How Justdial founder VSS Mani built the 'Indian Google'
From being a gritty 29-year-old with 50K in his pocket, this ‘failed entrepreneur‘ now ranks among India‘s top entrepreneurs in the digital business space
November 26, 2012 / 10:35 IST
Khyati Dharamsi
His first venture, the popular AskMe telephonic search service, nosedived in a couple of years. Today, 7.7 million businesses are grateful he didn’t call it quits and dialled the right numbers second time around. But it wasn’t as simple as it sounds. Ironically, from not being able to afford a telephone connection, to sitting on a Rs 277-crore empire built on a telephonic search service, VSS Mani’s story is the stuff movies are made of.Building on his original idea, Mani launched Justdial, ‘India’s No 1 local search service’, in 1996 with a seed capital of Rs 50,000. With just six employees and a few rented computers in a pokey garage, the 29-year-old entrepreneur was determined to revolutionise information search media. “When you don’t have the money, you use innovative ways to build a business,” says Mani, about hiring college students instead of experienced hands to put together the database that laid the foundation of the service. Next, the company created software that could search for extremely relevant information in the database – within seconds. “You can see the parallel between Justdial and Google but we were born before Google was,” smiled Mani, whose search service has since become the sole source of advertising for millions of small and medium businesses in the country. Of course, Justdial is now also available on the Web and mobile platforms.
How It All BeganMani was working with a yellow pages company, United Database India (UDI), when he thought it would be great to have a database like his company’s over the telephone. So in 1989, he and a few friends launched AskMe. “The venture failed because only 1 per cent of Indians had telephones back then and the economy was also in a downturn. We also got the number wrong. People had ‘Ask Me’ on their lips but when you asked them the number, none of them could recall it,” he admits.Mani had a family to support and had to think up something really quick. Finally, he and a couple of friends invested the Rs 50,000 he had in a ‘Wedding Planner’ business. “We earned a profit of Rs 2-3 lakh. But it was not a meeting of minds. So I walked out and decided to go back to my original idea.”Business ModelThis time, Mani made sure he learnt from his mistakes. “We focused a lot more on the phone number than the brand name and got the number 7 times 8,” he reveals. Justdial then put together a sizeable database of businesses in Mumbai by literally going door-to-door. The next step was getting people to use the database. “We couldn’t afford to advertise. So we convinced our initial set of clients to ask their employees to use our service. We had a wonderful product and so word-of-mouth worked. As for revenue, the tenth client we spoke to agreed to a sponsored listing and that set the ball rolling,” recalls Mani.Justdial priced its product low and still managed to end up with a surplus every month. The money was ploughed back into increasing the sales staff. “Fortunately, we had a negative working capital as advertisers paid us in advance and we used the money to expand,” reveals Mani.Growing brick by brick in multiple cities and even in the US, Justdial earned a profit-after-ax of Rs 52 crore for the fiscal year ended March 31, 2012, and a total revenue of Rs 277 crore. Seventy per cent of its annual revenue comes from existing customers.So how much does a client pay to move up on Justdial’s listings? In a stroke of genius, Mani came up with a pricing engine, where clients get to see what competitors in their area are paying. This can be customised to a geographic area.Disrupting Its Own ModelFrom a phone-based directory to an Internet-based model and now a mobile service, Justdial has kept disrupting its own model. “When people found it difficult to note down telephone numbers, we devised a way to send an SMS and an email responding to the search request. We say, ‘Please use our mobile site and you will never call us again!’ It is an interactive site and, apart from phone numbers and addresses, users get hotels, videos, pictures and reviews of others who have used the services before.”Mani has always loved playing the numbers game and claims Justdial clocked a staggering 254 million search queries in 2011-12. What’s the next step? “More numbers, big numbers,” he laughs. “This time, it’s an IPO.” You can send your feedback on smementor@moneycontrol.com or simply post comments below Invite your friends and family to sign up for MC Tech 3, our daily newsletter that breaks down the biggest tech and startup stories of the day
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