Micromax, YU and I: Meeting Rahul Sharma!
There are some people who charge into an office, as if wading into battle. Rahul Sharma is not one of them. The founder of Micromax and YU tends to ooze in quietly, a bit like PG Wodehouse’s iconic gentleman’s gentleman, Jeeves. I had been waiting in the reception of Micromax’s head office in Gurgaon (near the Indian capital of Delhi) for an interview with him, flipping through the inevitable magazine, when I realised that the man was actually standing a few feet from me, dressed informally in a jacket, t-shirt, jeans and loafers. For a man whose products are shaking up the Indian market, Rahul Sharma walks very quietly.
He took a look at the large poster of Hugh Jackman (he is a brand ambassador for Micromax) in the reception, smiled at me and mouthed the words “two minutes” as he walked into his office.
The first thing you notice about his office is his desk. I have been writing about tech for more than a decade now, but I have never seen so many phones on a single table. There must have been close to thirty phones out there, from different brands – some open, some taken apart, with parts littering the table: memory cards, displays, speaker grilles, back covers.
Some would call it a mess. I would call it a geek’s dream.
“Let’s talk on the sofa,” Rahul said, as I entered the room.
I looked at the desk and asked, “How many phones out there?”
He smiles. “It is messy, I know. But I cannot work on an empty desk. I like to keep things in front of me, so that I know what is happening and what is not happening. I like to keep on doing a lot of designing and redesigning so a lot of renditions keep on coming to me. I could clean this table but it will get messy in a few days again.”
“My problem is I get bored very easily,” he confesses. “Remember that 7Up ad with Fido Dido in it? I used to sketch it a lot. Perhaps that got the ‘normal is boring’ thought process into me.”
His voice, like his gait, is quiet. Rahul Sharma is very unlike the in your face marketing that Micromax does. Perhaps at the core, he is a quiet person. It’s not that he does not have much to say. It’s just that he does not say it very loudly.
He gets up the moment he sits on the sofa. “Something in my pocket,” he mutters. And pulls out a rather old looking handset. “Remember this one?” he asks with a grin, then answers his own question. “We had brought this one out with MTV branding. It still works and a lot of people still have it, even though it is about four-five years old. People love the Yamaha audio amplifier. It did pretty well at that time. My dad is using it. It went bad – he got it repaired and is still using it.”
He switches between Hindi and English as he speaks, seamlessly. Unlike some CEOs, he does not use a particular language for a particular subject or topic, but actually starts and finishes the same sentence in different languages.
Table of Contents
In the beginning: A software company that saw gaps in the market
We start off with the inevitable question – how did Micromax start in general and end up in phones in particular?
“We started off as a software company – our original name was Micromax Software (it is now Micromax Informatics),” he says. “We used to work on lots of platforms and we started off on ERP in around 1999. Towards the end of 1999, we got into e-commerce. I was more into business development in those days – we were making B2B and B2C engines in those days. The problem was that the industry kept changing with technology – ERP went bust, Dot Coms went bust…” he pauses with a wry grin, then continues. “We used to wonder – yaar kahin galat industry mein to nahin phans gaye! (Have we got trapped in the wrong industry?). However, even as all this was going on, we always wanted to be a product company. We started working on embedded technology with the University of California. And slowly we began to wonder if we could also work on the product side.
“Of course, mobile phones were not the first products that we worked on. We worked a lot on SIM card technology, we worked on a lot of Government projects – we made the digital airport information system for the Airport Authority of India to assist in the landing of aircraft. And so we started going slowly on the product side. We even tied up with Nokia for a project! We made fixed wireless phones for CDMA. And then we started work on GSM technology. As we got more involved, we began to see various gaps in the market.”
Perhaps the most prominent of these was spotted by Rahul on a trip to Bihar, where he saw people paying money to get their phones charged from power outlets. “And I wondered why shouldn’t we make a phone that has exceptional battery life,” he recalls. “Of course that meant getting into phones.”
The Phone-y way!
The company did not exactly jump with joy at Rahul’s idea. And even when they decided to make the phone, the consensus was that it should not be called Micromax because “who will buy a phone called Micromax!
“We decided on a brand name called Extreme,” recalls Rahul. “Mind you, it never reached the market. We got so fed up of the double brand fuss, that we decided to go with Micromax after all. So the first phone was released with thirty days of battery life. And that phone made us realise that there was a humungous demand that other brands were simply not addressing. I remember meeting the heads of the multinational companies and they never took us seriously. I used to read about them in newspapers, see them on television and used to think ‘wow, they were big guys.’ But they never took us too seriously.”
Had he expected to succeed?
