Rao the the not-for-profi t, state-of-the-art polarity in life and learned that power of discipline and hard work. hospital that treats patients regardless you have to detach yourself, deeply The formative years in the village of their ability to pay. The institute has observe your surroundings and made him a permanent villager served 15 million people at its main then consciously choose a path so in the big world, something that centre in Hyderabad along with three that you do not live a life of false makes him very proud and rooted, tertiary, 10 secondary and 86 primary centres in various states. Half of the YOU HAVE TO DETACH YOURSELF, OBSERVE institute’s patients do not have to pay YOUR SURROUNDINGS AND THEN CHOOSE no matter how complex the treatment. A PATH SO THAT YOU DO NOT LIVE A LIFE the medical fraternity has moreIND or overdraft. No pending payments.IA Dr Rao’s decision to become OF FALSE COMPARISON than its share of non-believers. Pay salaries without fail on the last an opthamologist was easy, as he ------“At LV Prasad, we decided on one day of each month. Spend [based on] followed in his father’s footsteps. thing: we will bring all newcomers only what we earn. All of us are full- His father lived in Chennai near comparison. Among professionals, that he took from Chennai to into the organisation fi rst to time employees and there is no private another great doctor, the legendary doctors as a community are more Vijayawada to Guntur to Delhi to Hyderabad, this is where we incubate practice. Think before spending Dr Govindappa Venkataswamy, who prone to become “victims of lifestyle”. Boston and now back to his roots. the mind, the intellect. When a doctor, every time something comes up. has spread Dr Rao’s idealism far and founded the Aravind Eye Hospital, Usually, that path is a one way street. “In late 1981, my wife Pratibha fresh from college, comes and works Deliver on each and every promise.” wide, a living testament to a man’s and Dr Rao remembers seeing him The man in front of me in the and I decided to return to India. here, the values get imbibed for life. The issue is not only fi scal integrity; faith in the human capacity to make come and go. At the tender age of incongruous bow tie drives around We donated all our savings and If you walk around the campus and it is about beliefs that go deeper. Dr substantial impact in one lifetime. three, Dr Rao was sent to the care in a Zen and comes to work in a then approached friends and ask the security guard or the ward boy Rao tells me about a doctor whose The LV Prasad Alumni Association of his maternal uncle in a village Mahindra Scorpio. There are stories ophthalmic corporations for support. what our values are, he may not be privileges were suspended. She today is a humming network of called Edupagallu, 10 kilometres of how, at events where he was the I then approached NT Rama Rao, able to articulate it but if you ever try was heard telling a patient not to doctors that is making the idea of from Vijayawada. He studied there chief guest, people have shooed then the chief minister of Andhra vision go beyond what the normal until his class 8 at a Telugu school. him away to park remotely. Pradesh, for land. The allotted land “WE ARE ALWAYS READY TO LOSE A eye can see. The community showers The early years in the village His second great abiding infl uence was used for our public health LOT OF PEOPLE BECAUSE THEY DON’T its aff ection and praise on Dr Rao chiselled his inner being and impacted came from his school teacher and optometric education [division]. FIT INTO OUR VALUE SYSTEM” so eff usively that I feel jealous. In the summer of 1985, I was ------It is time for me to go. As I am introduced to Ramesh Prasad, son leaving, I want to understand from Dr of LV Prasad, well known movie to tip him, he will simply not accept be diffi cult because he was “non- Rao how great doctors like him are director and producer, by a mutual it. We are extremely selective about paying”. Ability to pay is not what able to maintain their mooring amidst friend. After discussions and going lateral recruitment and we are always gets you entitlement at LV Prasad. all the adulation. I ask him in earnest, through the project proposal, he ready to lose a lot of people because After meeting Dr Rao, I attend the “Tell me doctor, how do you keep your decided to donate one crore rupees they don’t fi t into our value system.” 25th annual reunion of LV Prasad balance when the whole world creates and 5 acres of land. In recognition, the And what about institutional Institute fellows, which brings this huge, larger than life image and Institute has been named after him.” practices that ensure fi scal together doctors from many parts of doctors are treated like God?” I want to ask Dr Rao a fundamental prudence and governance? the country who, once trained at this “But aren’t we?” he asks question: How do institutions that “I am no fi nancial wizard and great place, have fanned out to create a in mock seriousness. scale maintain integrity? How is chose the path of simple, transparent community connected with the shared I marvel at his audacity and it possible to keep the spirit intact systems that I can understand and feel vision of excellence and service. It both of us laugh our heads off . as new people join? After all, comfortable with: Never depend on we live in a society where many ‘soft funds’ like grants and donations Subroto Bagchi is co-founder & chairman, MindTree and a best-selling author. professionals have an ambivalent for operating expenses. Never keep His brief: Every fortnight, exchange tales of the road with successful entrepreneurs. attitude towards governance and refunds to patients pending. No loans

72 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 73 Features/Cross Border

on a rocket sled and shepherded it goal was to create a framework for who had mutations in a gene called PHARMA’S through Sanofi ,” says Verdine. what bio-geeks call “translational PCSK9. We know that patients who In January, Warp Drive raised medicine,” the process of turning NIH lack this gene, and the protein it $125 million from Sanofi , Third innovations into drugs that industry makes, have low cholesterol and a MISSING LINK Rock Ventures (Verdine’s fi rm) can use. “We have been making huge lower chance of heart attacks; those and Greylock Partners. The key advances in knowledge, but we failed with a version that is overactive have Elias Zerhouni has spent his career trying to understand why only to getting the deal done was that to translate that to patients,” he says. too much cholesterol and die sooner. one in 10,000 drugs makes it to market. Can he fi x Sanofi and the Sanofi committed to buy all or part Only one of 10,000 drugs the Because the underlying biology is of Warp Drive within six years pharmaceutical industry invents so clear, it is far more likely that industry’s woeful innovation record at once? if Verdine’s ideas pan out. “The makes it to market; of those that the PCSK9 inhibitor Sanofi is de- By MATTHEW HERPER number one thing I want to do in start clinical trials, at least 9 of veloping with partner Regeneron R&D is just open the doors and every 10 don’t work or aren’t safe. will prove helpful to heart patients. break barriers,” says Zerhouni. The result: Vast sums are spent for The power of this idea became “And this is a good example.” every success. The number of new clear early in his new job. In 2009, It’s no mystery why Zerhouni, medicines invented per billion dollars Sanofi pledged up to $500 million 61, is in a hurry—Sanofi needs to of research money is halved every for BiPar Sciences, an 18-person invent drugs. The US patents INDon 9 years, an inexorable slump thatIA biotech fi rm with a breast cancer its most famous products, notably Bernstein Research European drug drug thought to target a protein Plavix for heart disease and Ambien analyst Jack Scannell has dubbed called PARP. It seemed to work in the for insomnia, have expired. Chief Eroom’s Law—the opposite of the deadly and nearly untreatable triple- Executive Christopher Viehbacher computer industry’s Moore’s Law. negative form of the disease, but in has managed to deliver a 9.2 percent annual return to shareholders since taking over in 2008 with a string SANOFI NEEDS TO INVENT DRUGS AS of acquisitions, including the $20 THE US PATENTS ON ITS MOST FAMOUS billion purchase of biotech giant PRODUCTS HAVE EXPIRED Genzyme. But Sanofi has gotten only ------two drugs approved since, both puny sellers. Viehbacher declared R&D as his top goal—and needs his old “My fundamental understanding January 2011 failed in a clinical trial. friend Zerhouni to make it happen. of what’s ailing R&D is the fact that Zerhouni put three teams on fi gur- Yet Zerhouni, just 18 months on true translational medicine is not ing out what went wrong, and in just the job at Sanofi , has even more to practiced,” says Zerhouni. “R&D 90 days one told him the drug wasn’t a prove: He thinks he can transform in pharma has been isolating itself PARP inhibitor at all. (Embarrassingly, the way drugs are developed and for 20 years, thinking that animal researchers at Abbott fi gured it out, use Sanofi to do it. It’s work he models would be enough and highly too—and published it.) Zerhouni,

Marthe Lemelle started a decade ago as director of predictive, and I think I want to however, thinks that information the US National Institutes of Health just bring back the discipline of out- could help him zero in on a group of hemist Gregory Verdine to Paris. Taking a brief break from a microbes and put the results in a (NIH), the $31 billion provider of standing translational science, which cancer patients it will actually help. was a Harvard professor scientifi c meeting he was running at database. When you wanted a new science funding that generates the means understand the disease in hu- Meanwhile, he’s using phase-zero with a position at a the Collège de France, Zerhouni sat natural-product drug candidate, research drug companies turn to mans before I even touch a patient.” thinking to jumpstart drugs, too. venture fund, but neither Verdine at a computer and personally you could basically Google it. He for ideas. During the six years he He calls fi nding this kind of strong One example is a drug for systemic C biological proof “phase zero”—a lupus; he rushed it into clinical trials job was helping get his new project— reviewed his ideas. Half of currently called the startup Warp Drive Bio. ran the NIH under George W Bush, building a vast database of natural marketed drugs are derived from Zerhouni liked it—and for good Zerhouni, a pioneering radiologist necessary step before the expensive after his researchers showed him chemicals that might work as drugs— natural sources like bacteria, but reason. Sanofi ’s own researchers were raised and educated in Algeria, set Phase I, II and III gamut of clinical that the protein the drug targets was the money it needed to take off . drug companies have lost interest in considering shuttering their repository the fi rst rules for funding research trials all medicines must run—and correlated with more serious disease Then Elias Zerhouni, head of re- fi nding more. Verdine had a high-tech of 120,000 microbes because they had on human embryonic stem cells demands it of new Sanofi products. in a database of 2,000 patients. search and development at Sanofi , the way of reviving these old-fashioned no use for them. Verdine could turn and banned NIH scientists from A good example of what Zerhouni “This is what I think is going to save $43 billion French drug giant, called methods. He would sequence the waste into profi ts—if he was right. taking big industry consulting fees. proposes: Research he funded at the industrial medicine,” he says. For him up and told him to get on a plane DNA of hundreds of thousands of “Elias put the Warp Drive project His real—and far less publicised— NIH led to the discovery of people Sanofi ’s sake he better be right.

