Tuesday, September 16, 2014: Failure can be devastating, but it didn’t crush him. The daily grind of being an entrepreneur, and the big highs and lows did not deter him. Confident in his vision, he fought all odds despite several pitfalls and managed to carve a niche for himself in the electronics industry. He believed in staying focused on his goal and treating the challenges that cropped up as opportunities. Meet Ashutosh Agate, managing director, Agate & Agate Marketing Resources (India) Pvt Ltd, as he recounts his success story, in conversation with Kartiki Negi of Electronics Bazaar.
I was born in 1964 in a joint family in Mumbai. Ours was a big family of 10 members settled in Vadodra with my father, Arvind Agate, being the only bread winner. He worked as a quality assurance professional and retired as a general manager from Voltas Ltd. My mother, Anagha Agate, was initially employed with Vadodara Municipal Corporation but later gave up her job to take care of the family.
My childhood was quite pleasant. My younger sister Arundhati and I grew up with my grandparents, uncles and aunts. I was a pampered child and my every wish was fulfilled, despite the fact that our financial condition was not so strong.
As a child, I used to love cricket and would spend hours at the famous Shivaji Park in Dadar, Mumbai. Indoor games such as table tennis and chess were my favourite seasonal sports during the heavy Mumbai monsoons. Going to the gym was another passion I had developed from my childhood, which continues even today. I believe all these extra curricular activities help in developing one’s personality and a healthy outlook towards life.
I did my primary schooling from Junior School, Vadodara, Gujarat, as my father was posted there. Cultural activities and sports were given more importance in our school, which I enjoyed the most. However, when my family shifted back to Mumbai, I was enrolled in Balmohan Vidyamandir, a top ranking school in Dadar. As a student, I was reasonably good in studies but not extraordinary.
My entrepreneurial instincts developed at college
Electronics had always fascinated me since my childhood, so to nurture my interest, I joined Dnyaneshwar Vidyapeeth College, Pune, in 1981 to study electronics and telecommunications engineering. It was not just a regular degree course but gave students hands-on training, making them ready to face the industry. The unique structure of the classroom and industrial training given in small and medium enterprises during college helped me in a big way, making me ready to face the challenges of the industry.
I was driven by a strong desire to take up entrepreneurship. I had started dreaming of becoming an entrepreneur during my college days itself. Since there was no pressure on me to enter the professional world after college, it made me more ambitious and led me to take my first entrepreneurial plunge at the age of 21.
With the hands-on training that I got in college, I was a confident engineer when I passed out in 1985. I did not want to work for any company as I wanted to start my own venture.
Since most of my industrial training was in small scale units, it helped me to closely watch how the small and medium-sized businesses were nurtured and run in the Indian scenario. It gave me lots of exposure to different industries, helping me acquire practical knowledge besides complementing the theoretical aspects I’d learnt in the classroom. All this had a deep impact on me.
I learnt a lot from every job
Soon after passing out from college in 1986, along with a college classmate, I started developing a liquid level controller to automate the operation of water pumping motors for residential apartments. We used to do everything ourselves. Right from securing orders to purchasing materials from the market, soldering and assembling PCBs, winding transformers, installing the controller on site, and collecting payments from the customers. The manufacturing activity was done out of one room at my partner’s house in Pune.
Initially, we managed to get good business, particularly from Pune and some nearby cities. Impressed with our work, some of our well-wishers offered to invest in our activities in a small way. We accepted the investments from these ‘angel investors’, but returned the amount within the stipulated timeframe.
But despite slogging for 18 hours a day, and our early encouraging performance, this first venture could not take off. Certain mistakes that we’d made earlier on, turned out to be very costly and we had to close the business. I had not done an in-depth analysis of the business and that was a big mistake. Lack of analysis meant flawed plans and an absence of contingency plans. Also, the lack of experience in various activities such as design, manufacturing, sales, finance, etc, resulted in several wrong decisions and with very little capital supporting us, these mistakes were irreparable. The quick initial success also prompted me to become too adventurous and I took on financial liabilities than I couldn’t manage.
