Subroto Bagchi, co-founder & gardener, Mindtree Ltd, in conversation with Rajeev Mecheri, co-founder of iMetrex Technologies.
Name: Rajeev Mecheri
Profile: co-founder of iMetrex Technologies
He says: “I think an entrepreneur must learn to differentiate himself from his business. I would say, build an identity for yourself so that you can thrive in life-after.”
Rajeev Mecheri is grateful to student organisation, AIESEC for two reasons: It gave him his wife Rinku and his first business idea while he was interning in Europe as part of an AIESEC programme. Thus, when Rajeev returned to India, at the bright young age of 22, he was ready to start on his own. He asked his brother Anand to join in and the two started a building automation company from scratch.
Mecheri, born in 1970, son of a public sector employee and raised in Tuticorin in Tamil Nadu, is not your classic techno-entrepreneur.
Rajeev actually studied commerce, if he studied at all, given the boyish good looks and all the pretty young things that must have milled around him! It was when in Europe, he felt that soon, Indian building construction standards would change and as greater sophistication arrived, the need for fire, intrusion and energy management was inevitable. So, in 1992, with a capital of Rs 10 lakh borrowed from their father, Rajeev and Anand started iMetrex Tech. Along the way, they raised venture funding and Infrastructure Leasing & Financial Services Limited (ILFS) picked up a stake of 21 percent for Rs. 18 crore.
Quietly, and efficiently, Rajeev and his brother went about building their software solution, the service and the sales network and went about winning business. In time, they became the go-to organisation for every high-rise in town that required compliance with safety, security and energy management norms.
In 2007, Siemens noticed their work. And Siemens also noticed that their building solution software was comparable and in some ways, actually ahead of what Siemens offered. It wanted to buy them out but with a condition: The brothers came with the business. Rajeev came on board as the managing director of Siemens’ Building Technology business for an agreed period of five years. This year, the business having fully integrated, Rajeev has decided to move on and brother Anand has stayed on as the chief marketing officer of the Building Technology business, located out of Switzerland. The acquisition is valued at a whopping $100 million. If you have not heard about it, it is because in Chennai, folks do not crow about such things. I wanted to know about the experience of selling his enterprise.
The deal with Siemens was that we would work until 2012. The idea was that Siemens got our full support and involvement in integrating the business. Once that happened, given the inevitability of my own departure, I started questioning the value-add to me as an entrepreneur. So, we amicably agreed I could move on.”
“What was the most important thing in your mind while you settled on Siemens as a strategic buyer?”
I ask. “While the price is important when you do a deal, the thing to do is leave it aside for a moment. Keep the financials out. I always felt, I had to look for, not what value the acquiring entity was going to pay for the business, but what value it was going to bring to it. The thing to do is to look at the company through the eyes of your own employees. Would the buying entity be a great brand for them? This needs assessment of the long-term outlook of the buyer. And yes, I would never sell to someone who would sell the business again.”
“And how do you mentally prepare for selling your business?”
“It is a tricky thing and it goes to well before you know you want to sell. When you start a business, it pays for your house, the car, the driver and you expense every other thing. In the process, you become the business itself and soon the perceived privileges, the lack of accountability so engulf you that you cannot live without the business. In our case, the day ILFS came in, we disciplined ourselves. We stopped looking at ourselves as owners the way many people do; just because we had majority shareholding did not mean we would entitle ourselves to extra-privileges. That mindset paved the path for the Siemens acquisition and now, it is that thought process which is helping me to move on. The trappings of ownership, the lifestyle do not come in my way as I dismantle myself to hit the road again.”
“What are the things that make you feel good about yourself vis-à-vis the transaction?”
“I gave my very best to the business before and after I joined Siemens. As I moved on, I did not succumb to the temptation of taking the core employees away. I feel proud of both these facts because it is a natural temptation but a moral obligation of someone who is selling his business, not to damage it as he bids goodbye.”
“What did you learn from being part of Siemens?”
“I learnt about the power of a brand; the power of size. Only when you are large, you have the leverage, the negotiating power. Today, even as I leave, we have inked a deal to deploy a physical and logical security system involving 105,000 cards to be deployed across the world for Infosys. At iMetrex, all by ourselves, we would not have even bid for the business because we had no capacity to deploy such a solution across the world. On the flip side, in a large entity, you lose out on relationships. Employees tend to think of customers as quotations, invoices and account receivable and not as people with needs. Customer needs and not numbers are the end game and that requires empathy ahead of size.”
The man is not yet 40 but he speaks like a man wiser by a couple of decades more.
“I think an entrepreneur must learn to differentiate himself from his business. I would say, build an identity for yourself so that you can thrive in life-after and finally, remain transparent. Transparency in your business would actually deliver much larger personal gains in the long term than you ever thought.”
It is time to leave. I ask him about what he plans to do now.
“I am getting ready to start all over again. Apart from contemplating a new venture, I am now planning to do an international MBA. I am also beginning to angel-invest in areas that interest me and I am taking swimming lessons. In all these years, I never learnt to swim.”
That, I tell myself, is sure to keep the man afloat for the next couple of decades and on that note, we shake hands.
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