74 FORBES INDIA | July 6, 2012 July 6, 2012 | FORBES INDIA 75 THECELEBRITY100

INDIA

78 104 How Justin Bieber is Seth MacFarlane spending his money gets serious about science 86 Portfolio: 110 Entertainment’s The Rock A-list investors becomes the franchise saver 94 Jennifer Lopez 113 tops our annual The many paths Celebrity 100 to fame 100 J Lo makes a mid-life 114 career correction Thoughts Ethan Miller / Getty Images Ethan INSIDE ➼ THECELEBRITY100

Justin Bieber, VENTURE CAPITALIST INDIA The 18-year-old idol remains a Hollywood force, having earned $108 million over the past two years. With several quiet tech startup investments—including Spotify—he’s now trying to make similar conquests in Silicon Valley

★ By ZACK O’MALLEY GREENBURG Photographs by MICHAEL PRINCE for FORBES

eaning on a soundboard in a Hollywood recording studio, Justin Bieber is about to make me an off er that would prompt instant hysteria among millions of American teenage girls: Do I want to be the fi rst person outside of his inner circle to hear some Lrough cuts he’s considering for his upcoming , Believe? “You’ve gotta hear this, it’s crazy,” gushes the singer. “It’s called ‘Die in Your Arms.’” A moment later his ubiquitous lilt surges full volume from the stadium-quality speakers, a Forbes soulful love song reminiscent of early Jackson 5. Next Celebrity 100 he plays “Happier When We’re Together,” a ballad in which he worries a girlfriend will be unfaithful while he’s on tour. Standing up as his own beatboxing merges No 3 seamlessly with a drum machine at the beginning of “You’re the One,” he does an impromptu variation of the Moonwalk. One can forgive him for the victory dance. Since his debut three years ago Bieber has sold 15 million , grossing $150 Stylist:Joseph D’acetis; Groomer:Vanessa Price. Suit, Shirt, And Pocket Square By Prada,www.prada.com;Belt By Dolce Square By Prada,www.prada.com;Belt And Pocket Shirt, Suit, Price. Groomer:Vanessa Stylist:Joseph D’acetis; Beverly Hilton,Los Angeles By Panerai,www.panerai.com.Location: & Gabbana,www.dolcegabbana.com;Watch

78 FORBES INDIA | JULY 6, 2012 JULY 6, 2012 | FORBES INDIA 79 THECELEBRITY100

million on 157 tour dates across two recording studio, owned by Rodney dozen countries along the way. His Jerkins, who had a hand in many biopic, Never Say Never, pulled in of ’s late-career $30 million on its opening weekend, hits and is now producing songs for just shy of the concert-fi lm record, Believe. His dancing done, Bieber and racked up $100 million at the quickly settles into a chair behind box offi ce in total. His fragrance, a keyboard. Inspiration has struck: Someday, debuted last June and did He starts tapping out a fresh beat, as $60 million in retail sales during comfortable with the sophisticated its fi rst six months on the market. equipment as a pop star a generation Those income streams helped Bieber earlier would be strumming a rhythm personally earn an estimated $55 guitar. “Can you loop that, what I million over the past 12 months and did?” he asks the engineer at one $108 million over the past two years. point. Bieber eventually turns to me: “You have humans, and you “The tech aspect is just fun for me.” have aliens,” says veteran hitmaker Bieber’s tech savvy infuses more INDIA Timothy “Timbaland” Mosley, one than his music—it’s also a core of the producers on Believe. “I think strategy for how the entertainer he’s half-human and half-alien.” intends to translate all that fame Even more impressive than Bieber’s and fast money into enduring riches. earning power: His vast social media Instinctively, he embraces a Peter reach, part of the reason he ranks Lynch model of investing—“I’m not third on this year’s Celebrity 100 going to invest in something I don’t

“I’M NOT GOING TO INVEST IN SOMETHING I DON’T LIKE. I HAVE TO BELIEVE IN THE PRODUCT.”

list. Bieber boasts 21 million Twitter like; I have to believe in the product”— links to the singer. Spotify, which changed: “I do calls every week with always looking for the next thing,” by herself in state-subsidised followers—more than any person but rather than load up on buy-what- is still working to establish itself my business manager and my lawyer,” he says. “If we’re coming in and housing. “Yellow shag carpets,” he on Earth not named . His you-know value stocks, the singer in the US, wouldn’t even discuss he says. “Each week I’m learning putting his name to something, and remembers, “and we had mice.” 43 million Facebook fans are more has been quietly plowing millions Bieber’s investment. Yet he’s among something about my business and his brand and likeness and his social He quickly saturated those carpets than Mitt Romney’s and Barack into private tech startups. According the most prominent examples in what I need to know for my career.” media power, then we will try and with sound waves, teaching himself Obama’s put together. With 740 to his manager, Bieber holds stakes the new Hollywood game: Tech- Yet the core truth of last year’s fi gure out a proper compensation.” to play drums, trumpet, piano and million views, his breakout ballad, in a dozen such companies. Forbes savvy celebrities using their fame statement remains. Bieber is still a The story of how Braun discovered guitar. At age 12 he earned second “Baby,” is the most-watched video was able to verify four: Messaging to secure stakes in Silicon Valley cocky, jokey teenager who, rightfully, Bieber four years ago became so place in a local talent competition for in YouTube history; if you assume platform Tinychat, social-curation darlings while ordinary venture thinks he has the world by the short immediately legendary that the his rendition of Ne-Yo’s “So Sick.” three minutes per song, his VEVO app Stamped, gaming outfi t Sojo capitalists salivate on the sidelines. hairs. His eye for technology and latter is loath to go there. “You want His mother posted videos of his channel’s 2.4 billion impressions Studios and, most critically, Spotify, trends ultimately determines the go or me to tell you how I got started, performance on YouTube for friends are enough to provide one minute of the disruptive music service founded ieber has come a long way in no-go—and some of the investments bro?” complains Bieber, before who couldn’t make the show; soon video to every person on the planet. by Daniel Ek and backed by everyone the fi nance department since have come through his own contacts— relenting. “I really don’t want to.” she was regularly uploading videos Bieber’s infl uence and money- from Sean Parker to Li Ka-shing. BI fi rst broached the subject but the guy actively scouting deals, Bieber grew up in Stratford, of her son covering soul songs. making talents are fairly well These deals aren’t equity-for- with him a bit over a year ago. “I have whether venture capital investments Ontario, a town of 30,000 two hours Around the same time, Braun was established. It’s far more surprising endorsement trades. Bieber put a business manager,” he told me at or brand extensions, has a nickname west of Toronto. His mother was doubling as an Atlanta party promoter what he’s doing with that cash. He cash into each one, and few of the the 2011 Grammys. “That basically worthy of a teen idol’s manager: Scott 18 when she gave birth to her only and a small-time music industry provides a hint in the dim octagonal companies have promoted their sums up the question.” Today that’s Braun, known to all as Scooter. “We’re child, and she raised him mostly executive. When singer Akon asked

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him to research an unrelated YouTube such a small town and things like 20 after its July 2009 release, and sensation, Braun accidentally came that didn’t really happen.” Before his debut EP, My World, catapulted across one of Bieber’s videos—a Web 2.0 they probably never did. him to mainstream fame that fall. nine-fi gure misclick. Astonished Yet there was Bieber, blowing away In December, President Obama by the youngster’s tone and range, Braun and in March 2008. invited him to sing at the White Braun tracked down Bieber’s The duo quickly signed him to House, and he wowed a national mother and off ered to yfl her their joint venture, Raymond Braun audience with a performance on Dick and her son to Atlanta to sing for Media Group, and Braun became Clark’s New Year’s Rockin’ Eve. him and R&B crooner Usher. Bieber’s manager. By September This cultural phenomenon, born “It was just crazy to me because they’d landed him a record deal with of social media, took a modicum of I didn’t really think that it was Universal Music Group’s Island Def fame and tossed it into the digital possible,” Bieber says. “I lived in Jam. His fi rst single cracked the top echo chamber. Bieber opened a

ast the Koi Pond and through the 12-foot front door Bieber’s of Scooter Braun’s Hollywood home, Warner Music Pexecutives sip beers with former Google bigwigs and Silicon Valley entrepreneurs; in the backyard British Business Brain boy band The WantedIND lounges on a poolside divan.IA This is the kind of mix that Braun assiduously cultivates. Scooter Braun made his name with As his cash cow, Justin Bieber, records a few miles away, Braun is tending to his other investments— Justin Bieber. Now he’s diversifying namely tech deals and The Wanted, whom he also manages, along with rapper Asher Roth, singer- songwriter Mike Posner, Australian popster Cody Simpson and Canadian songstress Carly Rae Jepsen. Bieber is fi ne with it—to a point. “It’s a family, and we all help each other,” says Braun. “At the same time, he has that line where he looks at me and he’s like, ‘Your best ideas go to me.’” Bieber is specifi cally referring to tech investments; Braun coinvests with Bieber and also has done a few that his young singer has passed on. In some ways Braun is still trying to make up for the one that got away. In 2004 he noticed an interesting startup he wanted to invest in: Facebook. He e-mailed Mark Zuckerberg, whose address was listed on the home page at that point. Zuckerberg expressed some interest before fi nally telling Braun that he was no longer looking for new investors. “I defi nitely didn’t know how big it was going to become,” says Braun. “But it made me feel confi dent in being aggressive the next time I felt good about something.” Lately he’s been feeling good about companies like Spotify and Tinychat, as well as Uber and Airtime, which he invested in without Bieber. “Sean Parker once said to me, ‘Scooter, I don’t like to have a portfolio. I like to be in things I can understand and take part in and work on.’ And I like that.” He seems to be following the same blueprint when it comes to artists. Bieber taught him everything there is to know about turning teenagers into gold. “Scooter just nags me all the time,” Bieber explains. Then, lowering his voice to mimic his manager: “‘What are you doing today? All right, make sure you get there on time. Justin, make sure to be nice to this person.’ I’m RAISING CAPITAL: Manager Scooter like, ‘What do you mean, be nice? I’m nice to everybody Braun and Bieber. I meet.’ He just wants to make sure I’m on my toes to be, you know, respectful and all this stuff .” —Z.O.G.