“At that time there was only one major Indian brand in handsets – Spice,” he says, and continues with a grin. “Now, we are from very humble backgrounds. My dad was a principal in a Government school in Delhi. We had a very middle class background. And you know in India, corporate success is measured in terms of Tata-Birla-Modi (three iconic Indian capitalists). So we used to think the day we can match Modi (Spice), we would have done something big. They used to sell about 1,60,000 phones a month. We started off with barely 10,000 phones a month. We thought it would take three-four years to catch up with them.”
How long did it actually take?
He smiles. “About six months.”
It was clearly a huge lesson for them. “That was when we realised that the existing brands were not doing justice to the market. The market was a huge one and full of potential. We just needed to be able to tap it.”
Focusing on consumer needs – in person!
And tap the market they did. With such stunning success that today Micromax is one of the leading players in the Indian phone market, well ahead of the likes of LG, Sony, Microsoft and HTC and even challenging Samsung for the mantle of numero uno (no, we are not getting into that debate right now). What does he reckon made Micromax such a hit?
Well, evidently it was the ability to identify what Rahul calls ‘consumer pain points’ (no, he does not speak in corporate jargon). “There were so many companies in India at that time – BenQ, Siemens, Philips, Panasonic, Fly…” Rahul recalls. “The problem was that the mindset seemed to be ‘let us have a couple of phones in each price segment and price them below Nokia’s.’ But you know, you cannot win on pricing alone. You need to have a deep understanding of the consumer and make products accordingly, and then keep evolving. Motorola invented the mobile phone, but seemed to stop innovating after the RAZR. Nokia was a great company, but perhaps became too big, and failed to recognise the change happening around it.”
But how do you gauge what a consumer wants? Research agencies? Reports?
He drops a bomb for the research loving crowd. “I don’t believe in secondary research. I could tell you that we do focus groups and all that. The blunt fact is we do not.”
My eyebrows must have shot up at this, because he reaffirms the point.
“No, really, we do not. I think all these things become inherent to your DNA. We have a core group. And we try to spend time finding out what the consumer wants. Through personal experience.”
“I go out every month and sell phones at shops for an hour. I go there as a normal person. I take off a jacket. And I don’t sell a particular brands. I sell all brands –Indian brands, Samsung, you name it. You need to do this to understand consumer behaviour and what he wants.
“For instance, once a person came up to me and said he wanted a phone with call recording within a budget of Rs 2,000. When I asked him why he needed call recording, he said he was a painter and wanted to record the conversations on which deals were struck because people frequently paid him less than what they had promised on the phone, and then claimed that they had not committed to that amount. I promptly went back to the team and asked them to do it. It cost us nothing additional – it was all there in the software.”
But doesn’t he feel awkward selling phones?
Rahul smiles. “In this industry, as long as you are innovating, you exist. You cannot become arrogant. The day you become arrogant, the public will kick us out. It is true for every industry. You need to keep on innovating. The ‘normal is boring’ thought process is part of the way we work now – whenever we design a product, we always ask ourselves “why will the consumer buy it?” “How can we solve different problems” – whether it is design, or long battery.”
Well, it is part of the way we work now –
What about YU?
Which leads us to YU – the brand Micromax launched to sell phones running Cyanogen in India. What was the need for a new brand altogether, when you already had an established one?
He pauses before replying. “Well, it is my personal opinion that this industry is going to plateau soon, like the notebook industry. It might happen in one or two years. I cannot be certain of the time, but it will plateau. A level of saturation is being reached. How many cores can you stuff into a phone’s processor, how many megapixels can you put into a camera, how big can you make a screen? In this scenario, where will differentiation come from? We seriously felt that the differentiation will come from software and services.
“The next thing was: how could we provide this differentiation? So we decided to work more on software and services and differentiate there. We decided to start off by providing a very customised solution for…” he paused and looked straight at me.
“…for digital tech natives,” he finished the statement with a laugh. “Well, this is a segment that is emerging and growing rapidly. Internally everyone said that I was targeting a very small segment. But I felt that this was not a niche segment, but a community. Remember the days when we wanted to buy a computer? What did we do? We went to a friend of a friend or some relative of some friend somewhere who was ‘considered’ to be an expert – the ‘local’ expert. I figured that the new generation of geeks were like them. If we were able to convince them, the cascading effect would be huge.”
But why go with Cyanogen?
“It was easy to say we need to differentiate on software and services. Doing it was the tough job. We figured we needed to have control over the OS. We had two choices – to make our own or partner with someone else. We however, figured that if we wanted to make a world class ROM, it would take use 2-3 years. ROMs take a lot of time to evolve. That was a lot of time, so we decided to partner with the best.”
