Naveen Tewari: Riding the unicorn
- The founder and CEO of InMobi talks to Mint about growing up on the IIT-K campus, how employee loyalty has played a role in the company’s success, and the importance of serendipity
- Each of these (three) units has the potential of being an over $10 billion company in three-five years
Those who know Naveen Tewari, 41, as the founder and CEO of the Indian unicorn InMobi may find it hard to believe that the entrepreneur was completely uninterested in the business world for most of his student life.
In fact, had it not been for his serendipitous three-year stint with consultancy firm McKinsey and Co., and subsequently as the member of a McKinsey team that worked on a project of Reliance Infocomm (now known as Reliance Communications), Tewari would perhaps never have founded InMobi, one of the top global advertising technology companies.
Tewari was born on the campus of the Indian Institute of Technology, Kanpur (IIT-K), which may explain his continuing love for academics and research. His grandmother, the late Krishna Tewari, taught algebra at IIT-K in the 1960s. His father taught electrical engineering there in the 1980s. “My bua (aunt) too was a PhD from IIT-K. And so is my father-in-law," says Tewari.
Most dinner-table conversations at home revolved around how education can transform lives. While studying at IIT-K, many a time Tewari would land up in the class of the very same professor who had been at his home the previous evening, sipping tea with his parents. “I would find it difficult to skip their class," he says with a smile.
Though he was also good at cricket and basketball, and once even considered professional sports as a career, Tewari ended up becoming a mechanical engineer. He had a simple plan in mind—go abroad to do a master’s in engineering and a PhD thereafter.
Life, however, had different plans for him. In his last year of engineering, a recruiting McKinsey team visited the IIT-K campus. “I had no idea what McKinsey was. All I knew was that they were a ‘Day 0’ company at IIMs (Indian Institutes of Management), which meant they were good. About 400 people applied to McKinsey. I too applied, and was selected," recalls Tewari.
Tewari contemplated rejecting the offer since he couldn’t see the connection between McKinsey and academics. But his father urged him to take it up.
It wasn’t about the money. “My father felt I did not have the mindset and the temperament for research, where the gratification periods are very long. He advised me to do something that would excite me on a daily basis," Tewari recalls.
His father was right. The three years Tewari spent at the consultancy firm were a game changer. The turning point came when he was part of a McKinsey team on a Mukesh Ambani project—the launch of the special price scheme Monsoon Hungama by Reliance Infocomm in 2002 (the Ambani brothers parted ways in 2005, with the telecom business, renamed Reliance Communications in 2006, going to Anil. Mukesh started Reliance Jio Infocomm in 2012, soft-launching services in 2015).
“This was my first experience of watching how a business was being built—up close and centre. It was also one of the biggest reasons to start InMobi. He (Mukesh) still remembers that I was part of the project," says Tewari, who was just 23 at the time.
If the seeds of entrepreneurship were sown in part by Mukesh, it was Harvard Business School (HBS) that helped Tewari hone his business acumen. Tewari left McKinsey to do his MBA at HBS in 2003-05. Initially, he just believed that going to Harvard would get him a high-paying job, but he met many inspiring people and professors. One of them, Tarun Khanna, a professor, recently joined InMobi’s board.
After his MBA, Tewari had a couple of interesting offers, including one from McKinsey. But he found the offer from a venture capitalist (VC) alluring and even accepted it, only to develop “cold feet" a week before joining. It was not the job as much as the fact that if he took it up, he would never be able to leave the system. “These systems are built very smartly. You get golden handcuffs and end up buying an expensive car, then a home, then a dog—and you will never come out of it," says Tewari.
You might think that refusing such a job required some amount of maturity for a 27-year-old business graduate. “No, I think it was stupid. It was rash," says Tewari, who did not have his father to counsel him (Prof. Sachchidanand Tewari died a few months after his son joined HBS). A jobless Tewari found himself dipping into his savings. His wife, an engineer, helped.
Those were tough years, recalls Tewari. “The social pressure gets to you. I just wasn’t doing anything—almost nothing for two years. I was trying things but nothing was moving." He joined a five-member startup but it did not work out. He contemplated going back to the US to take up a job but decided to wait another six months.
During this period, Tewari worked on the idea of mKhoj, aiming to monetize SMS-based search. He wrote a business plan and began meeting investors. It wasn’t easy. Then he met Sasha Mirchandani (co-founder of investor collective Mumbai Angels and now managing director and founder of early-stage investment firm Kae Capital). “I was by then accustomed to failures and rejections, so I had no expectations from Sasha either," he says. This time, though, Tewari landed a $500,000 cheque. “Even today, it’s a lot of angel money," he says.