82 FORBES INDIA | JULY 6, 2012 Twitter account in June 2009 raun fi rst came up with the in Stamped, an app that allows users and by September had amassed idea of getting Bieber to to rate everything from restaurants 1 million followers. (In 2010 a Binvest in startups three years to music. Spotify was the big one, as Twitter employee said 3 percent of ago. Just as Diddy partnered with founder Daniel Ek recruited a handful the company’s infrastructure was Ciroc and Jay-Z launched a Reebok of recording artists to buy in while dedicated to handling Bieber-related sneaker line, it made sense for Bieber seeking industry credibility ahead of tweets.) He was also an early adopter to directly benefi t from something he his company’s US launch last year. of Instagram, the photo-sharing could promote to his core audience. Next up: Viddy, a video-sharing app service recently purchased by But teenagers aren’t allowed to with an Instagram-like interface. Facebook for $1 billion, and boasts buy vodka, and they generally “Scooter has a team that helps fi nd 1.5 million followers there, more don’t have the disposable income investments,” says Bieber. “Usually than any other user (his girlfriend, necessary to buy $150 shoes. What we work together. If I fi nd something, singer/actress Selena Gomez, they do consume in nearly unlimited I bring it to the table.” In the latter ranks third with 1.4 million). “It quantities, however, is social media. camp, Ellen DeGeneres turned Bieber used to be there was a mystery “I said, ‘This is a space where on to social gaming company Sojo to the artist,” says Bieber. “Now you can move the needle and you Studios, and he soon joined her as an there’s, like, no mystery—the fans can actually be a part of something investor. One of his favourite products: want the connection, they want that’s more than just your money a FarmVille-esque Facebook game to see you Instagramming at a working,’” Braun recalls. “‘You INDcalled WeTopia, whereIA players collect coff ee shop in the morning.” worked hard to get to this point, and virtual points that can be redeemed With such social media these [startups] are benefi tting over as donations to real charities. Neither dexterity Bieber has built himself a what you’re doing. … You should be Bieber nor his manager will reveal formidable platform. The 30-year- old Braun’s challenge: Sustaining the phenomenon. In many ways Bieber “THE FANS WANT THE and Braun are the most intriguing CONNECTION, THEY WANT talent-manager combo since Elvis and Colonel Tom Parker. Both TO SEE YOU INSTAGRAMMING managers wielded the infl uence AT THE COFFEE SHOP.” that comes from discovering their charges young, and both faced the challenge of moving them past the a part of that process.’” Adds Bieber: any other startups he’s backed, but fi ckle market of hysterical, screaming “Social media helped launch my Braun says they’re all still in business. teenage girls. But whereas Parker career. Without the Internet and In a typical Bieber deal, he’ll put took any deal he could and up to 50 without YouTube, I wouldn’t have in about $250,000 at the favorable percent of the action to make sure gotten the chance to put my music pricing generally reserved for his once-in-a-lifetime meal ticket out there and have people hear it.” smart money—the kind of strategic turned into a decades-long feast, Bieber’s fi rst investment came in partners that help a company long Braun is more judicious. His deal 2009, and though he won’t reveal term. Braun won’t disclose the size with Bieber is closer to the standard that company’s name, he’s been on of Bieber’s portfolio but says it’s 15 percent; he thinks long-term a venture capital roll ever since. between 2 percent and 5 percent success requires selectivity, not Last January he and Braun joined of the singer’s net worth. Forbes ubiquity, and aligning all deals with a $1.5 million fi nancing round for puts Bieber’s fortune at about Bieber’s brand. “I don’t let him get Tinychat, along with A-Grade (the $80 million, which translates to involved in anything unless he likes investment fund run by actor Ashton somewhere in the ballpark of $3 it,” he says. Turning Bieber into the Kutcher, billionaire Ron Burkle and million in venture investments. world’s most unconventional venture Guy Oseary, ’s manager). There will surely be more loot to capitalist is simply a sophisticated In May Bieber joined Google put to work. This fall Bieber embarks manifestation of that philosophy. Ventures and Bain Capital to invest on a year-long tour, hitting every

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“I’M TRYING TO MAKE MUSIC THAT’S MORE MATURE AND THAT CAN APPEAL TO ALL AGES”

continent but Antarctica; promoter AEG Live has guaranteed him $80 million for 125 concerts. Anyone who sees Bieber as a fad should take note of that deal. “He’s not just an American domestic phenomenon, he’s a worldwide phenomenon,” says Randy Phillips, AEG’s chief. INDIA On the tour Bieber will be showcasing the more grown-up fare of Believe—a crucial step as he tries to transition from teen idol to adult icon. “It’s not really a transition, it’s just opening doors,” he insists. “I’m trying to make music that’s a little bit more mature and that can appeal to all ages, and I’m not trying to lose my younger fans.” Some compare this blueprint with that of another Justin—Timberlake, a crossover former boy-band star with venture capitalist proclivities. Similarly Bieber is taking acting more seriously, planning to costar with Mark Wahlberg in a fl ick next year. But Bieber maintains there’s only one role model: Michael Jackson, who converted child stardom of Jerkins as an album producer. media breakthrough, MTV. Bieber has to icon status. Inspired by the King of The fi rst day Bieber went to the a legitimate claim on the social media Pop’s largesse, he says he includes a studio, Jerkins played him footage of crown (regarding Lady Gaga, Bieber charitable component in every deal. Jackson in the recording booth; Bieber is dismissive: “She didn’t have online “People were fi ne with buying 20 watched it twice. “There’s something fans before she had mainstream fans”). CDs from Michael Jackson because about Justin, he has this eff ect that And just as Jackson’s bankruptcy- he went and did good things.” reminds me of Michael,” says Jerkins. staving investment was the thing he It’s no coincidence that Bieber “It’s not just music, it’s everything— understood best— catalog— went with AEG’s Phillips, a longtime it’s his spirit, his personality.” perhaps someday Bieber will live Jackson partner, to promote his And why not? Jackson was the well not from the songs he sings but tour. The same goes for his choice genre-defi ning star of his generation’s the assets they let him buy into.

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STEVE NASH Sporty Portfolio Known for his uncanny court vision, the 38-year-old NBA point guard is one of just 12 players to win the MVP award multiple times. His eye off the court is just as daring, through The nine investments that are mostly sports-centric, including Liquid Nutrition ( juice retailer), OneBode (supplements), the Vancouver Whitecaps Major INDIA League Soccer club and a string NEW of gyms that bear his name. “I want to build something special and be a part of exciting growth with diff erent companies and at the same time not impact FAME my kids’ chances of going to college,” says Nash. Dividends from his investments, along with traditional endorsements with the likes of Bridgestone, Dove GAME and Sprint, generate $4 million annually for Nash—a sweet supplement to his NBA salary, First, celebrities used which was $9.4 million this past season. —Kurt Badenhausen their stardom to get ★ Photograph by TIM PANNELL for FORBES free things. Then they got paid to endorse products. Then they took ownership. But the newest A-list perk hits another level entirely: Leveraging their fame to make early-stage investments—or launch startups themselves Groomer: Mandi Black; Location: Venezia Garden Salon, The Grand America Hotel, Salt Lake City The Grand America Hotel, Salt Garden Salon, Groomer: Mandi Black; Location: Venezia

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JESSICA ALBA Closing Her Series A Alba, 31, became an entrepreneur out of necessity. Pregnant with her fi rst child, the actress read the book Healthy Child Healthy World and realised how diffi cult it would be for an average mom to keep her house toxin free. So she used her own money to start The Honest Company, a website that off ers monthly deliveries of non-toxic diapers and cleaning products to new moms. In March, the company closed a $27 million Series A investment led by General Catalyst, Lightspeed Venture Partners and Institutional Venture Partners. Alba, who owns a signifi cant stake, says she prefers building a business to just endorsing a product. “I’m big on data and statistics and hard facts,” says Alba. “This is my passion.” —Dorothy Pomerantz INDIA ★ Photograph by Emily Shur for FORBES

ASHTON KUTCHER Silicon Valley’s Star Demi Moore’s Twitter-happy ex might be best known for playing dim-bulb characters, but ask Kutcher about his investing strategy and terms like “social platform,” “angel investments” and “scaling” roll easily off his tongue. The godfather of celebrity investors, Kutcher, 34, fi rst bought into tech startups six years ago, when he was looking for tools to help his Web production company. Since then he’s become a darling of Silicon Valley, putting his money into such companies as Skype, Spotify and FourSquare. Kutcher says he uses products from all of the companies he invests in, including Airbnb, which was recently given a $1 billion valuation. His advice to new celebrity investors: “Educate yourself. If you’re going to make an investment, make sure you know what you’re investing in, and invest in really good people.” —Dorothy Pomerantz

★ Photograph by Michael Prince for FORBES Hair: Jen Atkin; Makeup: Lauren Anderson

88 FORBES INDIA | JULY 6, 2012 JULY 6, 2012 | FORBES INDIA 89 Stylist: Djuna Bell For Tracey Mattingly; Groomer: Erin Lee Smith; Location: The Bedford House, Beverly Hills THE