Since I had no source of income, savings or any financial support, and with no other option left, I accepted the job of a sales engineer in a small Mumbai-based trading company, which was then distributing PC card sets, manufactured by Semiconductors Complex Ltd (SCL), Chandigarh.
Being a self-motivated person and a go-getter, I quickly started producing results and was given a substantial salary hike within six months of joining the company. This job brought me close to the computer hardware industry, and the sheer dynamism of the industry attracted me to the big players.
In 1989, I joined the RP Goenka Group (RPG) for better professional exposure. The company was then planning to establish a sales team for its new range of personal computers with a newly acquired firm, called ICIM. Here, I was designated as the head of the Maharashtra territory, excluding Mumbai, and my job was to build a dealer network and develop a sales team to support these dealers. This was indeed a challenging job as we had to launch RPG’s completely new PC business in a market dominated by established players like Wipro, HCL, PCL, DCM, etc. With innovative strategies, a competitive product range, coupled with relentless hard work, we managed to capture a sizeable share of the market and also earned a good name in the industry.
Even though I now had a stable job with a handsome salary, my heart still yearned for entrepreneurship. Hence, I left ICIM after four years. My short stint at ICIM had taught me many valuable lessons that helped me as an entrepreneur.
Birth of Agate & Agate
There’s something addictive about entrepreneurship. Despite the failure of my first venture, I was once again ready to start a new business. Although my first venture did not succeed, it did instill confidence and courage in me to successfully shoulder all responsibilities. So, with renewed energy, I started Agate & Agate Marketing Resources in 1993, a trading company providing cost-effective automation solutions to the electronics industry. The firm was set up in Pune with an initial capital of Rs 90,000 from my savings.
During my association with ICIM, I was introduced to PCB assembly through the surface mount technology (SMT) process. Even though I was not involved with manufacturing, I used to frequently visit the factory with potential customers and show them the manufacturing process. It was during this time that I realised that SMT would be the technology of the future electronics hardware manufacturing and had decided that my future business would be in this domain.
After starting Agate & Agate, I had subscribed to some SMT journals to understand the subject better. From these, I learnt a lot about the manufacturers of various SMT equipment and materials. I would also visit international trade shows exhibiting SMT lines. All this helped me a lot in understanding the technology, trends, major players, markets, etc, in the SMT field. Our first agency agreement for SMT products was signed with AIM Products Inc (US) for promoting solder pastes in India. Thereafter, there was no looking back and we kept on improving our line card.
However, setting up the business was not a cakewalk. Finance was a major hurdle, as during the 90s, banks were not ready to finance young entrepreneurs with little experience. Moreover, India was not as as important a market to the rest of the world as it is today. Prominent SMT equipment and material manufacturers responded poorly to our requests to represent them in India, and there was no Indian manufacturer for such SMT equipment and materials. So I had to face different kinds of adversities before I could taste success.
During the initial period, my uncle Anand Agate was my partner, whosupported me and nurtured my entrepreneurial dream. But he belonged to a completely different industry—textiles—and could devote very little time to this business. He, therefore, exited this company after three years when he saw me handling things well. I started handling everything alone, till I hired two people after a couple of years.
Entrepreneurship posed many challenges
Way back in 1997, no SMT automation line was available for less than Rs 10 million. Agate & Agate was among the very few companies in India to have introduced absolutely affordable SMT automation equipment. Also, we were the first to launch value-added services like training and consultation in SMT automation and even launched computer-based training courses on the SMT process.
As a trading company, the ability to provide total solutions, not just machines or materials, was a great challenge as we were a small-sized company with limited resources. But we persisted with our hard work and efforts and were successful in delivering results.
