Global GaMe cHanGeRS 2017 pRice ` 190. july 7, 2017

GenNext Special IndIa’s Future Leaders

“[One shOuld] try nOt tO predict the excluSive future, but we must be tHe kpmg the fastest tO ceo poll: react tO that How futuRe situatiOn” Ready iS india inc? lakSH vaa- Man SeHGal director Motherson Sumi Systems Ltd

the motherson laksh vaaman sehgal sumi scion has navigated tough terrain and taken the auto parts major to rising son the next level

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editor’s note The next generation of India’s business families will have to negotiate an uncertain new world

Tomorrow’s Leaders usinesses of today need it around, changing the fortunes to navigate change of the group itself as a result. rapidly. Whether it Laksh is a perfect example of the is the global market drive and determination which andB the demands it places, or characterise the next generation the disruptions which present of Indian business leaders. themselves suddenly, leadership is But there are many others too— more demanding than it ever was. like Tarun and Nikhil Sawhney of Which is why today’s business the Triveni Group, Avni Biyani of leaders, as most experts will tell the Future Group (who created you, need to be flexible, nimble, a bustling business by way of innovative and ready to adapt to lifestyle food superstore Foodhall) fast-changing conditions. The next and Neil Parikh, the son of the generation, which is preparing to late investment expert Parag take over the reins at their family- Parikh—who are taking the family owned businesses or even setting legacy forward by either growing up ventures of their own, therefore existing businesses or carving out Best, have their task cut out. It’s a whole their own niches. Being a part new world out there, and sitting in of such business families also the corner room will hardly be easy. comes with an added dimension. For this year’s GenNext special As Senior Assistant Editor Salil Sourav MajuMdar issue, we pick those business Panchal, who helmed this issue, Editor, Forbes India leaders who are showing the way writes, it’s not just about the talent in taking their businesses forward, or passion demonstrated by the [email protected] adding their unique stamp to next generation. “It is also about @TheSouravM them by way of innovation and the family managing a smooth sheer entrepreneurial energy. transition—of business ideas, This set of gen-next leaders is just values, practices and leadership— a sample, but a good example of from the previous generation to how today’s Indian family-owned the new one,” Panchal says. businesses are grooming the next Coming back to the issue of generation to take charge as the change and disruption, I would global business environment also urge you to take a look at presents new challenges every the Forbes list of Global Game day. It is also representative of Changers. These people, who are what Indian enterprise is all about: changing industries and touching The ability to navigate the odds lives, are selected on the basis and succeed. That’s exactly what of how well they are growing Laksh Vaaman Sehgal, the son of and innovating compared to auto parts billionaire Vivek Chaand their peers. Sample some names: Sehgal, did when his father threw Larry Fink of BlackRock, Evan him in the deep end of the pool. Spiegel of Snap and Cheng Wei He took charge at ailing UK-based of Chinese ride-hailing company mirror maker Visiocorp, which Didi Chuxing. The only Indian their Samvardhana Motherson on the list: Mukesh Ambani Group had acquired, and turned of Reliance Industries Ltd.

6 | forbes india july 7, 2017

Contents / July 7, 2017 ● Volume 9 Issue 14

on the Cover

GenNext leaders

48 | Laksh vaaman sehgaL: rewiring the Future From turning around an ailing auto component firm in Germany to spearheading innovation solutions at auto parts maker Motherson Sumi, son Laksh is fast stepping out of the shadow of Vivek Chaand Sehgal, his illustrious billionaire father

We value your feedback. Apart from being a successful businessman, Write to us at: [email protected] | letters may be edited for brevity. Laksh Vaaman Sehgal also wears an Read us online at www.forbesindia.com investor’s hat in his personal capacity on the cover & on this page: Amit Verma digital Imaging by: Sushil Mhatre ContentS

uF P ront 37 interview 22 | ‘the nPa issue has Been reCognised and is Being deaLt with’ Joris Dierckx, BNP Paribas’s India head, says the BJP government’s actions have been positive and the markets have replied suitably

CoLumn 24 | Banking ProBLems redux Highly leveraged global banks could trigger another doom loop that governments may struggle to tide over

Features

interview 53o | ‘Ce s must PiCk teams with the right skiLL sets’ Arun Kumar, chairman and CEO of KPMG India, says restaurateur Zorawar kalra now has foreign destinations on his mind India Inc is capable of upgrading their abilities 40 66 | ‘even a smaLL groCery store shouLd Be aBLe to exPerienCe iBm’ Karan Bajwa, IBM India’s new managing director, wants to offer end-to-end digital solutions to both large and small enterprises

gne next Leaders 32 | the Baton Carriers Some of the brightest and most inspiring young business leaders who are keeping a legacy alive

34 | avni Biyani: the Future is here Kishore Biyani’s daughter has successfully scaled up the most premium offering from the retail king’s stable

37 | Zorawar kaLra: the CuLinary maestro Neil Parikh is comfortable with the idea of slow and steady growth Journalist-cum-gastronome Jiggs Kalra’s elder son is looking to be the last word in gastronomic inventiveness in Indian cuisine 44

40 i| ne L Parikh: in For the Long hauL

After father Parag Parikh’s sudden demise, A m Neil has brought stability and growth to his mutual R Ve

fund business IT

44 | tarun sawhney and nikhiL sawhney: ; 44: Am

two to tango KAR l While the Sawhney brothers run disparate businesses, AVA

they are committed to making their companies the best N A

run in their respective fields u H

survey 56 | the C-suite study India Inc reveals its preparedness to deal with disruption and a hostile business environment KAPPARATH; 40: Jos KAPPARATH; u ADH m

Tarun Sawhney (left) and brother Nikhil have similar qualifications 37:

juLY 7, 2017 forbes india | 9 July 7, 2017 ContentS

Cross Border 26 | the wiZards From oZ 26 Move over sales pitches. Two Australian billionaires behind Atlassian have built smarter tools that sell themselves

58 | the Big Cheese With supplies to Pizza Hut, Domino’s, Papa John’s and many more, billionaire James Leprino explains how he built a cheese juggernaut in the US

64 | China’s ai advantage Veteran researcher and investor Kai-Fu Lee believes that the US is destined to lose its lead in the race

68 | CLass aPP ClassDojo’s educational software is the go-to app in 90 percent of US schools. But will anyone pay for it? Thirty-seven-year-old aussies Mike cannon-brookes (left) and 72 | how Long oF a reaCh? Scott farquhar are worth $2.6 billion each Pro basketball’s appeal in Asia is obvious, but it struggles to seed NBA talent here 84 LreC iner reCLiner 1 76 | a room with a view, and muCh more Heritage hotels and homestays cater to travellers who seek unique experiences from their holidays rLeC iner 2 80 | street smart Berlin’s street-food market scene is a reflection of a city that is a melting pot of cultures LreC iner 3 84 | a (diFFerent) aFriCan saFari Uganda’s geography and its variety of natural habitats make it a haven for wildlife enthusiasts Tree-climbing lions can be spotted in the Ishasha area of uganda

76

With rising incomes, travellers are opting for unique experiences such as choosing heritage es villas or homestays RB during their vacation Fo R o

F

RAN reguLars 19 | Letters 20 | LeaderBoard 98 | thoughts

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CEO-News & Group Editor-in-Chief: CEO-Forbes India & President- FORbES MEDIA llC Rahul Joshi Revenue, Network 18 News: Chairman & Editor-in-Chief: Joy Chakraborthy Steve Forbes Editor, Forbes India: President & CEO: Mike Perlis Sourav Majumdar FORbES INDIA SAlES TEAM Chief Product Officer: Vice President: Preeti Sahni Lewis D Vorkin Executive Editor: CEO / Asia: William Adamopoulos Abhilasha Khaitan Girish Sharma, Vinayak Ambekar, Editor, Forbes Asia: Tim Ferguson Deputy Executive Editor: Brijesh Singh, Atishay Singh, N Madhavan Vibhor Nigam, Divya Bhatia, Mona Parate, Ajinkya Tambe, Design Director: Anjan Das Dilshad Ahmed Khan, Maulik Views & opinions expressed in this Thakkar, Neha Chatterjee, Karina magazine are not necessarily those Mehta, Riti Menghani, S Salim of Digital18 Media Limited (Digital18), Senior Associate Editor: Baig, Kaushik Paradkar, Karishma its publisher and/or editors. We (at Pravin Palande Dhawan, Abhishek Shah, Digital 18) do our best to verify the Associate Editors: Vaibhav Kumar information published, but do not Monica Bathija, Aveek Datta take any responsibility for the absolute accuracy of the information. Digital18 Editor (Technology): MARkETING Harichandan Arakali does not accept responsibility for Vice President: any investment or other decision Senior Assistant Editors: Priyanka Tiku taken by readers on the basis Salil Panchal, Samar Srivastava of information provided herein. Assistant Editors: Anshul Dhamija, Assistant General Manager: Paramita Chatterjee Neha Chimbulkar Senior Correspondent: Varsha Meghani Juhi Batra, Jitendra Gujar FORBES INDIA is published by Digital18 Correspondent: Media Limited under a license agreement Shruti Venkatesh SubSCRIPTION & CIRCulATION with Forbes LLC, 499 Washington Blvd., Jersey City, NJ 07310. General Manager: “FORBES” is a trademark used under license Head of Desk: Kunal Purandare Subhadra Bose from FORBES LLC. Deputy Heads of Desk: ©2009 Digital18 Media Ltd • ©2009 FORBES Jasodhara Banerjee, Kaushal Pillai, Vinod Parab LLC, as to material published in the U.S. Kathakali Chanda Edition of FORBES. All Rights Reserved. Chief Copy Editor: Pramod Mathew ADVERTISING OPERATIONS ©2009 FORBES LLC, as to material Senior VP & Head–business published in the edition of FORBES ASIA. Editor (Online) & Head-Events: Planning & Strategy: All Rights Reserved. Neeraj Gangal Chaitali Karia Forbes India is published fortnightly. Copying for other than personal use or Senior Data Analyst-Online: Bhagwan Patil Smita Suvarna, Krishna Gupta, internal reference or of articles or columns Prashant Rane, Kalpita Sawant not owned by FORBES INDIA without Web Programmer: Aditi Satam written permission of Forbes India is expressly prohibited. Senior Art Director: Compliance Editorial Office: Mumbai - Digital 18 Media Ltd, Benu Joshi Routh Ratnesh Rukhariyar Ground Floor, Empire Complex, 414, Senapati Graphics Director: Sameer Pawar Bapat Marg, Lower Parel, Mumbai 400013. Chief Designer: Sachin Dagwale legal and Corporate Affairs Tel:+91-22-66667777, Fax: +91-22-24910804. Delhi - FC-7, Sector 16A, Film City, Noida, Senior Principal Designer: Ashis Panikkar Pradeep Belhe Uttar Pradesh- 201 301. Tel: +91-120-469 1418. Bangalore - Millennia Tower, Tower C, 6th Principal Designer: Finance Pinaki Saha Floor, No.1&2, Murphy Road, Ulsoor, Pandharinath Pawar Bangalore- 560 008. Tel: +91-80-4064 9191 Chief Illustrator: Subscriber Service: To subscribe, change Chaitanya Dinesh Surpur address or enquire about other customer Chief Production Manager-Digital services, please contact: FORBES INDIA, Imaging & Print: Sushil Mhatre Subscription Cell, Digital 18 Media Ltd, Ground Floor, Empire Complex, 414, Senapati Bapat Production Manager: Mithun Anare Marg, Lower Parel, Mumbai 400013. Tel: 022 4001 9816 / 9783. Chief Photo Editor: Vikas Khot Fax- 022-24910804 (Mon –Friday: Photo Editor: Mexy Xavier 10 am - 6 pm) SMS FORBES to 51818 Chief Photographer: Amit Verma Email: [email protected], Senior Photographer: To subscribe or advertise, Joshua Navalkar visit www.forbesindia.com Forbes India is printed & published by Head-Photo Archives and Research: Prakash Rasal Sourav Majumdar on behalf of Digital18 Media Limited & Printed at Kala Jyothi Process Pvt. Ltd., Plot No. W-17 & W-18, MIDC Industrial Interns: Area, Taloja - 410 208 & Published at Empire Mashad Arora, Ishaan Chakraborthy, Complex, 1ST Floor, 414, Senapati Bapat Marg, Katherine Sullivan, Isaac Wolfe Lower Parel, Mumbai - 400 013.

Editor: Sourav Majumdar

12 | forbes india july 7, 2017 letters to the editor Readers Say

Green Cover country to become environment-friendly. Refer to ‘Nothing Like The Sun (And Kuldip, via email Wind)’ (Issue dated June 9, 2017). It is fantastic to know that India is working Environment Concerns aggressively towards the generation and Refer to ‘Winds Of Change’ (Issue dated adaptation of renewable energy. I wish to June 9, 2017). This is a great initiative by thank Forbes India for covering the way Sumant Sinha and Rahul Munjal. In their the sector is shaping up in their special own way, they have shown that caring for issue. The stories about how Indian the environment can be good business. companies are going green have been Kumar Vansh, on the web enriching and interesting to read. Mohammad Namazi, on the web Pursuing Her Dreams Refer to ‘Carolyn Rafaelian: The Bangle I enjoyed reading Sourav Majumdar’s Billionaire’ (Issue dated June 23, 2017). twitter.com/Forbes_India piece on the government’s renewable The article on America’s richest jeweller energy push. While it’s a positive sign who grew Alex and Ani into a $1-billion facebook.com/ForbesIndia that enterprises are thinking about the company was a nice read. It was great to linkedin.com/company/forbes-india environment, greater challenges know the mind of a person who consults persist. However, it’s refreshing to see planetary charts during decision-making. www.google.com/+ForbesIndia a conscious effort being made in the Chandrakant, on the web

Gen-Next special: Podcast india’s future leaders www.forbesindia.com By Salil Panchal

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The secret to fair and meaningful appraisals Performance appraisal systems across the world are considered to be inadequate, biased Farm loan waiver: Moral and even unnecessary. This hazard vs political unanimous discontent with and expediency loathing of an entire system RBI Governor Urjit Patel is cannot be rooted simply in How to convince the Charismatics, the Thinkers, right in calling for a consensus the fear of receiving negative and the Sceptics among political parties against feedback. Maybe there really Tailoring your arguments to a business leader’s decision-making style announcing this populist but are aspects of the appraisal will give you the best chance of obtaining a desirable outcome economically debilitating measure system that need attention

july 7, 2017 forbes india | 13 Toby Melville / ReUTeRS LeaderBoard Up In Flames apeRTURe would beamiracle ifanyoneelseisfound alive missing and the firecommissionersaying it is expectedto goupwithmanyresidents still Grenfell TowerinLondon onJune14.Thetoll injured afterafirebroke outinthe24-storey Seventeen people died and over 70 were Seventeen peoplediedand over70were

LeaderBoard

BRIGHT IDEA An Art Deco sculpture of a woman holding two lamps watches ABOUT-FACE The rear of the over the courtyard, house is actually its front. a fitting reminder of According to local legend, Belcourt’s two guiding Oliver Belmont wanted to show lights: Alva Belmont and Bellevue Avenue his back—but Carolyn Rafaelian he also wanted a better view

GHOST STORY The original entrance of the house,which Rafaelian had cleansed by a shaman to remove bad spirits and energy

16 | forbes india july 7, 2017 FIRE POWER The crest above the fireplace in the REAL ESTATE library contains the Belcourt motto, Sanscrainte: ‘Without fear’ The Jewellery Queen’s Castle designed in 1891 by renowned Beaux Arts architect Richard Morris Hunt, the Newport, Rhode Island, mansion known as Belcourt was inspired by Louis XIII’s hunting lodge at Versailles and built for banking heir Oliver Belmont. With 60 rooms and more than 55,000 square foot of living space, the estate was intended to be Belmont’s summer bachelor pad—with stables on the first floor for the horse-loving owner. Shortly after the home was completed, Belmont fell in love with a neighbour, suffragist Alva Vanderbilt, who, after divorcing her husband and moving out of their mansion down the street, brought a woman’s touch to the place. (The horses were the first to go; then she added a library and transformed the halls for entertaining.) WORDS TO LIVE BY “First marry for money, In 1940, the Belmont family then marry for love,” Alva sold the estate, and it has changed Belmont once famously SHINE ON Every chandelier in hands several times over the decades, Belcourt was taken down and said. Her first husband was a Vanderbilt; her second falling into disrepair and disrepute: disassembled for restoration, In 1999, Belcourt was reportedly including one weighing 460 was Oliver Belmont pounds and held up by a nail the site of an infamous 800-person “no underwear” party. Then in 2012, Carolyn Rafaelian, the billionaire founder of the jewellery brand Alex and Ani purchased the property for $3.6 million—and the spirit of Alva Vanderbilt returned. Rafaelian has invested many millions in the estate, including a complete WHOA The courtyard was once used to exercise the renovation of the library. She also horses of Oliver Belmont, added solar panelling to the roof whose father is the namesake and, of course, restored Alva’s of the Belmont Stakes bedroom to its Gilded Age glory.

july 7, 2017 forbes india | 17 $1.45Box office grossesbln from Broadway shows in the 2016-17 season, the highest ever recorded, according to LeaderBoard the Broadway League

entertainment Hello, Dollars! even billionaires think there’s no business White Way has long run on the dollars of the ultrarich— like show business. These six produced or co-produced even a young Daddy Showbucks named Donald Trump Broadway shows this year. The headliner: Len Blavatnik produced a 1970 show called Paris Is Out! It was a flop (with trophy, below), who financed the most shows by and closed in less than three months. far, putting money into seven productions. The Great —micheLa tindera

Steve Cohen RobeRt Smith len blavatnik CameRon baRRy DilleR RobeRt RiCh JR. Net Worth: $13 bln Net Worth: $2.5 bln Net Worth: $19.2 bln maCkintoSh Net Worth: $3.1 bln Net Worth: $3.9 bln ShoW: A Bronx Tale ShoW: In Transit ShoWS: Hello, Dolly!; Net Worth: $1 bln ShoW: A Doll’s House, ShoWS: Cats; The Musical Star poWer: Groundhog Day; ShoWS: Cats; Part 2 Present Laughter Star poWer: Justin guarini Sunset Boulevard; The Miss Saigon Star poWer: laurie Star poWer: robert De Niro total Box office Front Page; The Glass Star poWer: metcalf, chris cooper Kevin Kline, leona lewis total Box office groSS: Menagerie; Sweat; leona lewis total Box office total Box office groSS: $6.1 mln A Doll’s House, Part 2 total Box office groSS: groSS: $21.9 mln moSt expeNSive Seat: Star poWer: groSS: $538,000 $43 mln moSt expeNSive Seat: $249 Bette midler, glenn close $46.2 mln moSt expeNSive Seat: moSt expeNSive Seat $275 toNy NomiNatioNS: 0 total Box office moSt expeNSive Seat $273 (Present Laughter): $350 toNy NomiNatioNS: 0 moNey liNe: groSS: (Miss Saigon): $248 toNy NomiNatioNS: 8 toNy NomiNatioNS: 3 moNey liNe: “i got temping skills $61.4 mln toNy NomiNatioNS: 2 moNey liNe: moNey liNe: “the grocer, the peddler, to pay my bills, that’s moSt expeNSive Seat moNey liNe: “it looks like you’re “if you offer me fish, then the whole neighbour- my scheme till my (Hello, Dolly!): $748 “tonight i’m out of my definitely not destitute.” i always want a feast.” hood—wherever i go dream comes true.” toNy NomiNatioNS: 31 mind, not to mention —Cats i know my money’s moNey liNe: ten bucks.” no good.” “money... is like manure. —Miss Saigon it’s not worth a thing unless it’s spread around” —Hello, Dolly! ackson / r euters ackson and; top: Lucas j Lucas y john ue L and; top: ustration B ustration i LL

Source: The Broadway League All box office figures are for 2016–17 (through April 30)

18 | forbes india July 7, 2017 $11.4 bln Amount of FDI in India’s renewable energy sector between LeaderBoard 2000 and 2016

ClImAte ChAnge agreements with the US include cooperation on Reaching India’s Climate financing, investment, and technical assistance for renewable energy. These Goal—with or without Trump agreements are likely to be It is yet to be seen if the US President’s decision to withdraw from the on the table when Prime Paris Agreement will impact India-US bilateral deals on tech and funds Minister Narendra Modi visits the White House on us president donald US’s, or that nearly 300 carbon intensity—or the June 26. Alyssa Ayres, a Trump’s decision to pull million people in India amount of carbon emitted senior fellow at the Council the United States out of the still live without reliable per unit of GDP—to 33 to on Foreign Relations, says Paris Climate Agreement— access to electricity, while 35 percent below 2005 these agreements may be an accord negotiated and misstating that India’s levels. They also pledged to cut if and when Trump’s adopted by members of the participation in the Paris generate at least 40 percent bare-bones federal budget United Nations Framework accord was contingent of their energy from non- goes into effect. His Convention on Climate on receiving “billions and fossil fuel sources by 2030. budget proposals include Change in December billions and billions” of Reaching these deep financial cuts to the 2015—sent ripples of dollars in aid. It’s not. goals requires the right agencies involved in these discontent across the world. External Affairs combination of policy, agreements—notably the However, while devastating Minister Sushma Swaraj finance, and technology. Department of Energy and to climate activists and to rejected Trump’s claims. And while the US will the State Department. the spirit of international “If someone says we be beginning the long “We can’t say for certain cooperation in general, signed the pact due to lure process of exiting the based on the present this move doesn’t have to of money and pressure accord, some important, budget documents whether stop the rest of the world, from someone, it is technical agreements indeed the sun has set including India, from wrong. I reject both these on climate collaboration on what had become a moving forward on allegations,” she said at a between the US and India terrific arena of bilateral climate goals. press conference on June 5. are enshrined in bilateral cooperation between the Long a sceptic of By ratifying the Paris agreements and these, at US and India,” said Ayres climate change, Trump accord last October, India least for now, remain. in an email, “but the signs in the past has called it a committed to reducing its India’s bilateral are not promising.” “hoax” propagated by the While the loss of this Chinese to suppress US collaboration would be a manufacturing. And while setback, India is showing no announcing his decision signs of slowing down on to exit the agreement, the renewables front. PM he addressed China Narendra Modi announced and India in particular. that India will keep its Paris om

“India can double their commitments, whether C coal production. We’re or not the US is involved, supposed to get rid of but has stopped short of CK . to ours,” he said on June 1. signalling that India will Never mind that natural fill the gap in leadership gas and other cheaper on climate issues. With energy sources have killed the recent cancellation of US coal production, not coal-fired power plants in global climate agreements. Gujarat and Uttar Pradesh, Trump also failed to some projections show that acknowledge that India’s India could even surpass per capita carbon emissions US President Donald Trump announces his decision to withdraw from its goals laid out in Paris. are a mere fraction of the the Paris Climate Agreement at the White House —KAtheRIne SUllIVAn Sh U tte RS K e VI n l A m ARQU / R U te RS; top:

july 7, 2017 forbes india | 19 LeaderBoard

counting air miles AI’s Fate Uncertain; Mild Turbulence in Indian Skies Despite the recent slowdown, the Indian aviation sector is on the cusp of a boom period and Air India’s survival, even as a private entity, is critical

india’s domestic aviation market ended 2016 on a high note. The 100 million passengers that flew on domestic routes last year were the third highest in the world, topped only by the US (719 million) and China (436 million), according to data released by aviation think tank Centre for Aviation-CAPA. This growth, however, seems to have fizzled out in 2017. After posting over 20 percent year-on-year Air India has an accumulated debt of `52,000 crore while IndiGo saw its profit fall by 25 percent in the growth in passenger traffic January-March quarter for 12 consecutive months, saw its profit drop by 90.7 entity, is critical. “AI has a Manish Agrawal, leader- growth in air travel was percent to `36.8 crore in 14 percent domestic market capital projects and below 15 percent from the last quarter of FY17. share and a 20 percent infrastructure at PwC February to April this year. For flag-carrier Air India international market India. Despite the current While the deceleration (AI), the problems are more share, which is not easy turbulence in the sector, is not big enough to impact acute. The country’s third to replace, particularly in he remains optimistic. the pipeline of over 800 largest airline by market the international sector,” “The overall trend suggests aircraft orders that local share, which has `52,000 says Bhargava. He says that it [aviation] is a airlines have placed with crore in accumulated debt, the airline’s debt does not fast-growing market. In Airbus and Boeing, they is reportedly on the block reveal the entire story. terms of India’s per capita may revisit expansion after government think tank “AI has tangible assets income levels, India is at plans if volume growth Niti Aayog recommended such as real estate, slots a cusp where air travel wanes to single digits. a complete privatisation. and parking spaces at can suddenly shoot up.” Compounding matters But Civil Aviation Minister international airports, A recent research is a rise in aviation fuel Ashok Gajapathi Raju engineering services, report by Morgan Stanley prices. India’s biggest and believes finding a “strategic ground handling services Investment Management most profitable airline investor” may not be easy. and subsidiary companies, supports this view. It IndiGo saw its profit fall According to Jitender besides running a pilot forecasts domestic air by 25 percent year-on- Bhargava, former executive training academy.” The AI passenger traffic to grow year to `440 crore in the director of AI, privatisation building at Nariman Point, at a CAGR of 13 percent January-March period of is the only remedy. “I’m Mumbai, is worth `1,800 between FY16 and FY26 2017. The budget carrier convinced that AI, in its crore, adds Bhargava. and expects a capex of attributed the fall to fuel current avatar, can neither “There are several $25 billion in the 10-year H / reuters as prices that were 40 percent survive nor be revived.” factors to consider for the period, primarily for higher than in the year-ago That said, the airline’s sale of AI—[employee] upgrading infrastructure.