90 photo credit CELEBRITY FORBES INDIA than revenue. buyouts, usersaremoreimportant Instagram proved,whenitcomesto are signingupeveryday,and,as a profi round. Thesitehasyettoturn DiCaprio tookpartina$4million this yearafterhisfriendLeonardo actor. HeinvestedinMobliearlier us alltobestorytellers,”saysthe the waytechnologycanempower and video.“I’mpassionateabout a sitethatletsuserssharephotos Maguire, 36,gotinearlyonMobli, sharing isthehotnewspace.Tobey acquisition ofInstagram,photo In thewakeofFacebook’s$1billion Watch Out,Instagram TOBEY MAGUIRE ★

Photograph by t, but20,000newusers |JULY 6, 2012 —Dorothy Pomerantz —Dorothy Emily ShurforFORBES 100 ★ on tosomething.” common,” shesays,“thenIthinkwe’re how muchallwomenreallyhavein with thirtysomethings,fi where 13-year-oldbloggersareengaging cash outlay.“Ifwecanbetheplace monthly visitorswithamicroscopic reached arespectable1.5millionunique old queenofhipsters—thesitehas called infavours,”saysthe32-year- lowcost startupwave—“Weliterally Die. TakingapagefromSiliconValley’s fi to buildhellogiggles.com,asitethey months teamingupwithtwofriends Fox, Deschanelhasspentthepast12 In additiontolaunchingahitshowon Startup Story ZOOEY DESCHANEL rst envisionedasafemaleFunnyor

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INDIA cey Mattingly;

SELENA GOMEZ Tra Mitchell For Group; Makeup: Karan or The Wall Teenage Active Investor Justin Bieber isn’t the only teen star dabbling in early-stage investing—his girlfriend caught the bug, too. In November Gomez joined a $750,000 angel-investment round for photo- sharing app Postcard on the Run. The LA startup, led by former MySpace exec Josh Brooks, lets mobile users snap pictures on their phones (both Android and iOS) and turn them into physical postcards at 99 cents a pop and up. Gomez is an active investor—she says she’s helped Brooks understand his app “from a 19-year-old’s perspective,” encouraging him to add space on each card for messages. “I put my money into the project because I really felt like it had meaning,” she says. —Meghan Casserly

★ Photograph by Michael Prince for FORBES Ackerman; Location: The Bedford House, Beverly Hills Dress By Jexica; Shoes Dolce & Gabbana; Earrings Kara Stylist: Basia Richard For Artistsbytimothypriano.Com; Hair: Richard Collins F Stylist: Basia Richard For

JULY 6, 2012 | FORBES INDIA 93 THECELEBRITY100 The CELEBRITY 100 Movie stars once called all the shots in Hollywood. Not anymore. Thanks to unscripted television and social media, 24-hour personalities dominate this year’s list of the 100 most infl uential people in entertainment— BEYONCE KNOWLES DONALD TRUMP DR DRE ranked by earnings, press coverage and internet impact ★ Edited By DOROTHY POMERANTZ 10 | 17 | $130 MILLION $80 MILLION Spielberg got into TV in a big way this year, The 65-year-old pop rocker is still going strong putting 4 shows, including Smash and megafl op with over 100 shows in the past 12 months and 1 | Jennifer Lopez 5 | Lady Gaga Terra Nova, on the air. In theatres War Horse a 34th album on the way. His animated fi lm, $52 MILLION $52 MILLION was nominated for Best Picture and The Gnomeo & Juliet, brought in $200 million. Adventures of Tintin brought in $375 million. Between American Idol, a new clothing line and A lack of touring pushed Gaga from the No. 1 18 | upcoming tour, Lopez is on fi re. The singer also spot this year, but an arsenal of older hits and 11 | appears with her ex-husband on the Univision a new album kept the singer-songwriter in the IND$90 MILLION IA talent contest Q’Viva! top 5. $57 MILLION Cowell’s newest show, The X Factor, wasn’t the 6 | Swift benefi tted from a huge tour this year, hit he was hoping it would be. Expect a new slate 2 | grossing more than $1 million per night. The of judges for the upcoming season. Rumours $58 MILLION young singer-songwriter also earns big as one have everyone from Britney Spears to Miley $165 MILLION of the faces of CoverGirl. Her fourth album is Cyrus signing on. After a one-year hiatus a successful tour helped With the end of her syndicated show, the media due out this fall. get Spears back on The Celebrity 100 this time. 19 | Rush Limbaugh mogul’s earnings plummeted $125 million from Her Christmas engagement kept her in the news. last year. Still, Winfrey remains the highest earner 12 | $69 MILLION on our list. Her new full-time job: Saving her $58 MILLION struggling OWN cable network. 7 | Kim Kardashian The radio host stirred up plenty of controversy $18 MILLION Woods doesn’t bank as much as he used to this year when he waded into the war over 3 | Justin Bieber for appearances, but he still cashes in on Nike paying for contraception. He’ll now have to win Kardashian is the lowest earner in our top 10, but clothes and shoes, and endorsement deals with back advertisers that left his show in droves. $55 MILLION no one plays the fame game better. Her splashy Rolex, NetJets and others. The teen idol is now a serious investor. Among wedding on E! attracted 10 million viewers, and 20 | his portfolio holdings: Spotify, Tinychat and Sojo her whiplash divorce landed her more than 50 magazine covers. 13 | $105 MILLION Studios, which makes the FarmVille-esque game $20 MILLION WeTopia. The writer/director/producer/star continues to 8 | Jolie wrote and directed her fi rst fi lm, In the churn out at least one movie per year, like the 24 | $45 MILLION Land of Blood and Honey, this year. It fi zzled at recent fi lm Good Deeds. His income is boosted $35 MILLION 4 | the box offi ce, but Jolie still earns from residuals by a trio of TV shows, including House of Payne $53 MILLION Still minting hits off of her 2010 album Teenage and Louis Vuitton ads. and Meet the Browns. Heartbreak has never been so lucrative. The Dream, her divorce from comedian Russell Brand big-voiced Brit gained mainstream fame singing The Barbados-born diva lands on our list for the kept her in the press and inspired her latest hit, away her pain on sophomore album 21, which fi rst time thanks to hits including 'We Found Love' 'Part of Me'. 14 | Donald Trump 21 | Paul McCartney has sold over 23 million copies since its 2011 and 'Talk That Talk', as well as endorsements $63 MILLION $57 MILLION debut; hits like 'Rolling in the Deep' and 'Rumor for the likes of Vita Coco and Nivea. With over 9 | Has It' sent single sales past 25 million. After 53 million Facebook fans, she’s second only to Trump’s Apprentice TV show is still going strong, Sir Paul continues to tour and milk his days with undergoing vocal surgery in November 2011, . Her fragrance, Reb’l Fleur, adds millions $75 MILLION and he sells everything from a Trump fragrance the Beatles. The singer got some extra press she made her comeback performance at the more to her coff ers, as does a heavy touring to shirts at Macy’s. Flirtations with politics kept attention this year when he married New Yorker Grammys, winning all 6 awards for which she schedule that included over 85 shows in the All but written off as a has-been a few years him in the news. A lot. Nancy Shevell. was nominated. Up next: Hitting the studio to past 12 months. Up next: After collaborating with ago, Cruise’s career has rebounded. Mission: work on new material and reportedly moving in Emporio Armani on a small collection last year, Impossible—Ghost Protocol earned $700 million 15 | LeBron James 22 | Jennifer Aniston with a new beau. Record executives may she’s hinted at plans to launch a fashion line of at the global box offi ce. be rooting for a breakup. her own in the near future. $53 MILLION $11 MILLION In addition to earning on the court, James makes Aniston took a break from playing the nice girl 25 | millions shilling for Dunkin’ Donuts, Coke and last year, co-starring in Horrible Bosses as a State Farm. He also owns a stake in Liverpool’s sexually aggressive dentist. Her relationship with $60 MILLION soccer team. Justin Theroux helped land her on 78 magazine The New Jersey rockers continue to rake it in covers. with sold-out shows and a new album on the 16 | Beyonce Knowles way. Guests pay what they can at frontman Jon’s Soul Kitchen restaurant. $40 MILLION 23 | Glenn Beck $80 MILLION The new mom took a break from her hectic 26 | Dr Dre touring schedule this year, but she still has Beck may no longer be on cable, but he hasn’t her music, House of Dereon clothing line and disappeared altogether. He’s succeeding with his $110 MILLION endorsement deals with companies like L’Oréal Web empire, which includes a radio feed, videos Handset-maker HTC paid $300 million for a 51 and DirecTV. and blogs. percent stake in Beats by Dr Dre, the headphone JENNIFER LOPEZ TOM CRUISE BRITNEY SPEARS LADY GAGA STEVEN SPIELBERG company he co-founded with Interscope chief Jimmy Iovine in 2006. L to R: Lucas Jackson / Reuters; David Moir / Reuters; Mario Anzuoni / Reuters; Herman / Reuters;Jason Redmond Jason Merritt / Getty Images / Reuters; Yves L to R: Kevin Mazur / Getty Images; Lucas Jackson / Reuters; Jumana El-Heloueh / Reuters; Mazur / Getty Images; Lucas Jackson Reuters; Jumana El-Heloueh / Reuters; L to R: Kevin Danny Moloshok / Reuters; Eric Thayer / Reuters; Lucas Jackson / Reuters UP DOWN UNCHANGED RETURNS TO LIST NEW TO LIST

