ENTREPRENEUR/STARTUP SPECIAL...LESSON NO.20 FROM REAL EXAMPLES

Shashank Joshi
My Mobile Payments 

Minting money from mobiles

    You can call me a serial entrepreneur. I started my first venture as a 19-year-old student, and moved on to execute and abandon four business ideas over a span of 16 years before setting up my current venture, My Mobile Payments Limited. Given my background—an army officer for a father and a medical practitioner mother—not many would have thought I would shun the services route. Yet, I have always wanted to be an entrepreneur.
    When I was pursuing my mechanical engineering degree from MIT, Pune, in the early 1990s, software programming was the biggest craze. So I enrolled myself for a software diploma course from Aptech Institute in 1992. Around that time, I bagged an offer to develop a software program for a couple of corporate clients through Aptech. The size of the first deal was about 10,000 and it took me around two and-half months to develop the program. Hot on its heels, another couple of projects landed in my lap and in 1992-93, I made a turnover of around 70,000 with zero investments.
    After completing my education in 1994, I set up my own computer retail store, where people would be able to personally handle and experience computers before making a purchase. This might be ubiquitous now, but when I conceptualised it, it was different. Back then a customer had to place an order with companies such as IBM and HP and the model would arrive directly at their homes.
    The idea in place, I applied for a loan from the Pune People’s Co-Operative Bank for 2 lakh, with my mother as the guarantor. Incidentally, the bank policy was to furnish loans only to entrepreneurs in manufacturing business. But thankfully, one of the directors had seen the concept I was peddling in practice in the US and he sanctioned the loan.
    By September 1994, I leased a 300 sq ft place at Shaniwar Peth in Pune, and hired four people to handle operations, and Om Computers was born. We were the first to coin the term ‘one-stop computer shop’ and the concept was a hit. Multimedia, especially, was a huge crowd puller. Our turnover in the first year of operations was over 9 lakh. Three years on, we had three more outlets in Pune, had increased our turnover to 3 crore.
    Things were going great, but by 1999, the competition heated up considerably and the margins were getting squeezed. So, we decided to change the business model and get into the data transcription business in 2000. The new business was called Voice Soft and between 2000 and 2003, it was registering an annual turnover of around 1.2 crore. When this  marketplace also started getting too crowded leading to cut-throat pricing, I decided to don yet another avatar and get into the merchant cash advance business. The new venture, called Prospect Base, was set up in 2003. The idea was to offer businesses a lump sum in exchange for a share of future sales and mostly target companies that have strong credit-card sales but don’t qualify for loans, either due to bad credit or little or no collateral. For seven years, we registered a turnover of about 1.6 crore annually. But after the fall of Lehman Brothers, we were forced to close this business by mid-2010.
    However, I rose again and started a new venture called My Mobile Payment Limited (MMPL) in June 2010. This time, I joined hands with seven promoters and we equally chipped in to raise 6 crore as the seed capital and leased a 6,000 sq ft office space in Bandra, Mumbai. Since I manage the business, I have a 25% share in it.
    The venture’s biggest claim to fame, so far, is the recently launched m-wallet service called Money on Mobile (MoM). It enables subscribers to buy prepaid mobile top-ups, DTH recharges and make utility bill payments using their cell phones instead of cash or plastic money. MoM’s service operates independent of the consumer’s mobile operator or bank, so any mobile subscriber can avail of its services through SMS or a mobile applicationbased platform. Mobile money credits can be bought from our franchisees.
    MoM was first launched for the B2B market in 2010, and a year later, received the RBI’s permission to offer semi-closed m-wallets for the consumer market. Currently, the service is being rolled out pan-India with a network of 82,000 retailer touch points and a presence in 300 cities. So far, MoM has added 5 lakh subscribers and has a daily business volume of 2 crore.
    In its first year of operations, MMPL generated a turnover of around 19 crore. In 2011-12, we scaled up to post 240 crore and this year we are eyeing 1,500 crore. We also hope to increase our staff strength from 150 to 200 people. As the fastest growing market of its kind in the world, India’s mobile phone industry presents a hotbed of opportunities and MMPL aims to harness this power.
    (As told to Amit Shanbaug) ETW120625