Success isn’t in the numbers, believes Sunil Vachani, chairman and managing director, Dixon Technologies. He is among the few assiduous leaders who have been tirelessly engrossed in reviving the electronics industry. Having spent almost two decades in the industry, he has had his own share of successes and failures. Despite the trials faced, he is confident of riding the crest of the wave. His passion for electronics is unmatched, and the confidence and optimism he exudes is contagious. Speaking to Richa Chakravarty of Electronics Bazaar, Sunil Vachani recounts his journey within the industry as well as the course his life has taken.
The influencers in my life
I came down to India in 1992, after completing my bachelor’s degree from American College of London. My father, the late Sundar Vachani, a man with brilliant ideas, was the pioneer in introducing colour TVs in India, under the brand name Weston. He also introduced the country to video games. My family has always been in the electronics business, so that seems to be in my DNA. Hailing from a Sindhi business family, the easiest way out for me was to join my family business. But I did not follow that trend. I think the
biggest mistake we entrepreneurs do is to join our family business, and I did not want to commit the same mistake.
We were a huge joint family—almost like a small country! We are four brothers and I am the youngest. While my other brothers were more flamboyant, I was simpler, more studious and an introvert. I was a decent student scoring around 75 per cent, and my parents were quite happy with my performance. Of course, now the concept of a ‘brillant student’ has changed, where even scoring 90 per cent is not good enough! Though I was always closer to my mother, my dad had a huge influence in my life in terms of his achievements and how he attracted people. He could foresee the future and knew what people wanted.
Though it’s been 15 years since my father passed away, even today people remember him and talk about his simple way of connecting with people, unlike me, who takes time in reaching out to people. I was lucky to be trained under him. I wish he had been around—things would have been different in my life as well as with my business. It was a difficult time as I was young when he passed away, and I was not established in the business then. I do miss him a lot.
Books have also influenced me. I was not much into reading, but when I got into business, I discovered that reading was a necessity. That’s when I started reading good books about various successful leaders, which had a huge influence in my life and the decisions I took.
I charted out my own way
Electronics is something I was always interested in, so I told my father that I wanted to start something of my own and I really respect him for having trusted me. Not many parents have faith in the capability of their children to start a new venture. But before taking the plunge, I undertook a brief six month training under him in one of the divisions of his company.
No matter how big or small your dream is, achieving it is what counts. Having dreamt of making my new venture a success all by myself, the major obstacle I faced back then was raising the capital. I approached my father and he agreed to help me but advised me to arrange finance on my own.
In December 1993, I started Dixon Technologies with Rs 2 million lended by my father. Though it sounds a meagre amount today, this was a sizeable sum to hand over to someone who was just a graduate from a business college. During those days, going to a banker was difficult as none of them were ready to invest in any startups without collateral. To our surprise, we were able to convince a Japanese bank to give us a loan. Luckily, the banks then were keen to fund and support the companies that are into exports. This is how I started my first company. The point I would like to
make here is that budding entrepreneurs usually tend to take ‘No’ for an answer too soon. One should not give up easily, but push for one’s dreams harder.
Joy of small victories
I had decided to start an electronics manufacturing services (EMS) firm. Back then, EMS was a relatively new concept in India. It was yet another risk I was undertaking. At that time, LG, then known as Gold Star, was looking for an EMS firm to deliver a small amount of 2000 TV sets to be exported to Europe. During those days, Korean companies were not really trusted and due to a very low dollar conversion rate (a measly US$ 1.5 on a colour TV), no one was willing to take on the order at that price. We were then just four months into the EMS business and were therefore in a dilemma about taking the plunge. In fact, the LG order did not make any business sense, but I decided to go by my gut feeling and intuition and not by the numbers. We entrepreneurs sometimes get too much into number crunching and detailing. Instead, sometimes we need to take a few risks.
As expected, we did not make any profits for 8-10 months. So the first year was a kind of total washout. But this led to a great relationship with LG. As LG had decided to part ways with Besta Vision and did not want to set up a manufacturing facility immediately, it was looking for a partner. We became their local partners. This was again a big risk as LG was a new entity then.
The relationship with LG worked wonders. In fact, it proved to be a stepping stone for us. In the first year, our turnover was Rs 3 million, but slowly we started getting orders from LG India on a trial basis, and in the second year our turnover grew to around Rs 60-70 million.
My team believed in my vision
We started off as a six member team and my current CEO, who has been around for 18 years, is more like a partner now. We recruited 25-30 people in the company and now, after 18 years, we have 3500 people working with us, and the turnover is now Rs 8.5 billion. The credit for this exponential growth goes to my competent core team. My strategy has always been to hire people who are smarter than me and know more than me. I firmly believe in having a team which is self-driven and self-motivated. You may not hire the exceptional talents from the IIMs or IITs, but you need to hire people with passion and who can carry forward your vision. Also, if the leaders are consistent in their thoughts and actions, the team starts trusting and respecting them.