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 won) generated 1.34 million pay-per-view  shows still run endlessly in syndication, which 27 | buys. Pacquiao shills for Monster Energy 40 | Peyton Manning means Wolf will rake it in for years to come. $50 MILLION drinks and Hennessy. $42 MILLION 55 |  The NBA lockout dinged 34 | Ellen The quarterback signed with the Broncos this his on-court pay, but the year after missing the 2011 season because $25 MILLION Lakers star still earns  DeGeneres of neck surgery. He still collected his $26.4 Bullock’s 2011 movie, Extremely Loud & plenty from endorsement million salary. deals with brands like $53 MILLION Incredibly Close, didn’t make much noise at the box offi ce. She’ll earn a hefty upfront payday Sprite and Turkish  Airlines. The lesbian talk show host 41 | David Letterman for the sci-fi movie Gravity, though. masterfully handled criticism $45 MILLION SANDRA BULLOCK TOBY KEITH CAMERON DIAZ GISELE BUNDCHEN 28 | Brad from One Million Moms when 56 |  the group objected to JC Penney The host signed a contract that will keep him Pitt  hiring her as a spokesperson. on the air through 2014, making Letterman the $30 MILLION She is also one of the faces of longest-serving late-night host of all time. $25 MILLION CoverGirl makeup. Depp’s summer blockbuster, Pirates of the  Caribbean: On Stranger Tides, made $1 billion, Pitt got his third Oscar  47 | Rafael Nadal  50 | Lionel Messi 35 | Michael Bay  42 | Sean “Diddy” Combs but the star earned most of his money up nomination this year, for $33 MILLION $39 MILLION front. Next he’ll play Tonto in Disney’s The Moneyball, and proposed $160 MILLION $45 MILLION Lone Ranger. to his long-time partner The bulk of Diddy’s earnings came from his Nadal brought in a healthy $8.6 million in Messi has been chosen player of the year for (and fellow Celebrity 100 Transformers: Dark of the Moon premium vodka, Ciroc; sales have doubled in prize money over the last 12 months, but he 3 straight years. Widely considered the best 57 | Adam Sandler  member), Angelina Jolie. made Bay this year’s top-earning the past year. earns more from endorsements for Nike, soccer player in the world, Messi attracts director. Next: Pain & Gain starring Bacardi and Kia. upscale sponsors like Dolce & Gabbana $37 MILLION The Rock and Mark Wahlberg. and Audemars Piguet. 43 | Kristen Stewart  INDIASandler’s Jack & Jill, where the comedian  29 | Ryan  48 | Phil Mickelson played both starring roles, won a disgraceful 10 36 | $34.5 MILLION 51 | Ashton Kutcher Razzie awards, but it won’t hurt the star’s career.  $48 MILLION Seacrest $90 MILLION At the young age of 22, Stewart is the highest- $24 MILLION He’s one of the few actors who still collects $59 MILLION paid actress of the past 12 months. Much of The new Golf Hall of Fame member fi nished third $20 million pay cheques. Lucas returns to this list after sitting her money comes from the Twilight franchise, at the recent Masters Tournament. Off the tee With Kutcher as star, ratings on Two and a After signing on to host back in the producer’s chair with the but she’s also starring in Snow White and the Mickelson endorses brands like Callaway and Half Men have slipped a bit, but the show is 58 | Will Smith  American Idol for at least 2 recent Red Tails. Lucas still earns Huntsman. Rolex and is designing golf courses in China. still a major hit for CBS. The Twitter heartthrob more years, Seacrest also millions from the Star Wars franchise. recently went through a very public split from $30 MILLION  wife Demi Moore. recently inked a new deal 37 | James Patterson  44 |  49 | Toby Keith After a break from the big screen Smith is back with Comcast that extends his in the summer blockbuster Men in Black 3. His presence within the company $94 MILLION $42 MILLION $55 MILLION children are threatening to eclipse his fame. from E! to NBC, where he’ll 52 | Floyd Son Jaden is a movie star and daughter Willow Patterson is a writing machine. The The Real Madrid player gets a nice pay boost In addition to touring, Keith opened 2 more cover news, sports and branches of his I Love This Bar & Grill churns out hits. entertainment. Look for the author published 14 new books in every year on his soccer salary. He also endorses Mayweather  2011, almost all of which landed on the products from Castrol, Konami and restaurant, including one in Boston, now his busy host on NBC’s Olympic second-best-performing location.  coverage this summer. Seacrest bestseller list. a Portuguese bank. $40 MILLION 59 | Cameron Diaz is also the man behind the  Mayweather is the biggest draw in since $34 MILLION Kardashian TV empire, producing 38 | Jay-Z  45 | Mike Tyson, the fi rst boxer to have 4 straight all of the clan’s shows. His newest hit is $35 MILLION fi ghts eclipse 1 million buyers on pay-per-view. Diaz’s latest, Bad Teacher, grossed $216 million Shahs of Sunset about Iranian-Americans $38 MILLION “Money” Mayweather commands a bigger on a tiny budget of $20 million. Diaz took home a living in Beverly Hills. West’s collaboration with Jay-Z, Watch the percentage of each boxing purse because he nice chunk of that. She’ll play a rodeo queen Becoming a father to baby Blue Ivy didn’t in the upcoming Gambit. slow down Jay-Z’s prodigious pace of Throne, went platinum. The hip-hop star also also acts as promoter through his company, 30  always attracts plenty of media attention, Mayweather Promotions. In his latest | Howard Stern money-making. The hip-hop star cashed in  $95 MILLION on Watch the Throne with Kanye West and a most recently for his relationship with Kim bout he defeated Miguel Cotto by 60 | Tom Brady slew of non-musical ventures. Kardashian. unanimous decision on May 5 $27 MILLION The radio star hits network TV this year as to run his record to 43 wins one of 3 judges on the talent show America’s 39 | Jerry Bruckheimer  46 | Leonardo DiCaprio  and zero defeats. He’ll The Patriots may have lost the Super Bowl, but Got Talent. net as much as $50 Brady is still one of the best-paid stars in the $115 MILLION $37 MILLION million when all of NFL. His dejected pose after the game inspired the revenue is split the meme “Bradying.” 31 |  Bruckheimer’s fourth Pirates of the Caribbean The star’s recent big movie, J Edgar, was a box offi ce dud that failed to earn any major Oscar up (our earnings $52 MILLION was a huge hit, bringing in $1 billion at the global cut-off was May 1).  box offi ce. Up next: The Lone Ranger, with nominations. Next up for DiCaprio: A 3-D version 61 | Gisele Bundchen of The Great Gatsby. The boxing world Federer is the best-paid tennis player in the Johnny Depp as Tonto. eagerly awaits a $45 MILLION world. He gets millions for exhibition matches Mayweather versus and to push products like razors and chocolate. Manny Pacquaio fi ght. Bundchen runs a mini-empire that includes lines of clothing and lingerie. Criticising husband Tom 32 |   Brady’s teammates after they lost the Super 53 | Kenny Chesney Bowl got her more attention. $46 MILLION $44 MILLION  The soccer star just signed what is likely to A big tour helped Chesney return to our list 62 | Mark Burnett be his last contract with the LA Galaxy. At 37, this year. The country star’s 13th album, $55 MILLION Becks has his eyes set on team ownership. Welcome to the Fishbowl, is scheduled to hit Welcomed his fi rst daughter with wife Victoria stores this summer. Its fi rst single, 'Feel Like Reality master Burnett has another hit on in 2011. a Rock Star', is already selling well. his hands with The Voice. He also has The Apprentice, Survivor and Shark Tank on air. 33 |  54 | Dick Wolf  63 | Alex Rodriguez  $67 MILLION $70 MILLION MICHAEL BAY ELLEN DEGENERES JAY-Z KRISTEN STEWART PEYTON MANNING $34 MILLION Pacman is still a huge draw in the boxing world. Wolf is down to one prime-time show, Law His 2011 fi ght against Shane Mosley (Pacquiao A-Rod makes most of his money on the fi eld. L to R: Ray Tamarra / Getty Images; Phil McCarten / Reuters; Paul Zimmerman / / Getty Images; Phil McCarten / Reuters; Paul L to R: Ray Tamarra / Reuters; Rick Pelissier Wilking / Reuters Getty Images; Jean-Paul & Order: Special Victims Unit, but his TV L to R: Marcos Brindicci / Reuters; Carlo Allegri / Reuters; Steve Marcus / Reuters; Steve Marcus / / Reuters; Craig Durling / Zuma Newscom (Bottom) Reuters; Benoit Tessier

