An amazing story: From Rs 60,000 to Rs 435 crore

Today Ma Foi Management Consultants is the largest HR services provider and staffing
company in India, with a turnover of Rs 435 crore (Rs 4.35 billion).
Ma Foi has so far helped generate career opportunities for more than 169,000 people in
35 countries.
K Pandia Rajan started it in 1992 with a capital of just Rs 60,000. Ably assisting him in
his long journey has been his wife, Hemalatha Rajan, who is also the director of the
company.

To know the inspiring story of the Ma Foi couple

Childhood in Sivakasi

Pandia Rajan was born in Vilampatti village in Sivakasi district. His father who was a
worker at a match factory died when Pandia Rajan was just three months old. He was
brought up by his grandparents in a joint family of about 40 to 50 people.Later his grandparents started their own match factory.
After studying in the village school, the hard-working boy went to Coimbatore to study
engineering at the PSG College of Technology.

Having stood first in the university, he joined XLRI, Jamshedpur for his MBA. That, he
says, was where the seeds of entrepreneurship in the HR arena were sown in his mind.
“At that time, HR guys never became entrepreneurs, but I wanted to study HR and then
be an entrepreneur. In my village too almost everybody is an entrepreneur. Unless you
are on your own, you are a nobody there. So, you can say the entrepreneurial spirit is
deeply ingrained in all of us.”

But he had to wait for some time. After working for six years, and getting married to a
chartered accountant (Hemalatha) in 1989, he and his wife decided to put all their
dreams together in their own enterprise.”

Starting Ma Foi

On August 15, 1992, the couple decided to launch Ma Foi Management Consultants ?to
market expertise as a product.’
But why a French name? “We were targetting the international market. So, Ma Foi — or
My Word — is a name that meant something to all European countries. It gave us an
occasion to speak about our value to the clients. ?Ma Foi’ symbolized what we wanted to
say and do.”
With an investment of Rs 60,000, they started Ma Foi in “a small shack of a place.” But
by the end of the year, four of their friends put in Rs 10,000 each and upped the
investment to Rs 1 lakh (Rs 100,000).

They started primarily by placing engineers overseas. The Chennai office, which opened
at 6 a.m., remained open till midnight so that candidates could walk in and register any
time. “Although it was a struggle initially, we wanted to position ourselves as a
candidate-centric organisation. About 30 to 40 people visited us every day. It was 1992-
93 and the Gulf region was booming. We sent dozens of middle-level and managerial
people at that time to countries like Oman, Saudi Arabia, Kuwait, Malaysia, Brunei, etc. .
.”
Even as visa processing began, the Babri Masjid was felled. All Gulf nations put a ban on
issuing visas to Indians. And Ma Foi’s losses ran into lakh (hundreds of thousands). “It
was a tough phase and we had to pledge even our jewellery. But when we came out of
the struggle, we expanded into all kinds of things.”
By 1994, a lot of multinational companies made their entry into India. By the end of
1994, Ma Foi got a huge offer from Apple Computers to recruit all their heads of
departments. “That was also the time the salaries in the Gulf region started falling. Till
then we had not done any such huge recruitment in India. Whatever we had done was
only on the secretarial side. With that one assignment from Apple Computers, we moved
ahead in India.”
Ma Foi also set up offices in all the big cities in India and seriously started looking at
domestic recruitment and sectors like IT, finance and banking.
By then, Ma Foi became a closely held public limited company. “We gave equities to our
friends, relatives with the promise that we would return at least 20% dividend every
year.”
During the dot-com boom in 2000, Ma Foi also had a dot-com plan and got a lot of
venture capitalists investing in it. But then came the dot-com bust. “Thankfully we were
affected only slightly by the dot-com bust. We pulled back the dot-com model very soon
and convinced our VCs to use what we got — around Rs 8.5 crore (Rs 85 million) — in
the brick-and-mortar model. With that money, we could spruce up our offices and add
more people.”

Part of the Vedior Group

In 2002, Ma Foi set up their first overseas office in Dubai. “In terms of turnover, we were
number one in India then, with 600 people working for us. Whenever we travelled abroad
we noticed that the staffing industry over there was quite evolved. It also made business
sense to have offices abroad. Deputing 10 people in the United Kingdom is equivalent to
deputing 100 people in India!”
After understanding how the overseas market worked, they had two choices: either to go
for an initial public offering, or to look for a global, strategic partnership. “The IPO market
was down and volatile then. So, we decided to go for a strategic partnership with global
majors. Giants like Manpower, Adecor and Vedior were also looking at the Indian
market.”
“Vedior (the world’s leading specialist staffing company from the Netherlands) was much
below the two in terms of turnover, but it allowed us much more flexibility. It was a
multi-brand company and called itself a federation and corporation. Because it is a
federation, a lot of entrepreneurs become a part of it. We run the show and they support
us. We had 270 shareholders, plus the VCs, then. It was a majority partnership with 76
per cent held by Vedior and 24 per cent by us. Today, we hold 18 per cent.
With Vedior’s support, Ma Foi set up offices in the United Arab Emirates, the UK,
Singapore, Sri Lanka, Oman, the United States, Bahrain, Kuwait, Qatar, Thailand, Hong
Kong, China, and Malaysia.

