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Tuesday, Nov 19, 2019

Scaling up is absolutely necessary for any profitable start-up, says Devendra Deshmukh, founder, e-Zest Solutions

In the early days founders do everything themselves, but if you have to grow you have to delegate, you have to have processes without which you cannot grow, he says

pune Updated: Dec 19, 2018 16:27 IST
Namita Shibad
Namita Shibad
Hindustan Times, Pune
Devendra Deshmukh, founder, e-Zest Solutions, a company that helps others digitise their business.
Devendra Deshmukh, founder, e-Zest Solutions, a company that helps others digitise their business.(HT PHOTO)
         

A lot has been said about entrepreneurship and setting up new businesses. But what happens after you have set up your business? An important stage that comes in the life of all successful startups, is when they have to scale up. Devendra Deshmukh, founder, e-Zest Solutions, a firm that helps others digitise their business shares his experience of scaling up.

How did you start out?

“We were in college, my co-founders Ashish Gupta, Amol Pande and I, when we decided to start this business in 2000. Our aim was to help companies digitise their business. In those early days, digitization acted as an enabler, but today that has changed. Digitization today helps transform a business completely. It is important to leverage this benefit. So a bank could digitise its business, but when it offers an app to its customers to do most of the banking by themselves, that actually transforms the business.

Webootstrapped initially, used our own funds and did all the work ourselves in the early days. We would do the programming, we would get the clients and we would do their servicing. Slowly as our business grew, we employed about 30 people. Still we were out there, our sleeves rolled up, doing everything ourselves.

When did you realise it was time to scale up?

About four years after we had started, we realized that we were too involved in the operations part of our business. Most of our work involved firefighting. We were doing fairly decent business and our revenues were about one crore and it occurred to us that we need to change. Till then, we were taking whatever business was coming our way. There was no strategy in our actions. Even though we were profitable, we realized that things had to be changed. We had to see beyond the horizon. We decided to make the business less dependent on founders. So we brought in Rajendra Babtiwale, a consultant who was to guide us to make our operations more process driven.

How did you do this? What did it take?

We realised that the company had to become process driven. We could no longer let things work as they were. Rajendra helped us set up the processes. The good thing about our transformation was that we put in processes that were defined by our team. We did not define it and ask others to follow it. They were involved in the defining of the processes from the word go. When one founder raised the doubt about staff learning the processes and leaving the company, Rajendra said that it is better to have systems in place and have people leave rather than have them stay indefinitely and have no processes in place. This was to be prophetic. As much as 90% of our staff that was there when we decided to set up processes are still there with us, working independently and managing business units or foreign offices. It took two years to set up the processes.

How did setting up of processes help?

Work flows in a smooth manner. Rajendra helped us define the work flow as per the Anar Process Review System (APRS) that makes things easy. APRS is a process review that streamlines operations and eliminates inefficient processes. This system has helped us founders have more time to devise strategy and meet more clients. Before we decided to set up processes, we were growing at 10 to 15% year on year, now our growth is 30%.

What are the lessons you learnt from scaling up?

Scaling up is absolutely necessary for any startup. And this depends on setting up processes. Startups these days are very business model driven. I think when you reach a point when your business model is helping get from 1 x to 2 x or whether you have defined as your growth, it is time to think of scaling up. In the early days founders do everything themselves, but if you have to grow you have to delegate, you have to have processes without which you cannot grow. You will stagnate at a low level. If we did not think of scaling up and setting processes in place we would not have become such a profitable company.