96 FORBES INDIA | JULY 6, 2012 JULY 6, 2012 | FORBES INDIA 97 THECELEBRITY100

Unlike some of the other athletes on our list, he 72 | Ben Stiller  earns only a couple million from endorsements 76 | Sofi a Vergara for brands like Nike and Rawlings. $33 MILLION $19 MILLION  Stiller’s latest, Tower Heist, struggled at the box The Modern Family star’s overnight success 64 | offi ce, but he still earns plenty for comedies like was actually 17 years in the making. In $40 MILLION the upcoming The Secret Life of Walter Mitty, addition to acting and ad work for Pepsi and which the actor is also directing. CoverGirl, Vergara co-heads an entertainment The comedian had a high-profi le ad during the management company. Super Bowl this year, but most of his money comes from touring. Seinfeld’s eponymous  sitcom remains lucrative. 73 | Khloe 77 | Serena Williams $13 MILLION  65 | Kardashian Williams was sidelined in 2011 with $26 MILLION serious injuries, but she still managed to Odom win 2 of the 6 tournaments she entered. Hanks’s Larry Crowne, which the actor co-wrote, She is now ranked ninth in the world produced and starred in, was a fl op, earning $11 MILLION and has a clothing line that sells only $52 million on an estimated budget of Kim might be the most famous on HSN. $30 million. Next up: A fi lm based on Richard of the 3 Kardashian sisters, Phillips’s tangle with pirates. but insiders say Khloe is 78 | Alec the sister with the business 66 | Stephen King  smarts. With Kim and Baldwin  Kourtney she designed the $39 MILLION Kardashian Kollection for $15 MILLION King is still going strong with 2 books in the Sears, promoted apparel line The 30 Rock actor is also last 12 months: 11/22/63 and The Wind Through K-DASH on QVC, opened a a breakout Twitter star. He the Keyhole, the eighth book in his Dark Tower new location of the family earned legions of followers series. A planned fi lm adaptation of the series boutique, DASH, in New York IND(and detractors)IA when he got fell apart. and Kardashian Khaos, a into a fi ght with a fl ight attendant novelty store, in Las Vegas’ who wanted him to stop playing Mirage Hotel. Those are all Words With Friends on his phone. 67 | Taylor Lautner new revenue streams for $26.5 MILLION 2012. And while the family just 79 | Janet re-signed with E! for 3 more Lautner earned the same amount as his Twilight years of Keeping Up With the Evanovich co-star Robert Pattinson in the past 12 months, Kardashians, Khloe’s spin-off but he got a lot more press attention. So Lautner show with husband Lamar Odom $33 MILLION lands on our list for the fi rst time while Pattinson is a hit in its own right. The couple’s drops off . At the age of 69 Evanovich is still fragrance, Unbreakable, is a big seller churning out books. She released her at Perfumania.  latest Stephanie Plum book, Explosive 68 | Brad Paisley Eighteen, this year. A fi lm adaptation $32 MILLION 74 | Seth MacFarlane of the series starring Katherine Heigl bombed. The country crooner’s 18th album, This is $36 MILLION Country Music, went gold last June. The busy MacFarlane is best known for his animated 80 |  singer had a major tour and is already at work TV shows like Family Guy and American on his next album. Dad, but his secret passion is science. The $16 MILLION  TV producer is using his infl uence to bring a Roberts is at an age and fame level when 69 | LilWayne new version of Cosmos to TV. she can pick and choose her projects. This $27 MILLION year she made some questionable choices. 75 | Charlize Theron Larry Crowne bombed, and Mirror Mirror The diminutive rhymester’s Carter IV sold nearly is struggling at the box offi ce. 1 million copies in its opening week last summer, $18 MILLION but the bulk of his money came from 51 shows Theron’s career is booming. She stars in 81 | Eva Longoria  and a multimillion-dollar pact with Pepsi’s 2 big-budget fi lms this summer: Snow White Mountain Dew. and the Huntsman and Prometheus. Theron’s $15 MILLION also gotten plenty of attention for her recent With Desperate Housewives winding down, 70 | Dwayne Johnson adoption of a baby boy. Longoria is well positioned to stay in the $36 MILLION The Rock returned to wrestling this year and established himself as Hollywood’s biggest up- and-coming action star, reviving the Fast and Furious and Journey to the Center of the Earth franchises. 71 | Maria Sharapova  $26 MILLION Sharapova earns way more off the court than on thanks to sales of her Cole Haan ballet fl at and endorsements with companies like Samsung. Up next for the tennis star: A candy company. STEPHEN KING LIL WAYNE CHARLIZE THERON SERENA WILLIAMS JOHN GRISHAM Top: Gregorio Binuya / Everett / Newscom; L to R: Joe Kohen / Getty Images; Hans Deryk / Newscom; L to R: / Everett Joe Kohen Gregorio Binuya Top: / Reuters; / Reuters; Getty Images Vivek Prakash / Reuters; Benoit Tessier

98 FORBES INDIA | JULY 6, 2012 limelight. Her new show, Devious Maids, is in production and her perfume, EVAmour, sells well on HSN. 82 | John Grisham  $26 MILLION Even when he’s not writing about legal intrigue, Grisham’s books are bestsellers. His latest, Calico Joe, is a father-son tale set against the world of professional baseball. It debuted at No. 1. MERYL STREEP JK ROWLING HUGH LAURIE LI NA TIESTO 83 | Meryl Streep  $12 MILLION but the actress, who is expecting her third deals with Hugo Boss and Longchamp. It’s been a few years since Streep starred child, needs a hit. in a box offi ce winner, but her latest, 95 | Ray Romano  The Iron Lady, a biopic about Margaret 90 | Jeff Dunham  Thatcher, won the actress her third Oscar. $18 MILLION $22.5 MILLION Romano’s new TV show, Men of a Certain 84 | Tiesto The ventriloquist is one of the biggest touring Age, was cancelled, but he still cashes in on $23 MILLION acts in the nation. Dunham builds his own Everybody Loves Raymond. dummies and helicopters. The self-professed The Dutch DJ grosses $250,000 per night on nerd also has a Mac museum with 40 96 average; low production costs let him keep the functioning computers. | Zooey Deschanel bulk of that sum from more than 100 shows in $9 MILLION the past year. 91 | Larry the Cable Guy INDIA The actress has a hit with the Fox show New   Girl. Thanks to endorsements, her earnings 85 | JK Rowling spiked since her fi nances were made public $17 MILLION $18 MILLION in divorce fi lings last year. Harry Potter books and movies may be at an end, The comedian earns big money from  but the boy wizard is still hard at work online. touring, but he also has endeared 97 | Bethenny Frankel Rowling launched Pottermore this year, an himself to a whole generation $12 MILLION interactive place for fans to play and download of little boys playing Mater in e-books. Disney’s Cars franchise. Our 2011 cover girl takes a tumble on our list because her biggest earnings  came from selling SkinnyGirl 86 | Sarah Jessica Parker 92 | Skrillex cocktails to Beam last year. $15 MILLION $15 MILLION  Parker’s latest movie, I Don’t Know How She The side-mulleted sensation 98 | Tim Allen Does It, bombed. Still, Sex and the City re-runs helped popularise the dubstep $14 MILLION keep the cash fl owing. subgenre of electronic music, winning 3 Grammys for his work. Allen is back on prime-time 87 | Li Na He cashes in on the road. Skrillex television with Last Man Standing, played over 150 shows in the for which he is being paid millions. $18 MILLION past 12 months. Allen still earns from Home Improvement and the Toy Story Li is the fi rst Chinese tennis player ever to win a franchise. Grand Slam event. She’s now in demand 93 | Tina Fey  for endorsement deals. $11 MILLION 99 | Melissa 88 | Hugh Laurie  30 Rock is still more of a critical than ratings success, $18 MILLION but syndication helps Fey’s TV McCarthy earnings. The writer/producer/ $6 MILLION This is Laurie’s last year playing the cranky Dr actress gave birth to her second House. His TV show is going off the air after 8 daughter, Penelope. Melissa McCarthy had a breakout year. Her years on Fox. Oscar-nominated performance in Bridesmaids—  which pulled in $290 million at the box offi ce— 89 |  94 | Kate Moss was lauded by critics. On CBS, McCarthy is one- $9 MILLION half of Mike & Molly, which averages 10 million $9 MILLION viewers each week and earned her a Golden Moss is a fashion double threat, Globe in 2011. Up next for the Illinois native: Witherspoon is no longer box offi ce gold. Her landing rich modelling jobs and 2011 comedy, How Do You Know, was a major Judd Apatow’s This Is 40 and Identity Theft, designing gigs. She has a fashion line alongside Jason Bateman and Jon Favreau. fl op. The recent This Means War did a bit better, through Top Shop and endorsement 100 | Adriana Lima  Reported by: Zack O’Malley Greenburg, Kurt Badenhausen, Meghan Casserly, Jenna Goudreau, Jeff Bercovici, $7 MILLION et Emmanuel / Sipa Newscom; Chris Pizzello AP (Bottom) Clare O’Connor, Erin Carlyle, Ryan Mac, Brian Solomon, Natalie Robehmed, Sean Kilachand. Research: Susan Radlauer, Julia Bricklin. Sources: Forbes, Google, LexisNexis, Factiva, The Nielsen Co., Pollstar, Box Offi ce Mojo, The Brazilian Victoria’s Secret model is now Euromonitor International, Publishers Weekly, IMDBPro. Methodology: Rankings based on a mix of estimated earn- the face of Donna Karan. She got plenty of ings, press coverage in major publications and internet footprint, including Twitter and Facebook, from May 1, 2011 press this year for 2 Super Bowl ads, one for Telefl ora and one for Kia. to May 1, 2012. Nakao / Reuters; Suzanne Plunkett / Reuters; Phil McCarten / Reuters;L to R: Yuriko Getty Images; Joff

JULY 6, 2012 | FORBES INDIA 99 THECELEBRITY100

Planner and Maid in Manhattan—had been felled by fl op after fl op. Her last The two albums, Como Ama una Mujer and Brave, both released in 2007, sold fewer than 400,000 units combined, TURNAROUND prompting a split with her longtime label, Sony. Jersey Girl, Angel Eyes, Enough and Gigli were box-offi ce disasters of historic nature. The style ARTIST icon’s initial fashion lines—Just Sweet and Sweetface—shut down in 2008 Over 40, with more bombs than an artillery range, and 2009, respectively, leaving her Jennifer Lopez seemed washed up. Then American only her fragrance brand, Glow. The downfall can be traced back Idol gave her a second chance, which she’s taken to 2003, when she also had an ugly, all the way to the topIND of our Celebrity 100 IAlitigious breakup with her manager, Benny Medina, who had worked ★ By HANNAH ELLIOTT & JENNA GOUDREAU wonders with , Sean Photograph by TONY DURAN / CORBIS OUTLINE Combs and Will Smith before Forbes discovering the Bronx-born t’s 9:30 on a Thursday night of clothing for Kohl’s. Celebrity 100 Lopez. That same year she in Los Angeles, and Jennifer Besides judging Idol, she’s engaged in a too-public Lopez is on the giant American released her fi rst album hookup with actor Ben Idol stage, about to strip in four years, Love?, and No 1 Affl eck that turned her into off her white terry cloth picked up three movie a tabloid staple and late- bathrobe.I Practicing for a performance roles (What to Expect night fodder. (A subsequent of her upbeat new single, “Dance When You’re Expecting, Ice marriage to singer Marc Anthony Again,” which will appear on the Age: Continental Drift and Parker, recently ended in divorce.) The following week’s Idol, the 42-year- which is due out in 2013). In the past J Lo brand had lost its lustre. old reveals a rhinestone body suit 12 months, Forbes estimates, she That was the state of play three gilded in a peacock palette. Casper raked in a whopping $52 million— years ago when Lopez turned 40, a Smart, her 25-year-old boyfriend enough money, when combined milestone that in Hollywood’s double- and dance partner, puts his hands with her media omnipresence, to standard vortex often accelerates on her shoulders, hips, thigh and complete a remarkable comeback. a career decline for women. Then then snaps her around to face him, Last year, Lopez was number 50 American Idol came calling. her caramel hair teased beach-sexy on Forbes’ annual Celebrity 100 TV is almost always a huge career- silhouetted against magenta lasers. list—this year, she’s number one. comedown for a star of Lopez’s “That’ll sell tickets,” whispers “I’m a little bit tired now, I’m not one-time wattage, especially since the Randy Phillips, head of AEG Live, going to lie,” says Lopez. “We’ve been show’s ratings were slipping, down who is producing Lopez’s upcoming rehearsing, doing Idol, promoting 20 percent from their high. Linchpin tour, as he watches just off -stage. “I the movie. It’s a lot of stuff . The Simon Cowell was out, abandoning don’t mean to be crass, but it’s true.” kids. But I feel really in the zone.” what seemed to be a listing ship. Actually, anything Lopez will sell Even two years ago it was quite When Lopez agreed to become a right now. In the last year she graced the opposite. Her meteoric career— judge, for one year and $12 million, it 46 major magazine covers, topped more than 40 million albums sold, reeked of desperation on both sides. People’s 2011 Most Beautiful list, paced by Billboard-toppers like “If But the risk worked. Last year, signed deals with L’Oréal, Gillette, You Had My Love,” “Ain’t It Funny” when she and rocker Fiat and TOUS jewellery, and and “Jenny From the Block,” and Steven Tyler joined the show, ratings launched a Jennifer Lopez collection 23 movies, including The Wedding popped 4 percent. Idol humanised her.

