Start-up Stories: NR Narayana Murthy, Infosys

NR Narayana Murthy says he measures the success of his company not on the figures it generates but on the happiness it creates.

NR Narayana Murthy is the co-founder of Infosys, a giant software company. But despite heading a huge multinational enterprise, Mr Murthy says there is one thing he does without fail every night when he returns home: he cleans the lavatory.

It is a habit instilled by his father. "We have a caste system in India where the so-called lowest class… is a set of people who clean the toilets," he explains.

"My father believed that the caste system is a wrong one and therefore he made all of us clean our toilets… and that habit has continued, and I want my children to do that. And the best way to make them do it, is if you did it yourself."

This no-nonsense approach may be one of the factors that explains the success of his business creating bespoke software for a huge range of clients - including some of the largest companies in the world.

Start-up Stories

INFOSYS

  • Turnover (2010): $4.8 billion
  • HQ location: Bangalore, India
  • Employees: 127,779
  • Year founded: 1981
  • Ownership: listed on BSE and NSE (India), NASDAQ (USA)

Infosys will celebrate its 30th birthday this year, but Mr Murthy says starting up required a lot of persistence, confidence… and a little help from his wife.

Patience

Mr Murthy remembers India's environment in the early 1980s as "extremely business-unfriendly". Slow bureaucracy and long-winded procedures meant just getting the basic technology required to run a company was a battle.

He recalls waiting a year to get a telephone connection and three years for a licence to import a computer.

"We used to have a joke: half the people in the country are waiting for a telephone, the other half are waiting for a dial tone."

He launched Infosys in 1981 with six other colleagues on a mere $250 dollars borrowed from his wife.

This tiny sum only kept the company going for a short time, but Mr Murthy says there was one simple way to remain profitable from the start: "you spent less than what you earned, that's all".

"We stayed in very inexpensive hotels… we didn't have any cars, sometimes we took buses, sometimes we walked," he says. "It was tough."

Mr Murthy's tirelessness paid off. Today, Infosys has grown from a company of seven workers to a global corporation employing more than 125,000 people, with revenues of billions of dollars. "We stuck with it, and God has been kind to us," he says.

History
The team at Infosys in the early days Infosys in the early days, launched on $250 borrowed from Mr Murthy's wife.

In the late 1970s and early 1980s there was growing demand for customised software.

The founders of Infosys realised that this could provide an opportunity for suppliers based in India.

To this end, Mr Murthy says he had history on his side. From the start of India's independence, there was a deliberate government policy to encourage the development of technology. The result was a glut of engineers searching for work.

"By and large we have recruited very smart people," he says. "And smart people, they learn pretty quickly, they adapt very quickly, and they think of new innovations."

First impressions

For Mr Murthy, the first customer is the most important. They can make or break a start-up.

He recalls that when Infosys first launched, the company worked solely with one customer, developing and installing a software package for the client's business in New York.

He believes it was a good way for his unknown company to establish their reputation.

"We were selling on our competencies, on our commitment, on our value system and because this company knew us…we had no issue at all".

"And then of course we got other customers," he adds.

Growth

Start Quote

The only way countries, like India, can solve the problem of poverty is by entrepreneurship”

End Quote NR Narayana Murthy Co-founder, Infosys

But despite its success today, Infosys took a long time to develop. Mr Murthy attributes this to India's earlier economic policies, which he believes were not conducive to entrepreneurship.

It wasn't until economic reforms got underway in the 1990s that Infosys could accelerate its growth. He says the changes, including some to financial regulations, had a big effect.

"We could travel abroad, we could travel easily, we could get consultants from outside, we could import - all of that," says Mr Murthy.

Infosys has grown enormously over the past 30 years, in step with the huge expansion in India's IT industries.

But some critics say the company cannot continue to grow at the same pace for ever, and that sooner or later it will start to slow down. Mr Murthy rejects such suggestions.

But he also believes there is no room for complacency. The firm will continue to make progress he says, but "while I would like it to be… eternal… the only way that we can make it permanent is through innovation, is through hard work, is through smartness, is through commitment."

Conversion

Mr Murthy says he is passionate about entrepreneurship. "In some sense, there is a religious fervour… religious dogma about these things," he elaborates.

Infosys campus in Bangalore The Infosys corporate campus in Bangalore looks similar to many sites in Silicon Valley

But growing up, Mr Murthy reveals he was ardently opposed to capitalism. "I was a strong leftist, almost a communist," he recalls. It wasn't until "a seminal experience" in Bulgaria where he was incarcerated by the authorities for almost 3 days that he forced himself to examine his beliefs.

"That's when I realised that the only way countries, like India, can solve the problem of poverty is by entrepreneurship," he says.

The realisation allowed him to transform from what he describes as "a confused leftist to a determined compassionate capitalist."

Indeed, Mr Murthy says he measures the success of his company not on the figures and revenues it generates, but on the happiness it creates.

He believes that the impact of his company - indeed of entrepreneurship in general - extends not just to its employees, but to their families and beyond: "the children of those families have new opportunities… new hopes, new confidence. And that's what makes me sleep well."

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