The Indian market and the world market

“India is still an evolving market; it is still not a mature market though a lot more clarity
has emerged in the last five years. In terms of legality, it is clearer too. On the other
hand, the European and the US markets are quite mature. It will take another decade or
so for the Indian market to evolve fully.”
“People are slowly getting comfortable with temporary staffing in India too. In a country
like France, almost 80 per cent of the staffing is on temporary basis. People mostly work
on contract. But in India, there is a stigma attached to temporary jobs.”

Impact of the US recession

“Definitely the slowing down of the US economy will have an impact on the Indian
economy too, but not too much. It may take another six months for the IT and BPO
sector to feel the pinch. Sometimes, the impact could be positive; there may be more
outsourcing too as they have a problem there.”

Making profits

Ma Foi broke even in their first year itself. From placing 30 to 35 people in the first year,
now they find jobs for around 5,500 people every month.
If the turnover of the first year was Rs 520,000, today, it is Rs 435 crore. In the initial
years, Ma Foi grew at more than 100 per cent. The company’s compounded annual
growth rate has been 70 per cent.

Social responsibility

“Though both of us were fairly well employed, our dream was to build an institution, do
something meaningful and give something back to society in whatever way we could,”
the Rajans say.
The company made a profit of Rs 5,000 in the first year. Vandana Gopikumar and
Vaishnavi Jayakumar, two college students had just started Banyan, a Trust that helps
rehabilitate mentally challenged destitute women at that time. “We sent the entire money
to help them set up Banyan. From that year onwards, we keep aside a part of our profits
for charity.”
As they doubled their profits every year, their contribution to charity too increased. In
1997, they started a Trust called Sornammal Educational Trust (SET) in the name of
Pandia Rajan’s grandmother. The first effort was to help the students of his village.
In 2000, when a school with 100 very poor children run by Hemalatha’s grandmother was
to be closed down after she passed away, the educational trust decided to run it. “When
we saw the poor children, we felt like helping them. We bought a piece of land and built a
school. We called it Sornammal Matriculation School. Now we have 650 children, of whom
350 study free of charge.”
It was when Hemalatha met the mothers of the poor children that the idea to start Self Help
Groups (SHGs) originated. These women are clustered into groups and are given
vocational training so that they could start their own ventures. Training is provided to
women to become nurses, DTP operators, housekeepers and even auto drivers. They are
also taught tailoring, bag making, handicrafts, embroidery, et cetera.
“Till today, we have given Rs 3 crore (Rs 30 million) as loans to these women to start
their own businesses. I must say the repayment of loans has been 100 per cent,” a
satisfied Hemalatha said.
The trust has 816 SHGs for 13,128 women in Chennai.

CIOSA

In 2004, after working with many NGOs, Hemalatha felt the need to bring all the NGOs
under one umbrella, and that was how the Confederation of Indian Organisations for
Service and Advocacy (CIOSA) was born. It acts as a good platform for corporates and
NGOs to work together.

In 2007, the Ma Foi Foundation was formed so that all the corporate social responsibility
activities are taken care of by one body. Under the Disha Scholarship Scheme, 1,300
children from corporation school — 150 are from the Rajans’ native town Sivakasi — get
scholarship to study. The foundation also runs career guidance programmes for the 8th,
9th and 10th standard students.

“Ma Foi Foundation promises a better society as we believe in giving back what we take
out and changing the world for the better,” the Rajans said.

Source: http://www.indianstudentsnetwork.com/Attachments/Ma_Foi.pdf

Remarkable Climb for Self-Made Dalit Millionaire

At a party on Sunday to celebrate Dalit entrepreneurship, Chandra Bhan Prasad called out to the businessmen in dark suits who surrounded him:
“Who is going to buy a helicopter next year?” asked Mr. Prasad, a Dalit writer who was one of the organizers of the shindig.
The person who pushed to the front of the crowd with hand raised was wearing a black sequined sari and a heavy necklace of rubies ringed with diamonds.

Businesswoman Kalpana Saroj attended a party on Sunday to celebrate Dalit entrepreneurship.