100 FORBES INDIA | JULY 6, 2012 JULY 6, 2012 | FORBES INDIA 101 she goes,thereis’?She’sgot that says Tyler,echoingAmericaat large. love withherwhenIgottomeet her,” did wellandwhentheyfailed. “Ifellin who gotemotionalwhencontestants self-made, empatheticsinglemother, grabbing siren,metahardworking, Viewers, whoknewonlyanattention- Few stars enjoyLopez’s risetothetop.Fewer doittwice. J LO’SHIGHS billion total sincethen. Inc. Her18fragranceshavesold$2 Launched fragranceGlowwithCoty 2002 with a reported $12millioncontract.with areported Signed onasajudgeAmericanIdol’s tenthseason 2010 “You knowthatsaying,‘Wherever at $94million. top-grossing movie Manhattan, her comedy Maidin Starred inromantic 2002 on themap. million andputLopez which grossed$35 born Latinasinger, film aboutaTexas- Starred inSelena, a 1997 AND LOWS AND Gillette, TOUS jewelry andFiat.Gillette, TOUS jewelry endorsement dealswithL’Oréal, Kohl’s andsecuredorexpanded Launched clothingcollectionwith 2011 soul mate”and“themostconsistent the returnofMedina,her“creative pinkies, afterherpracticeroutine. walking withherboyfriend,holding Idol cast,ashewatchesLopez titan whomentorstheAmerican Iovine, theInterscopeRecords power. Sheisaforce,”saysJimmy Affleck, wasuniversallyAffleck, A keypartofthismasterstroke: panned andmade Gigli, herbiggest costarring then box-office flop, just $6million. boyfriend Ben 2003 2003 copies combined. selling fewerthan400,000 were financialfailures, Ama unaMujerandBrave, Two albumreleases,Como 2007 in Panama City. dates beginsinJune music tourwith60 First international 2012 3 millioncopies. selling over album, Onthe6, herfirstReleased 1999 D N I the $5millionrangeforLopez. Coty Inc.andalicensingfeein million inretailsalesayearfor line, whichgeneratesover$100 scent toherten-year-oldfragrance In May,sheintroducedan18th with atourofwinnerstofollow. Q’Viva! TheChosen (Latino AmericanIdol,anyone?), Spanish-language talentcompetition production companypremiereda audiences. InJanuary,Lopez’s capitalise onthesenewlyengaged agency HollywoodBranded. executive ofentertainmentmarketing range,” saysStacyJones,chief demographic, almosteveryage deals. “Sheappealstosuchawide in additiontotheotherendorsement her newroleasthefaceofL’Oréal, Def JamRecordsandhelpedengineer Idol gambit,spearheadedamoveto manager, heendorsedtheAmerican Lopez describeshim.Backasher man inmylifebesidesdad,”as The Celebrity100listnextyear. attention tokeepLopezonthe topof there mightbeenoughdollars and fragrances, fashionandfi $20 million.Combinethatwith her salary nearlydoubledthisyearto ratings haveagainfallen,Lopez’s the tour.AndwhileAmericanIdol’s Lopez willearn$13millionfrom to come.Forbesestimatesthat money, it’saboutthemoney.’” the quoteis‘It’snotabout new single.Hepauses:“When the just-releasedvideoofLopez’s other endifShakiracouldretweet cellphone askingthepersonon chat hecouldbeoverheardonhis J Loresurgence.Rightbeforeour working feverishlytoleveragethe eh?” laughsMedina,whohasbeen worldwide tour.“Nicetiming, In June,she’llstartherfi Lopez ismovingquicklyto And therewillbeplentyofmoney THE CELEBRITY JULY 6, 2012 , onUnivision, IA |FORBES INDIA lms, and rst 100 103

Selena: Zuma Press / Newscom; Maid In Manhattan: Newscom; Gigli: Newscom; Kohls: Neilson Barnard / Getty Images; Concert: Kevin Mazur / Getty Images THECELEBRITY100

Seth MacFarlane GETS SERIOUS The Family Guy creator makes millions with his crass humour. But his next project will shock even INDIA his most hardened fans: He’s bringing Carl Sagan’s Cosmos back to television

★ By DOROTHY POMERANTZ Photographs by EMILY SHUR for FORBES

eth MacFarlane came in 74th on this year’s Celebrity 100 by making people laugh. But sitting in a booth at the Polo SLounge in Beverly Hills, the 38-year- old creator of the hit Fox cartoon Family Guy is surprisingly distracted by the cackles emanating from a nearby table. “What I wouldn’t give for a sack of manure,” he says in a dead-on Woody Allen impersonation. Usually it’s MacFarlane who is getting the yucks. His animation empire, which includes American Dad and The Cleveland Show, generates more ad revenue for Fox than the venerable Simpsons. (All four shows are bundled on Sunday Forbes night for what Fox accurately Celebrity 100 calls Animation Domination.) Family Guy alone has earned more than $200 million for Fox. No 74

104 FORBES INDIA | JULY 6, 2012 JULY 6, 2012 | FORBES INDIA 105 THECELEBRITY100

MacFarlane’s sense of humour in new areas. His fi rst movie project, director Jerry Zucker to help spares no sacred cows—abortion, Ted, hits theaters this July. The $65 Hollywood work with scientists to diarrhoea and matricide represent million fi lm, which MacFarlane wrote, ensure shows like CSI are factually some of his lighter fare. A typical directed and kind of stars in, is not a correct. Through the group he met the gag: Stephen Hawking having sex huge departure from his Family Guy famous astrophysicist Neil DeGrasse with his similarly disabled wife. The brand of humour. It tells the story of Tyson. “He said he was going to host biggest part of MacFarlane’s genius, a man (Mark Wahlberg) whose teddy Cosmos, and he was trying to sell the however, might be his business model. bear came to life when he was a child, show to a cable science network,” says As the creators of the The Simpsons with the two still living together as MacFarlane. “I said, ‘Let me take you have learned over the past 20 years, cursing, dope-smoking best buds. into Fox and we’ll see what happens.’” channeling racy humour through the MacFarlane voiced Ted and acted the Fox might seem like a strange prism of animation means the cast role using motion capture technology. network to host a reboot of Cosmos. never has to age, and MacFarlane is His second initiative is further The show was one of the most able to keep an outsize share of the out there, at least for him. The man popular ever on PBS, but much of profi ts—$36 million over the past 12 who never met a toilet or sex joke its success depended on viewers months, Forbes estimates—for himself. he didn’t like is deeply concerned buying into Sagan’s poetic vision The son of a teacher, MacFarlane that the US has lost its passion for of space as the exhilarating new drew cartoons from the age of two. He science. No one seems to care about frontier for exploration. Not exactly studied animation at the Rhode Island the space programme. Evolution has INDthe kind of show you’dIA expect on a School of Design and worked on somehow become a debatable fact. network dominated by shows like cartoons like Johnny Bravo until 1999 “The resistance to science is idiotic,” American Idol and MacFarlane’s when Fox picked up Family Guy. The says MacFarlane, sipping on a coff ee naughty cartoons. “It’s not going rise and fall and rise of the show about that he declares way too fancy. “Those to be the biggest money earner,” admits Kevin Reilly, head of THE RESISTANCE TO SCIENCE IS entertainment at Fox Networks. “But it could have a cultural impact.” IDIOTIC, SAYS MACFARLANE Ann Druyan, Sagan’s widow and the force behind the new Cosmos, a clan from Quahog is now the stuff people shouldn’t be allowed to have says that the network has agreed of Hollywood legend. After getting a antibiotics. Give us back your TVs to make the show using cutting- big post-Super Bowl push, Family Guy and the dentures.” But MacFarlane edge visual technology (the original failed to fi nd a large audience. It didn’t is serious, putting his money and was one of the fi rst to use green help that Fox repeatedly changed his clout with Fox, where his mouth screens) and is letting her have the night it aired. After two seasons is. Fox plans to air a reboot of the control over the content of the show. the network gave up on the show. 1980s PBS science show Cosmos, one “Seth was already a hero in our But not on MacFarlane. He started of the most popular and least hip household because of Family Guy,” developing his second show, American programmes ever made. MacFarlane says Druyan, who has two sons. “I Dad. Meanwhile, Family Guy started is also spending his money to help knew he would be someone with a to attract a large fan base on DVD get late Cosmos host Carl Sagan’s sceptical nature and an impatience and in reruns. In 2005 Fox made substantial collections of letters, with superstition and nonsense.” the surprising decision to bring the notes and drawings into the Library Perhaps in penance, the king of show back. The fi rst new episode of Congress. “I never met Carl Sagan, animated lowbrow hopes the show attracted 11 million viewers, and a but this is my way to give something will help inspire better programming hit was reborn. The Cleveland Show, back to him for all of the things he on TV. “The trend today is vampires, launched in 2009, gave MacFarlane gave to me,” says MacFarlane. zombies, angels, all the stuff that puts a cartoon troika on Sundays with the MacFarlane’s path to Cosmos me right to sleep,” says MacFarlane. Simpsons as his formidable lead-in. started with the Science & “It’s too bad because it’s so much This year MacFarlane is trying to Entertainment Exchange, an less interesting than the diversity of leverage his TV animation success organisation set up by Airplane stories you can tell with science.”

