Startups should strive to gain respect from all stakeholders: Infosys' founders

India's second largest IT services firm Infosys is an incredible entrepreneurial success story. Seven engineers, mostly hailing from lower middle-class background, are able to build a multi-billion-dollar IT services firm that serves most of the Fortune 500 companies. Led by NR Narayana Murthy, Infosys recently celebrated its 40 years of operations. Currently, the Bengaluru-headquartered IT firm has more than $17 billion of annual revenue with a market cap of above $70 billion. At the foundation day, founders of Infosys reminisced their entrepreneurial journey which is filled with many unheard stories about their successes and failures. As the company sets its eyes to an enterprise that can live beyond a century, co-founder and non-executive chairman Nandan Nilekani said the company would create a framework for smooth succession in coming days. The company's founder Narayana Murthy said the company had done well under the current management and it should strive to last beyond a century with solid corporate governance at its core. Both also had a word of advice for startup founders. They said capital should be respected and founders should be in pursuit of gaining respect from all stakeholders. According to the founders of Infosys, technology sits at the core of the current world and its applications are going to increase in coming years. The foundation day also highlighted the importance of 'value' in building an institution, which should be a guiding principle for the startup ecosystem.

What are the reasons behind starting Infosys? What were your initial thoughts?

Nilekani: When I meet Narayana Murthy way back in 1979, he was the most charismatic leader. He spotted talent and gave us the opportunity. Frankly, if he had asked us to jump off the cliff, we would have done that. That was the loyalty towards him. So, when he proposed this (to form a company), it was a no brainer. I and rest of us who were 10 years younger than him and NS Raghavan, we didn't have much to lose. We were in our twenties. But, for him (Murthy), it was a huge thing. He was at the top of his career. So, the cost of doing it for him and his wife (Sudha Murthy), it was a lot higher. We were very committed to that.

How will you plan to take Infosys ahead? What are the strategies for making Infosys more than a century-old enterprise?

Nilekani: I am last of the jokers left. My challenge is a little more acute, because I have some founder's clout, but I'll be handing over to a chairman at whatever point that I exit from the scene, who will be a non-founder. There's no plan B now. If I hand over to somebody and it doesn't work out, there's no Plan B. I can't come back at 75 or something. So there's no plan B. So, I have to make sure that his vision of right leadership structure is formed. I have not found a person yet to hand over the responsibilities.

Infosys always believes in 'under promise and over deliver' and stands for wealth distribution through wealth creation. What are your views?

Shibulal: When you are building an organization, you are building an industry, you are also building a country. All of us came from middle class background, values are middle-class values. The opportunity is to make capitalism work towards betterment of society.

As Infosys' founder, you were not keen about joining of promoters' family members in the company. Do you still hold that view?

Narayana Murthy: I was completely wrong in that. I was depriving this organization of legitimate talent. I take back whatever I said. I think every individual should have the same opportunity as every other individual if he or she is considered the best person for that role. The reason why at that point of time, probably, I embraced that idea is I was afraid some people might bring undeserving candidates and put them in positions, and I wanted the future of the organization to be strong. So today, my view is that you should not worry about what nationality, what heritage, whose son you are or whose daughter you are, as long as you have the best competence for a position. But you have to put in the proper process of maturing in the organization before being given the suitable position or responsibility.

How did you hire Nandan Nilekani and Kris Gopalakrishnan into your team at Patni Computer Systems?

Narayana Murthy: I was working as the head of software at Patni Computer Systems. Nilekani walked into my room on February 18, 1979 to ask for a job. When asked, he said he wanted a job in February because he had 'free time' till September before getting into a business school in the US. So, though he was only looking at a short stint, I gave him a learnability test. It is better to have an intelligent man with you. No matter how short that period because that intelligence will add tremendous value. That is my belief. In that test, he was only candidate to get 50 out of 50 marks. But I was not satisfied. I have this principle - the reward for winning the semifinal is to play a tougher game which is the finals. I had developed an IQ test called Matrix Rotation. Interesting test, and the really intelligent people did it in about a minute and half. And reasonably intelligent people did it in 5-6 minutes and he did it in a minute and half. Gopalakrishnan was the quiet one in the room, who never asked questions but perfectly executed the tasks. This was the 23-year-old kid, who was being assisted by an IIT graduate and was a project leader.

What are your views on the current state of affairs in the Indian startup ecosystem and advice to founders?

Nilekani: What worries me is, do they want to build an institution? I think the hard part is to build an institution, it's a marathon race. Today we (Infosys founders) are as optimistic and working as hard as 40 years back. Do these guys have the stamina to play the long game? That's what worries me because too much money is a curse. Once you lose respect for capital, for frugality, lose respect for managing your expenses, then the game's over.

Narayana Murthy: My answer will be similar to what Nandan said. They (founders) should take a few moments of their busy schedule and think about the issue, how do we earn respect of every single stakeholders? The moment I ask the question of respect, everything falls into place - your austerity, focus on excellence, getting repeat customers, attracting good employees, attracting long-term investors, getting the approbation of the society, and the bureaucracy among others.