Our focus had always been the SME sector, and our biggest challenge was dealing with customers with limited capital and also some of those with limited vision. To overcome this challenge, we decided to focus on ‘entry level’ equipment so as to deal with the limited capital scenario. We also tried promoting ‘used/refurbished’ SMT capital equipment as a solution for those with limited capital. But this proved to be a bigger challenge as equipment failures became a big issue with some customers, and also garnering support from the respective vendors to solve those problems was an uphill task (as these were the same vendors who had lost an opportunity to sell their brand new equipment to these same customers!). However, we managed to overcome these tough challenges by arranging support from experts on these machines from other countries, even though it sometimes meant actually making a loss on those deals. We also hired engineers and sent them abroad for the necessary training on some leading SMT brands.
My biggest challenge has been in changing the mindset of clients. The electronics hardware industry in India has never been strong. Most SME sector manufacturers had never dreamt of making it big, so they were always hesitant to invest in automation or innovation. Convincing them about even the most basic type of automation was almost an impossible task. I did try to convince them—sometimes it worked and helped us win their business. But even when it didn’t, we generated tremendous goodwill, which proved to be an asset for future business with them.
All these years have been packed with several challenges, multiple opportunities, lessons learnt, growing industry knowledge, fulfilling rewards and most importantly, handling of several setbacks, which made me tough and kept me going.
Venture into LED lighting sector
In the recent past, we have also equipped ourselves with adequate knowledge and expertise to support manufacturing in the next big growth area of LED lighting. As we did in SMT, our approach in this business too has been about providing total solutions.
The ‘Centre of Excellence for LED Lighting’ houses the most modern manufacturing machinery and R&D equipment required to design, prototype, manufacture and test virtually any type of LED lighting product. A specially configured SMT line is the backbone of this centre, besides a photometry testing facility.
We design and manufacture LED light engines for a variety of LED light applications. Integrating these LED modules with matching drivers and configuring those with suitable heat-sinks/housings to ensure light- and heat-efficient designs have been the main activities at this centre. Supporting various OEMs has become the obvious choice for us. With resources at our disposal, we offer complete support and consultation to set up LED light manufacturing lines.
Besides LED modules and drivers, we also manufacture LED streetlights, floodlights, high bay lights, tubelights, bulbs, etc. EMS and photometry testing are additional services for those who do not plan to invest in machinery.
Life’s major lessons learnt
Since my first failed venture to the most recent one of setting up a Centre of Excellence for LED Lighting, every incident has made a lasting impression on me. Each success and failure in my life has taught me a lesson.
During the initial phase of my SMT business, I had also taken up international trade in commodities with some like-minded businessmen in the Far East countries and Russia, which were introduced to me by my uncle. The idea was to identify commodities that could be exported from India to these countries. Since all the orders were of high value, the profit margins were huge and I worked really hard at promoting this business. We were very close to concluding huge deals with my partner in Russia, but USSR ceased to exist in December 1991. The Ruble collapsed against the US dollar. All our projects sank due to this political and economic turmoil. However, by then I had spent considerable amounts of money on these projects and all my savings had been invested in them. This was the second big failure of my entrepreneurial journey. But this helped me in future ventures—I learnt to analyse all business proposals more carefully before committing to them and not just to rely on instincts.
One of the important lessons that I learnt early in life early in life was that one should pursue only those projects or businesses where profits are derived out of one’s core expertise and education, and not on perceived profitability of a project or potential benefits.
I firmly believe that each incident in one’s life only makes one wiser and more mature to face challenges in future. So, there is nothing in my life that I wish had not happened. I am satisfied with the way I have progressed so far, but just wish we could have achieved this a little faster.
My management style
My style of working is democratic in nature but with tight control over the proceedings. I firmly believe that being on a mission with a purpose is the right way to success. Hence, I always consider sharing my vision about the business with my employees and instilling in them the confidence that they are going to be successful. This approach ensures their commitment to the job. Having understood the goals clearly, delegating tasks to each of them and empowering them with the necessary authority and resources ensures that they are able to discharge their responsibilities with pride. The simple act of sharing with them how their company is performing today, which many firms have not done so far, is enough to make them proud of their job and this helps in motivating them to do better. Besides this, their monetary benefits are worked out on the basis of a percentage of the revenues they are directly responsible for generating.