But a separate brand, I persist. Was that necessary?
“This brand needs to have a different flavor,” Rahul points out. “Micromax was a brand that offered something for everyone. YU was a brand for tech natives. Our segmentation was different and needed a different effort and team. There is absolutely nothing in common between YU and Micromax – there is even a new office that is being made for YU.”
He pauses for effect and then adds with a grin that is definitely cheeky: “The only common thing between them is me.” And then goes on to talk of the YU brand.
“YU will be completely online. It is a digital brand and will be totally in the digital space. Even the service will be at your doorstep – if you buy a phone online, why should you have to go to a service centre to get support! You click a button and someone will come and collect the device and fix it and return it – we have tied up with different companies for this.”
But is something like that possible across India?
Rahul leans forward and gently taps the table between us “Agar poore India mein phone deliver ho sakta hai, to service kyun nahin ho sakta? (If a phone can be delivered anywhere in India, why cannot it serviced anywhere in the country?) If a person can go to a remote location to deliver a phone ordered online, why cannot a person go to the same place to provide service?”
Which of course seems an apt moment to bring up the service problems that many associate with Micromax.
To his credit, Rahul does not dodge the question or deny the existence of servicing troubles. “We grew too fast,” he concedes. “But I think we are fixing matters now.”
But by making YU a purely online brand, isn’t he ignoring the massive offline one in India?
“Even in the US, the offline market is much bigger than the online one,” he points out. “It is not as if Amazon has wiped out the stores. Both will coexist always. Look like China – just because Xiaomi is there does not mean Lenovo and other brands will not exist. Yes, online is growing but there is always going to be room for both.”
But can Cyanogen meet Indian needs?
“The Cyanogen team is in Seattle and we have a team in Bangalore,” he replies. “It will work along with Cyanogen on this, and we will be adding India-centric features to it.”
And did he expect the Yureka to sell as much as it did?
“I think we totally underestimated demand. We did not expect anything like this,” he concedes.
What of allegations that the “gone in three seconds” kind of announcements about Yureka were marketing stunts fuelled by limited stock releases?
Rahul looks bewildered. “I am in the business to sell products,” he says. “Why would I deliberately try to sell fewer units when I can sell more? That is ridiculous.” Production of the Yureka is being ramped up meanwhile.
All industries into one phone!
So what can one expect from Yureka and Micromax in the future?
Well, at the very least an attempt to compress the world into the handset! “We would like to converge all industries into a phone,” he says. “As many as possible. No matter what it takes. We are working on being able to measure ECG on a handset, saving you the need to go to a hospital. You are also going to see a lot of services coming from us. For instance, I am a music buff, but downloading music is generally a pain. You generally need to download an app, and even that generally comes with its own charges when it comes to getting music. We want to provide you a beautiful native music experience. The default music player should be so good that you can not only play music on it but also purchase more music from it.”
And then he switches back to the importance of software, unconsciously echoing the words of one of his rivals, Xiaomi’s Hugo Barra.
“Whoever does not have a ROM solution is in danger. If you do not have an ecosystem, you can only fight on price and that can only last for that long. We are working on smart shirts too – they will tell you when they need to be washed.”
I point out that has Micromax not gone back to being a software company?
“We never went away,” he replies. “Software is in our DNA.”
The interview/interaction (there are so many things people call it these days) over, I take my leave. As I am leaving, Rahul walks up to me and asks me if I have used the Yureka. When I reply in the affirmative, he says gently, “You MUST tell me about the phone. Anything you would like to change about it. What does not work. Anything that comes to your mind…”
“It is a good phone,” I say. (We really do think so. You can read our review of the YU Yureka here)
“So a lot of people say. So I think,” Rahul persists. “But there is nothing that cannot be improved. So, whatever you think about it, tell me. You see, we have to keep improving.”
And that little tete a tete at the end of the conversation told me as much about Rahul Sharma as the hour-long conversation that had preceded it. He may appear quiet, but he is no fan of stability. The man loves to tinker. The thirty odd phones on the table, the constant flow of devices, the strategy switches, the new products and alliances…changes is a constant with him. Some might call it dynamism. I would not – it is too heavy a word for someone who moves so lightly. And speaks so quietly.
The one thing you CAN be sure of with Rahul Sharma is that something will happen. Because no matter how much he loves cricket and music (“I listen to pop, rock…anything. These days I like Calvin Harris and Tiesto!”), he will get back to that messy table. And tinker around. And make something happen.
You might not like it, but happen it will.
Because Rahul Sharma gets bored easily.