V i e K P ra quarter. Jet Airways too survival, even as a private unions, debt etc,” says —ansHul DHamija

20 | forbes india july 7, 2017 $450 mln the amount pulled in by the world’s 20 highest-paid hip-hop acts over 12 months in 2016 the 10-Q entertainment How to Survive a Richest Rappers the only thing more predictable than Stampeding Elephant a Diddy name change? His place atop our annual list of the wealthiest hip-hop artists. Billionaire Tom Siebel on why small firms outperform But the man formally known as Sean Combs mammoth rivals, GE’s innovation problem and one now has some real competition. Jay Z’s very memorable safari fortune has jumped by 30 percent in the past year after a $200 million investment Q Your 2009 elephant goring: Q What makes IoT software What’s the story? a hard problem to solve? from Sprint reportedly put the valuation Daybreak in the Serengeti. I’m armed Integration. You need a base of big-data of his music-streaming service, Tidal, at with a Nikon. Herd of 15 elephants, 200 and predictive-analytics capabilities, $600 million, more than ten times what yards away. Gust of wind. Matriarch and a platform for third-party apps. he paid for the company two years ago. charges us. Q So does this mean Silicon Valley Which rapper will hit billionaire status Q Then? wins the IoT sweepstakes? first? Hard to say. Diddy has a lucrative She hurls the guide about 12 yards away No. The next generation of IoT apps in, Cîroc vodka deal with Diageo, while Jay Z and races up to me. I can smell her. I say, the aerospace industry probably took a tusk through my left leg. She come from Honeywell, not Silicon augments his portfolio with a champagne stepped on my right leg, and my foot Valley. Same in health care. And so on. brand, Armand de Brignac, and a growing came off. Q How did Oracle, your alma entertainment company, Roc Nation. Q By ‘off’, you mean...? mater, spin off so many —ZaCK O’maLLeY GreenBUrG Detached! Hanging on by a flap of skin. great entrepreneurs: You, 1 with nataLie rOBehmed Marc Benioff and others? DIDDY 3 Q That’s your pattern: Start a NET WORTH: Larry Ellison hires bright, type A, DR DRE company. Then get almost killed. $820 mlN $740 mlN We started Siebel Systems in 1993. Two think-outside-of-the-box-type people. years later, I was kicked by a horse. The But Oracle never encouraged a lot of prognosis: “Permanent, irreparable internal entrepreneurism. So people brain damage.” It’s hard to tell whether who were entrepreneurs needed to go that prognosis turned out to be accurate get that experience someplace else. or not [laughs].

Q Perhaps the verdict comes through your latest startup, C3 Internet of Things (IoT)?

The Internet of Things needs a software dra K e , Y, a platform. Today there are 19 billion sensors. In five years, 50 billion. O p: m ari a n ZUO ni / r e U ters Q But why your startup? G es; t Huge companies like GE plan to own the IoT market. 2 GE is the world’s greatest 19th-century JAY Z $810 mlN 4 5 company. Its market value the last 17 BIRDmAN DRAKE / re U ters ; J ard O mU n OZ years has gone from $475 billion to $110 mlN $90 mlN about $250 billion. Nice job. These / Gett Y i ma tins KY Y: e d U Y: O guys make valves and pumps.

Q So, small companies K ave always win during transitions? Microsoft built its first product with two O r B es ( L eft); didd m; B irdman : d CO people. Apple did it O r f with four. GE takes OCK . 3,000 mediocre people and says, “Build a software stack.” th Y ar C hi B a L d f dr dre : s h U tterst tim O

july 7, 2017 forbes india | 21 interview Joris Dierckx

`30,000 crore, making us the sixth largest foreign bank in terms of assets ‘The NpA Issue has [after Citibank, HSBC, Standard Chartered, Deutsche Bank and DBS].

Been Recognised and Q Which business areas will draw more focus in wholesale banking? BNP Paribas is not just a bank, is Being Dealt With’ but also a mix of other businesses. Joris Dierckx, country head for BNP Paribas in In India, wholesale banking business forms two-thirds of India, says the BJP government’s actions have been the overall business; the balance positive and the markets have replied suitably is other financial services. For the wholesale bank, there are By Salil Panchal three main lines—global markets, investment banking, and transaction NP Paribas is one of the on maintaining market share in retail banking. In global markets, we few foreign banks in financing and developing consumer continue to develop; the areas of India that commands finance and digital/mobile banking. emerging growth are towards a a strong retail banking We are investing in the more open market, with a focus on presenceB to complement wholesale Americas and APAC region; we structured products, particularly banking operations. Joris Dierckx, have successfully concluded a structured derivative products. the head of BNP Paribas in India, big investment plan for 2013- Our institutional brokerage firm talks about the country’s sluggish 2016 for the APAC region and BNP Paribas Securities Services loan market, the performance of the are now in the next phase of has a strong presence in secondary government and the growth strategy investment, going towards 2020. markets. In IPOs, we have the for its recently completed acquisition mandate for a few upcoming IPOs, of Sharekhan. Edited excerpts: Q How much investment but we will look at a niche approach. would flow towards Asia? Q How has BNP Paribas fared in I would be unable to give Q India’s loan growth the current global environment? specifics, but there is a total continues to be sluggish... In the US, economic growth is budget for acceleration of digital There is not much demand; capacity quite stable; China is recovering transformation of €3.3 billion till utilisation in the industry is still and even the Eurozone’s 1.6 2020; of this, €70 million will go below historical averages and as long percent GDP growth is not bad. towards Sharekhan. [BNP Paribas as that remains, we don’t expect much The risk, in such a case, is more on completed its acquisition of the retail capex from the corporate sector. account of geopolitical factors; we brokerage firm last November.] Consequently, there is low demand have to see how they play out. In India, we entered a lot of for financing. How fast this will For BNP Paribas, the group in partnerships 12 to 13 years ago. An change depends on domestic demand. 2016 had a €7.7 billion net profit important evolution [in the bank’s and that continued in the first journey] was the APAC investment Q How would you assess the three quarter of 2017 [the bank reported plan, which was a response to the years of the NDA government? a 4.4 percent rise in net profit to change in the financial landscape The actions of the government €1.89 billion]. What’s impressive after the 2008 global slowdown. have been positive and the markets was that the growth was strong in The group decided to go deeper into have replied suitably. The GST is corporate and institutional banking, the local markets they operate in. a clear example; there could be and there was lower cost of risk. We are building the local balance some disruption over the short term sheet capability. In wholesale because it is something new, but in Q How critical is India to banking, we have become relevant the long term, it will be beneficial, the BNP Paribas group? in terms of size [in India] as our resulting in the full integration of the India is an integral part of our Asia- local currency balance sheet has Indian economy. There is progress Pacific region; the group is focusing quadrupled in the past three years to in the banking sector; the NPA

22 | forbes india July 7, 2017 Joris Dierckx, country head of BnP Paribas in india problem has been recognised and is Fund Services (loan book of `7,663 umbrella. The key will be digital being dealt with. The merger of the crore as on May 31, 2017) and then marketing and client satisfaction. associate banks with its parent State the equity brokerage Sharekhan [now Bank of India is the first step towards called Sharekhan by BNP Paribas]. Q Why did you rework consolidation in the sector. There will Sharekhan is India’s third the Geojit deal? be more consolidation in due course. largest equity brokerage with The proof of the group’s long- 1.4 million customers in 500 term commitment to India was Q You are one of the few cities. We will look to expand our through the JV with Geojit about foreign banks to have gone investment and savings-linked 13 years ago. Sharekhan and Geojit beyond corporate banking... products under the Sharekhan are complementary, in terms of We have a whole range of business investments. [But] the independent lines available in India. Those that directors of Geojit had concerns form a part of our retail banking over conflict of interest in the operations—wealth management “[In India] our two investments we made. We ($8.7 billion as of March 2017), local currency acknowledged their concerns, in the mutual fund space (assets although we did not agree with them, under management `6,556 crore), balance sheet has and decided to step out of the day-to- bancassurance and life insurance quadrupled in the day management of Geojit. We gave (BNP Paribas Cardif holds a 26 up the rights for representation on percent stake in SBI Life Insurance), past three years to the board and in management, and avier consumer finance through the joint `30,000 crore.” will just be the largest shareholder venture (JV) Sundaram BNP Paribas in Geojit (33.4 percent). x Mexy

July 7, 2017 forbes india | 23 das capital Many bank business models are in need of major reforms which are politically difficult to implement

BaNkiNg PrOBLems reDux Highly leveraged global banks could trigger another doom loop; whether governments have the financial capacity for one more bailout is uncertain

By Satyajit DaS

today, there are over $3 trillion in to the 1994 and 2001 crises, while real stressed loan assets globally, compared with estate lending was responsible for the 2008 around $1 trillion of US sub-prime loans problems. in 2008, which was the catalyst for the The current problems have some similar financial crisis. The World Bank estimates causes. Banks have significant exposures to that the current ratio of non-performing the troubled resource sector, to emerging loans (NPLs) to total gross loans is around markets and to overvalued housing markets. the 2009 levels of 4.2 percent. Lending to the energy sector alone amounts European banks have around euro 1.2 to around $3 trillion, where borrowers are trillion of problem loans. Italian banks alone struggling to service debt in an environment have an estimated euro 360 billion of NPLs, of falling commodity prices, weak growth, or around 20 percent of its GDP. Italian overcapacity, rising borrowing costs and (in NPLs comprise around 15 percent of total some cases) a weak currency. Banks in the loans in the country, compared with around 5 percent in the US, Canada, some European countries, Asia, Australia and US during the 2008 banking crisis. New Zealand are exposed to over-valued property markets. Banking systems in many other advanced economies There are also some non-traditional factors contributing also face increasing risks. Loans are supported by artificial to banking instability. A weak recovery from the 2008 crisis collateral values, especially real estate and equity, are is a problem. In advanced economies like Italy, low growth inflated by unconventional monetary policies. Debt and deflation rather than aggressive real estate lending are sustainability is based on artificially-maintained low interest driving loan stresses; in other European countries, it is the rates and any normalisation of rates could threaten the byproduct of a lack of global competitiveness exacerbated solvency of over-indebted borrowers. by the effects of a single currency. NPL problems are also apparent in emerging markets, Since 2009, official policies have targeted expansion of especially India, China and Brazil. India’s stressed bank lending to increase growth and inflation. With safe loans total more than $150 billion, or over 15 percent of assets offering low returns, risk in the financial system has bank assets. The problems are driven by over-leveraged risen. Seeking higher returns, banks have financed less borrowers, including state-owned enterprises, family- credit-worthy borrowers. Abundant liquidity has increased owned conglomerates, as well as infrastructure concerns— asset prices and banks have lent against this overvalued government-driven trophy projects with dubious economics collateral. Low rates have allowed weak borrowers to to which state-owned banks are pressured to lend. survive. This has encouraged a persistent failure to address China’s official bad debts are under 2 percent of asset quality problems, by writing off bad loans. total credit and if ‘special mention’ loans are included, In developing economies, strong capital inflows, seeking around 6 percent. However, estimates say it could be higher returns or fleeing depreciating currencies, has as high as 15-16 percent. Studies by the International encouraged increases in leverage. State policies encouraging Monetary Fund indicate there are $1.3 trillion of risky debt-funded investment or consumption to create economic loans, with potential losses equivalent to 7 percent of activity has also led to banking problems. GDP, lower than other forecasts which peg it at as much as 20 percent of GDP. Doom Loop Banking sector problems can trigger a familiar doom loop. Old and New Causes Banks are highly leveraged, around 10-12 times; hedge funds Traditional banking crises are caused by bad lending, often are leveraged 3-5 times on average. This means a small loss to an individual sector, most commonly real estate. Lending can wipe out a significant portion of their capital, increasing to leveraged buy-outs and telecommunications contributed the risk of insolvency; for example, a loss of 5 percent of

24 | forbes india July 7, 2017 and cost reductions that are unlikely to be embraced by and costreductions thatareunlikelytobeembraced by models areinneed ofmajorreforms,entailing consolidation the attractionforpotentialinvestors. Manybankbusiness of banksandmayhavereduced availablereturns,reducing factors havecreateduncertainty aboutthelong-termfuture rates, hascollapsed,reducing thisoption. premium, thedifferencebetweenshort-andlong-term rate assets,suchasgovernmentbonds.Today,theterm margin betweenlowdepositratesandsafe,long-termfixed requirements forstablefunding. the needtomaintaindepositsandcomplywithregulatory deposit ratestothesameextentaslendingbecauseof rates lowerbankingprofitabilityasbanksareunabletocut by thecurrentmonetarypolicies.Lowandnegativeinterest troubled bankshavelowprofitability,whichiscompounded the crisistoallowlossesbewrittenoffislimited.Many banks toearntheirwayoutof reforms. Buttheabilityof of badloans,andindustry capital infusions,isolation requires strongearnings, Solution ofbankingcrises No Quick-Fix and creditflows. failure ofessentialpayment to supportbanksprevent and centralbanksareforced problems flowasgovernments consumption. Publicfinance wealth andincomeaffectsreal affect investors.Lossof payments orcutindividends losses, deferralofinterest for transmission.Principal German banksholdingalargeproportionofthis. than euro500billionexposuretoItaly,withFrenchand other weakerEuropeanissuers.Thesebankshaveamore degrees toItalianbanksandsovereigndebtaswell banks, primarilyEuropeanones,areexposedbyvarying affecting otherfirmsandthefinancialsystem.International transactions. Problemsatonebankcanquicklyspread, through inter-bankborrowingandlendingderivative results inarealeconomicslowdown. payments andsupplyingtheessentialcredit.Anydisruption relative totherealeconomy.Theyarevitalinfacilitating banking assetscanreducethecapitalbufferbyhalf. Access to new capital may be limited. Several structural Access tonewcapitalmaybe limited.Severalstructural Traditionally, bankshavebuiltcapitalbyearningthe Bank deposits,bondsandsharesactasotherchannels Banks arenetworkedbothdomesticallyandglobally In advancedeconomies,manybankingsystemsarelarge be beginning. by banks,creatingfinancialcrises. Anewsuchepisodemay reservoir ofadeadlypathogen—bad debts—whichisspread continued economicinstability. economy, bankingproblemsrepresentamajorsourceof and mid-sizedcompanies,whichmakeup70percentofthe sovereign debtandthemainsourceoflendingtosmall- in newcapital.Giventhattheyaresignificantownersof European banksalonemayneedeuro150-900billion A newbankingcrisiswillbesignificant.Forexample, same a bailout isuncertain. to dothatandifthepubliciswillingcountenanceanother economy. Whethergovernmentshavethefinancialcapacity the taxcode.Furtherwrite-downswouldcreatepolitical securities heldbyretailinvestorsinpartduetoaquirkof would resultinwritingdownaroundeuro200billionof only insureddeposits.However,“bailingin”creditors down equity,subordinateddebtandseniordebt,protecting banks underEUproceduresrequireprogressivelywriting banks. ThiscanbeseeninItaly.Resolutionofinsolvent politically difficultbusinessclosuresandjoblosses. are complex.Thereisreluctancetoforeclosebecauseof procedures fordealingwithcorporaterestructurings investments inbanksordistressedassets.Emergingmarket inefficient bankruptcyprocedures,arebarrierstonew governments fearingjoblossesandlackofcompetition. He isalsotheauthor ofTraders, Guns&Moneyand ExtremeMoney . ( In modern economies, the financial system acts as a In moderneconomies,thefinancial systemactsas Political factors are impeding the recapitalisation of Political factorsareimpedingtherecapitalisationof Poor institutionalandlegalframeworks,especially Satyajit Dasisaformer banker. Hislatest bookisAge ofStagnation. gain of essential funding for the of essentialfundingforthe payment systemandsupply be requiredtoguaranteethe public fundsarestilllikelyto major crisis,governmentsand until thenextcrisis.Butina regime willnotbeknown failure, ofthenewregulatory bailout. Thesuccess,or for afuturetaxpayer-financed safer andeliminatetheneed introduced tomakethesystem banking regulationswere government tointervene. debt limitsmakeithardforthe regulations andbudgetary At thesametime,EUbanking difficulties forthegovernment. After the 2008 crisis, new After the2008crisis,new J uly 7,uly 2017 forbes india

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chaitanya dinesh surpur CROSS BORDER glB O al gamE ChangERS The Wizards From Oz Enterprise software giants use armies of salespeople to hawk imperfect products and endless updates. The two Australian billionaires behind Atlassian have built smarter tools that sell themselves. Just ask Tesla, Snapchat, NASA and the entire Ivy League by Noah Kirsch

resh off the red-eye from San Francisco, Mike Cannon- Brookes enters a rented office space in Midtown FManhattan to seal the biggest deal in his company’s history. Dressed in a Detroit Tigers T-shirt and blue baseball cap, he greets the room in an undulating Australian twang. Seated around a conference table are executives from his collaboration- software firm, Atlassian, which is in the final push to acquire Trello, a smaller competitor whose founder, Michael Pryor, is also present. For four hours, Cannon-Brookes relentlessly sells the importance of achieving scale and the benefits of uniting their rival firms. Pryor is convinced. One month later, in January 2017, Atlassian will

26 | forbes india july 7, 2017 college. started (left) and getting “real jobs”after computer science grads apply to theircompany Mike a h c tlas alf of annon- s cott Farquhar sian to avoid a us b rookes tralia’s NASA, Snapchat, TwilioandSpotify. prominent innovators, including used bymanyoftheworld’smost over adozencollaborationproducts developers, hassincemorphed into bug-tracking toolforsoftware footprint. WhatbeganasJira, a a continuallyexpandingglobal highly disciplinedbusinesswith they haveunquestionablybuilta But despitetheself-effacement, in,” Cannon-Brookesdeadpans. experienced forthejobthatwe’re completely under-skilledandunder- their meteoricrise.“Ithinkwe’re acknowledge theimprobabilityof Atlassian’s co-chiefexecutives,freely startups inAustralianhistory. the mostsuccessfultechnology $600 millionandstatusasoneof in 2015,annualrevenuesapproaching milestones aswell:AblockbusterIPO have managedtoreachafewextra Those aimsthoroughlysatisfied,they “and tonothavewearasuit.” not getarealjob,”Farquharadmits, “Our aspirationswereliterallyjustto a lifetimeofcorporateITdrudgery. starting Atlassianin2002:Dodging the pair’shumbleobjectivewhen executives, areworth$2.6billioneach. like off-dutysurfersthantop-flight 37-year-old Aussies,whodressmore his co-founder,ScottFarquhar.The the fortunesofCannon-Brookesand four monthsandadd$820millionto company sharesup47percentin million dealthatwillhelpsend to its software for pay access who 85,000 clients has sales staff. Yet it officially acquire Trello in a $425 officially acquireTrelloina$425 Atlassian no has The founders, who serve as The founders,whoserveas That ascenthasvastlyoutstripped july 7, 2017 july forbes india

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JamES hORan fOR fORBES CROSS BORDER gl B O al gamE ChangERS

Atlassian has 85,000 customers who pay as little as a few dollars per person per month for access to its software. Confluence, its knowledge- GLobAL sharing app for teams, is its most popular after Jira. Other products GAme chAnGers include Bitbucket, an online repository for storing code; Bamboo, a technical- workflow interface; and Hipchat, a These global business leaders are changing industries and lives around the messaging service that competes with world. To make our list, leaders needed to run for-profit operations that are Slack. Trello, the latest addition, is a growing and innovating better than their peers. They also needed to have project-management tool that helps market values of at least $1 billion. —Edited by Lauren Gensler Atlassian further appeal to individuals and smaller, less technical teams. In essence, Atlassian has taken mukesh AmbAni, 60 JAmes dYsOn, 70 ChaiRman, reliaNce iNd.* fOunDER, dysoN on the unsexy mission of bridging inDia unitED KingDOm organisational and communication Connectivity home appliances Bringing the internet to India’s Inventor who built a better, bag less gaps. If the back-end seems dry, masses. Oil and gas tycoon entered vacuum before turning his attention the country’s telecom market, to hair dryers, fans and now batter- the applications are anything but. offering fast internet at dirt-cheap ies. Recent success: A battery-pow- When developing the software prices. Gained 100 million custom- ered vacuum that took 17 years and ers in six months. “Anything and 1,000-plus prototypes to finish. underpinning Tesla’s electric car, Elon everything that can go digital is Musk turned to Atlassian. SpaceX going digital. India cannot afford to be left behind.” is using its software to coordinate scOTT FArquhAr, 37 coding teams and rocket scientists, mike cAnnOn- and NASA relied on it to help plan Ziv AvirAm, 58 brOOkes, 37 CO-fOunDERS, atlassiaN the Curiosity Rover’s mission to AmnOn shAshuA, 56 auStRalia Mars. The customer list extends CO-fOunDERS, Mobileye Business productivity iSRaEl See story, page 26. further: Airbnb, BMW, BlackRock, autos “batteries are Sotheby’s, Paypal, all eight Ivy League Making cars smart and safe. Mobileye is a leading provider of quite exciting and universities and 85 percent of the camera-based assisted-driving sys- sex y things.” lArrY Fink, 64 100 largest companies in America. tems. Now building maps that use crowd-sourced data from millions -James Dyson, Dyson CO-fOunDER, blacKrocK That success has come despite of vehicles to give cars human-like unitED StatES decision-making skills. Intel is buying money management Farquhar and Cannon-Brookes’ the company for $15 billion. With $5.4 trillion in assets, Black- insistence on skirting industry norms. Rock dominates ETFs and is strong in both active and passive strategies. Atlassian has no sales staff, unheard Fink is using his firm’s vast share- of in the hypercompetitive world sTeWArT holder positions to press boards for better behaviour in areas of execu- of enterprise software. And in an buTTerField, 44 tive pay, climate-risk disclosure and era when some tech leaders helm CO-fOunDER, slacK boardroom diversity. unitED StatES more than one multibillion-dollar workplace communication Messaging platform Slack is now venture (Jack Dorsey, Elon Musk), evolving into something of a cor- g ken FrAZier, 62 the co-founders are the conspicuous porate nervous system at scores of BER businesses. Next: Leverage Artificial CEO, MercK m duo leading a single entity. Intelligence to automate mind- unitED StatES OO numbing office tasks. Cancer treatment Growth has come easily so far, but When Frazier took over Merck, it i / Bl l the pressure is on for Atlassian—which was scandal-plagued and had few promising experimental drugs. Now posted just a $4.4 million profit last it rivals Bristol-Myers Squibb in a JOhn And PATrick year—to prove it deserves its $8 billion new class of cancer drugs (including cOllisOn, 26, 28 the one that saved Jimmy Carter) market cap. And as it ventures further that amp up the immune system. m; Sam Kang Kang m; Sam CO-fOunDERS, stripe O unitED StatES

SC from its technical core competency, w competitors are anything but idle. Digital payments nE The Irish brothers made it effortless Smaller startups like Slack and Asana for merchants to accept online and “A long-term approach should not be

att / att mobile payments. Stripe processes are nibbling away at market share, billions in trans actions every year in confused with an infinitely patient one.” ERR while industry giants like Microsoft 25 countries. Its new business-in-a- box product, Atlas, will help coun- -Larry Fink, BlackRock

ian Sh pose a persistent threat from above. tries like Cuba leap into ecommerce.

aDR Farquhar and Cannon-Brookes, (*Reliance Industries owns Network 18, the publisher of Forbes India)