Being in a technology-driven business, I always ensure that the employees keep themselves updated on the latest trends in the business, and also make them understand the direct and indirect benefits of staying abreast of technological developments.
Contribution to the industry
It gives me great satisfaction to see some of our customers from the small scale industry growing rapidly to large scale organisations in the SMT business, especially companies that had started out using our entry level SMT equipment. The small scale electronics hardware industry in India is large in numbers but is yet to embrace automation in a big way. Entrepreneurship, affordable automation and innovation are words close to my heart, and I have helped the industry in my small way in these key areas. Being a total solutions provider, we just did not stop at equipping small companies by providing cost-effective automation solutions but have also helped some of these firms to get business relevant to the equipment supplied by us. I would like to be remembered as an entrepreneur who could inspire at least a handful of others to take the same path.
Being able to remain relevant in one’s field at all times is a simple definition of success. Being able to continuously add value to what you have been doing in the past is the way to remain relevant. For budding entrepreneurs, it is necessary to think out-of-the-box and never shy away from taking calculated risks and developing the necessary skills. Success and rewards will surely follow but one must be ethical and fair. This is my advice to my children as well—to chase their own dreams without being materialistic, greedy and without losing humility.
My family is my strength
I would attribute whatever little success I have achieved to my family. All the values I inherited from my father have made me a strong person. I have inherited the qualities of a task master from my mother, which helped me remain focused on diverse tasks. They always extended the much needed moral support to be a first generation entrepreneur.
My wife Asawari Agate, who is an architect, gave me unconditional support through all my entrepreneurial adventures and supported me through thick and thin. She has also been the family’s financial backbone during the initial turbulent years of my career. Despite her being a practicing architect, she played the major role in raising our daughter, Anupreeta, and son, Anurag, without complaining about my lack of attention to this important aspect.
My daughter is studying product design from the National Institute of Design (NID), Ahmedabad; my son is in high school and is passionate about game designing and sports.
I would like to further strengthen our ability to offer cost-effective solutions for entry level and medium volume SMT automation. We would also like to continuously improve the cost-performance ratio of the machines we offer so that more customers will find investing in SMT machines viable.
Meanwhile, we are focusing on raising capital to set up more establishments across India, similar to the Centre of Excellence for LED Lighting in Pune. We are also working on getting our photometry laboratory accredited by NABL for ISO17025 soon, in order to offer certification for LED luminaires. The objective is to be closer to customers, so that they can walk in at these centres to learn more about LED lighting manufacturing techniques, photometry testing aspects, product development and, eventually, decide if they would like to set up their own manufacturing units with our assistance or simply outsource all their LED lighting needs to us.
On the personal front, I have not yet thought about retirement. Being a workaholic, the word ‘retirement’ scares me. But, on the other hand, I have plans to explore several places. Even though I have travelled a lot in India and abroad, I have hardly explored the places I’ve visited; hence, I would like to take some time out to travel. I would also like to pursue another hobby of playing the synthesizer, though I am not very good at it yet. But I believe that I have an ear for music and find it very relaxing to play some musical compositions on the synthesizer.
Having spent so many years in the industry, I would love to train the youth from rural India. With this small initiative, I believe I will help in creating more jobs in their respective fields. I would also love to contribute by sharing my vision and thoughts with policymakers in government departments about how we can improve the SME sector in India.
What I would like to change…
|In this world:||Perceptions about our country and its people|
|In the country:||To nurture qualities such as discipline, cleanliness, innovation, a commitment to work and honesty|
|In society:||Guide people on how to be a responsible citizen, while respecting fellow citizens|
|At my work place:||Inculcate dedication towards work and help people achieve an optimal work-life balance|
|THESE ARE A FEW OF MY FAVOURITE THINGS…|
|Hobby/Pastime:||Listening to music and working out in the gym|
|Political/ historical figure:||Narendra Modi|
|Book:||Iacocca – An Autobiography|
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine