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The Rediff Money Special/ Giselle Regatao

Older executives get adventurous

S Ramachandran has just moved to a smaller office. After six years as CEO of Ramco Systems, Ramachandran quit to open his own company. Last month, he launched the Internet software solutions firm, Changepond, in Chennai. "I am thrilled," he says.

But Ramachandran is not what most people today who are starting up a company in the information technology industry are -- in their early twenties. In fact, he is not even in his early forties. The former Ramco CEO is 48 years old.

As the IT industry is growing in India, so are the number of not-so-young entrepreneurs. More and more executives in their mid-forties or fifties are exchanging stable and prestigious careers for the adventure of opening a new company.

Ashok Soota is one of the pioneers of this trend. One year ago, at 56 years of age, he left a position as vice-chairman of Wipro Ltd. to found MindTree Consulting, a software solutions company specialising in e-commerce and telecommunications. "I felt I needed to do something new," says Soota. "And this is my last chance."

Like Soota, middle-aged Indians used to work in an environment that didn't encourage entrepreneurship. Their career goal was to hold a high position in a large and respectable organization. But the IT boom created opportunities hitherto unknown and changed this mentality. As a result, Indian society has become more supportive of middle-aged start-ups.

The first consequence of the IT fever for senior executives was money. In the last five to ten years, the increase in salaries put them in a more comfortable financial position. That was translated into more savings, a net that protects these professionals from the unavoidable risks involved in setting up a business.

However, while beginning a new venture became much easier, the level of competition also increased. Which is the reason why most of today's start-ups won't survive long. In this scenario, the older entrepreneurs have one major disadvantage -- the energy of the younger lot. As Soota says, he sometimes wishes he were ten years younger. "I know I don't have forever to do what I am now doing," he says.

Younger start-ups tend to work harder and can put in longer hours. Usually, they are also more innovative and more willing to take risks. Moreover, young people have less obligations and distractions, like a family, for instance.

This is not to say that the odds are far too heavily stacked against the not-so-young entrepreneurs. They do have a significant asset, namely, experience. "In the IT industry, it is no longer enough to merely have talent," says S Sumant, chief executive officer of the management consulting firm, OMS Pvt Ltd, based in Bangalore and which works mainly for high tech firms. "You have to know how to run the business," he says.

Venture capital firms like to see older entrepreneurs showing up as well. Especially when the environment is turning more competitive and the market for high tech stocks more volatile. "I would be glad to take tech companies run by 45 or 50 year-old start-ups," says Vijay Angadi, managing director of the Bangalore-based IFC Ventures.

Angadi, while waiting for the older entrepreneurs, prefers to avoid the very young ones. IFC receives proposals from around 200 companies every year, 30 per cent of them run by people in their early twenties. All the nine companies IFC has chosen to fund, however, are headed by entrepreneurs aged between 32 and 45 years. "The entrepreneurs in their twenties will end up working for these older start-ups," predicts Sumant.

With more experience and contacts, middle aged entrepreneurs find it easier to attract funds and people. For instance, it was with a friend's help that Soota managed to join other eight industry professionals to open MindTree and didn't have around too far for money. He had personal contacts at the US-based Walden International and with Sivan Securities in India, the two firms that are funding his company. "I didn't have to negotiate. They told me that the money was on the table," recalls Soota.

The IT industry remains being a very young environment however. When Soota left Wipro a year ago, the company had 6,000 employees and the average age was 26. Probably the story will change in the new companies. MindTree will soon celebrate its first birthday and the firm is already 100 per cent ahead of the projections on performance. "The company's aim -- to reach $ 123 million in revenues by 2005 -- will be achieved earlier," says Soota.

The founders of MindTree and Changepond are enjoying being "late" entrepreneurs. Since Soota left Wipro, his life didn't change much, he says. The executive keeps working 70 hours per week and is not thinking about retirement. Ramachandran is also eager to put a lot of work hours in his just-born company. As they say, working hard is something they have been used to since a long time.

Gisele Regatao, a graduate student of business journalism at City University of New York, spent six weeks at rediff.com, after winning a Reuters Foundation fellowship in journalism.

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