As a leader, I like to get a lot of information from my people. After I am assured that they are heading the right way, I do not like to interfere in their work.
Starting as an assembler of TVs, now we have diversified into various segments including consumer electronics, lighting (CFL and LED), set top boxes (STB) design and manufacture, home appliances, energy meters and PCBs. I owe this success to my enthusiastic army of people, who have believed in my vision.
Strategy to sustain in the industry
The biggest challenge I’ve faced so far with regard to my business is how to create a sustainable and competitive advantage, which can ensure the business lasts over a very long period. Only if we perform well consistently for 25-30 years, can we sustain ourselves in the business. This gives me sleepless nights. Incurring losses is not an issue—there were a lot of ventures and projects that did not do well and we had to wind them up, incurring losses. We faced a lot of problems on the distribution side as well.
Another major challenge faced was when I started off with the idea of designing and manufacturing STBs in India. An STB involves not just hardware but also a large part of software. I employed a large team to take up the project. But my initial talks with some Korean and Indian players dashed my dreams of making it big in this sector, as most of them warned me that India was not a hardware destination, and about the inability of Indian software engineers to develop software for STBs. However, I took this advice with a pinch of salt.
I had once read a very interesting article by Neil Armstrong, which I truly believe in. He said that in a race, your toughest competitor is not the person behind or in front of you, but it is you. You have to beat yourself. Hence, we decided to take up the challenge, and in the next two-and-a-half years we did come out with the product for the first time in the country. Today, having delivered a million STBs, I can proudly say that in terms of quality we are far better than the Chinese products and as good as the Koreans.
Now we provide complete end-to-end solutions for consumer electronics, lighting, home appliances, STBs and smart meters—right from freight design, sourcing, manufacturing, distribution and reverse logistics. Not many EMS companies have attempted that and at the same time, we are now totally backward integrated in sheet metals and plastic injection moulding.
My wife is my friend in the true sense
I got married at a young age, 21 years ago. Ours was a love marriage. We were neighbours and I proposed to her a few times, while she kept refusing. She finally agreed when we were studying in the same college in London, where she was pursuing her degree in fashion. Belonging to the same Sindhi community, our parents eagerly got us married within six months of our reaching India. Gayatri, my wife, is a home maker and my friend in every true sense.
Marriage is nothing but companionship and Gayatri has been a true friend, an honest critique and a strong support. She is the one who wears the pants in the family. I sometimes consult her on official issues as well.
I have two lovely kids—my son, Prithvi is 17 years old and my daughter, Karishma is 14. My kids are completely on their own; there is no pressure from our side. I always tell them that as a parent, I cannot guarantee them wealth but I can guarantee them a good education, good values and a good upbringing. What they want to do in the future is completely left to them. I’ll be very happy if my son follows my footsteps and starts something on his own. But if he wants to join my business, I will be equally happy. However, I would advise him to work for three to four years elsewhere and get handson training before joining the family business. He also knows that he will have to make his way up only through merit. My daughter has an inclination towards the latest technology and gadgets. Many of her qualities match mine.
I am often asked about my future plans in number terms—like what would be the turnover next year or what my target for the coming years is. I seriously have no answer to these questions as I believe that I do not want to limit myself with a set of figures. Steve Jobs is the perfect example of this mindset; he could never have imagined that the net worth of his company (empire) would be more than the cash reserves of his country.
My vision is to make Dixon globally competitive as an EMS company in terms of quality, cost and delivery. You really need to stand out among others, and I want my customers to see that difference. Today, we offer EMS services to only Indian companies; tomorrow we will do it for the world. The Indian government has also realised that if it has to create jobs, it has to do this at the grassroots and that, too, in the electronics and IT sector. We need to play our cards well to grab the opportunities.
I strongly believe in my father’s philosophy which says that if a company has to be successful and sustain itself, it must be continuously recreated or rejuvenated with new ideas. This is a thought deeply entrenched in Hindu mythology and manifests itself through the trinity of Brahma, Vishnu and Maheshwara—the creator, the preserver and the destroyer.
One thing that I would like to change:
In this world: Make our global leaders spend less on defence and more on upliftment of the under privileged
At you work place: Make my team even more happier
In the country: The gloomy economic scenario
In the society: Nothing. People around us have to be what they are, our response to their reaction needs to change
In yourself: Be more perceptive to problems of people around me
These are a few of my favourite things:
Music: 80s retro
Film: Kahani, Godfather
Hobby: Reading, listening to old Hindi songs
Actor: Al Pacino
Actress: Vidya Balan
Business leader/figure: Steve Jobs
Book: Steve job’s biography