Tewari got cracking. Within a few months, he got Abhay Singhal, Amit Gupta and Mohit Saxena, whom he knew from IIT-K or Harvard, as co-founders.
But mKhoj, launched in 2007, did not make much headway. “It would have been a decent business but never a larger business," says Tewari, who decided to close it down and start InMobi in 2008. Tewari’s pivot from mKhoj to InMobi proved to be a good bet—focusing on the broader mobile ecosystem made better business sense. Investors, too, rewarded this move.
On 15 September 2011, InMobi and SoftBank Corp. completed a $200 million investment. Along with existing investors Kleiner Perkins Caufield & Byers and Sherpalo Ventures, this helped InMobi make its presence felt in the mobile advertising industry. It speeded up its growth by making strategic acquisitions of companies in the mobile advertising space.
There was no looking back. In 2011, InMobi became India’s first company to cross the $1 billion (around ₹7,115 crore) valuation, earning for itself the appellation of a unicorn. “We were in an ultra-aggressive, ultra-growth phase from 2008-14. We never saw any failure in that period," says Tewari. In 2015, however, there weren’t enough products to cater to, a couple of clients backed out, and business fell 25% on a quarterly basis.
Tewari, who acknowledges that InMobi was at the time a “darling of the media", did not know how to deal with the negative media reports. To fix things, they innovated in three broad areas. First, the company rejigged its model by developing new products and setting up new lines of business to complement the core business. Between 2015-17, it laid the foundations for TruFactor and Glance.
The InMobi group now comprises three units—Unified Marketing Cloud, TruFactor and Glance. The marketing cloud unit, which accounts for almost 90% of the group’s business, is headed by Singhal. TruFactor, which provides security, privacy, governance and compliance services to telecom service providers, is led by Piyush Shah, who was inducted as a co-founder nearly a decade after the company was launched. The group’s business-to-consumer (B2C) unit Glance—which uses Artificial Intelligence (AI) to identify trending topics and personalize the screen experience for smartphone users—is yet to get a chief executive.
Among other things, Tewari credits employee loyalty for the group’s success. For instance, Gupta, who left inMobi to co-found bike-sharing company Yulu, remains part of the InMobi board. “We are very good friends even today and are neighbours in Bengaluru," says Tewari. Nearly 41% of the employees of the 1,300-strong firm have spent over five years with it, he adds.
The company also supports employees with an entrepreneurial streak. It does not incubate startups but offers budding entrepreneurs workspace, especially in the initial stages. Additionally, it offers most of these people a chance to rejoin the company if their startups fail. “We call it the Boomerang programme. Every year, we have 20-25 people boomerang back to us," says Tewari.
Going forward, Tewari is bullish about InMobi, which he believes is no longer just an advertising player but also a media and software company.
“Each of these units has the potential of being an over $10 billion company in three-five years," he asserts, adding that he plans to list each of them. “InMobi Marketing Cloud is the most advanced. So, thinking about an IPO (initial public offering) for it is natural," says Tewari, who plans to list it in the next two years. An IPO for TruFactor, he says, will not happen in a hurry since it is the youngest of the three units. On 25 February, InMobi said it plans to invest about $100 million over the next three years in it.
Tewari likens Glance, which has at least 36 million daily active users, to a “super-app". He says 65% of all new smartphones in India today have Glance pre-installed.
The global mobile advertising market, valued at $31.98 billion in 2016, is projected to reach $261.72 billion by 2025, according to US-based market intelligence firm Reports Intellect. Firms such as Google, Facebook and Amazon account for the lion’s share of the market but Tewari, who believes the worst is behind him, is confident of InMobi’s future.
What’s your favourite vacation spot?
Maldives, Bali and Goa; close to a beach and not too far from home.
What is your business philosophy?
- Think big, be entrepreneurial. Linear thinking is nothing but a delusion, one that also keeps us unhappy. Reality is non-linear. Create craziness.
- Inspire ordinary people to do extraordinary things by truly trusting them and caring for them. Create a clan.
- Find a way to win and to make things happen. Create pride.
‘Hit Refresh’ by Satya Nadella; ‘The Hard Thing About Hard Things’ by Ben Horowitz