28 | forbes india july 7, 2017 mail-archiving tool,aknowledge- drove anumber ofotherprojects:A proved difficulttoscale,so they test- But thethird-party-supportmodel Atlas, whoholdsuptheheavens. Atlassian—named fortheGreek titan to cultivateclientsunderthe banner their respectivebedrooms,working stint, wastheonlypersontosignon. eager toavoidanotherconsulting a Swedishsoftwarefirm.Farquhar, would providethird-partysupportfor for anewstartup.Thecompany handful ofclassmatesseekingpartners Cannon-Brookes sentanemailtoa their lastyearasundergraduatesafter intern atatechnologyconsultingfirm. many ofhisclassmates,asanunhappy successful startups,andFarquhar,like Cannon-Brookes onacoupleofmildly years workingonseparateprojects: they spentmostoftheircollege signature nonchalance.Nevertheless, Cannon-Brookes recountswith seemed likeareallygoodbloke,” developed afastaffinity.“Hejust annual stipendofroughly$9,000. dozen standoutstudentsofferedan scholarship cohort,oneofafew landed atUNSWaspartofthesame business threwitaway.Hetoo his firstcomputerafterdad’s a servicestation,andheacquired and laterMcDonald’s,hisfatherat means. HismotherworkedatTarget in ahomewithfarmoremodest New SouthWales(UNSW). programme attheUniversityof and computersciencescholarship accepted intoaprestigiousbusiness technology onawhimafterbeing and decidedtopursueacareerin first computerusingairlinemiles boarding school.Heboughthis between SydneyandaritzyBritish spent muchofhisyouthjetting son ofanEnglishinvestmentbanker, trajectories. Cannon-Brookes,the dangers, begantheirlivesondisparate unified intheirdrivetofendoffsuch After graduating, they huddled in After graduating,theyhuddledin They finallyteamedupduring Despite theirdifferences,thepair Farquhar, meanwhile,wasraised k 100,000 members. says Neumann,whohasamassed tion ismore important thanever,” costly prepackaged solutions. obviating theneedfor hardware or tem hassaved businesses millions, saging. Itsusage-basedpricingsys- apps withvoice, text andvideomes- and Salesforce, to enhance their tomers, includinggiants like Airbnb Has empowered some40,000 cus- m u f Je peddles ser and columbaria across Asiaand burials.) Nirvana runscemeteries face alottery orall-outbanonland a neglected publiccemetery. (Others despised buryinghisfather-in-law in service was evident,” says Kong, who enjoy ameal.“Demandfor abetter relatives canpay respects andeven remains inornate columbaria where Kong sellstiny lockers for human On acontinent starved for space, f m fO dA lift passes collect data onitsskiers. reducing cyclicality. Chip-equipped $859, iscrushingcompetitors and access seasonpass, priced at alow style data-driven marketing. Hisall- Vermont to Australia, andcasino- enterprise withnew locations from Transformed Vail into aglobalski Ski r u CEO, Vail rO ers andsellers inover 70 countries. business. Transferwise matches buy $3 trillionconsumer money-transfer and giants like Western Unioninthe challenge theworld’s largest banks Uses peer-to-peer technology to m unit t C 36; T world. “The needfor humanconnec beer kegs, in44citiesaround the perks like arcade rooms andon-site Rents outco-working space, with Offic u C Ad O ra unerals O O nit nit nit obile apps alay oney transfers AA äärm FF un un -f -f ber A vid esorts N k e space ED ED ED ED O O ve m

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management product and Jira, mOhAmmed hAmdi designed to help coders track bugs. bin sAlmAn, 31 GLobAL ulukAYA, 44 1,deputy croWN priNce, fOunDER, chobaNi Jira was the first to gain traction, SauDi aRaBia GAme chAnGers unitED StatES so they scrapped the other ideas Energy yoghurt Rebooting Saudi Arabia’s economy Turkish immigrant popularised and went all in. There was only by taking measures to wean it off Greek yoghurt in the US. Started one possible business model. “Our oil, from raising taxes and reducing in an old Kraft factory, his Chobani subsidies to slashing over-the-top yoghurt eventually took off, and software didn’t do very much to start perks for those on the government’s today the company is raking in with, so we couldn’t sell it for much payroll. He is also leading the charge $1 billion in sales per year. Ulukaya for the world’s largest IPO, the state- gave away a tenth of Chobani’s money,” Farquhar explains. “If you owned oil behemoth Aramco. equity to his workers and is actively aren’t going to sell it for much money, hiring refugees. you need to sell a lot of it. To sell a lot, it needs to be sold globally. And if PAulO cesAr de sOuZA e silvA, 61 chenG Wei, 34 you sell globally, it’s got to sell itself fOunDER, CEO, eMbraer didi chuxiNg online.” So Atlassian put Jira on the BRazil China Ride sharing manufacturing Web and largely let customers find it Saved China from Uber’s grasp by Pioneered a now widely used defending the ride-sharing com- on their own. Among their first clients outsourcing model by plucking pany’s home turf. “It was an epic parts from companies like GE and battle,” says Wei, a nicer, humbler was American Airlines, which bought Honeywell and then assembling version of Travis Kalanick. Didi in Brazil. Came to dominate the a thousand dollars’ worth of software amassed 300 million users across regional plane industry with its sleek China in four years and just added without ever speaking to the Atlassian and spacious E-Jets, which it sells to “snap is a camera another $5 billion in funding to its team. “American Airlines was the first 70 airlines in 50 countries. company. We’re war chest. company that just sent us some money at the beginning and said, ‘We want the software’,” of what cameras Cannon-Brookes says. “That was a evAn sPieGel, 26 chrisTO Wiese, 75 CO-fOunDER, sNap can do.” ChaiRman, steiNhoFF pretty big moment. Obviously, we’ve unitED StatES SOuth afRiCa Social media -Evan Spiegel, Snap continued to see that model.” Bargain shopping Got the world hooked on disappear- The African retail tycoon made ing photo and video messages. Snap That low-cost approach gave an end run on big urban-market has 158 million daily active users competitors by targeting rural the company a positive cash flow who check the app an average of and low-income areas with rock- 18 times a day. Instagram and Face- from the get-go, allowing Cannon- bottom prices and everyday items. book are copying. Offers a host of His central distribution system Brookes and Farquhar to make innovative mobile ads, like allowing also made more efficient work of brands to sponsor filters. outsize investments in research and stocking shelves. Wiese presides over Africa’s largest retail empire development and to pay early hires and has 11,000 stores spread across in cash rather than forfeit equity. 30 countries. JudY WenhOnG Buoyed by organic growth, TOnG, 46 Atlassian took no outside capital until CEO, caiNiao 2010, when Accel Partners invested China Anne WOJcicki, 43 logistics CO-fOunDER, 23aNdMe $60 million at an estimated $400 Masterminding a vast collaborative unitED StatES million valuation. By the next funding logistics network for Alibaba and Personal genomics others. The onetime secretary is When the FDA told 23andMe to round—a $150 million infusion led by maestro over a data-backed central- “ it was an stop marketing its test, it looked T. Rowe Price in 2014—its valuation information system that delivers 57 like the company was toast. But million packages in 224 countries a epic battle.” Wojcicki has worked to get the had soared to $3.3 billion, and its day. “We work with local partners product back on the market and -Cheng Wei, Didi Chuxing, unassuming, shaggy-haired co-CEOs and empower them with our data deploy the company’s genetic-data and computing ability,” Tong says. on beating Uber in China troves for drug development, too. were billionaires. The following year, the company went public with a $4.4 billion market cap, and the help of Elon Musk, engaging With a lifetime of cash already their fortunes swelled even more. in a round of high-profile Twitter stockpiled, the two are focussed on The founders downplay their diplomacy in a bid to import a 100 making Atlassian an indispensable riches, citing job creation as a more megawatt-hour Tesla battery farm (a tool of enterprise that will catalyse meaningful metric. But belying their plan that has so far gone nowhere). many of the next generation’s most low-maintenance public personas are For his part, Far quhar recently profound innovations. The Trello some decidedly ten-figure trappings. paid $52 million for a 154-year-old acquisition, then, is simply phase one gRECCO

l Cannon-Brookes speculates in Bitcoin seven-bedroom New South Wales of a master plan. “In ten years’ time E

ha and invests in sci-fi passion projects. estate that features a harbourside we’ll still be young and doing the job C i m In March, he sought to alleviate tennis court, reportedly Australia’s at 47,” Cannon-Brookes says. “We OP: t South Australia’s power crisis with priciest home purchase ever. think about the world in decades.”

30 | forbes india july 7, 2017

GenNext leaders

THE BATON CARRIERS

By Salil Panchal

his is as good a time as found some of the brightest and most entrepreneurial legacy alive? any for gen-nexters to inspiring next-generation leaders. The 11 names profiled in prove themselves true For this second edition of the the following pages threw up leaders in their family Forbes India GenNext special, we the right answers to at least businesses. The dark asked, like last year, the following one of the three questions. storm clouds, which questions in order to arrive at Typically, family-controlled Tformed some of the toughest years for the selection (which, needless businesses—many of which are led India Inc between 2009 and 2014— to say, is just a sampling of the by revered but aging patriarchs— with a heady mix of funding and entrepreneurial stars in India’s have had to grapple with decisions capital raising concerns, weakening family business firmament). surrounding innovation, strategy, consumer demand and subdued  Have the GenNext leaders working leadership, governance, succession earnings—appear to be thinning. in a family-owned business given and even survival. But, unlike in Though challenges still persist for their business a fresh impetus, in the decades gone by, promoters of some of India’s largest lenders, several terms of strategy or innovation? well-oiled businesses are starting businesses in the consumer goods,  Has the GenNexter introduced to understand that their children, automobile, financial services and processes or expanded into if they are to become leaders and commodity-led cyclicals have shown new areas of opportunity that head vast empires, should not be profit growth in the March-ended have helped boost growth? mollycoddled. And they are not. quarter of FY2017. Their businesses  Or has he or she made a Take the case of 34-year-old Laksh are continuing to grow, innovate and mark outside of the family- Vaaman Sehgal, son of billionaire it is in this space that Forbes India run business, keeping the Vivek Chaand Sehgal who co-founded

32 | forbes india juLY 7, 2017 the auto parts giant Samvardhana Tarun and Nikhil Sawhney of while about 85 percent of those Motherson Group. His childhood Triveni Engineering & Industries, surveyed had a mechanism to deal and education was largely overseas due to the nature of their family- with conflict, only about 15 percent but he came back to join the family led business—sugar production and had a robust and well-documented business. His father, known to adopt making turbines—find themselves plan to manage succession. a hands-on and direct approach to in a tough space. Just maintaining The PwC report found this business, pushed his son right into the efficiency is helping both siblings to be an “alarming finding” that vortex of trouble—to head an ailing grow the empire their father Dhruv needed to be addressed, given UK-based mirror manufacturing set up. (See story, page 44) that about 40 percent of family company they had just acquired. In Some leaders have risen out of businesses across the globe will be less than a year, Laksh came out with adversity and personal loss. Take passing on the business to the next flying colours, which in fact helped the case of Neil Parekh, CEO and generation in about five years. the group climb out of troubled director of PPFAS, who took charge Further, there are also business times in late 2009. Today Laksh is of the business after his father Parag practices relating to strong corporate strengthening what he thinks could be Parekh, who founded the firm, passed governance and keeping an arm’s the areas of new growth, in innovation away. His approach has no frills: length distance between ownership and technology. (See story, page 48) He has simply kept the business and management which are critical Avni Biyani, 27, has proved lean, nimble and profitable. And it to making the business work. as enterprising. Starting out as has worked. (See story, page 40) Industrialist Adi Godrej had warned one who simply “shadowed” her There are a few tricky elements in an earlier interview to Forbes India illustrious father Kishore Biyani, to determine the success of GenNext about the longevity of the family- known for pioneering organised within their family-led businesses. business model; that India will see retail in the country, at various It is not just about talent, ambition, fewer and fewer pure family-run meetings, Avni is now the concept doing something different or businesses, considering that for head at Foodhall, the Future Group’s passion of the new generation. several of them the ownership is gourmet, premium food retail chain It is also about the family widening and, in other cases, more and building it fast and strong. (See managing a smooth transition—of professionals are joining the boards story, page 34). It isn’t far-fetched business ideas, values, practices of companies. This is part of a natural to say that Avni is steadily building and leadership—from the previous evolution and large corporates across her own brand within the group. generation to the new one. the United States and Europe have One of the strongest attributes of This is still a work-in-progress. already transitioned towards this. Generation Next is that it is willing The PwC India Family Business It does however make the role of to take more risks and is flexible in Survey 2016 (which spoke to 102 GenNext in the family-led business, or

tweaking ideas that have not worked. family-led businesses) showed that in their own ventures, more critical. pawar sameer illustration:

juLY 7, 2017 forbes india | 33 GenNext

l e a d Avni BiyAni: e r s The FuTure Is here Daughter Avni has successfully scaled up the most premium offering from retail king Kishore Biyani’s stable. And she’s just begun

By Shruti VenkateSh

he first time Avni Biyani imported tomatoes from the Netherlands to sell at Foodhall, her mother threw Ta fit. “When I told her they cost `2,500 per kg, she thought I had gone crazy. She told my father no one will buy it. But he was so proud of it that he went around telling people. He still does that because, for him, it is value addition at its best,” she says. You could attribute the words to a fond, indulgent father, but Kishore Biyani surely knows a thing or two about retail. The was much higher than a Food Bazaar brand, a distinct light blue and brown, founder and CEO of Future Group Gourmet and we were toying with the and the tagline ‘for the love of food’ had pioneered organised retail idea where customers could come and and just gave it to a team to handle.” in the country. Under him, the shop in an unhurried environment, Today, Avni, concept head of Future Group operated diverse where ‘deals’ were not available,” Foodhall, has scaled the number of retail formats—Big Bazaar, Central, says Avni, 27, seated in her tenth- stores to seven, in cities including Brand Factory, Pantaloons (since floor office at the Future Group’s Mumbai, Pune, Delhi, Bengaluru and sold to the Aditya Birla Group)— headquarters in Mumbai’s Vikhroli. Gurugram. Under her leadership, and was dabbling in a slightly- That’s how Foodhall, a premium the store has successfully positioned premium concept, Food Bazaar food superstore, came along. The itself as a gourmet, premium food Gourmet, with moderate success. first outlet was set up in Palladium retail chain which, retail analysts But when the Ruias (who own mall in Lower Parel in May 2011 say, is the only such offering in Mumbai’s upscale Palladium mall) and, in 10 days, Avni, who had just India. The number of stock-keeping wanted a store that would cater to returned to India after completing units has increased to 6,500 from an upwardly mobile segment, Biyani her graduation from New York 2,000. While the company refuses knew he had to look beyond Food University (NYU) in sociology and to divulge revenues, it does disclose Bazaar Gourmet. “The Ruias were political science, joined the team. that the business broke even in 2014, encouraging us to do something that “My father chose the colour for the is profitable and has been growing

34 | forbes india juLY 7, 2017 biggest learning about the sector she and founder and CEO, Nobby Brand Soon after joining Foodhall, Avni Biyani operates in came from a year’s gap Architects. Often, scaling up comes realised there are between the opening of the first and with a flipside: A dip in the quality of customers willing to pay a premium for second store. “We started looking into service. Adds Gupta: “The real test for quality products every cuisine and every product in Foodhall, too, will be to maintain the every country and realised there is so current level of service, delivery and much one can do with cheese, meat, customer interaction as they scale up.” fruits and vegetables,” says Avni. Along with its stock of premium This was also the time she and imported gourmet food items, realised that there is a discerning Foodhall also runs its own bakery customer who is willing to pay and kitchen, and manages its own a premium for quality products supply chain. “It stocks everything, from across the world. It would be from regular dal, aata, chawal and a classic case of demand ghee to the most premium meeting supply, she felt. Change food. It has been designed Her instinct proved to be quotient to complete a customer’s right. Says Harminder Sahni, shopping basket,” says Avni. founder and MD of retail The company has also avni Biyani consultancy Wazir Advisors: caught on to the launched a bunch of its own “There is a clear trend in the ‘premiumisation’ brands, which includes the of the market market for premiumisation early enough to spices brand ARQA, The of consumers. Incomes at take the Future House of Tea, dry fruit brand Group’s retail the top of the pyramid are business to an Bustaan, a traditional food growing at a faster pace… audience that it range under Traditions, wasn’t catering and they are looking for to otherwise. personalised chef service something differentiated.” The only pre- Party Chef and gifting brand mium retail chain Concurs Arvind Singhal, within the group, Blue Ribbon. Recently, Avni chairman and MD, Foodhall is not also co-founded WhisQ with just a trendsetter Technopak, “Of the $250 in the sector, but dessert chef Pooja Dhingra, billion [around `16 lakh also within her and launched a nine-piece father Kishore Bi- crore] food market in India, yani’s conglom- macaron set under the brand. premium and lifestyle food erate that tracks Jay Jhaveri, COO, the gourmet products constitute $3 billion lifestyle store to Foodhall says, “The one and has been growing at glean trends. similarity between Mr Biyani around 15 percent year-on- and Avni is that both are risk year. The category has a huge growth takers. They have this vision about by around 14 percent every year. opportunity because there is an things. She has a foresight about “Avni would consult me a lot in evolution of the Indian consumers’ what she wants to achieve and she the beginning, but now she handles palate; with more exposure to drives it very well with the team.” things on her own. She brought in international cuisines, they are a perspective which we didn’t have beginning to experiment more.” hat her father’s company and that is understanding the new In the premium space, Foodhall had the capabilities and generation, new India, food culture faces competition from retail chain T the network to ramp up and global cuisine,” says Biyani, 55, Godrej Nature’s Basket, which has operations may have made the job a adding, “without her, we wouldn’t a larger scale with about 30 stores tad easier. But it was only just, says have been able to create Foodhall.” across India, including in big cities Avni. It wasn’t enough to stock the like Mumbai, Pune and Bengaluru. store with premium products. usiness has been Avni’s thing But analysts feel that while Nature’s While customers knew of the since childhood. “For as long as Basket has a stronger brand recall products through international travels B I have lived, I have only visited because of its upper middle class or multiple food channels, not many shopping malls and stores,” she says. target, Foodhall is positioned a level had interacted with or knew how to She developed an interest in food higher. “The gourmet category is use them in their daily lives. Foodhall avier from a few culinary classes that she more pronounced in Foodhall,” says had to be made more experiential,

took during her stint at NYU. But her Nabankur Gupta, a brand expert Avni figured. One way to do that x Mexy

juLY 7, 2017 forbes india | 35 GenNext

l e a was to launch tasting counters, with relevant product offerings, d buy avocado and make guacamole in addition to being involved with e r seasoned to one’s taste, for instance. Future Consumer Enterprise, which s “The whole idea is that every time has a focus on food and FMCG. a customer walks into Foodhall, the Adding to the customer experience experience should be something are the cafés inside Foodhall’s else. So we celebrate a lot of days. larger stores. “We are just trying For instance, you can walk in and to build experiences and influence sample a croissant if it is Croissant the customers each time they Day. We need to constantly excite walk into the store,” says Avni. customers and give them reasons to The attempt to engage with the come back,” she says. Avni is also customer also goes beyond the store— planning a newer format in which through their website and social customers can shop around the store media accounts that are updated and hand over the ingredients to the regularly with recipes, videos, and Radha KapooR Khanna chef to have them rustle up a dish. through predictive analysis of a Founder and CEO, DOIT Creations “The whole ambience is experiential customer’s shopping needs. and executive director, ISDI and luxurious, but not intimidating.” For all this, and to steer the Luxury is a key theme in Avni’s company to the next level, Avni has strategy for Foodhall. She is fully roped in an industry veteran (who she the Creative aware that not everyone is her declines to name) to mentor her. “I am customer. “It is the only format not scared of seeking help. Recently, entrepreneur in our group where we believe I decided to look at the next phase of adha Kapoor Khanna, 32, decided to this. And we take some amount Foodhall and the next level of growth try her hand at entrepreneurship only of pride in saying this, because opportunity and relook at oneself R at her father Rana Kapoor’s (MD and CEO, Yes Bank) insistence. “I was always Foodhall doesn’t offer deals/value as a leader,” she says. For now, she creatively inclined and never into finance,” in the traditional sense that other has her hands full with a number of she says. But even as an entrepreneur, she hypermarkets offer. So while we are ‘experiments’—cheese rooms to make has not cast aside her creative instincts. a customer-centric company, we are fresh cheese, adding a hydroponic Her company DOIT Creations, founded in 2009, operates the Indian School of not necessarily customer-obsessed.” unit where customers can go and Design and Innovation (ISDI) in partnership Avni also lays an emphasis on the pluck leafy vegetables and herbs, with New York’s Parsons School of Design, way the store has been designed, with and trying out the home delivery Radha’s alma mater. under ISDI, she has also started a school of communications a free-flow philosophy that allows the service in partnership with Scootsy. in alliance with the British advertising customer to explore the space and With so many tasks at hand, isn’t company WPP and a creative accelerator not get caught in silos. Says Vishal there ever a fear of failure? Not for programme with Microsoft Ventures. Kapoor, chief design officer & concept Avni, who has seen her father reinvent DOIT Creations also holds the franchisee rights for Spanish dry cleaning business head, Future Group, “The his business not too long ago. In 2012, chain Pressto, retails the French luxury consumer likes to explore. There are Biyani sold off his majority stake in brand Longchamp in India and has invested tasting and sampling counters for Pantaloons Retail to Aditya Birla almost all products and the space Group and also divested his stakes “it’S not juSt aBout wealth. is fluid. The colour scheme is blue in Future Capital Holdings to US- But alSo Value and impaCt.” and brown [to reflect the premium based private equity firm Warburg value] and not too stark and white. Pincus. He instead wanted to focus in Pro Kabaddi team Dabang Delhi, Hockey And Avni is involved in everything; on core operations by relisting the India League franchise Dabang Mumbai, and the Sequoia-backed co-working space you will find her at board meetings fashion business under a new entity, Awfis. All the investments have been and at the store discussing even a Future Fashion, growing the FMCG funded by the Kapoors’ family office Three small shelf problem.” Design-led business and trebling its revenues Sisters (a reference to Radha and her thinking has been central to the to `75,000-1,00,000 crore by 2021. younger siblings Raakhe and Roshini). Amit Ramani, founder and CEO, Future Group as a whole, ever since Says Avni, “My father always Awfis, says, “Radha is able to foresee Avni’s elder sister Ashni, a graduate says that in his second innings, he what people will require tomorrow.” And from New York’s Parsons School of knew what not to do. There is so Radha corroborates: “These businesses are here to stay. It’s not just about wealth, Design, joined in 2007. She currently much that needs to be done, the but also creating value and impact.” heads Future Ideas, which studies only thing we need to remember —SV consumer behaviour and comes out is to not repeat the mistakes.”