106 FORBES INDIA | JULY 6, 2012 THECELEBRITY100 The FRANCHISE SAVER Dwayne “The Rock” Johnson has emerged as the world’s biggest action hero through feats not even the mighty Stallone or Schwarzenegger could ever pull off —reviving left -for-dead movie brands

IND★ By DOROTHY POMERANTZ IA Photographs by MICHAEL PRINCE for FORBES

wayne “The Rock” Johnson’s formula for box offi ce success is two-fold: “I can kick ass better than anyone on the planet,” he says. “And I have a decent smile.” He fl ashes his teeth winningly to try to underscore his point. But the numbers are more impressive: This 6-foot-5 wrestler’s 15 movies have grossed more Dthan $2.3 billion at the global box offi ce. Then there’s how he’s done it. Rather than launch f ranchises, Johnson saves them. Last year he climbed onboard the tired Fast and Furious series and turned Fast Five into the franchise’s highest- grossing fi lm ($626 million). Then he took over Journey to the Center of the Earth from Brendan Fraser, and Journey 2 brought in $81 million more than its predecessor. Next up: The second installment of GI Joe. Producers have taken note: We estimate The Rock earned $36 million in the last 12 months, and his fi rst spot on The Forbes Celebrity 100 seems to be a fl oor, not a ceiling. “The second you see Dwayne on screen,” says Paramount Film Group President Adam Goodman, “it’s like everything you ever imagined in an action hero and then some.” A college football star, Johnson broke into entertainment as a pro wrestler in 1996, following in the footsteps of his father and Forbes Celebrity 100 No 70

TALK TO ME Producers love Johnson’s global appeal

JULY 6, 2012 | FORBES INDIA 111 THECELEBRITY100

encouraged to play a character that didn’t quite fi t. “It reached a point where I felt that instead of me trying to conform to Hollywood, I needed to have Hollywood conform to me and embrace my past,” says Johnson. So, last year Johnson took matters into his own hands. He ditched his agents at CAA in favour of Ari Emanuel’s WME, decided to focus mostly on action movies—and decided to start wrestling again. “People love him as a wrestler,” says WME’s Brad Slater, “and because he left seven years ago, there’s a whole generation of young fans who never saw him.” In April The Rock fought John Cena in a Wrestlemania battle, the most-watched in the history of the IND27-year event, whichIA raked in $67 grandfather (his wrestling moniker, Johnson took a small part in The million, thanks to 1.3 million pay-per- Rocky Maivia, combined their names). Mummy Returns and was immediately view downloads in 105 countries. While his dad was upset—he had bitten by the acting bug. The next Such wrestling cred only burnishes spent years getting pounded in high year he starred in a Mummy spinoff , his action hero status, allowing him school gyms nationwide and struggled The Scorpion King, which earned to become, as Goodman of Paramount to support young Dwayne and the $165 million worldwide. Johnson says, “toyetic.” And there are many family—Johnson recognised that pro continued to wrestle, playing up his more merchandise-friendly roles lined wrestling in the 1990s off ered more new movie fame by pretending to up in his immediate future. After GI upside than it did for generations past. be too big for the WWE and singing Joe there’s Snitch, about a father who Still, cast in the role of a good guy, fans songs mocking whatever city he goes undercover to try to free his quickly tired of his non-stop smiling was performing in. And eventually imprisoned son. Then Michael Bay’s attitude and began to chant, “Rocky he did get too big: By 2006 he had Pain & Gain, where Johnson co-stars sucks!” Faced with the prospect of basically retired from the ring. with Mark Wahlberg as a couple of failing, Johnson implored World Around that time Johnson’s former bodybuilders who kidnap a Wrestling Entertainment head Vince movie career took a strange turn. rich man and try to steal his life. McMahon to give him 30 seconds The Rock found himself at the centre The studios are falling over one on live TV to respond to the fans. of family fi lms like Gridiron Gang, another not just because of his Throwing off the sunny, third- The Game Plan and Race to Witch newfound box offi ce power but also generation Rocky character dreamed Mountain. “When he was wrestling, because of his unwavering enthusiasm up by the WWE, he became The he was at 270 pounds and the ruler when it comes to promoting his Rock, and he antagonised the crowd of the world,” says Dany Garcia, fi lms. Most stars negotiate how few right back. They ate it up. Now a his manager and ex-wife. “When days they’ll have to be on the road funny bad guy with a penchant for he went into movies he dropped promoting their fi lms. Johnson is catchphrases, a star was born. When to 230 pounds and they told him happy to talk about how he can help fans would try to join in on a chorus to stop talking about wrestling.” promote the fi lm from day one. of “Do you smell what The Rock is To Johnson and Garcia, who’s “That’s the wonderful part about cooking?” He would cut them off and been an integral part of Johnson’s being in this business,” says Johnson. yell, “This ain’t sing-a-long with The career since they met as teens, it “I love knowing the audience and Rock!” And they loved him for it. felt very much like the early days listening to the audience.” Oh,

Hair: Rachel Makeup: James Mckinnon; Location: R2k Studio, Las Vegas Solow; Hollywood came calling in 2001. with the WWE when Johnson was and kicking a little ass, too.

112 FORBES INDIA | JULY 6, 2012 THECELEBRITY100 The MANY PATHS TO THE CELEBRITY 100

GET KNIGHTED Elton Paul ONE John McCartney NAME REDNECKS AND STEAL AN PUPPETS Larry the Jeff AWARD Cable Guy SPEECH Kanye Dunham MUSIC West Adele

GET COMEDY AWARD Rihanna SPEECH STOLEN Taylor Beyonce, Swift Jay-Z THIRD WHEEL POWER INDIA SEX COUPLES Jennifer TAPE Aniston Sean “Diddy” Combs Tyler Kim Perry STAND-UP Kardashian INSPIRED SITCOMS SHARKS AND Brad Pitt, WOOKIES Angelina Jolie Jerry MOGUL Seinfeld SISTER Kristen Stewart MADE SEX TAPE Steven George Ellen Khloe Spielberg Lucas DeGeneres Kardashian Taylor Lautner

TWEEN RADIO VAMPIRE WINDBAGS FLICKS Oprah Glenn Howard BOMBS Beck Stern

HOLLYWOOD Adam Sandler TELEVISION REALITY

Peyton Manning Simon Cowell

Julia Jennifer Roberts Lopez CHEESY ACT WITH EXPLOSIONS SITCOMS Bethenny Frankel Tom Hanks Tom Cruise

Meryl Streep Will Smith Alec Baldwin Photographs: Reuter

JULY 6, 2012 | FORBES INDIA 113 THECELEBRITY100

“It’s nearly dusk outside for a business enterprise. In Silent Sound studios in the celebrity-driven, hip-hop Atlanta, and Sean (Puff y) world of 1990s music, no one Combs, the 29-year-old boss manages an image, exploits of Bad Boy Entertainment, it and protects it better is obsessing about his than the young man known business—specifi cally, its alternately as Puff Daddy image. Every performer and artist fi xates and Puff y. ‘Floss,’ as a sheen of success is on his or her image—it’s what sells books, known to hip-hoppers, has helped propel albums, movie tickets, T-shirts, sneakers. Bad Boy to $130 million in annual sales— But Combs is preoccupied with more than and make it rap’s most valuable label.” his own. He’s trying to build an image FROM THE MARCH 22, 1999 ISSUE OF FORBES

Ex “names” never quit. They enter Has-Biz. Thoughts on MALCOLM FORBES CELEBRITY Fame is the beauty parlour of the dead. INDBENJAMINIA DE CASSERES

It’s really quite a situation. It’s ridiculous. For all fl esh is as grass, I make $200,000, and all the glory of man $300,000 a night. For as the fl ower of grass. years I was working The grass withereth, little dives, and if and the fl ower thereof I got $700 a week, falleth away. I’d say, “Wow, I’m I PETER 1:24 really cooking.” TONY BENNETT Penélope Cruz belongs to the Mediterranean Before Jules [in Pulp school of acting, a style Fiction] my characters On celeb Twitter feuds: that is characterised by were just “The Negro” It’s a combination of self- its carnality, gutsiness, who died on page 30. importance gone awry, shamelessness, messy Every script I read, “The the headiness of having hair, generous cleavage Negro” died on page 30. followers, the lack of and shouting as a natural After Jules, I became the self-censorship. It’s not form of communication. coolest [expletive] on the really to communicate PEDRO ALMODOVAR planet. Why? I have no some bone of contention, clue. I’m not like Jules. it’s to humiliate the It’s called being an actor. person in front of the SAMUEL L JACKSON Why would you want whole world. Social to work for a living media in general, and if you could just joke Twitter in particular, around? Being a is the coward’s way of celebrity expands your expressing yourself. A-LIST PSYCHIATRIST commercial possibilities. CAROLE LIEBERMAN JERRY SEINFELD Tony: Danny Moloshok / Reuters; Penélope: Lucy Nicholson / Reuters; Samuel: Jason Redmond Lucy Nicholson / Reuters; / Reuters Danny Moloshok / Reuters;Samuel: Penélope: Tony:

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