Most people in the room agreed that Kamani Tubes Chairman Kalpana Saroj, who said in a conversation later that her assets total five billion rupees (about $112 million), was the most successful entrepreneur there.
The gathering was held ahead of a Monday meeting between a Dalit business chamber and the Planning Commission. People from the community that falls at the bottom of the caste hierarchy say liberalization has been good to them—giving them more opportunities to use their smarts and skills to move ahead than socialist-era India and its government jobs did. Perhaps no one epitomizes that movement quite like Ms. Saroj.
“The main thing you need to know is this is a woman who is ninth-class pass and who was earning two rupees a day,” said her husband Samir Saroj, who used to run a company that provided sand for construction purposes, but now works for his wife.
Ms. Saroj described a remarkable journey from a place called Akola in Maharashtra state to Mumbai in the mid-1980s, perhaps five years before India liberalized its economy.
In Akola, she was married at 12 and dropped out of school at 14. The marriage didn’t work out. She also began working as a teenager, after her father was suspended from his police officer job.
In Mumbai, at first she earned just two rupees a day (about .05 U.S. cents) as a seamstress, though her earnings increased as she became comfortable using a sewing machine. Later, with a bank loan, she ran a furniture shop.
In her life, as with many of India’s newly rich, real estate provided the big break.
In 1997, she bought a plot of land in the city that was going cheap because the property had an obstinate tenant and faced possible legal problems.
“I knew people,” said Ms. Saroj, who had by then been in Mumbai over a decade. “I thought I can get this done…I had a strength inside me.”
Ms. Saroj says she followed the files that related to her building from one government office to another until she sorted out the tenancy issue. She eventually did put up a building on the site (she called it Kohinoor Plaza, after the world’s biggest diamond). Along the way she says she faced threats from local mafia who weren’t pleased to see someone they saw as an interloper getting into the property business.
After her building plans were passed, a man came to her warning that a contract for 500,000 rupees ($11,363) had been put on her head, and that she had better get out of town, she said.
“Where you come from the land needs water to produce, here in Mumbai the land wants blood,” Ms. Saroj recalls the man telling her.
She went to the police station and reported the threat to the cops, who rounded up the goons whose names she says she had managed to get out of the man who told her about the contract.
“Then the matter got solved,” she said.
She sold Kohinoor Plaza in 2000 and parlayed that money into other land deals. Ms. Saroj says that because of that she got a reputation as a woman who could help people in Mumbai solve complicated problems.
In 2006, she took over Kamani Tubes (she had previously been on its board), a metal tubing factory that had 1.1 billion rupees of debts and that faced liquidation. She says she expects the factory to clear its debts over the next year. She also owns a sugar factory.
Ms. Saroj puts her success down to her persistence – she says she is unwilling to believe she can’t do something once she sets her mind to it.
“There are many roads,” she said. “If one way doesn’t work out I try to think of another way. If that doesn’t work, I think what’s an alternative?”
The millionaire now works out of Ballard estate, from offices around the corner from those of India’s richest man, Mukesh Ambani, at Reliance House.
Along the way she paid for the weddings of a younger brother and sister and gifted them an apartment each, sent her daughter to study hotel management in London and her son to train as a pilot in Germany.
As for the helicopter, Ms. Saroj says she does indeed plan to buy one this year, as well as a plane—but not for personal use (at least not at first, she says). Pointing to the fact that her son had to go overseas for training, she says she plans to set up a school for pilots at a multi-billion dollar aviation hub being planned for the district where she grew up, at an airport named after Dalit icon Dr. B.R. Ambedkar.

Source: Wall Street Journal

Andrew Carnegie - Rags to Riches

The story of Andrew Carnegie is a story of a man who went from rags to riches. Carnegie was born in Dunfemline, Scotland on November 25, 1835. Will Carnegie, Andrew's father, was a weaver. When steam-powered looms are incorporated into the weaving industry in Scotland, Andrew's father found himself strapped for cash. The family moved to the United States in 1848, and created a life in Pittsburg, Pennsylvania. While many American families were working in factories to make a living, Andrew Carnegie's father refused, continuing his weaving career. This kept the family in poverty.

Andrew Carnegie's first job was working as a bobbin boy in a textile mill. He made $1.20 per week, before starting work in a factory, taking care of the steam engine and boiler. This job earned him $2.00 per week. When Andrew Carnegie was fifteen years old, he got a job working in a telegraph office. He started out as a messenger, and then moved up to an operator. He earned $20 per month. Three years after he started working at the telegraph office Thomas Scott, supervisor of the Pennsylvania Railroad, hired Carnegie as a personal clerk, earning himself $35 a month.

During this time, he began investing money in different businesses. Andrew Carnegie invested in such industries as oil fields, ironworks, and companies that made train cars. In 1865, he quit the job as head of the Western Division, and invested his time and money into the steel business. He opened his own steel mill with a plan in mind. "Watch the costs," he said, "and the profits will take care of themselves." To do this, he cut consumer and production prices and paid employees very little. He made millions with this plan, before selling his business in 1901 at the age of sixty-six.

In 1889, Andrew Carnegie published "The Gospel of Wealth." In this, he argued in favor of laissez-faire by relating it to Charles Darwin's theory of evolution. He stated that while competition may be hard, it is best for society because it ensure that only the best will survive.

Before Andrew Carnegie died on August 11, 1919, he began giving his money away to charities, libraries, colleges, and peace causes. Millions of dollars were given away to worthy causes. His explanation is quoted,

"he who dies rich, dies disgraced."

Andrew Carnegie was a man who truly went from rags to riches in the span of a lifetime.

Source: http://www.associatedcontent.com/article/318815 /andrew_carnegie_rags_to_riches_pg2.html?cat=37