36 | forbes india juLY 7, 2017 food” has just opened in Mumbai. Zorawar Kalra: Kalra, meanwhile, has become a household face by appearing as a judge The Culinary on the fifth season of MasterChef India. So, despite an apologetic “I’m just kidding” that follows, you better MaesTro mark Kalra’s words when he says he is gunning for “global domination”. Zorawar Kalra has not just lived up to father Jiggs’s status as an iconic gastronome, but has gone a step hat he would get into the F&B further by adding a global edge to Indian cuisine industry was a given when T Kalra was growing up. For one, his father—once celebrated author By KathaKali Chanda and journalist Khushwant Singh’s mentee at the Illustrated Weekly—was an illustrious gastronome who ran orawar Kalra has a need Over the next few years, Punjab Grill a food column at the now-defunct for speed. When he is not became synonymous with gourmet The Evening News. Later, he moved racking his brains to trump North Indian food that had big, bold on to food consultancy, collaborating up flavour profiles that could flavours yet sat light on the palate. extensively with top Indian chefs and Zshock food gods or have them in awe, But Kalra wasn’t resting easy serving dignitaries like Princess Diana the 39-year-old can be found zipping even during the heyday of Punjab and former US President Bill Clinton, around Noida’s Buddh International Grill. “I knew this format had a and authored multiple cookbooks, Circuit in his Mercedes-AMG. “I clock finite life. The only way to get a including Prashad: Cooking With good timings too,” he says. Often, young demographic interested in Indian Masters, his seminal work. when he is at home, Kalra is fiddling traditional cuisine was to modernise But Sr Kalra doesn’t remember with computers. He buys the best it. Innovation was the key. People formally grooming Zorawar to be a hardware, assembles them and amps were bored with katoris of daal with restaurateur, except that travelling them up to perform at superfast speed, cream on top, however fancily you with him on work assignments so much so that the processors need served it,” he says. In 2012, he sold off exposed his elder son to a variety of to be cooled with liquid nitrogen. Wrapster Foods, the parent company cuisines. There’s another influence It’s no mere coincidence, then, that that ran Punjab Grill, to Lite Bite that Zorawar squarely attributes his speed is of essence when it comes to Foods, and, in December that year, epicurean interests to: His Punjabi expanding his F&B footprint as well. set up Massive Restaurants, an F&B lineage. “Even if my father was not In 2006, Kalra, back from the company that, he felt, would upend in the food business, it wouldn’t US after an MBA from Boston’s all existing notions of Indian food and be any different. We always talked Bentley University, started Punjab be the last word in inventiveness. about food at home,” he says. Grill as a kiosk at the food court Four years on, the company has But what changed his approach of Gurugram’s MGF Metropolitan posted revenues of `200 crore for to food, turning his concepts inside Mall. The authentic Punjabi food FY17, a growth of 400 percent from out and steering it in a direction that he served there “tasted great, the previous fiscal, and also registered opposite to his father’s, was a visit to but lacked innovation”. He raised “high profits” in the year (it refused El Bulli, a multi-hatted restaurant in some money from Lite Bite Foods to disclose the number). It already Spain recognised as the godfather of to jazz up the brand, one that has five restaurant brands with 16 haute cuisine. In 2006, Kalra went could live up to the reputation of outlets between them, including one to Spain for his honeymoon and, his author-columnist-restaurateur in Dubai. A sixth concept, Kode, that without divulging as much to his wife, father J Inder Singh ‘Jiggs’ Kalra. will serve “cuisine-agnostic, freestyle dropped his father’s name to jump the waiting list and book themselves in FY17, Kalra’s Massive restaurants had a table at El Bulli. The meal that followed was the definitive moment revenues oF `200 Crore, a growth oF for his food philosophy, not in terms 400 perCent FroM the previous FisCal of taste, but in terms of techniques and innovation—foams, spherification, what have you—that could be applied

juLY 7, 2017 forbes india | 37 GenNext

l e a to everyday restaurant food. “One d of the dishes I had was chicken feet e r with algae that someone had picked s up from the bed of the sea the night before. I hated both the components individually, but was blown away by the innovative way in which it was presented. I figured the taste won’t work in India, just gimmick and no flavour won’t survive, but I could apply similar techniques of molecular gastronomy to Indian food,” he says. The food that Change he would plate up quotient would be Indian in taste, yet global in his father’s stat- ure as an iconic essence. Rasmalai tres gastronome and leches, for instance: his foodie pun- jabi lineage gave A dessert that would Zorawar kalra a taste like the Indian headstart in the F&B industry. But rasmalai but would be kalra Jr turned prepared deploying traditional Indian cuisine, his fa- the Mexican ther’s forte, on its technique of mixing head and intro- duced molecular three types of milk gastronomy in and cooking it for Indian kitchens to give it a global 24 hours. He would edge. Not only stuff arancini balls has his father, Jiggs kalra, be- with the regular daal come a convert, chawal and make but the five res- taurant brands in it one of the most Zorawar’s popular vegetarian stable are either the best items on the menu. Or or among the make a jalebi caviar— top lot in their respective cat- tiny beads of jalebi, egories, making shaped like fish roe, him one of the most successful floating in pistachio restaurateurs in rabdi and saffron the country. foam—that could easily become the stuff of hashtags.

alra set up his first venture under Massive Restaurants, K Masala Library, in Mumbai’s Bandra-Kurla Complex in 2014, eight years after returning from Spain. “One week after we launched, the first Friday, we got 400 calls. The service was poor, we couldn’t keep up with the diners, but they kept coming. I knew I had hit the jackpot,” he says. Following the success of his fine-

madhu kapparath dining format, Kalra expanded his

38 | forbes india juLY 7, 2017 reach to the younger demographic Zorawar Kalra has turned traditional Indian with Farzi Cafe (a modern, Indian cuisine, his father’s bistro), Pa Pa Ya (South Asian fusion), forte, on its head and introduced molecular MasalaBar (molecular cocktails gastronomy in and drinks) and Made In Punjab Indian kitchens (fine-dining North Indian food). While Kalra is aware that he isn’t a chef himself, he sets an extremely detailed brief for his team to execute what he has on his mind. Right from the decor (green walls replicating those of French castles at his bistro-style Farzi Cafe outlet in Gurugram’s Cyber Hub), to quirky motifs (mini red telephone booths for cheques at Farzi and cocktails served in lightbulbs at Pa Pa Ya) and precise flavours (spaghetti in coconut cream), he goes through multiple iterations till it reaches the diner. Saurabh Udinia, executive chef at Massive Restaurants, recalls his incredulous feeling when Kalra first spoke of the jalebi caviar. “Sitting in his office, he drew a dot on the table and asked me if we could make jalebi like this. It was the first time I even thought of attempting something like that,” he says. Sameer Sain, co-founder and managing partner of Everstone Capital, which has a 37 percent stake in Massive Restaurants, calls Kalra the best artist in the space. “In the whole F&B landscape, we’ve only done one investment where we don’t have a majority stake and where we don’t have our own team running it. And that’s Massive [Restaurants].” Despite his breakneck speed of growth, Kalra isn’t going to stop soon, with international destinations next on the line. He asserts there is much to explore in the post-molecular phase with centrifuges, magnetic stirring and rotary evaporation, techniques beyond the scope of “traditional molecular”. And for every summit that he braces to climb, he goes back to the first day his then-traditionalist dad had come to Masala Library for a meal. “He ate and gave me a hug. We aren’t the hugging kind, you see, so that meant a lot,” he says.

juLY 7, 2017 forbes india | 39 GenNext

l e a d neil parikh: e r s In for the long haul Neil Parikh, who took over PPFAS Mutual Fund after his father Parag Parikh passed away in 2015, has kept the fund’s philosophy of value-investing intact even as he moves the business to the digital platform

By Pravin Palande

round 5 pm on May 3, 2015, Neil Parikh got the fateful call. It was a Sunday and he remembers watching an IPL Amatch between Mumbai Indians and Kings XI Punjab. The call was from Rajeev Thakkar—chief investment officer of PPFAS Mutual Fund—who was in Omaha, US, with Neil’s father Parag Parikh, chairman and CEO of the fund, to attend the annual general meeting of legendary value investor Warren Buffett’s firm, Berkshire Hathaway. Thakkar informed Neil that there had been an accident and that his parents, Parag and Geeta, had been admitted to hospital. His father was unconscious, he was told. Neil, now 35, did not panic. After all, his parents had gone to see Warren Buffett, a man Parag Parikh deeply admired. He didn’t believe anything could go wrong. But when Neil told his wife Khushboo that there had been a minor accident involving his parents, she asked him to immediately get more information about the mishap. Neil tried calling Thakkar, but couldn’t get through. Thakkar, who had been driving the car that was involved in the accident, was caught up in police inquiries and hospital formalities. It was 3 am by the time he managed to get in touch with Nebraska Medical Center and got the news that his father was no more. His mother was in a serious condition. Neil Parikh had to lead When the founder of a firm passes the PPFAS Mutual Fund away, the first responsibility of the overnight after his father passed away following a new head is to bring stability to the car accident in the US

Joshua Navalkar Joshua organisation by communicating

40 | forbes india juLY 7, 2017 with clients, trustees and partners. relationship. He spoke with Thakkar more and that his mother was battling “I suddenly realised I was the head and “the first thing we decided was for her life in another country. He of PPFAS Mutual Fund and that to call a meeting of the trustees then rushed to the US to complete the next morning, I would have and the board members and then the formalities. There were around to go to my office and take care communicate to the world that Parag 200 Indians at the funeral in the of all the responsibilities without Parikh had died in an accident”. US, he says. “I did not know any of shedding a tear,” recalls Neil, CEO He remembers he had to make them. They were just there because and director, PPFAS Mutual Fund, around 200 calls to tell all the of the goodwill of Parag Parikh,” who was then vice president, client stakeholders that his father was no says Neil, who returned to India in a week to take care of the business.

he fund has only one scheme called the Parag Parikh Long T Term Value Fund, with a total corpus of `750 crore. The scheme is a multi-cap equity fund that can invest up to 30 percent of its corpus in overseas securities. Neil’s biggest challenge was to ensure the value system of the organisation does not get eroded and the business remains on the growth path. And so far, he has succeeded in his attempt. Over the last two years, the number of clients has grown by 70 percent and he has added a new distribution strength, at the same time sustaining growth of the business which has been profitable since its inception. For the financial year ended March 2017, the asset management company (AMC) had a profit of `6 crore. This is considered significant because apart from the top 20 companies in the AMC business, most of the others struggle to make a profit even though their AUMs (assets under management) are greater. Today, the top holding of the fund is Alphabet Inc (Google Class C), HDFC Bank and Bajaj Holdings & Investment Ltd. Over the last three years, the fund has returned 14.92 percent neil is aware that he has Big shoes to fill, But he has learnt the art of Being Patient from his father

juLY 7, 2017 forbes india | 41 GenNext

l e a against the Nifty 500, which has was able to outperform all its peers. as quickly as possible. It is only after d returned 13 percent annually for the It was one of Parag Parikh’s losing money that you learn more e r same period. In the last year, though, strengths: To not get swayed by the about the markets. This way the s the fund has underperformed the noise in the market and to follow his market becomes your best teacher,” market by returning 18.51 percent own philosophy of value investing. he remembers his father telling him. against the 23 percent for the Nifty Parag Parikh, one of the earliest It didn’t take long for Neil to 500. Many analysts feel the call to value investors in the Indian market, lose his money. When he gave his go for international equities has had been managing a PMS since father the news one evening over not worked well for the fund. 1996; this had one of the lowest ticket dinner, he educated him about value It’s a question Neil is constantly sizes—of `5 lakh. In 2013, when new investing and since then, Neil is a asked: Why, at a time when the market laws came into effect stating that convert. This also means he learnt to is trending high, is this fund not investors into a PMS should have a be patient: He is now ready to hold performing? But he is unperturbed minimum investment of `25 lakh, he on when some of the investments in by such queries. “Isn’t this something decided to convert his scheme into a his funds do not perform. He knows my father would do? Staying away mutual fund business. He wanted to he only has to wait and watch as the from a market where the valuations remain true to his ethos of creating tide of the market ebbs and flows. are high and not participating in the wealth for the middle-class instead PPFAS also believes in most fashionable names that are of going for high net-worth or rich diversification where it can give trending at high PEs?” says Neil, investors. His confidence was evident above-normal returns by taking who had seen his father advising in the fact that he even encouraged his lower risks. “We are not doing any clients during the high markets employees to invest in the scheme. market timing, but are in the business before the dotcom crisis. Neil, who started working with of asset allocation which provides Parag Parikh at the time managed his father in 2004 across various stable returns in various market a portfolio management scheme departments, picked up many lessons conditions. Our investors understand (PMS)—to stay away from software along the way. In 2004, PPFAS was our fund philosophy,” says Thakkar, stocks that were trading at a PE a broking firm with a small arm 44, who does the heavy lifting related multiple of 100 times in 1999-2000. dedicated to investment advisory to the management of the fund. He lost many clients during that services and a PMS. Neil recalls that In October 2016, for instance, phase, but then the markets crashed some of his friends had made a quick the Allahabad High Court scrapped and the same clients returned to him. buck in the market, which was in a the toll on the Delhi-Noida flyover, Later, in 2007, during the bull run. When he told his father he which was managed by Noida Toll infrastructure boom, Parag Parikh too wanted to play the market—buy Bridge, a company that the fund again told investors that the market stocks and make some quick money held to the extent of 2.5 percent of valuations were not sustainable. —Parag Parikh told him he would its portfolio. Thakkar sold off the Several clients decided to move out end up losing because he did not investment in the next week. “We again. Then, the markets crashed and understand the pitfalls of short-term have a strong philosophy of value in the next year, the PMS business investing. “I hope you lose money investing and diversification across the globe. But there are regulatory top 10 Holdings: parag parikH long-term Value Fund risks or diversification risks that we need to deal with. Nobody can Company seCtor Holding (%) predict the market,” he says. “And Alphabet Inc. Software 12.27 we are long-term investors.” HDFC Bank Bank 7.8 The key words are long-term value Bajaj Holdings & Investment Finance 6.4 investing. The fund’s approach has Hindustan Petroleum Corp* Petroleum Products 4.92 always been to take a long-term call on equities. Here, the fund manager Indraprastha Gas Gas 4.9 does not play momentum, but rather Balkrishna Industries Auto Ancillaries 4.36 stays true to his core philosophy of Persistent Systems Software 4.25 investing in businesses that are solid Zydus Wellness Consumer Non-Durables 4.03 and have predictable cash flows. This Mahindra Holidays Hotels, Resorts & Other Recreational 3.71 is an approach Neil is sticking to. & Resorts India Activities The past two years have been Century Textiles Industries* Diversified 3.62 tough and the memory of the first Source: PPFAS (Data for the month of May 2017) *For arbitrage few days at the helm is still fresh in

42 | forbes india juLY 7, 2017 “we are comfortaBle losing 50% of our clients than 50% of the wealth of our clients. my father Believed in that.”

his mind. He was told that he was too as he is chasing a profitable AUM. young and inexperienced to run the “I don’t mind growing slow. I’m not business while some even advised going to pay high commissions for him to sell it. But he wanted to take growth. We are fine with slow and his father’s legacy forward. Parag steady growth. We might take time, Parikh had big dreams for the mutual but then, we have all the patience,” fund business. He wanted to take the he says, sitting behind his father’s fund to tier 2 and 3 towns and sell desk where the only change, besides the fund to people who had never the fact that his father’s yoga chair Aditi KothAri desAi even heard of equities. But he was is gone, is a computer. Parag Parikh Head, sales and marketing, DSP BlackRock Investment Managers not interested in partnering never had a computer on his with anybody. Neil decided ChAnge desk; Neil does. He believes to act along the same lines. quotient in using technology to grow “Neil brings a natural the business. “We look at like father, gravitas to the business. ourselves as an ecommerce Neil Parikh be- He has his father’s sense lieves the future business. Everything is like daughter of purpose in him and is ecommerce driven by technology and t DSP BlackRock Investment Managers, and has already Aditi Kothari Desai religiously he carries Paragbhai’s made the fund nobody wants paperwork an online enter- A preserves the organisational culture legacy on his shoulders and that is how it is going to prise. The fund that her father Hemendra Kothari built. comfortably,” says Vikaas operates as a be in the future,” says Neil, Kothari had always put his managers in the Sachdeva, CEO, Enam AMC. lean company of who launched the mobile saddle, empowering them to take decisions. 50 people where The philosophy has worked well—the Aalok Mehta, an all the functions app of the fund in May ` are outsourced. 64,177 crore (assets under management) investor in the fund, adds, 2017 and is now working DSP BlackRock has outperformed “Parag Parikh left a deep on a web-based app to peers in almost every category. impression on his staff and his on-board distributors and clients. Aditi, 41, took over as head of the sales team at DSP BlackRock in October 2015 investment philosophy is going to Everything else in the office is when the assets of the fund were around remain intact at the firm. I have exactly the way it was. The ambience `39,000 crore. Her decision to realign known him since 1986. I’m invested is the same and all the employees the structure of the sales team helped in his fund and it is the only mutual believe in the product. Though it’s the company achieve its present size. The size, however, does not flatter fund investment I have because underperforming the markets, the Aditi. “Size is not as important as integrity. the fund house is conservative. It is fund is already into cash because the It is important to be the most trusted defensive and the return is reasonable valuations are not sustainable. And advisor with a focus on performance, and over a period of time. Otherwise even today, a lot of clients come and I invest in stocks on my own.” tell Neil to invest in the trending aditi religiously Preserves the Neil is conscious of the fact that sectors, that they want the fund to culture that her father Built he has big shoes to fill. While Parag be more aggressive, that they want Parikh had the personality to take the higher returns. Like in every other size will follow,” she says. Aditi cites a Harvard Business Review study (‘The Risky fund to any new town, Neil, for now, bull market, these investors lose out. Business of Hiring Stars’) to claim that is sticking to Mumbai, Delhi-NCR But it’s not something that bothers just 30 percent of a fund’s performance and Bengaluru because he believes him. “We are comfortable losing can be attributed to ‘star’ fund managers; he understands the customer base 50 percent of our clients than 50 the rest is due to the institution. Says Mayana Rajani, a former consultant better and there is plenty of room to percent of the wealth of our clients. with DSP BlackRock, who has known grow. He also knows that the present It is something my father believed in Aditi for 17 years: “I have seen her corpus of the fund would probably and I’m carrying that legacy ahead. determination over the years. When Aditi sets her mind to achieve something, she have been multi-fold if Parag Parikh Sometimes, not doing anything is sees it to its culmination. She is result- was still around. But the size, he the sanest thing to do, especially in oriented and extremely focussed.” says, is not really important as long markets that trend so high.” —PP

juLY 7, 2017 forbes india | 43 GenNext

l e a d tarun sawhney and e r nikhil sawhney: s Two To Tango While the Sawhney brothers run disparate businesses, they are committed to making their companies the best run in their respective fields

By Samar SrivaStava

oth the Sawhney brothers to produce 30 MW of power; in went to The Doon School their joint venture with GE, where in Dehradun. Both went to Triveni has a majority stake, it makes University of Cambridge turbines that can produce between Bwhere they studied economics. 30 MW and 100 MW of power. Both went to Wharton School at the The two brothers took over from University of Pennsylvania, where their father, Dhruv Sawhney, now they got their MBA in finance. So how 73, in 2012 as managing directors of did they decide who gets to run the their respective companies. Sawhney family’s sugar business and who the Senior, himself a mechanical engineer turbine business? “The answer to that from Cambridge and a management is simple,” says Tarun, 43, the older of graduate from Wharton, had joined the two siblings. “Our father decided.” his uncle’s sugar business—set up Tarun runs the Triveni Group’s in 1933 with one unit at Khatauli sugar business—called Triveni in UP—after returning to India, in Engineering & Industries Ltd; it 1973. It also had an engineering also has a smaller gears and water business in Naini, Allahabad, UP. In systems business—which has seven 2000, he merged his father’s sugar mills in Uttar Pradesh (UP). They mills with his uncle’s. Eventually, are not only among the country’s the Sawhneys set up four new sugar largest sugar producers, but also factories in UP in 2005-06, and among the most efficient. made Triveni among the top three Younger brother Nikhil, 40, sugar producers in the country is in charge of Triveni Turbine, in 2016-17. Although he has now Bengaluru-headquartered makers of stepped back, leaving the day-to- steam-based rotating turbines that are day operations to his sons—he is bought by industries for captive heat chairman of Triveni Engineering and power requirements as well as and Triveni Turbine—he continues by renewable fuel-based independent to play a key role in the international power producers. On its own, Triveni expansion of the turbine business. makes turbines that have the capacity Tarun and Nikhil have strong tarun expectS the Sugar BuSineSS to Bring in over `6,500 crore in revenue over the next five yearS

44 | forbes india juLY 7, 2017 Tarun Sawhney (left) and brother Nikhil took over from their father in 2012 and brought a new wave in their respective businesses Amit Verm A

juLY 7, 2017 forbes india | 45 GenNext

l e a projections for growth: Tarun is the state’s price that prevails. an investor in the sugar industry d expects the sugar business to bring The state-advised price in UP, on condition of anonymity. e ` r in over 6,500 crore in revenue however, had no relation with the The rise in sugar prices from s over the next five years, up from price of sugar. For instance, when 2016 onwards has dramatically `3,000 crore in 2017, while Nikhil sugar prices were low, mills affected the profitability of Triveni expects the turbine business to would be in a position where they Engineering. The company, which quadruple from the present `800 would have to pay more for cane, had lost `400 crore between crore within the same time frame. than they would earn from selling 2012 and 2016, swung to a `233 the sugar. Consequently, they didn’t crore profit in 2017, which will IncreasIng effIcIencIes pay the farmers on time. Arrears in allow it to pay down at least `200 It is not hard to see why Tarun has payments made the farmers plant crore of its `460 crore debt. an unmistakable spring in his step. less cane, thus bringing down sugar And the reason for the spring in The sugar business which had gone production and pushing up prices. Tarun’s step is because the industry is through an extended downcycle has This would allow the mills to pay finally beginning to see rationality in seen prices improve over the last off the arrears, which in turn would cane pricing. “The messages coming 12 to 18 months. As a result, sugar make farmers plant more cane, from Lucknow about having the companies based in UP (those in leading to a glut, which would bring interests of stakeholders [farmers Karnataka and Tamil Nadu down prices once again. and the industry] more aligned are have suffered on account of Change The Indian Sugar Mills encouraging,” says Sawhney Senior. a drought) have swung to quotient Association has estimated For instance, even though sugar profits after several years of that, countrywide, the prices rose in the last 12 months, the losses. “That, coupled with mills had piled on a debt government has allowed the import Tarun Sawhney: better support from the Has worked at of `60,000 crore in 2015. of only 5 lakh tonnes of sugar; in the regulatory policy, has meant planting new Operating in a regulated past it would have allowed a lot more. cane variet- that the Triveni Group’s ies with higher industry meant Triveni was Industry observers say sugar business should see sucrose content, not immune to the poor there is every chance that the resulting in much better days ahead better sugar re- economics. But, as Tarun government could implement the before the sugar business covery. Plans to explains, even with these recommendations of the Rangarajan reduce debt as reverts to the inevitable the company has limitations, the company Committee, which had asked for downcycle,” says Tarun. seen a profitable worked towards ensuring cane prices to be linked to sugar year after a gap The regulatory policies of five years. that their mills were the most prices, which would give the he mentions are changes Nikhil Sawhney: efficient, i.e, they recover a industry a much more transparent Has steered that he, as president of the company higher percentage of sugar pricing mechanism. Tarun expects the Indian Sugar Mills through a devas- from a given quantity of this to lead to consolidation in the tating slowdown Association, lobbied for. in demand by cane. Over the last two sector and suggests that Triveni India’s sugar industry creating a global years, the company has would be interested in making export market has always been cyclical. for their prod- spent about `50 crore on further investments in their A typical cycle lasts ucts; has made working with local farmers sugar business if the regulatory the turbine busi- between five and seven ness internation- towards growing cane with environment is more certain. years with, roughly, two ally competitive. higher sucrose content. This In addition, Triveni’s mills bad years, three average does not include the cost produce electricity from the years and two good years. It is incurred on the company’s nutrition steam that is generated during the in the good years that efficient information and farmer outreach processing of cane, and supply 55 mills are able to make enough programmes. Triveni sources cane MW to the grid. In FY17, it earned money to survive the bad ones. from 1.5 lakh hectares of farms `182 crore from power generation. With cane farmers constituting around their mills; 93 percent of this an important vote bank, politicians land has been planted with the newer crossIng borders are loath to upset them. This has cane varieties. These efforts have Triveni Turbine is a testament to made cane pricing highly politicised. made Triveni’s recovery rate rise how Indian companies are capable of Across the country, states annually to 11.06 percent from 10.8 percent, producing world-class engineering announce a minimum price that compared to the UP industry average products. A steam turbine mills must pay to the cane farmers. of 10.61 percent. “Operationally, manufacturer, it makes turbine blades The Union government also Triveni’s mills are among the most that efficiently convert the enthalpy annually announces a price, but it efficient in the industry,” says drop in steam temperatures into

46 | forbes india juLY 7, 2017 kinetic energy. Triveni’s upto-30 people overseas.” Export margins MW turbines have a 60 percent- are double the 10 to 12 percent profit- plus share in the Indian market. before-tax margins in the Indian (For the joint venture with GE, market. In addition, the company Triveni consolidates the bottomline also earns a steady `110 crore a year but not the topline, in accordance from servicing the installed turbines. with new accounting rules.) Among the moats Triveni The lack of capacity expansion Turbine has dug around itself over across the sugar, power and the years are the 200 patents that it cement industries has resulted in owns. These ensure that competitors the turbine business being buffeted can’t replicate their blade designs by poor demand, both globally and that come about after hundreds locally. Nikhil illustrates this by of hours of engineering, testing pointing out that in 2011, overall and validation. Symbolic of the demand for Indian turbines was company’s confidence is the fact worth `4,200 crore. That number that it recently invested `160 ARJUN JUNEJA fell to `750 crore in 2017. “The crore in expanding capacity to Director of operations, Mankind Pharma business has had a horrible time as manufacture 200 turbines annually. the Indian market has shrunk by The company is also working on 60 to 70 percent,” says Akash modernising existing turbines by Prakash, chief executive officer retrofitting and reinstalling them. reformulating of Amansa Capital, an investor in For now, both the brothers and his Business Triveni Turbine. “Still, they have their father look poised to exploit hen Arjun juneja joined the family handled the Indian downturn much the upturn in the sugar business business at Mankind Pharma, it better than other capital goods and the expected upturn in the W wasn’t a cakewalk for him. “For companies.” He likes the company global investment cycle. They point the first month or two, everything was for its high return on equity— to the fact that all avenues to raise going over my head,” says Juneja, 31, who is now director of operations at the more than 37 percent—as well as funds are open. Also on the cards is pharma company. He dreamt of becoming its high margins of 22 percent. a demerger of the water systems and a cricketer, but extreme competition With low domestic demand, gears business when the business prompted Haryana’s state-level cricketer Nikhil has worked hard at environment for these two segments to give entrepreneurship a shot. He joined his father, Ramesh, chairman of Mankind developing their products for the improves. They’ve also been approved Pharma, and uncle Rajeev, CEO of the global market. Triveni Turbine as defence contractors and are now company, in early 2009 when he was just 23. has an installed base of its turbines making parts for the indigenous Initially, juneja—who has an MBA in more than 72 countries with submarine programme, of which from the University of Strathclyde in the uK—was put through the paces inquiries for orders from over they do not wish to share details. across departments. Over the years, 105 nations. It has nine service So, how did they really decide his involvement has helped speed up a centres in India and six overseas. who would run which business? change in strategy for the company. Monika Sood, co-founder & partner This has been a significant shift Tarun, who spent the first three from the India-centric business that years of his career at Triveni’s sugar juneja now wantS to revamp his father had focussed on, and in mills, says he is temperamentally mankind’S otc Section which they then had a larger share. more suited to run the business. “Since we have a larger installed Nikhil first started at the Triveni at Arete Advisors and leader of the base, we have been getting a lot of Turbine plant in Bengaluru. “Also, health care practice, says: “Arjun has new business based on reference,” Tarun’s Hindi is better,” he quips. leveraged his education, global outlook says Nikhil. “The hardest part about So, it wasn’t Sawhney Senior and understanding of operations to drive high growth at the company.” expanding has been to find the right who took all the calls, after all. “The focus changed from marketing to manufacturing,” says Ramesh. As much as 70 percent of Mankind’s products triveni turBine recently inveSted are now manufactured in-house as `160 crore in expanding capacity to against 30 percent in 2010. Its flagship products include Manforce, Prega News manufacture 200 turBineS annually and HealthOk. “Going forward, I want to revamp the OTC section too,” says Juneja. —Paramita Chatterjee

juLY 7, 2017 forbes india | 47 GenNext

l e a Laksh Vaaman sehgaL: d e From turning around an r ailing auto component s firm in Germany to spearheading innovation solutions at auto parts RewiRing maker Motherson Sumi, Laksh Vaaman Sehgal is fast stepping out of the shadow of his illustrious the billionaire father

FutuRe By Salil Panchal & Paramita chatterjee ew in the corporate world of 15 percent over the previous year MSSL reported a profit of` 78.05 would have been initiated to notch consolidated revenues of crore and SMR reported a small into a family business quite `41,985 crore, with profit of` 1,554 but significant standalone profit like Laksh Vaaman Sehgal crore, up by 20 percent from FY16.) of `9.16 crore. This was even more Fwas. Let’s call it baptism by fire. This announcement, made without creditable given that it was in the It happened in June 2009. The Laksh’s knowledge, was his father’s backdrop of the global slowdown top brass of Samvardhana Motherson way of initiating his son into the when most of the manufacturing Group (SMG) had gathered at the business. But Laksh was apprehensive activity across the world was in a Noida headquarters for a strategy about leading a firm, let alone with tailspin and the automobile industry review meeting to discuss a massively the charge of having to pull it out of faced one of its worst crises in recent ailing UK-based firm Visiocorp, the sick bay. The total capital invested decades due to slowing demand. which it had just acquired. (Visiocorp, in SMR at the time of acquisition which made rear-view mirrors for was €30 million; MSSL held a 51 n 2009, Laksh had returned to the cars, was renamed Samvardhana percent stake in SMR while a group family business after completing Motherson Reflectec or SMR, after the firm, Samvardhana Motherson I his master’s in finance from acquisition was completed in March Finance Limited, held the balance. Columbia University. Prior to that, 2009.) The UK-based company’s Laksh remembers telling his father in 2003, he had worked at MSSL’s losses were so sharp that they had that he could not be the CEO as there partner firm Woco Group—which pushed the flagship firm Motherson were several more experienced hands makes rubber components—at Bad Sumi Systems Ltd (MSSL) into a who could lead better. “He laughed Soden in Germany and then in loss for the June-end quarter. and said, ‘Look at the bright side. It 2004, in Thailand to learn quality Chairman and group co-founder [SMR] is in such bad shape that it training on the shop floor. Vivek Chaand Sehgal suddenly can’t do worse’,” the now-34-year-old The SMR turnaround was a pointed to his son Laksh Vaaman, director of MSSL says. “That was a significant achievement. Consider its then just 26, and said: “You will be the good way to take the pressure off me.” financial health around the time it was new CEO of the [ailing] company.” In fact, not only did the company acquired: The `22.3 crore loss that it “When he pointed towards me, I not do any worse, but in less than posted in the quarter ended June 2009 actually looked back to see if someone a year, Laksh also managed to turn pushed MSSL into a loss of `12.88 was standing behind me,” Laksh around SMR’s business—which crore (before considering minority recalls while speaking to Forbes India, conducted most of its manufacturing interests) in that period. Even in the after the FY17 financial results of in Germany—and navigate MSSL’s subsequent quarter, SMR reported MSSL were announced in May 2017. financials into positive territory. For a standalone loss of `24.3 crore.

amit verma (The company has shown a growth the quarter ended December 2009, The then CEO of SMR, an

48 | forbes india juLY 7, 2017 Laksh Vaaman Sehgal believes his experience as CEO of the ailing SMR was the game-changing event of his career GenNext

l e a lapping them up SMG has integrated 19 acquisitions since 2002 d e 05 08 r door trim business Gear cutting tools Huon Corporation s dagger Frost Tools Australia India (strategic 12 (asset purchase) business units purchase) 01 Powdered metal parts Wiring harness 09 06 sintermetal sa business Global rear-view Wiring harness Spain (share Wexford mirror business of business purchase) electronics ASL Systems Visiocorp Ireland (asset UK (asset purchase) UK purchase)

2002 2005 2006 2007 2009 2011 2012

02 10 Machined metal Interior & exterior components 07 polymer modules Peguform reiner Precision rubber moulding Germany Germany (asset purchase) business 03 empire rubber 11 Plastic injection moulding Australia (asset purchase) Thermoformed G&s Kunststofftechnik GmbH polyethylene and Germany (company purchase) blow moulded 04 components Plastic injection Vacuform 2000 moulding (Pty) ltd FP Formagrau South Africa Czech Republic (company purchase)

Source: SMG

Australian, had asked the Sehgals “The idea was if each and every unit Group more heft and added to its for two years to effect a reversal was profitable, the whole company roster of global customers: For but Vivek Chaand Sehgal did not would be profitable. We also got in a instance, MSSL’s auto components are agree, saying that Motherson Sumi lot of financial discipline,” says Laksh, found in cars manufactured by some would not survive for six months if who discussed business decisions of the automotive world’s biggest losses continued to mount. Instead, with his father on a daily basis during global brands like Peugeot, Ford, he chose to entrust his son with the that time. “He was there by my side Volkswagen, Audi, Porsche, Toyota responsibility. Not only did Laksh and allowed me to take decisions.” and Honda. The group’s business is live up to his father’s expectations, They also got rid of all the spread across 75 countries; it [the he also avoided the ignominy of a consultants, who were expensive and group] has made 19 acquisitions possible jail term: In Germany, the not adding too much value, he adds. since 2002 and it now has 39 joint CEO is held liable and can even be The group also tends to not ventures and 230 factories across 33 jailed if the company runs out of cash. hire people from the outside countries, which ensures that about Not without reason does when acquiring a company. In 84 percent of its revenues comes Laksh believe that the SMR the case of SMR, some of the from overseas and the balance from experience was the “game top management had decided to India. And its domination of the auto changing” event of his career. leave, but the second rung from parts space is evident in the disparity His first move at SMR—and he Visiocorp’s original staff stepped up between MSSL (`41,985 crore in credits his father for this—was to to take charge of operations. And in revenue for FY17) and the No 2 break down the business into units, keeping with the group’s practice player, Bharat Forge (`6,598 crore). so that each manufacturing unit of moving management away from operates like a separate company and ownership, Laksh stepped away ivek Chaand Sehgal looks back finds its own strategy to becoming from SMR in 2014, leaving the at Laksh’s initiation at SMR profitable. This technique helped management and execution in the V with pride. “When you want them keep a close watch on costs and hands of an experienced team. to train someone, you should throw processes. (SMR had 16 plants and a The revitalised SMR gave the $9.1 them into the storm. Vaaman had just majority of them were loss-making). billion-Samvardhana Motherson finished his master’s. It was important

50 | forbes india juLY 7, 2017 says Pankaj Mital, MSSL’s chief part, is how the Sehgals managed 18 operating officer (COO), who has been them. Both father and son travel in 17 Illumination with the group since the early 1990s. excess of 250 days a year, meeting Plastic solutions moulding Kobek siebdruck Up until the late ’90s, Maruti Suzuki officials and staff at various factories abraham and GmbH & Co KG was MSSL’s main client. As an initial and companies they have acquired, Co ltd Germany (share Hungary purchase) strategic move, Motherson Sumi and their customers. During the (automotive increased the number of components heady days of the SMR acquisition, business unit) per car, which meant offering more Laksh claims to have flown more products. This saw it expanding into than 2.5 million miles in 2009-10— plastic parts, later rear-view mirrors which is more than the distance of and then bumpers, handles, spoilers, the earth to the moon. He says he 2014 2016 2017 tail lights. “We became a company later received a congratulatory letter which listened to what its customers from Lufthansa Airlines for this feat. 13 extruded plastic parts (in this case car manufacturers, truck- scherer & Trier and two-wheeler makers) say and ow, nearly eight years into the Germany (asset purchase) require,” Mital adds. Acquisitions are business, Laksh has found his 14 19 also made based on this premise. In mojo in the form of Motherson Plastic moulding Wiring harness N the mid-1990s, the company became Innovations, a firm which sources Minda schenk PKC Group Plc Germany Finland one of the first Indian companies to innovative and technological solutions (share purchase) (asset purchase) announce a five-year sales from across the Samvardhana 15 target and the goal of a 40 Motherson Group, to build Wiring harness Change business of percent consolidated return solutions for the future. stoneridge Inc on capital employed (RoCE). quotient “This allows Motherson US And it has met these targets Innovations to pick and 16 after turning Magneti Marelli shock each time. This reflects in around the choose the best competencies absorbers Pvt ltd its stock performance: The fortunes of Smr and solutions in the entire India (stake purchase) (and mSSL) in his `66,871 crore (market cap as early years at the group and make one project that he needed to understand the on June 15, 2017) company, group, Laksh deliver a complete solution vaaman Sehgal difference between running a group which listed in 1993, is now spear- to the car maker for new against just [acquiring] bookish outperformed the Nifty Auto heading the technologies. And we can do innovations arm knowledge,” Sehgal tells Forbes Index over the last year, with of the company; that in ways the individual India by phone from the UAE. a rise of 62.2 percent against it draws from the companies would not be r&D experiences India’s 31st richest, according to the index’s 25.85 percent. of all their group able to do independently,” the 2016 Forbes India Rich List, with For FY20, the Sehgals companies and Laksh explains the business will offer new a net worth of $3.6 billion, Vivek have placed, for MSSL, technologies in a note to shareholders, in Chaand Sehgal co-founded the group a target of $18 billion in to their clients MSSL’s 2016 annual report. towards mak- with his mother (hence the initial revenues and $26 billion ing cars of the Considering that the name Motherson) in 1975; it was for the whole group. future. use of electronics in a car then into silver trading which it has To that end, in March, is constantly on the rise, since stopped. MSSL was formed in MSSL said that it has completed the Motherson Innovations is working on 1986, as a joint venture between the acquisition of Finland’s PKC Group for projects involving surface-, lighting- Samvardhana Motherson Group and €571 million, which essentially helps and new interior technologies, all Sumitomo Wiring Systems, and was in the company expand its footprint of which can be built into the next the business of manufacturing wiring into the United States region and generation of cars. Laksh’s logic harnesses. These are the organised Europe’s commercial vehicle market. is simple: As cameras get cheaper, set of wires, terminals and connectors PKC is a manufacturer of truck wiring manufacturers are more likely to use that run throughout the vehicle and harnesses, which adds to MSSL’s them. Earlier cars came with radars relay information and electric power product mix. “This acquisition that were more expensive and harder towards a smoother functioning. made sense for Motherson Sumi, to use. Laksh sees cameras replacing In terms of organic growth, besides adding to their geographical mirrors and lamps, and this is already Motherson Sumi saw itself as a reach,” says Deepak Jain, an happening in some high-end models of “not yet” company (meaning, there analyst with IDFC Securities. sports car brands like the Porsche and was always the possibility of doing Each acquisition (see box) was Lamborghini. He has set up offices in something asked for by customers), successful and the reason, in large Silicon Valley, Germany and Australia

juLY 7, 2017 forbes india | 51 GenNext

l e a to work on this technology while the d testing and validation are being done e r in Bengaluru, a low-cost location. s Laksh is also busy putting together a project internally called ‘Dashboard X’, which will explore unique designs and technologies towards building the dashboards of the future. This new project will involve 14 experts from across the US, UK and Germany in the Samvardhana Motherson Group. “We plan to showcase some of our products at the 2018 CES (Consumer Electronics Show) in Las Vegas,” Laksh says, without divulging more details. Laksh, who is a part of the M&A and technology teams, is involved in the “Cs of the business”, which means understanding customers, collaborators and control of the vision, GV KeshaV Reddy KRishna R Bhupal and has attended all MSSL’s board Corporate finance, GVK Airports Promoter-director of GVK Power and Infrastructure meetings and the group AGM last year. Ravi Mehta, managing director of Steadview Capital, an investment fund Powering ahead based in Asia, says: “Laksh is among t’s the rise of the third generation at exit from the Kempegowda International the best second generation leaders GVK Power and Infrastructure. Founder Airport Bengaluru (KIAB). In the last in India I see around.” Steadview i GVK Reddy’s two grandchildren, 15 months, GVK sold, in two tranches, Capital invested in MSSL in 2010 and Krishna R Bhupal, 34, and GV Keshav its entire 43 percent stake in KIAB to exited in 2016, with 10x returns. Reddy, 24, have been entrusted Canadian investor Fairfax for about with key roles at the infrastructure `3,450 crore. “The projects that I am Laksh too wears an investor’s hat in conglomerate that has business interests currently working on are of high value his personal capacity and through the spanning the energy, airport, road, for the company and its sustainability,” Sehgal Family Venture Fund. In 2006, hospitality and life sciences sectors. Reddy tells Forbes India. RK jain, CEO of he helped a close friend Paramdeep Bhupal, who is the son of Shalini the GVK-owned Mumbai International Bhupal, GVK Reddy’s daughter, holds Airport and a 10-year company veteran, Singh set up music streaming platform a finance and accounting degree from believes that Keshav’s involvement Saavn (then in its earliest form) by Villanova university, Philadelphia. He in the company’s exit from the seed funding it during his under-grad joined the group in 2007, and is presently Bengaluru airport, “was a very good years. (Laksh is still one of the largest the promoter-director of GVK Power and initiation for him to constructively Infrastructure. He is credited with having contribute in the negotiations and the independent shareholders outside successfully completed and commissioned concurrent back office work involving the founders of Saavn). He has also the group’s 330 MW hydro power project the legal and financial teams”. invested in other ventures, including in uttarakhand and the 540 MW thermal For Bhupal, the concern is to address power project in Goindwal Sahib, Punjab. the pressing worry of ballooning US-based LeagueApps in 2012 and Keshav Reddy, who is Sanjay Reddy’s consolidated debt, which is now in excess AdvantEdge, an early-stage investor son, is a more recent entrant into the of `30,000 crore. “My endeavour is to in technology startups, since 2015. family business, having joined the optimise the debt, particularly at our Of course, some of this often group’s airports division, GVK Airports, energy vertical, which will eventually lead in 2014. Reddy, a graduate in industrial to better cash flow for GVK,” says Bhupal. happens 30,000 feet above ground. and operations engineering from the jain believes “he has done tremendous “My challenge is waking up to see university of Michigan, uS, has been work to ensure that two of the projects where I am, sometimes it is Mexico, involved in corporate finance and business (the hydro and thermal projects) have Hungary or China,” he says. But development. He was part of the team gone on stream. He has been coping that successfully bid for the `16,000-crore admirably with the challenges and these he has no complaints: He is well Navi Mumbai International Airport project will stand him in good stead in the future.” aware of how the future needs to be earlier this year and also helped in GVK’s —Anshul Dhamija dealt with. “[One should] try not to predict the future, but we must be the “the ProjectS that i am currently working on are of high value.” — gv keShav reddy fastest to react to that situation.”

52 | forbes india juLY 7, 2017 interview arun m kumar ‘CEOs Must Pick Teams with the Right Skill Sets’ Arun M Kumar, chairman & CEO of KPMG India, says India’s CEOs are thinking of upgrading their own abilities and it is critical for them to stay on top of change

By Sourav MajuMdar & N MadhavaN

run M Kumar, 64, previous impressions. When I was that’s a little out of sync with chairman & CEO of KPMG in the US government, I was quite what’s happening these days? India, has had a chequered involved with the US-India CEO If you look at innovation and the career. He co-founded forums and had a chance to meet customer and put those two things threeA tech ventures in Silicon Valley many CEOs and was constantly together and see them as a source and mentored many more. He led the impressed by how thoughtful they of disruption, they [the CEOs] see trade and investment efforts of the were of matters relating to India that as quite important. In fact, I Obama administration in the US as its and the world at large. The survey, thought a big theme of it is awareness assistant secretary of commerce for in some sense, confirms some of of disruption—from the customer, global markets and director general these things with really good data. whether it is ecommerce, the of the US and foreign commercial You see that CEOs in India are quite millennials or things of that kind. service. An expert in finance, he has cognisant of the geopolitical issues worked to advance business practices in the world today, more than they Q But it’s still the lowest among in financial management. He has were in the past. That could lead perceived risks in the findings… also authored Plain Truths, a book of to some interesting new trends. Compared to other risks… But you poetry, and co-edited another, Kerala’s do find that Indian CEOs seem to Economy: Crouching Tiger, Sacred Q One thing which strikes us recognise they haven’t done enough in Cows. The global consultancy firm in the survey is that the threat the technology area; they want to bring is banking on his diverse experience from innovation still seems to in people on the executive team who to take its business in India forward. be a bit lower down in the list have technological knowledge to add In an interview with Forbes India, of perceived threats for Indian to the skills on the technology domain. he talks about Indian companies, its CEOs. It’s an innovation-driven But yes, you’re right. It didn’t rank CEOs and what KPMG’s annual Global world today. Do you think right at the top. But a lot of it is also CEO Outlook survey has thrown up that when you’re running a business, this time around. Edited excerpts: operational risks are often on top of your mind. So, you’ll see the survey Q You’ve been here for four “CEOs in India are shows there is quite a lot of focus on months. How do you see Indian cognisant of the operational risks. And sometimes, CEOs and corporations faring it’s the nature of the CEO’s job. in the current environment? geopolitical issues In the last four months, I’ve had in the world today, Q Overall, based on survey a chance to meet a number of findings, what is the state of [Indian] CEOs and I am impressed more than they the Indian CEO’s mind today? by their global outlook and fluency. were in the past.” The survey shows that Indian CEOs That’s been a reconfirmation of my are highly optimistic about the world

july 7, 2017 forbes india | 53 interview arun m kumar

at large and even more optimistic don’t have enough investments the whole idea of a data-driven about the companies [they run]. I from the private sector. Is enterprise and the awareness would temper that optimism with this again a disconnect? of cyber security, which is also the fact that there is concern about You see, CEOs are always confident seen as an important element. disruption and the need to add to of the prospects of their own the skill sets. What I also found companies. Generally you will find Q If you look at the top end interesting was that CEOs are that. This is an important statistic of the big companies, are you talking about their own skill sets, because if they were really worried seeing a sense of tech-driven, like recognising the importance about things, they would speak up. data-driven initiatives there? of emotional intelligence, of self- In my conversations I am seeing awareness and their own weaknesses. Q What are the major challenges a recognition that they need to do I think those are quite insightful. that Indian CEOs face today? a lot more in the areas of data and The survey talks about some areas digitisation. And anecdotally, based on Q As much as 90 percent of that are prioritised—the geopolitical my conversations, they do recognise Indian CEOs are confident environment, the changing customer, they are behind on that… and the about the prospects of their embracing technology, which can survey shows that too. These are own companies. And yet we be either an opportunity or a threat, among the largest companies. And

Arun M Kumar, chairman & CEO of KPMG India, says Indian CEOs seem to recognise that they haven’t done enough in the technology area mexy xavier mexy

54 | forbes india july 7, 2017 the way they want to remedy that is Look at Tesla. You can buy it online, Q The other discussion is by making sure they get the right skill they download the repair for you. about jobs. That’s clearly set fairly high up in the executive It’s a computer that moves (laughs)! one of the biggest challenges chain, which makes a lot of sense. In the future, you won’t need to the country is facing… own a car. In the US, where I’ve just That’s the whole idea behind Q Last year’s survey showed come from, the younger generation programmes like Skill India. To the quality of the data itself is does not believe in owning a car. create jobs, both in urban and rural an issue. Has that been taken They just don’t. It’s the whole idea India. We at KPMG are involved care of over the past year? of the non-ownership society. in some of those programmes. I I think that’s very much a big issue… would say that it’s a very important data quality, data integrity… and in Q From your perspective of area. The whole education area, fact, technologies are often very nifty having come from overseas, for instance, where some new but they don’t mean anything unless what’s your view on the reforms are just being rolled out. All the data they are dealing with is way the Modi government of those will have a big impact on consistent and accurate. But I’ve seen has managed so far? overall skills development. In the a lot of companies and banks looking These are anecdotal, but in the months future, the ability to acquire new at new approaches to managing large I have been here, I have not faced a skills will become as important as amounts of data. So, it’s early stages, single instance of load shedding. Not the very skill you learn. Because in but it’s an area that’s being addressed. once. I remember just a few years ago a few years, everything changes.

Q You’ve spoken to some of Q On jobs, do you think as the largest banks. They are “While ideas may private investments kick in fighting on two fronts: Bad that will get corrected? assets and disruption from have been there Infrastructure is one big way of fintech companies. What are your earlier, the current creating jobs. The service industry is thoughts on some of the sectors another that has to grow. India has a which are most vulnerable? government has huge amount of infrastructure needs. There are different kinds of done very well on challenges. The banking system has its Q How do you think the challenges which are well recognised… execution as well.” role of the CEO has evolved many of the banks are seized with from, say, ten years ago? ideas of how to address those. And The role of CEOs has always been then from a data point of view, there it was quite common. Then you go to complex because there are multiple is a different set of challenges. many parts of the country and you find stakeholders, multiple issues and there is surplus power, which again disciplines that have to be dealt Q So, which are the two or is unbelievable. Some years ago, you with. What I have noticed is things three sectors that have to get would have found it inconceivable. But are changing so much faster and the their act together quickly? I think that’s an area where there has technology of five years ago may We have seen the telecom sector been tremendous amount of progress. not be the technology of the next being disrupted. We have to see what Of course there are issues around five years. So being on top of the happens to the retail sector. These distribution, management, issues of change is critical. No CEO can be are the sectors which have seen collection, etc. But progress doesn’t knowledgeable about everything. disruption even globally. Financial happen smoothly. I think while ideas A CEO has to surround himself or services… there are banks around the may have been there earlier, the herself with different sets of skills at world, which have no branches at all. current government has done very the top leadership. That is a critical So, I would say these would be some well on execution as well. I think element of future CEOs—they have sectors which are on top of the mind. there are many areas where progress to find that team where there are And then manufacturing, with robotics is visible… power and renewable different skill sets. Technology, and automation… the whole approach energy, highways, there are so many regulatory, depending on the industry. to manufacturing is changing. metros being set up… When you come from outside the country, you Q The longevity of a CEO is Q There was a recent report do notice these differences. There is also becoming shorter… which talked about the threat of progress. But yes, there’s a lot more Yes! It has become shorter. It’s not digital to the automobile sector… to be done. This is a huge country. a high longevity job (laughs).

july 7, 2017 forbes india | 55 Survey kpmg global ceo outlook 2017: tHe INDIa cut

exclusive The C-Suite Study Indian CEOs share their insights on the business environment, perceived risks to growth and disruption

The domestic economy competitors or new difficult. The India is slowing down, so is business models—and results of KPMG’s the pace of globalisation customer loyalty cannot Global CEO Outlook as protectionism rears be taken for granted 2017 survey delves into its head. Disruptions anymore. Under these the mind of the CEOs come in many forms— circumstances, the life to understand their technology, unforeseen of a CEO has become challenges and priorities. : Sameer pawar : Sameer N o I t tra S llu I

ND a S c HI fograp IN

56 | forbes india july 7, 2017 ConfIdenT neuTrAl noT ConfIdenT Agree neuTrAl dIsAgree growth Plans Economic and BusinEss There is a need to reassess global What steps will you adopt to execute confidEncE footprint due to the changing pace your strategy for growth?* of globalisation and protectionism How confident are you about India’s sCAlIng up busIness growth prospects in the next 12 months? operATIons And proCesses 64%

CollAborATIve pArTnersHIps And joInT venTures 44% 41% 25% 34% 82% 11% 7% lArge-sCAle busIness model TrAnsformATIon 36% What is your level of confidence in the What are the risks that you are global economy’s growth prospects in concerned about?* mergers & ACquIsITIons 18% the next 12 months?

TIoperA onAl rIsks 38% Top three strategic priorities for organisations in the next three years: 54% 37% 9% greATer speed-To-mArkeT emergIng 31% TeCHnology rIsks 31% How confident are you about your company’s growth prospects in sfo TerIng InnovATIon 26% the next 12 months? rTegulA ory ImplemenTIng dIsrupTIve rIsks 30% TeCHnology 22%

90% 10% BusinEss Cyber seCurITy transformation rIsks 28% BusinEss & Policy EnvironmEnt Which of the following do you expect 46% sTT rA egIC rIsks 27% Ceos are likely to keep their buSineSS to have the biggest impact on the largely the Same aS today growth of your company in the next 0 5 10 15 20 25 30 35 40 three years?

repuTATIonAl /brAnd rIsk 15% 54% tEchnological risks Ceos are likely to tranSform their organiSationS into a SignifiCantly neW TeCHnology 14% and innovation different entity in next three yearS

globAl eConomIC fACTors 12% 53% domesTIC eConomIC 11% Share of Ceos who Say their Company iS not 93% fACTors fully prepared for a Cyber event Share of Ceos who Say they are now more open to new influenCeS and new TregulA ory CollaborationS than at any other CHAnges 11% point in their CareerS neW CompeTITors/ dIsrupTors 9% 37% *numbers don’t add up to 100% because respondents could Share of Ceos who Say their have chosen more than one option. oTHCT er fA ors 28% organiSation iS Struggling to keep paCe with the rate of teChnologiCal innovation Source: KPMG Global CEO Outlook 2017 0 5 10 15 20 25 30 Compiled by N Madhavan

july 7, 2017 forbes india | 57 CROSS BORDER JamES LEpRinO

From Pizza Hut And Domino’s To Little Caesars And Papa John’s, The Vast Majority Of Pizzas In America Feature Mozzarella From One Company. For The First Time, Secretive Billionaire James Leprino Explains How He Built A Cheese Juggernaut

By CHLOE SORVINO

Camera shy: If you Google James Leprino’s picture, you’ll get fellow billionaire John Malone. This 1970s company portrait is the only known image of Leprino Foods’ founder (right)

58 | forbes india july 7, 2017 Big The cheese GES G E tty i ma CROSS BORDER JamES LEpRinO

n avalanche of cheese Forbes’s list of billionaires, Leprino, pours into the test worth an estimated $3 billion, is kitchen at the Denver willing to be interviewed about how headquarters of Leprino his family’s grocery in Denver’s Little Foods,A the mozzarella supplier to Italy became the world’s top producer Pizza Hut, Domino’s and Papa John’s. of pizza cheese—the slightly derisive First, thin wisps of low-moisture term competitors use to describe its mozzarella, then a diced alternative, mozzarella. In all, Leprino Foods sells followed by an “artisanal” version, over a billion pounds of cheese a year, cut short and wide. Then come to the tune of $3 billion in revenue. flavoured cheeses made with a The little-known Leprino (he mozzarella base, as well as provolone, declined to be photographed) rates as cheddar and Monterey Jack. one of America’s all-time monopolists. Cooks bring out a take-and-bake He lets others worry about fresh pizza, a New York-style pie and mozzarella balls and pizza that a stuffed crust, fresh from nearly taste like they were made in the old a dozen ovens. Another course country. His laser focus on large pizza features frozen food made with chains has allowed him to control Leprino products, including ham- as much as 85 percent of the market and-cheddar Hot Pockets, Stouffer’s for pizza cheese and somehow sell lasagna and Smart Ones baked simultaneously to a set of customers— ziti. Then come the cheese cubes Pizza Hut, Domino’s, Papa John’s marketed as snack pairings: Pear and Little Caesars—that try to cut flavour with nuts or Gorgonzola each others’ throat in every way that with pretzels. Team Leprino next doesn’t involve where they buy their brings out dessert: Salted-caramel- milk products. Dominating the market flavoured mozzarella wrapped has its advantages: He’s able to invest some 300 clients in 40 countries and in hot dough, rolled in cinnamon in technology that no run-of-the-mill check every complaint received the sugar. After an hour, the plastic dairy farmer ever could, resulting week before. “Your employees have shot glasses appear for sampling in more than 50 patents—and an got to know you’re not a phony,” he the company’s lactose and whey estimated 7 percent net margin, which says. “They’ve got to believe in you. powders, which end up in protein dwarfs the dairy-industry average. “I support what’s going on, but I bars, Yoplait yogurt, Pillsbury Toaster As the diamonds of his watch bezel don’t try to lead it,” he adds. “My job Strudel and baby formula consumed shimmer on his wrist, Leprino takes is to hold them responsible for doing by millions of infants annually. out his beat-up black leather wallet, what they said they’re going to do.” Two floors above this dairy deluge, removes the rubber band holding He wasn’t always so hands-off. in a dark-wood-panelled office with it shut and reveals a card featuring While acknowledging his “genius”, white marble floors, Corinthian the four company watchwords: numerous industry executives paint columns and gold accents, sits James Quality, service, price, ethics. “I’ve Leprino, in his younger days, as Leprino, the Willy Wonka of cheese. got everybody keeping one in their an “aggressive” leader who wasn’t “It’s hard for me to believe I agreed to pocket,” Leprino says. “The company above visiting individual franchise this,” the 79-year-old billionaire says. was growing so fast they were owners to pitch his technologically “I really like to keep my privacy.” missing this important message.” advanced cheese. But very few will Indeed he does, to a nearly Quality is listed first intentionally. go into detail, and fewer still will unprecedented degree, given the way It’s easy to mock his product attach their name to their comments. he dominates his industry. Leprino (Frankencheese, anyone?), but One pizza entrepreneur puts it this has eluded photographers for decades: Leprino Foods is one of the few dairy way about the man who owns 100 A Google search picks up photos of giants that have never had a recall. percent of this mozzarella giant: “Jim fellow Colorado billionaire Philip Every Monday at 11.30 am, Leprino Leprino is a very powerful man.” Anschutz and cosmetics heir Ronald walks down to the test kitchen along Lauder. There isn’t a single image of with two dozen of his most trusted eprino’s office bears testaments Leprino on his company’s website. But executives for the weekly Monday to his roots, including a black- after nearly 60 years of running the Melts meeting. The executives test L and-white photo of his mother business and more than a decade on samples of the cheese produced for on her wedding day at the age of 16

60 | forbes india july 7, 2017 killed in action. “When Lester came, I went downtown to the junkyard and I bought a couple of bigger cheese vats to make it look like we were really in the business,” Leprino says. Leprino’s first coup came in 1968, when Pizza Hut was looking for a supplier that could help it cut costs while standardising portions. After hearing that shredding 5-pound cheese blocks in the franchises was time-consuming and inconsistent, Leprino Foods started selling frozen, pre-sliced blocks. For the first time, pizza-makers could simply layer a few slices onto each pie. While Kielsmeier made the cheese, Leprino fixated on efficiency. He quickly realised he was dumping half his raw ingredients into the river in the form of whey, the calcium- Whey to go: Leprino’s new factory is rolling out its rich liquid left over after curds are first direct-to-consumer strained. Inspired by the 1964 World’s product, a protein powder called Ascent Fair in New York, Leprino travelled to Japan to meet with scientists using milk proteins derived from whey to and a bronze relief of James and his market to close, the Leprino Foods help the Japanese population grow father rolling fresh mozzarella balls. cheese empire started with $615. taller. More than a half-century Leprino Foods’ genesis lies in the The timing couldn’t have been later, Leprino Foods remains the mountains of southern Italy, which better. That same year, the first Pizza largest US exporter of lactose, a Mike Leprino Sr left in 1914, at the age Hut opened, in Wichita, Kansas. A byproduct of sweet whey, and retains of 16. Accustomed to high altitude, year later, Mike and Marian Ilitch a large market share in Japan. he settled in Denver; without much opened the first Little Caesars, outside On the cheese side, Leprino of an education or the ability to read Detroit. Another year went by, and hustled to satisfy Pizza Hut, which and write English, he began farming. Domino’s began delivering pizza, in went public in 1972 with around More than three decades later, in Ypsilanti, Michigan. Frozen pizzas, 1,000 stores and, at its peak in the 1950, he finally opened a grocery introduced after soldiers returned 1990s, accounted for 90 percent of store to sell the produce he grew. home from World War II craving Leprino’s sales. Pizza Hut franchises Italian specialties followed, including slices, were also gaining popularity. would sometimes wait too long to fresh ricotta, mozzarella balls and After two years in business, thaw the pre-sliced mozzarella and ravioli made by James’s sister Angie. Leprino Foods was delivering reported that their cheese would Meanwhile, James, the youngest of 200 pounds of block mozzarella a crumble, so Leprino Foods responded five children, noticed his classmates week to local Italian restaurants. with its first major breakthrough: spending free time at neighbourhood Leprino realised he needed to A preservative mist. The scientists pizza joints. After graduating from learn the science behind making there soon realised that this method high school in 1956, he started cheese on a mass scale. But with a allowed them to add flavours such working with his father full-time young daughter at home and another as salted caramel and jalapeño. and shared a revelation: “Pizzerias baby on the way, he didn’t have time They could even make a reduced fat in this part of the country were for college. Instead, he hired Lester “cheddar” by using a mozzarella base

buying 5,000 pounds of cheese a Kielsmeier, who had run a cheese and then misting on cheddar flavour OR fORBES week,” he recalls. “I thought, ‘This factory in Wisconsin only to find out and orange food colouring. Leprino is a good market to go after’, so I that it was sold during his stint in Foods’ production rose sixteen-fold,

did.” In 1958, after larger chain the Air Force during World War II, to 2 million pounds of cheese a week. y p i C k E n S f OD

grocery stores had forced the Leprino because his dad believed he’d been Just as his timing ahead of C

july 7, 2017 forbes india | 61 CROSS BORDER JamES LEpRinO

America’s pizza boom proved lucky, Meanwhile, Little Caesars, with to him. When I said I didn’t like it, so did his location in the centre of more than 3,000 stores, was growing he took it personally.” Within two the country. In the 1970s, Wisconsin at 25 percent a year with its deal of months, Leprino switched Papa and New York were producing most “Two great pizzas, one low price”. John’s back to the previous blend. of the country’s milk, but California’s And by 1991, Leprino had become “Jim came at me and said, ‘It’s going to nascent dairy industry often priced the exclusive supplier for Papa cost you three more cents a pound’.” milk lower. Leprino had the foresight John’s, which launched in 1985. Price has long been Leprino’s to engage in some arbitrage, locking Leprino was able to grow with biggest advantage, and a large one California dairy farmers into multi- them all by putting them in silos, since cheese accounts for about 40 decade contracts at rates that were granting each company its own specs percent of a pizza’s cost. Leprino’s often above-market locally but below- and then troubleshooting as necessary. scale begat better prices, which begat market nationally. Over the next two “We treat every customer like our only more scale. And that scale also led decades, Leprino Foods also signed customer,” says Mike Durkin, a former to cost-saving breakthroughs that sweetheart deals with co-ops that Pepsi executive who came on six years Leprino’s competitors could neither eventually became the Dairy Farmers ago to run day-to-day operations as catch up with technologically nor fight of America, securing a lasting milk president of Leprino Foods. Domino’s in patent court. “They are a biotech supply with the country’s largest dairy company that is wrapped inside a co-op; the company also purchased food business,” Zimmerman says. and renovated some of the older dairy For example, in the 1990s, plants, cutting off the options for Leprino Foods Kielsmeier realised that just as the competitors who wanted to process cheese changed when ingredients milk. As Jerry Graf, a former cheese sells over a billion were sprayed on at the end, certain buyer for Pizza Hut, notes, “Jim was pounds of cheese additives used early in the process always one step ahead of the game.” could affect how cheese melts—from a year, to the how big and how brown the bubbles eprino’s most important tune of $3 billion get to how many are on the top of innovation, ultimately, was in revenue the pie. On the manufacturing side, L marrying science and sales—a Kielsmeier cut down the cheese’s combination that met the needs of ageing period from 14 days to just the four biggest US pizza chains four hours, which multiplied the during a period when they were agreed to an exclusive relationship in company’s production capabilities growing exponentially, launching 1996—the contract was just one page. while cutting costs significantly. one of the greatest turf wars in “It was more of a handshake than it “I would tell people, ‘Lester is the the history of American food. was anything else,” recalls Michael man that made me rich’,” Leprino says. The first key was something called Soignet, a former vice president Notably, though, Leprino never gave “Quality Locked Cheese”—shredded of supply chain at Domino’s. Kielsmeier any equity. While Leprino and individually frozen portions— When Pizza Hut began using got rich, Kielsmeier—who came to which Leprino introduced in 1986. a hotter conveyor oven, Leprino work every day right until his death Leprino’s competitors, still mostly Foods changed the formula so the at 95 in 2012—would have to content run by Italian-Americans with strong cheese wouldn’t burn at higher himself with being very well paid. immigrant roots, sniffed. “They didn’t temperatures. As delivery-focussed believe that was what should go on Domino’s expanded, Leprino’s head or James Leprino, the perks of top of their grandmother’s pizza cheese maker, Lester Kielsmeier, being a billionaire are relatively recipe,” says Ed Zimmerman, a 30- manipulated the product so that it Fmuted. Yes, the company owns year pizza-industry veteran. But the retained its fresh-out-of-the-oven look three private planes—a Gulfstream franchise-friendly process quickly and taste longer. When Papa John’s G450, a Bombardier jet and a small became the industry standard, both insisted it wanted cheese without 1980 commuter plane—and his house for consistency and scalability. With a fillers—eschewing a new Leprino in Denver’s affluent Indian Hills patent in place, Leprino made himself product that contained some—the suburb has 11 bedrooms, to go with indispensable. Graf left Pizza Hut, big cheese didn’t take it well. “His an 8,000-square-foot vacation home which was still growing, for Domino’s reflected sense of self is his patents, in Scottsdale, Arizona. But he’s more and brought Leprino’s business his business,” Papa John’s billionaire likely to pick up a hammer than call with him, as that chain surged from founder John Schnatter says of Jim a repairman: Leprino, who has been 200 outlets in 1978 to 5,000 in 1989. Leprino. “That really means a lot known to operate a forklift at the

62 | forbes india july 7, 2017 roles. And for now he’ll continue to roles. Andfornow he’llcontinueto for yearsbutwon’t takeday-to-day 55, whohavebeenontheboard two daughters,Terry,57,and Gina, He’ll splitownershipbetween his “My successis a fairytale,” he says. son hasnointentiontoretire, ever. anonymously. And theimmigrant’s every Sunday anddonatestocharity devout Catholic,hegoestochurch trees around hisColorado home. A factory, hasalsopersonally bulldozed p began washing dishesat Rocky’s Sub company’s shares. Schnatter, whoowns 26percent ofthe forget that. y we were negative broke—you never start offbroke—and we weren’t broke, 40 percent inthepast year. “When you company’s risingstock price—up by John’s owes his$1billion-fortune to the year. t p Schnatter—more commonly known as to become apizzabillionaire. John Selling mozzarella isn’ttheonlyway a billion-dollarfortunetoJohnSchnatter How Papa John’s,theworld’sthird-largestpizzachain,delivered Pies of Life do was make $50,000 ayear,” Schnat- to settlesomedebts.“ Camaro for $2,800andusedthemoney toward bankruptcy. Schnatter soldthe bar, mick’s Lounge, whichwas headed in 1983,hestarted working at hisfather’s to buya1971 Camaro Z28.a ing pizza.With hisearnings,hesaved up apa John—joined the club earlier this apa John—joinedtheclubearlierthis ub at 15andworked his way up to mak Schnatter, whowas borninindiana, Leprino’s succession plan is simple: Leprino’s successionplanissimple: he founder andCEOofp ou stay appreciative,” says all iwanted to fter college, apa apa - 2009, thecarcamebackto p ter says. andtheincentive worked—in a feeling itwas still around,” Schnat- was squashedupat thejunkyard. ihad said iwas crazy. t original ride. “Everybody around me to anyone whocould findSchnatter’s p in 45countries. asfor that Camaro, are now more than5,000 restaurants has since increased thirty-fold. t p be itsexclusive cheesesupplier. in1993, p six years, the100thlocation opened,and better pizza”,anditcaughton.Within touted itspiesas“better ingredients, in Jeffersonville, indiana.t by 1985,thefirst p mick’s eventually turnedaround, and installed inthetavern’s broom closet. used pizzaequipment,whichSchnatter shopping.” t ter recalls. “ithoughtcould take agirl perform well for our pizza, which is perform wellfor ourpizza,whichis technology above allelse.“Itdidn’t the companytosignon,selling the him atleastthreetimestotry toget Robert GrahamsaysLeprino visited remains inhissights.Co-founder the take-and-bakePapaMurphy’s, with theUK’sGlanbiaCheese). ones (Leprinohasajointventure as wellAsianandEuropean many Americanpizzasaspossible— ensure thatLeprinocheeseisonas apa John’s offered a$250,000 reward apa John’s went public,andthestock apa John’s brought inLeprino f America’s fifth-largest pizza chain, America’s fifth-largestpizzachain, he rest went toward some hey thoughtthecar apa John’s opened he company apa. —CS here oods to oods to

market, primed tobedominated. the olddays’.” A new,fractured was like,‘Ah,thisremindsme of “Jim Leprinowalkedinhere and who isoverseeingAscent’slaunch. had thissetup,”saysMikeArnold, “I rememberthefirstdaythat we factory’s loadingdockandwarehouse. space sitsatoptheoriginalcheese Ascent’s teamoftheirroots. and-growing USproteinmarket. will beanedgeinthe$6.6billion- muscle recovery.Leprinohopesthat proteins andvitaminsthathelpaid straight fromrawmilktoprotectkey cheese foritsclients,Ascentisfiltered protein asabyproductofmaking While Leprinostillproduceswhey dedicated wingattheGreeleyfacility. called Ascent,whichwillhavea product, awheyproteinpowder company’s firstdirect-to-consumer cheese—and its It’s LeprinoFoods’mostexpensive mozzarella withakissofbuffalomilk. artisanal-pizza-makers byoffering (“kiss” inItalian),iscateringto food trends.Onecreation,Bacio designed toridethecoattailsof an in-house“innovationstudio”, pizza companies.It’salsocreated that arepopularamongfrozen- cheese”—bulky 2.5-poundblocks Colorado, thatspecialisesin“ribbon million inafactoryGreeley, new markets.Ithasinvested$600 it’ll comeatsomepoint,”hesays. more? Probablytheanswerisyes,and eventually succumb.“Wouldwewant predicts thatLittleCaesarswill too—Leprino PresidentMikeDurkin chain’s blendusesMuenstercheese, Little Caesars,inpartbecausethe say Leprinoisn’texclusivewith other vendors—industryinsiders executives continuetopress. cheese. Itevaporated.”YetLeprino you couldseethesauceunder “Because ofthemoisturecontent, cooked in a home oven,” Graham says. cooked inahomeoven,”Grahamsays. There is plenty of history to remind There isplentyofhistorytoremind Leprino isalsorollingoutthe Meanwhile, Leprinowillpursue And whileLittleCaesarsuses july 7, 2017 july fastest-growing. fastest-growing. forbes india

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JamEL tOppin ORf fORBES CROSS BORDER ARTIFICIAL InTELLIGEnCE China’s AI Advantage Veteran researcher and investor Kai-Fu Lee believes that the US is destined to lose its lead in the Artificial Intelligence race

By AlexAnder KonrAd

ai-Fu Lee watched the as a duopolistic global tech economy. US beat China to global US internet software continued to internet leadership during lead the English-speaking world, the dotcom bubble from while a group of Chinese companies, Kthe inside. Now with what he sees famously led by Baidu, Alibaba as an even greater technological and Tencent (B-A-T), controlled “Whoever has the most revolution taking place in Artificial their domestic market and exerted data wins”: Kai-Fu Lee Intelligence (AI), Lee doesn’t expect increasing influence in Southeast sharing intelligence in mid-May with Forbes Asia China to take a backseat a second time. Asia and developing markets. editorial staff “China started slow, and American With companies on both sides companies went international,” Lee of the Pacific racing to develop says during a May visit to Forbes applications of AI, China’s scale talent in the field—that is still found Media’s headquarters. “But simple can prove a decisive advantage, Lee in the US, Canada and Britain, he math says China has a larger GDP. believes. The country boasts perhaps says—but China’s legions are good. The market will be bigger.” 43 percent of the world’s trained AI China’s political leadership When Lee talks about AI, he scientists, Lee says, with Microsoft continues to invest heavily in research speaks from first-hand experience. alone training about 50,000 Chinese and technology. And developers The Taiwan native developed the scientists in processes critical to may not face the same regulation first speaker-independent phone the field starting in 1998. Overall, when it comes to pushing real-world recognition programme as a PhD this doesn’t represent the cream of trials, such as with autonomous student at Carnegie Mellon in the vehicles, or in mass data collection late 1980s, before stints at Apple that would be viewed as intrusive and as an executive at Microsoft Facebook in china? or a privacy violation in the West. and Google in China—in fact, he was Google famously pulled its search engine out of In driverless cars, the US. founding president of Google China. China in 2010 and despite months of reported has about a two-year head start, off-and-on discussions with the Chinese govern- Google and its peers were ment has yet to return. To its former president of according to Lee. But each minute ultimately thwarted in their ambitions Google China, Kai-Fu Lee, Google is no longer American tech companies find the most intriguing US internet company to the to carve out leadership stakes in the Chinese market. That’s now Facebook, the lead- themselves mired in a regulatory Chinese market, in part due to cultural ing social network and Instagram and WhatsApp battle or hobbled by objections owner led by billionaire Mark Zuckerberg. In differences among consumers as well April, Xiaomi’s high-profile former vice president from transportation incumbents, as privacy clashes with the Chinese Hugo Barra joined Facebook to lead its virtual the Chinese can close that gap. reality (VR) efforts; Lee believes Facebook’s government. When Lee returned from VR hardware Oculus will launch in China in the What’s more, he says, top-down working at Google’s Mountain View, coming months. But success for Oculus wouldn’t rule in China will countenance increase the likelihood of Facebook’s core California, headquarters to launch his platform appearing in China, which now has a a long stretch of data-gathering own VC fund, Sinovation Ventures, host of social media alternatives. “Facebook has experience in which the casualty the best chance” when it comes to mainstream he came back to a China firmly adoption in China, says Lee. “But no one has a rates from autonomous-vehicle entrenched in what he now describes chance.” —AK use steadily drop—by orders of

64 | forbes india july 7, 2017 moving fast. As long as we continue moving fast.As longaswecontinue Intelligence. “However, Chinais Seattle’s AllenInstituteforArtificial US,” saysOrenEtzioni,CEO of and researchlabsarestillinthe researchers, universitydepartments voice inthefield.“Theleading AI by atleastonetopAmerican can workinChina’sfavour. the US.Evenalanguagebarrier after attendinguniversitiesin more academicstoreturnChina visa policiescouldencourage to investinR&Dwhileunstable Chinese governmentcontinues specialised leadersintheUS), use cases(comparedwithmore across arangeofapplicationsand leading playerstypicallycompete competitive marketinwhichthe have theadvantageofahyper- not passmusterindemocracies. Even relativelysaferecordsmay magnitude, Leehypothesizes. Lee’s odds on China are contested Lee’s oddsonChinaarecontested Not onlydoChinesecompanies the chance the machine is wrong or its the chance machineiswrongorits and-death that acompanycan’ttake will remainsomission-critical orlife- guesses about10percent—of decisions officers: Atinypercentage—Lee managers, doctorsandmortgage even evaluatingpatientX-rays. applications, shippingordersand of insuranceclaimsormortgage That couldincludescanninghundreds loop willgivewaytoAI,”Leesays. better. “Anythingwithafeedback produced areturnthatwaseighttimes run tradingalgorithms.Themachines his personalbankeragainstcomputer- of tellingthestoryhowhepitted massive transformations.Leeisfond health careandmediawillallface ranging frombankingtoinsurance, applications, Leeargues.Industries greatly exceeddirecttechnological because whatweknowasAIwill immigration, wewillremainahead.” to haveanopensocietyandstrong The small comfort for logistics The smallcomfortforlogistics The racetoAIleadershipiscrucial has themostdata wins.” than China.Says Lee:“Whoever hub hasmoreusersatitsfingertips percent intheUS.Noresearch 95 percentinChinaandonly 5 like Softbank’sPepper,however.) about humanisticservicerobots computer science.(He’ssceptical which makesrobotstoteachchildren people, andWonderWorkshop, exosuits fordisabledandelderly SuperFlex, acompanybuilding benefit fromAI,including,inAmerica, investing inapplicationsthatcan fund—building to$2billion—Leeis specialists. Throughhis$1.2billion as soldacontractserviceby and largecorporationsaswell practices withintechcompanies economy willbespreadoutacross and Google.LeebelievestheAI of Apple,Facebook,Microsoft or thedefactoAmericanhegemony won’t lookliketheB-A-Tcompanies monitor them,hesays.“It’snoise.” number ofpeoplewhowillbepaidto Facebook isreaching”relativetothe percent ofglobalinternetusers number,” hesays.“Lookatwhat inappropriate videos.“That’satiny help itssystemsflagandtakedown would hire3,000moderatorsto Facebook’s announcementthatit by recentdevelopmentssuchas by automation.Leeisnotimpressed the USeconomywouldbethreatened predicted that47percentofjobsin Frey andMichaelAOsbornethat research paperbyCarlBenedikt frequently invokea2013Oxford on interactions.Leeandhisteam or puttinga“lastmile”humanface managerial orquality-controlroles of workers,pushingthejobsto mean amassivedisplacement wrong, youcanstilllosealltrust.” isn’t there,”Leesays.“With10percent fake someempathy,butcompassion communications areoff.“Roboticscan Lee says he’s investing about Lee sayshe’sinvestingabout The risingAIeconomy,meanwhile, Even nearaccuracywouldstill july 7, 2017 july forbes india

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DAVID YELLEn FOR FORBES interview karan bajwa

‘Even a Small Grocery Store Should be Able to Experience IBM’ In an attempt to become India’s largest cloud and cognitive solutions company, IBM India’s new managing director, Karan Bajwa, wants to offer end-to-end digital solutions to both large and small enterprises

By Aveek DAttA

t’s been only about six months applications meant for grocery store infrastructure services component. since Karan Bajwa, 50, took over owners are built by developers. He The DNA of these verticals is different as managing director of IBM also expresses concern about the and there are large individual India. And he is already pulling recent cyber attacks worldwide companies in the market that focus on Iall stops to achieve the ambitious and says that while digital security some of them individually. Imagine goal he has set for himself: To make occupies high mindshare among the power of a company that can IBM India the number one cloud Indian companies, the funds allocated do all of these on a large scale. and cognitive solutions company for it are meagre. Edited excerpts: for businesses in the country. Q What strategy are you The former managing director Q What is IBM India’s implementing to help IBM of Microsoft India, who succeeded greatest strength? India play to its strengths? Vanitha Narayanan (now elevated I was clear on why I was taking If you see some of the work that we as chairman of IBM India), wants up this role. It was to leverage the are doing for our clients, it is about to position the company as a learnings of implementing digital implementing an end-to-end digital one-stop marketplace for all the transformation at enterprises on a transformation agenda by bringing in technological needs of an enterprise, much larger scale and in a much more first party (IBM’s own) and third-party and not merely for products. The complex environment. That is what capabilities together. If a customer had conducive environment in India— IBM is all about. IBM is four different to do this himself, he would have to which has emerged as a bright spot organisations rolled into one. There reach out to three or four companies. for the New York-headquartered is a hardware piece, a software firm, The three big shifts in the digital $80-billion global technology giant a consulting practice and a digital world over the next two decades will —is likely to aid Bajwa’s journey. be around cloud, data and artificial The company’s strategy is to offer intelligence, which have become end-to-end solutions for enterprises, more democratically accessible to spanning across the customer The three big users, even at an API (application lifecycle from consulting on the best shifts in the digital programming interface, which is solutions to devising them through used to build apps) level. Keeping products and services (even if they world in future will this in mind, we have devised a include third-party products) and be around cloud, ‘One India’ plan. This includes overseeing their implementation. mainstreaming cloud offerings, In an interview with Forbes India, data and artificial SaaS (software as a service) and Bajwa says he wants IBM India intelligence cognitive capabilities. We also want to become the platform on which to build and manage an ecosystem

66 | forbes india july 7, 2017 is happening in the world right now (the WannaCry ransomware attack). Security has a high mindshare with customers, but poor wallet share. In India, the surface area for cyber attacks is increasing with commercial transactions becoming digital. A lot of vendors have done a disservice to customers by giving them a view from their vantage point, rather than dealing with the problem. We don’t offer security solutions to customers with that mindset. We recently did a large security engagement with BSE where we integrated the entire ecosystem using a lot of third-party products along with our own. We are also working on blockchain and have built a first-use case with Mahindra Finance and another with Yes Bank.

Q While IBM’s global revenues have been declining, those in India are witnessing growth. If you look at IBM’s global earnings declared on April 19, India was one of the strongest performing and highest growth regions for the company. This has been the case for the last three to four quarters. We aspire to continue to grow in India, where the strong fundamentals of the economy present a great opportunity. As far as global earnings are concerned, there is a shift happening with strategic imperative businesses (including cloud and cognitive) now accounting of developers, startups, academia been built on the Bluemix platform. So for 42 percent of the overall turnover. and ISVs (independent software a small grocery store that would have So old revenue is getting replaced vendors). When they build a digital never experienced IBM otherwise with new and that always takes time. solution, IBM offerings like Bluemix will now do so in some form. (a cloud-based app development Q What is your view on platform) should be the platform Q Enterprises are now worried potential job losses because of that they should be thinking of. about cyber security. What role technological disruptions? By mainstreaming innovative can IBM play to allay these fears? There will always be prioritisation offerings, we want to expand the We want IBM to be the first partner of skills and people will transition market. For instance, a Chennai-based that enterprises think of when it to new-age skills, which will take company called Pace Automation comes to security and blockchain. some time. We have said in the past has built a digital solution for small Nothing exemplifies the need for that we will continue to reorient our grocery stores that will need to go companies to protect themselves workforce to newer technologies and

digital after the GST rollout. This has against digital threats better than what newer customer imperatives. n avalkar j oshua

july 7, 2017 forbes india | 67 CROSS BORDER ClaSSDOjO

By listening to its core audience—teachers— ClassDojo’s educational software has reached Class 90 percent of US schools. Now the real work begins: How to get someone to pay for it

App By KathLeen ChayKowSKi

very morning before Cindy Price starts teaching her first graders in New Castle, EDelaware, she fires up ClassDojo, a classroom management app. She checks parent messages, finds out whether any students will be out sick and reads school news. When a child shows a trait like “amazing thinking” or “great listening”, she adds a point to the student’s avatar—a personalised cartoonish monster—generating a bright ‘ping!’ that makes classmates perk up. Points come off for disruptive behaviour. Twice a day, Price shares class photos or videos with parents. And during free time, she plays ClassDojo’s short personal- growth videos, which use monsters like ClassDojo’s excitable green mascot, Mojo, to teach lessons on empathy and perseverance. “It’s helping teachers be successful in the classroom,” she says. Teachers like it because teachers have shaped it, in the form of 20,000 who provide constant feedback. That bottom-up approach, and kid-friendly gamification, has given it penetration into 90 percent of American schools, according to the company. “Why don’t we just go to the people doing the work?” says CEO and co-founder Sam Chaudhary. “It sounds obvious,

ORBES but it wasn’t being done.” OR f

ClassDojo co-founders Liam Don (left) and Sam Chaudhary believe the success of their free classroom-management app will pave y PiCk E n S f the way for additional paid services meant OD

C to support learning at home

68 | forbes india july 7, 2017 ClassDojo has been translated teens in Abu Dhabi and worked for area. Muhammed Chaudhry, into 35 languages and made inroads McKinsey & Co’s education group; the CEO of the Silicon Valley in 180 countries. The company says Don, the CTO, was a computer- Education Foundation, says gaming ClassDojo reaches 7 million kids science PhD student with a focus techniques succeeded in turning globally every day, or 1 percent of on educational tech. Three months ClassDojo into “the most widely the 700 million children in grades after their first meeting, the pair used and respected behavioural- K–8 or their equivalent. Price moved to Silicon Valley to tap management app out there”. says that at her school, Southern $20,000 from Imagine K12, a startup Academic studies have Elementary, nearly all the teachers accelerator focussed on education found that ClassDojo helped to and a healthy dose of parents use it. that’s part of the prestigious Y increase students’ positivity, self- All of this is great, of course, Combinator programme. control and engagement and to except for one sticky problem: The two spent a month meeting reduce behavioral problems. ClassDojo is free, and when you’re hundreds of teachers to gauge needs. ClassDojo now supports a dealing with teachers and young Supporting kids’ personal growth Facebook-like feed that teachers students, a freemium model through playful communication use to share photos and video of involving in-app purchases isn’t and building community became the class, and a ‘stories’ section that a natural winner. So what is this early goals. “How do you turn a lets schools and students post news company, which is successful in classroom from an isolated place and projects. “I can look through every aspect except the bottom line, the feed and see they’re studying the supposed to do? While the core app letter ‘m’ and that they had bagels remains free, the company plans for snacks,” says Jennifer Tyler, a to target parents by promoting ClassDojo has been working mom with two preschoolers learning outside of school hours. translated into in ClassDojo classrooms. “I feel “The home has been very more connected.” Teachers say underserved for educational 35 languages and the app helps to promote values resources and doesn’t support made inroads in like responsibility and focus. what’s happening in school,” Students, who have sent co-founder Liam Don says. Paid 180 countries. It ClassDojo 250,000 drawings features could take the form of reaches 7 million of its whimsical monsters and a content subscription aimed at mascot, may be the biggest fans. parents who can’t afford a private kids globally daily ClassDojo faces a handful of school but want to invest in their startup competitors that are more kids’ education. It’s all a bit fuzzy narrowly focussed on classroom at this point, though the stakes where one teacher is dealing with 30 communications or ways for are huge: Educational software kids and parents are disconnected, students to upload homework. The and digital content (preschool popping in every three months, company has stayed ahead through through 12th grade) represent a and kids aren’t excited to be at its broader focus and rapid product market bigger than $8 billion. school, into a community working innovation, based on pedagogical Chaudhary and Don, both Forbes together?” Chaudhary asked. research and teacher consultations. 30 Under 30 alums, began dreaming The first version of ClassDojo, It collaborated with educators up what would become ClassDojo which let teachers give kids at Stanford, Harvard and Yale to after a weekend gathering for feedback, spread to 35,000 develop a video-discussion series entrepreneurs in Cambridge in classrooms in a mere 12 weeks, on “big ideas”, with sections like their native England. The two prompting Y Combinator co- “growth mindset” and “perseverance” quickly bonded over a shared founder Paul Graham to personally as well as content to promote concern: The purpose of education invest in its seed round. empathy and mindfulness. has changed dramatically across Six years later, ClassDojo Chaudhary vows to double down the world over the past century, has raised about $31 million on ClassDojo’s user focus through but classrooms haven’t. from investors, earning a recent ongoing in-depth consultations with Though just 25 at the time, both valuation of $100 million. Its 30 teachers and parents. “Education is had relevant experience. Chaudhary employees occupy an airy former a human system,” he says. “You need taught 20 hours a week through his art gallery in San Francisco’s SoMa to work with people to change it.”

july 7, 2017 forbes india | 69

CRoss BoRDeR NBa hopefuls iN asia How Long of a Reach? Pro basketball’s Asian appeal is obvious, but it struggles to seed NBA talent here

By matt connolly

he NBA, while a “national to that of Yi Jianlian, whose NBA to impart fundamental skills and association”, conducts a career fizzled out after five seasons. core values. The programme has large part of its basketball Satnam Singh is the only Indian garnered participation from over 5.5 business on international player to come close to gracing the million youth, parents and coaches Tsoil. The brand has grown especially NBA hardwood, but the 2015 second- in the region. “To use a basketball popular in Asia, a region that carries rounder has floundered with the expression, we’re employing a the NBA’s second- and third-largest Dallas Mavericks’ D-League affiliate. full-court press behind youth revenue markets in China and The Philippines, where basketball development,” NBA China CEO the Philippines, respectively. borders on religion, has yet to David Shoemaker says. “It starts And yet, despite Asia making produce any NBA-calibre talent. with a partnership we have with up roughly 60 percent of the The league’s remedy? Nurture the the ministry of education, where world’s population, in a class of sport, and its participants. “There we teach basketball as part of the 113 foreign players to break camp may be nothing more important physical education curriculum in with an NBA squad this season, elementary, middle and high school.” not one hailed from that continent Jr NBA’s success has afforded the (unless you count Australia). programme an advisory council for In recent years, the league’s “It (basketball) can Greater Asia, featuring Basketball dedicated offices for China, India Hall of Famer Dikembe Mutombo and and six other Asian markets have be the No 2 sport business leaders (including Forbes launched initiatives, including newly in cricket-mad Asia CEO William Adamopoulos). opened academies, to establish the It has also led to the formation of game across all levels of play. India... maybe in sister programmes like the NBA For the NBA to reach its full five to six years.” Yao School, an after-school league potential in Asia, the region is going for teenagers that, above all else, to need stars its fan bases can identify emphasises playing basketball with. Players with full or partial Asian for the sheer enjoyment of it. heritage (see Jeremy Lin) obviously than having players come out of “Yao himself believes that what has help, but having a high-level player that region and be in our league,” been lacking in China is the number born and raised in Asia is key. said Mark Tatum, NBA deputy of people that have played sports for Yao Ming, an eight-time All-Star commissioner, chief operating officer the fun,” Shoemaker says. The NBA for the Houston Rockets from 2003 to and leader of all NBA international icon has lately assumed the presidency 2011 and a recent Basketball Hall of efforts. “What we’re hoping to do is of the China Basketball Association Fame inductee, did wonders for the provide the coaching, the training (CBA), a national league of teams.

G es game in China. But since the 7-footer’s and the competition required to India has followed suit. With Jr retirement in 2011, the country of develop an All-Star-calibre player.” NBA in 19 of its cities across the nearly 1.4 billion has failed to produce It’s been just over four years since country, it made sense for Mumbai to any standouts. The Rockets’ 2016 the league first introduced “Jr NBA” become the site of the league’s first second-round pick Zhou Qi is the to Asia, adapting to China, India NBA Basketball School, which opened country’s most promising prospect in and its Southeast Asian markets its its doors this spring. The tuition-based

Ramos / Getty i ma D Ramos Davi years, but his ceiling is probably closer American youth programme designed programme is for youth to age 18.

72 | forbes india july 7, 2017 Strong to the hoop and american shores: Zhou Qi, the Houston Rockets’ 2016 second round pick CRoss BoRDeR NBa hopefuls iN asia

Taking it a step further, prospects Basketball Association is having in India this off-season. Fellow with professional basketball its own problems filling stadiums, international “endorsement All-Stars” aspirations now have the opportunity but a newly opened NBA office like LeBron James (Nike, Tencent, to enrol in one of the newly formed in Manila should present more Intel), Stephen Curry (UA, Vivo) NBA Academies. The hope is that opportunities for collaboration. and James Harden (Adidas) now these global hubs—including three Japan, which had an NBA office make annual trips across the globe. in China, one in India and one in in Tokyo from 1994 to 2011, is also While individual player Australia that all launched this year— back on the pro basketball map appearances are met with fanfare and will turn Asian national team players after launching a new league with mobs, the NBA’s Global Games—pre- into legitimate NBA hopefuls. backing from the domestic sports season exhibitions involving two NBA “We have government- authority. With the Olympics coming teams or one NBA team and a foreign funded academies in a lot of to the country in 2020, Tatum of club—have arguably been an even sports, but in terms of that level the NBA hints at renewed ties. bigger hit. “It’s almost treated like of facility, it’s the first,” says Unlike most of the NBA-viewing an All-Star game when we go there,” NBA India Managing Director public, Asian fans are forced to catch Tatum says. “Last year, we sold out Yannick Colaco. “We’re creating games in the morning—either on their both games in a matter of hours.” a legacy through this knowledge commute or, for many, when they’re This, despite the games not even transfer with local coaches.” already at work. But despite occupying counting toward the teams’ win- Supporting local pro basketball loss records, is a true testament to leagues will prove just as essential the region’s interest in the league’s to the sport’s reach. But the NBA live-event experience. Actual not having a direct hand in how it Of the 113 foreign regular-season games in Asia would conducts business and handles its players to break obviously do big business, but that talent has presented some challenges. hasn’t been attempted since a 2003 Many CBA officials, for example, camp with an NBA visit to Japan. “Frankly, I don’t see double as investors in the Chinese squad this year, us playing regular-season games league, leading to top domestic talent today in that part of the world,” being coddled and barred from leaving not one hailed Tatum says, citing “jet lag and the the country to play in Europe, a prime from Asia potential impact it might have with entry point to the NBA. National team their performance on the court”. participation is mandatory, even when Though the Global Games have it leaks into the CBA season. The made stops in the Philippines, Taipei fundamental structure of the league— a bad block for programming, and Macau, China has served as the from outdated arenas to a three- viewership has steadily climbed exclusive Asia host for the past few month schedule to an overreliance across all major markets, due in large years. That is to continue in 2017, with on American imports—has left a part to advances in live streaming. the league strategically selecting the majority of its teams in the red. “Their fans are sophisticated,” country’s top merchandise-selling “With [Yao] at the helm, many Tatum says. “In those time zones, team, the Golden State Warriors, to of the old practices will fall by the they’re watching our games on play the Minnesota Timberwolves, wayside,” Shoemaker says of China’s our mobile platforms, our digital who sold a minority ownership professional-player development. platforms... there’s a consumption stake to Chinese businessman India’s situation is even more habit that’s now been built Lizhang Jiang last summer. problematic, as it lacks a clear-cut there because we’re making Markets like Indonesia and the professional league due to reported the product readily available, Philippines are beginning to lay the infighting within the Basketball easily accessible to them.” groundwork to follow in China’s Federation of India (BFI). Lucrative rights deals have footsteps, but cricket-mad India may But there’s an effort to change. been signed across broadcast actually offer the most surprising “Our focus is growing the game and social media in several Asian upside in hoops. Its national team of basketball... in that sense, we’re nations, as well as videogames. upset China in Asia tournaments in completely aligned,” Colaco says of No surprise, Asia’s also a priority two of the last three years. “We know NBA India’s relationship with the for the league’s most marketable its qualities resonate with Indian BFI. “Everything we do, we do in players. Kevin Durant, who toured youth,” says Colaco. “We believe it correlation with the federation.” China last summer, will grace the can be the number-two sport in the The long-tenured Philippine hardwood of the NBA Academy country... maybe in five to six years.”

74 | forbes india july 7, 2017 ReclineR 2 ReclineR 3 Discovering Spotting birds, Berlin’s street- and more, in food markets Uganda Recliner P/80 P/84 recliner 1 Heritage hotels and homestays offer more than mere rooms to stay

neemrana’s le colonial hotel in Kochi dates back to the 16th century Recliner 1 travel A Room with a View, and Much More Heritage hotels and homestays cater to travellers who seek unique experiences from their holidays

By Jasodhara BanerJee

76 | forbes india july 7, 2017 “These two categories represent a trend that is driving growth. We have observed this in our surveys, like the TripBarometer Travel Trends,” says Nikhil Ganju, the country head of TripAdvisor, adding that heritage hotels and homestays represent a unique holiday staying experience. While heritage hotels offer a glimpse into a bygone era, homestays are increasingly popular with holidaymakers seeking a slice of local culture and traditions. Both represent the widening horizons and expectations of the Indian traveller. “People seeking new experiences is something that figured very high in the Travel Trends report on the holiday preferences of Indian holidaymakers,” says Ganju. (See In Search Of...) Sharat Dhall, COO (B2C), of Yatra.com, agrees: “Increasingly, people are seeking an experience that a normal hotel cannot offer. Heritage is a totally leisure segment, with top-end products. With rising incomes, people are willing to spend on a higher-level experience.” This preference for ‘experience’ is also highlighted by the 2017 TripAdvisor Travellers’ Choice Properties like the Awards for hotels. The annual hill Fort in Kesroli, awards are based on the millions rajasthan, are a huge draw among tourists of reviews and opinions collected as they offer a in a single year from TripAdvisor glimpse into a bygone era and way of life travellers worldwide. In India, this year, the award was given to 148 hotels across eight categories—Top he ways in which you can significant investments and growth in Hotels Overall, Luxury, Bargain, vacation are probably the conventional hotel segment over Small, Service, B&Bs and Inns, as myriad as the places the past few years, with an increasing Romance and Family—of which 134 where you can. As ever- awareness of the potential of the were ‘independent hotels’, that is Timproving transport and internet industry. For instance, according to those that do not belong to a chain. connectivity make the world shrink— India Brand Equity Foundation, the “Experientially, there is no always taking a little away from the mid-hotel segment is expected to get comparison between a heritage mystery and wonder of far-flung investments of `6,600 crore over the and a conventional hotel,” says and unexplored destinations— next five years, with major chains like Aman Nath, founder-chairman of vacationers are seeking magic in Mariott, Carlson Rezidor and ITC Neemrana Hotels. “Whenever people other ways. The one big factor in planning upscale, budget hotels in do an India trip and stay in a host of this search is how (not just ‘where’) tier-I and II cities. However, besides properties, the memorable ones are people choose to stay on a vacation. the scope for growth in conventional not the city five-stars, but that palace Because how they stay can now, very hotel chains, there is a growing in the wilderness, where they may well, decide how they vacation. interest in two other segments— have been a lot less comfortable.”

India has been witnessing heritage hotels and homestays. Nath adds that although neemrana courtesy

july 7, 2017 forbes india | 77 Recliner 1 travel

GettinG onto the trAvel bAndwAGon Players from different industries are cashing in on the Indian travellers’ thirst for adventure and unique experiences

(Left) Mahindra adventure includes expeditions to places like Ladakh; Breakaway offers customisable trips for handloom enthusiasts

All for the roAd wAke up, And smell to-cup coffee tours, trekking and and crafts products—in 2013, white water rafting. she married the central theme Mahindra & Mahindra, one of the coffee Gautam Prakash, head of Planta- of both ventures to add a new the largest vehicle-makers in Tata Coffee, one of the world’s tion Trails, says these bungalows dimension to each. the country, has successfully largest integrated coffee planta- offer a unique experience to While Breakaway curates short created a travel and adventure tion companies, discovered those who are not looking for breaks that range from long offshoot—Mahindra Adventure— around 2006 that their India a five-star hotel experience: weekends to five-day trips, that combines the love of auto- plantations have more to offer “Our guests are experientially depending on location and the mobiles with travel. Mahindra than just beans. Nestled in these evolved. They just want to read a interests of the guests, Sharma’s Adventure has its roots in the lush gardens were bungalows book, enjoy the flora and fauna.” experience with the myriad company’s customer engage- that dated back 120 to 130 years, handloom and handicraft com- ment programme in 1993-94 and which held the promise of munities in the country puts her where owners would be invited offering an experience no con- weAve An experience in a position to curate experi- for a day of driving and fun. The ventional hotel could. ences for handloom enthusiasts event would be held at different In 2011, Shilpa Sharma co- Plantation Trails was started in and general tourists alike. Trips locations, with M&M customers founded Breakaway to offer im- 2006 to expand the plantation include visits to handloom making day trips out of Mumbai, mersive and customisable trips experience across the board, and crafts hubs where travel- Chandigarh, Shillong or Goa. to those who are not content while having a positive impact with conventional holidays. “It lers get a close look at age-old This activity was given an en- on locals. Starting with one is meant for those who want to techniques and processes, along tirely new identity and dimen- bungalow with three rooms, it meet people and understand with a glimpse into the lives and sion with the inception of Ma- now has eight bungalows across their lifestyle,” she says. “It traditions of craftsmen. “These hindra Adventure in 2011, which Coorg, Chikmagalur and Hassan. is for those who travel to find trips are for general tourists, but included single-day trips called While the bungalows provide a some meaning in travel, and get can be customised. They include Great Escape (only for M&M lifestyle experience—they come under the skin of a community.” food and heritage walks, and al- owners), multi-day expeditions with a personal butler, a chef After Sharma co-founded her though the focus is on craft and that last between seven and 16 and an in-house staff—the plan- next enterprise, jaypore—an textile, there isn’t an overdose of days (open to everyone), and tations offer nature tours, bean- online platform for handloom it,” she says. Challenge drives that are entry- level rallies for M&M owners. There are between 50 and 70 teams, each with three or four people, for each of the Great Escape events. The multi-day expeditions—to places such as ladakh—usually have about 15 teams, and are accompanied by the organisers, spare vehicles, medical and emergency services. Bijoy Kumar y, chief of Mahin- dra Initiatives, says, “These are not just customer engagement programmes, but also a part of experiential marketing, which enables enthusiasts to experi- Plantation Trails ence a Mahindra vehicle in combines a relaxing its natural surroundings, and holiday with coffee understanding its capabilities.” tours and trekking courtesy mahindra adventures, breakaway, plantation trails plantation breakaway, mahindra adventures, courtesy

78 | forbes india july 7, 2017 Neemrana’s larger properties like Travellers are Neemrana Fort-Palace and Tijara now opting for Fort-Palace in Alwar and Hill Fort homestays in in Kesroli (all in Rajasthan) are a their quest for going local huge draw, other properties like the Glasshouse on the Ganges and The Ramgarh Bungalows (both at Kumaon in Uttarakhand) have shown a great leap because of their peaceful locations. “Guests expect grandeur of scale, great views, some quirkiness, and a lot of history,” he says. “Basically people travel to see the ‘difference’, and the heritage hotels provide this without much effort.” Heritage also no longer means just the palaces of erstwhile royalty; bungalows and havelis too offer a slice of history, perhaps an even “The sector has seen good growth a role. Travellers get insights into more intimate one, making for a wide in the past one year to 18 months,” he local customs and culture.” The array of properties and budgets, as says. “But homestays are still nascent second segment is the value-seeker, well as experiences. So, while tariffs in India. Only the entry of new players or travellers in large groups. “For at the Rambagh Palace of Taj Hotels will drive this segment.” He adds that instance, if two or three families are and Palaces in Jaipur begin from a lot of education is required to make travelling together, they take over around `22,500 per night, Neemrana’s homestays acceptable to both hosts one complete house,” he says. Glasshouse on the Ganges can offer and guests; while hosts are reluctant But India is nowhere close in rooms starting at `10,000 per night. to put out their properties, travellers supply, compared to other nations That the sector has grown are iffy about putting up in them. in the region. “Although we have manifold, says Nath, is evident from “They expect amenities such as room witnessed a high level of interest, we the fact that the Indian Heritage service,” says Dhall. “Homestays haven’t seen the high growth rates Hotels Association, formed in also tend to have fixed times for that we have seen in hotels. Look at 1990 with 14 members from meals, with a caretaker who cooks. Bali in Indonesia, for instance,” says Rajasthan—“where the sector is These might not meet the Ganju. “The quality and largely concentrated”—has, in 2017, expectations of the guests.” in seArch of… variety of supply there 191 members from 16 states. The rise Online reviews, show we are far behind.” in number of heritage properties however, might come Going somewhere He adds that it is also a I’ve never been being listed on TripAdvisor, too, in handy. “Reviews do before: function of the economy: indicates the insatiable demand the job of tempering 80% “How many people in in this sector, says Ganju. “There expectations. A homestay India have a first home, Being able to learn will come a time when you will newbie would read something new on forget a second one they run out of true-blue heritage reviews and might want the trip: can put up for homestays?” properties, but there are always to stay away if they don’t 67% The nature of more forts and bungalows being like them,” says Ganju. homestays, Ganju says, Trying something discovered and restored,” he says. The homestay guest, new: is also regional and has says Dhall, can broadly be 67% cultural manifestations. omestays is another segment categorised into two. The While in the US and Amenities available that brings out the Indian first are those looking for a at the destination: Europe, it is common Htraveller’s search for out- differentiated experience. 70% for people to put up of-the-ordinary experiences. Both “Location, or the heritage their second homes as Somewhere I can Dhall and Ganju say the segment of the property—something travel as indepen- homestays—which are is witnessing significant growth. like a 100-year-old dently as possible: managed by professionals— So much so that Yatra launched an bungalow—is important,” 65% in the Asia-Pacific region, initiative last year, through which he says. “Elements such it is more common to they tie up with state governments to as the host living on the Source: TripBarometer have homestays where Travel Trends 2016 promote the concept of homestays. same property also play the host, too, lives. yatra courtesy

july 7, 2017 forbes india | 79 Recliner 2 Travel Street Smart Berlin’s street-food market scene is a reflection of a city that is a melting pot of cultures

By Vaishali Dinakaran

’m sitting at a table sipping to Street Food Thursday, let me piping hot masala chai, trying to explain the wonders of Markthalle moderate a friendly argument Neun by itself. Between Tuesday between two gentlemen and Thursday, from 11 am to 6 pm, Ifrom Berlin and a young lady from locals troop in to buy everything from Kazakhstan. I nearly choke on my fresh produce, organically grown chai, partly because it’s hot, partly vegetables, fresh meat and seafood, because I fear the discussion is to rather more exotic whole spices, heading in a dangerous direction. spice blends, tofu and a range of At that precise moment, we’re tea and coffee. A slightly amplified interrupted by someone who has an version of this is seen on weekends, interesting, if strange, proposition. He with more vendors and more wares tells us that his name is Mario. That on offer on Fridays and Saturdays. he’s from Colombia. And that for the But it’s Street Food Thursdays that price of one euro, he will recite a poem give the hungry Berliner or famished to us. It seems like a very good idea. tourist the gastronomic experience of “Among possible maybes a lifetime. In addition to the existing of green winter leaves, cafes and bakeries, the entire space A poet’s ideal lays far beyond is transformed with a multitude of trees…” Mario begins. stalls, each serving up delicacies He needs to shout the words from a different part of the world. a little, because the high-domed Whether you’d like to try cheese Markthalle Neun (which translates and spinach-filled empanadas from to ‘Market Hall Nine’), on Berlin’s Uruguay; Portuguese custard tarts friends, and we liked it all. So much Eisenbahnstrasse in Kreuzberg, is — those heavenly little bite-sized so that we went back the following chock-full of people. Every week, desserts invented in the Belem region week, simply because the draw of the Markthalle Neun hosts Street Food of Lisbon; gol guppes with the power happy market hall, full of laughter, Thursday, between 6 pm and 9 pm, to refresh the homesick soul from chatter, and cheerful people eating easily Berlin’s most popular street- the subcontinent; or some steaming good food, proved to be impossible to food market. Housed within the hot Taiwanese rice bowls with either resist. And there was more food to try. original Markthalle IX building pork belly or mushrooms lending it Especially the rolls at Chaiwallahs. aishali Dinakaran that first opened to the public in flavour, there really is something for Chaiwallahs is a Berlin street-food 1891, the new version of the market everybody. In the name of research, style restaurant that also puts up a flung its doors open in 2011 and I ate my way through all of the stall in Markthalle Neun once a week. ogra P hs: v

T brought people flocking right back. dishes that have been listed out, The stall is almost always crowded,

Pho It’s easy to see why. Before I get ably assisted by two fork-wielding and the food is often sold out fast.

80 | forbes india july 7, 2017 Chez su at the Turkish Market in kreuzberg offers lovely food; don’t miss the cauliflower and zucchini cutlets, or the cheese-filled Turkish rolls

They usually serve their very popular But food and flavours aside, I many fine wines they have on sale, naanwiches, or what we’d call rolls realised what made Markthalle Neun the fromagers will be happy to chat in India. The naan is handmade from magical when I was sitting at that for ages about rennet and the finer- scratch, as is the highly flavourful communal table, listening to Mario points of washed rind cheese. As for filling, in this case the options were recite a poem about a girl he met and the people who catch you staring paneer or pork belly. As someone fell in love with years ago in Italy: hungrily at their food? Well, they who normally turns up her nose at It was its ability to attract people will happily point out exactly which the prospect of eating Indian food from all parts of the world, and make stall they bought it from. It’s the ideal abroad, I salivated shamelessly, and them interact with each other. For place for an evening out with family though I was full, I wanted more of everyone you meet at the Markthalle and friends. And the fact that it’s those paneer and pork belly rolls. is amiable. The chefs will tell you indoors, makes it an excellent choice They were massive, filling, and packed about the food that they make, the during the cold winter months. with authentic Indian flavour. sommeliers will tell you about the It was my discovery of Markthalle

july 7, 2017 forbes india | 81 Recliner 2 Travel

(Clockwise from top left) a pan full of Turkish kofte; a cheese-filled empanada and indonesian serabi pancake at street Food auf achse; gol guppe at Markthalle neun; korean chicken wings and Vietnamese bahn gio at the kulturbrauerei

Neun, then, that led to my quest for addition to the services of my jacket, the quaint retro food trucks that are the very best street-food markets I needed some hot apple cider to help parked all through the brauerei. It’s in Berlin. Which is how I stumbled warm me up, as I worked my way like stepping back into the ’70s. upon Street Food auf Achse in the through some serabi or surabi, which But as I was to discover, there was Kulturbrauerei in Berlin’s Prenzlauer are Indonesian claypot pancakes, another Berlin street-food market Berg. The Kulturbrauerei, which empanadas, spicy Korean chicken that made me feel like I’d walked translates into ‘Culture Brewery’, wings, and Vietnamese banh gio (rice through a time portal. Tucked away started out as a brewery years ago. dumplings with a pork filling steamed in Wilmersdorf, Preussen Park is a Today, much like Mumbai’s many in a banana leaf). Once again, I found place where Thai families in Berlin mills, it’s become a cultural hub. It myself at a communal table, this time would meet over the weekend to have houses theatres, restaurants, and more sharing both food and conversation big old family cookouts. Eventually, than one bespoke designer store. But with strangers. The market, I was told these cookouts became so big and so every Sunday between the 15th of by some affable people, is far more popular, that they started attracting January and the 12th of November, enjoyable in the summer. The winter the attention of passers-by, who little stalls pop up in between the red bonfires are no longer needed, and wanted to sample some of the food brick buildings, and food is served. jackets and thermals are replaced with too. So, what had begun as a place for Since the market is outdoors, it helps shorts and flip-flops, and there’s the the Thai community to meet, cook, eat to have a jacket with you, unless, of air of a festival to the proceedings. But and make merry, eventually turned course, the forecast for the day is more irrespective of what time of the year into Thaipark. Open between Fridays than pleasant. Unfortunately for me, you happen to visit Street Food auf and Sundays when the weather is I chose a particularly nippy Sunday Achse (which literally means Street good (the market doesn’t open during for my visit, which meant that in Food on the Axis) make sure to notice the winter or when it’s raining) the

82 | forbes india july 7, 2017 and Neukölln dwellers coming here every Tuesday and Friday between 11 am and 6 pm, which is when the market is open, to do their weekly shopping. But, there certainly is food, and it’s certainly worth visiting the market for. Whether you’re in the mood for some hot Turkish coffee, which I needed given that my two jackets were failing me miserably, hot toasted nuts of various kinds, or some tea brewed traditionally in çaydanlıks (Turkish two-stacked kettles) and served in transparent glasses, there’s a stall for everything. Don’t miss the cauliflower cutlets served in thin dürüm, or the Turkish köfte that taste a lot like the Indian seekh kebab. Or the lights and life at street Food Thursday at Markthalle neun, easily Berlin’s most popular opportunity to bargain and haggle—it’s street-food market one of the few places where you can park sees several Thai people, usually around, clamouring for more actually try your hand at it in Berlin. women, spread out picnic blankets dumplings or pork noodle soup or And so, I found myself clutching a on the grass, place tiny little tables banana fritters and you can’t go wrong. bag of assorted toasted nuts, walking with portable gas stoves on them, and And armed with this knowledge the through the Turkish Market, taking cook food right there in the park. next time around, I got to eat some in the sights, but also absentmindedly Thaipark can be tricky though. fantastic noodle soup, terrific papaya planning a visit to the Bite Club When I first visited the park, I quite salad, and indulge in some lovely Thai (another one of Berlin’s must-visit simply didn’t know where to go, sticky rice and mango. I also managed street food markets that was then because I was worried that in some to procure a jar of homemade sambal, still a few weeks away from opening cases I really might be interrupting which added flavour to several for the season) and wondering a family picnic. But eventually, after batches of fried rice and red curry that what it is about the combination of scoping out the many vendors, and I whipped up in my own kitchen. Berlin and street food. I watched having been assured that they were Perhaps the best street-food market as a young German man bought indeed selling food, I opted for some in Berlin on a cold day though, as I some Turkish lamb skewers and dumplings that were quickly pan- was to discover, was the Türkischer began polishing them off with fried in front of me, and worked my Markt that runs alongside the relish, and then it occurred to me. way through some noodles and rice. Landwehr Kanal in Berlin’s Neukölln Berlin is a city that is as welcoming I realised, later, that I’d made some area. To begin with, this one isn’t of various cultures as it is possible for fundamental mistakes. The first was strictly a street-food market. It is, a city to be. Which is why, perhaps, that though the timings are meant to quite simply, a Turkish market, where alongside the humble German be between noon and 10 pm, all the you get everything from lengths of würstbrötchen (or sausage in bread) really good food gets sold out early. So, fabric, buttons, posters and paintings, and currywürst (sausages in tomato if you can’t make it there for lunch, it’s jewellery, and the odd knick-knack sauce with curry powder), the wiser to just skip it. The second was and curio, to spices, lentils and a döner kebab, falafel, sushi, crepes, that, drawn by the smells that wafted variety of fresh vegetables. Which is and a veritable cornucopia of other my way, I had stopped and eaten some why you’ll find plenty of Kreuzberg dishes from various corners of the pad thai, which proved to be very world thrive. Not just in stores and average and left me disappointed. A lot restaurants, but at the many spring, of research revealed that there were summer, winter and flea markets specific spots that one must not miss, Berlin is a city that that the city is dotted with at various but are hard to find simply because is as welcoming of points in the year. And thus cultures the vendors don’t put up signboards mingle, palates are acclimatised or names. But go early, preferably various cultures as it is to foreign tastes, and ideas are on a summer day, and head for the possible for a city to be exchanged. The word that I’m looking stalls with the most people thronging for, perhaps, is cosmopolitan.

july 7, 2017 forbes india | 83 Recliner 3 Travel A (different) African Safari M ock.co T

The kob, a handsome medium-sized antelope, is Uganda’s in Mecnarowski / s hu TT ers T in Mecnarowski national animal Mar

84 | forbes india july 7, 2017 Uganda’s geography and its variety of

By SaTyajiT DaS natural habitats make it a haven for African Safari wildlife enthusiasts ther than for its gorillas, Uganda rarely finds a mention among favoured African wildlife Odestinations. The country is still associated with its infamous dictator Idi Amin, who left the nation bankrupt and allowed the destruction of its national parks. But Uganda has made a remarkable recovery and today is one of the best wildlife destinations on the continent, as we find out. With our driver and guide Martin Okot, we undertake a month-long circuit of the country: From Entebbe, we travel north-east to Jinja, then north to Masindi and Murchison Falls, before turning south along the Rift Valley, returning to our starting point via Lake Mburo.

Mammal fix Uganda is different from eastern and southern Africa because it lacks the high concentration of wildlife, with the exception of the Queen Elizabeth (QE) National Park. Situated in the scenic Albertine Rift, bordering lakes Edward and George, fringed by the Rwenzori Mountains that rise more than 5000 m, the 2,000 sq km park has 95 species of mammals, including 25 predators. On drives through the park, we spot a wide variety of herbivores, such as waterbuck, topi, and buffalo. Uganda’s national animal, the kob, a handsome medium-sized antelope, is abundant. Hippos wallow in and around the many waterways while baboons, one of the 10 primates found here, are easily seen, as are warthogs. We also come across a group of giant forest hogs, the largest wild pig native to wooded habitats in Africa. Our lodge even has a large band of habituated banded mongooses, who

july 7, 2017 forbes india | 85 Recliner 3 Travel

patrol their territories and inspect kill of a kob on an early morning range of habitats: Open grassland, guests with obvious curiosity. drive. We park the car only metres euphorbia-studded savanna, There are now over 1,000 elephants away, and spend several hours acacia woodland, closed-canopy in QE, a significant recovery from the watching the clan in action. riparian forests, luxuriant tropical low of around 150 due to poaching The kill we came across had taken rainforests, swampland—including during and immediately after the place only minutes before our arrival: extensive papyrus swamps—as Idi Amin era, though the number The three adults at the carcass are well as numerous lakes and rivers. is still below the 4,000 mark from still panting from the exertion, their The Rift Valley and mountain the early 1970s. The tragic past is muzzles dripping with fresh blood. ranges create different altitudinal evident in the behaviour of some They quickly dismember the dead gradients, attracting different birds. older elephants who are nervous and kob. The clan hierarchy is evident: Uganda is also a convergence zone, sometime aggressive around humans. Lower-ranked animals, sub-adults encompassing several central and Lion numbers, too, have recovered and the young wait a short distance eastern African regions, each with in QE. The most famous are the away until they are called. its distinctive birdlife: The Sudan- tree-climbing lions in the southern More than 60 vultures—hooded, Guinean savanna, the Guinea- Ishasha sector, who rest on the limbs white-backed, Rüppell’s griffon and Congo forests, the Lake Victoria of trees during the hottest part of the lappet-faced—descend, and await basin, the Afrotropical Highlands, day. We come close to the Kasenyi their turn. But, in a little more than and the Somali-Masai biome. pride, in the northeastern sector of an hour, the only evidence of the There are more than 1,050 QE—with 16 lions, including several dead kob is the skin. Well before the recorded species, representing 60 cubs—although they are hidden in end, the disgusted vultures depart. percent of the bird species found in distant scrubs. However, we see Martin says he has only Africa, and 11 percent of the whole several of the tree-climbing variety in seen this once before. We have world. With the help of Martin and the beautiful and wilder Ishasha area. been extremely fortunate. local guides, we are lucky enough Martin is keen to find the spotted to see around 450 species. hyenas in the southern part of The King Whalehead At the Mamba Swamp, west of QE. Within a short distance of our Uganda is among the richest birding Entebbe, after a short boat trip, our lodge, we come upon them at a destinations in Africa, due to its wide guide points out a Shoebill Stork, one of the holy grails of African birds. Shoebills, also known as whalehead storks, are very large birds standing up to 1.5 metres high with a wingspan of up to 2.5 metres. The bird stands still beside a channel, waiting for its preferred prey—lungfish. When it spots one, it pounces. The razor- sharp edges of its mandibles and a large hook at the tip of its massive bill help it decapitate its prey. Due to the ; M ; ock.co T destruction of its favoured papyrus swamps and due to hunting, shoebills

M ock.co are now classed as vulnerable. T T / s hu TT ers a r More avian riches There are numerous types of weaver s / hu TT ers G es; Miro birds throughout Uganda, with their elaborately woven communal nests. There are warblers, thrushes, : Ge TT y iM a flycatchers, sparrows, woodpeckers and barbets. Perhaps the most striking op lef T M ; p e T er Be TT ock.co T are the crested barbets, their faces speckled yellow and red, with a small black crest, a yellow belly with

(Clockwise from top left) a Shoebill Stork, an african grey parrot, a grey crowned red dots, black wings with white wei / s hu TT ers clockwise fro M T clockwise a crane and a crested barbet specks and a broad black band on

86 | forbes india july 7, 2017 its neck. Despite the bright colours, the bird blends into the bush. There are mousebirds, the survivors of a lineage that dates back to the late Palaeogene and Miocene periods. The tiny and slender grey or brown birds have soft, hairlike body feathers. They scurry through trees in search of berries, fruit and buds, sometimes feeding upside down. We see kingfishers, ranging from the tiny (12 cm) African dwarf kingfisher to the large (40 cm) giant kingfisher. At the edge of a lake, we see an appropriately named Shiny Blue Kingfisher in the air, its wings brilliantly iridescent in the sunshine. There are multiple species of bee- eaters, with richly coloured plumage Tree-climbing lions rest on trunks during the hottest part of the day and elongated central tail feathers. There are turacos (literally ‘banana- At Murchison Falls National pitch darkness, we set off in search eaters’), with their prominent crests Park, we stake out the cliffs, hoping of the green-breasted pitta. About an and long tails, and massive hornbills. to spot a bat hawk, a specialised hour later, we spot the bird on the A pair of striking Abyssinian Ground raptor that preys on bats. While we path, rummaging for insects. Even Hornbills saunter on the side of are waiting, an African harrier hawk in the dull light, it is spectacular. the road. We watch beautiful grey appears, searching the rock crevices The array of wildlife may suggest crowned cranes, Uganda’s national for bats and flying off with prey. an idyllic wilderness. But that would bird, perform their courting dance. Nocturnal birds are present be misleading. These forests are A fruiting tree yields a flock even during the day. We see isolated patches in a sea of humanity. of African grey parrots. Their several Verreaux eagle owls, Much of our birding is done from busy intelligence and talking ability have their eyelids pink. On a boat trip, roads, and in and around villages. We made them prized pets, with over 3.5 the boatman surprises a pair of spot the elusive papyrus gonolek, a lakh birds being traded on the global roosting Pel’s fishing owls. At stunning crimson bird with a bright market between 1994 and 2003. They night, we see the pennant-winged yellow cap, in a tiny patch of swamp. are now classified as endangered. nightjar; during breeding season, The nearby village has created a the male acquires pennant feathers small reserve to earn tourist dollars. birds of Prey up to twice its body length. Near the Bwindi Impenetrable Birds of prey are everywhere. We find Uganda birding is sometimes National Park, in south-western a hobby—a small, slim falcon—near ridiculously easy. A beautiful Ross’s Uganda, we are on the lookout for one of the President’s residences, turaco turns up in our Entebbe wrynecks, a small woodpecker, only near the town of Jinja. Our binoculars lodge’s bird bath; a flock of white to find that a small copse where they attract the attention of armed soldiers helmetshrikes flies across the road, were often seen has been cut down. who tell us to move on. There are close to our car. But some birds are We try an alternative spot, which eagles, including long-crested more difficult to spot. It takes us turns out to be a single tree standing eagles with their punk hair-dos, and three weeks to get a decent view of amidst farmland. The guide has seen buzzards and goshawks. We get two black-billed turacos. Although a single bird here occasionally. excellent views of several martial we have heard their calls, their bright Uganda’s population growth is eagles, the largest of the African green feathers camouflage them around 3.25 percent, among the M ock.co eagles, with a wingspan of nearly 2 in the forest. We hear a chocolate- highest in the world. The needs of T metres. They hunt large birds and backed kingfisher call, but a two-hour a poor rural population to look for small antelope. We hear but are too search does not provide a sighting. agricultural land is rapidly destroying late to see a crowned eagle, the most forests and wild places. Uganda may powerful raptor in Africa. There are for How Long? be Africa’s overlooked jewel, but it is monkey bones from recent kills near The remaining forests, such as in unlikely that future generations will

its nest site, a testimony to its strength. Kibale, yield rare treats. There, in get the chance to see its wonders. Brina l . Bun T / s hu TT ers

july 7, 2017 forbes india | 87 The glory of each thoughts generation is to make its own precedents. oN thE NExt gENERAtIoN —Belva loCkwooD

The young do not know enough to be prudent, and therefore they attempt the impossible—and achieve it, generation after generation. —Pearl s BuCk

If I were given Each new the opportunity generation is a to present a fresh invasion gift to the next of savages. generation, it —hervey allen would be the ability for each History is the present. That’s why individual to learn every generation writes it anew. but what most people think of as history to laugh at himself. is its end product, myth. —Charles —el DoCTorow M sChulz

Every generation laughs Parents at the old fashions, but often talk follows religiously the new. about the younger The philosophy of —henry DaviD Thoreau generation the school room in as if they one generation will didn’t have be the philosophy

M; o M; anything to of government do with it. in the next.

s ABLI / R E ut ER s —haiM —aBrahaM

A z K Each generation There is always y A imagines itself a heavy demand GinoTT linColn to be more for fresh CK.C oo D : shutt ER sto intelligent than mediocrity. In every The next generation has

CKW , Lo the one that M; KAPIL DEV: F DEV: o M; KAPIL u generation the always been and will be went before it, least cultivated better than the previous and wiser than taste has the one that the largest one. If it is not, then o M; tho REA comes after it. appetite. the world would not —GeorGe —Paul be moving forward. orwell GauGuin —kaPil Dev CK.C LEV RADIN / shutt ER sto W: CK.C RICAL / shutt ER sto P EARL s Bu CK : EVERE tt h I sto R o D o C to

88 | forbes IndIa July 7, 2017

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