The next few months were both hectic and fun. Obviously, the first step was building the website. For which he caught hold of two friends who were skilled programmers. They built a somewhat rudimentary site, but it served its purpose. Improvements could come later. Then, of course, the website needed daily updates with job data.
For this, guess what the team did? They would buy twenty-nine different newspapers every day (and some magazines) and pick up all the job vacancy ads. They also hired data entry operators to compile and enter these into the website.
And then of course, the site needed to be hosted somewhere. For which they needed a server. At that time, almost all such servers were in the USA. They were expensive—the cost of hosting the site was around $25 a month. And the company did not have the money. But, by now, I’m sure you’ve guessed that little things like lack of money do not deter guys like Sanjeev.
He explained the problem to his elder brother Sushil, a professor at the business school at UCLA (University of California, Los Angeles). He also told Sushil that he couldn’t pay for the server at the moment. Fortunately, like most elder brothers, Sushil’s immediate response was, ‘No problem. I’ll hire a local shared server so you can host your site. You can pay me later.’
And that was that. Site ready and hosted, data entered, and Naukri.com was all set to launch. The actual launch took place on 2 April 1997. (Yes, Sanjeev avoided 1 April. I’m not sure why 😊. You could ask him when you meet him.)
They started with around 1000 job postings. The early days were not great since the number of users on the Internet was not too large—around 14,000 or so. And bandwidth, which you guys are so used to in today’s world, was just about picking up. But it was one of the first attempts in India to use the Internet for business.
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It Was Tough to Make Money
And now, I’m sure you have a question. I can guess what it is and I’m coming to it, so please be patient and give me a chance. You see, this was a business and not a charity. So these guys had to make money. Which meant two things. First of all, they needed revenues. In other words, someone had to pay them for the services they provided. And secondly, they needed to keep their costs low—ideally lower than their revenues—in order to make a profit.
Let’s start with revenues. I’ve already told you that these people used to publish salary surveys which were happily bought by various companies. Fortunately, this line of business continued and gave them some revenue, although it wasn’t a huge amount.
They needed much higher revenues because the new business they had launched, namely Naukri.com, needed a lot of money for it to stand on its own feet and become viable: money for developing the site, money for marketing, and of course, overheads such as salaries and rents. And the salary surveys they used to conduct provided only a fraction of this money. So the big revenues had to come from Naukri itself. That simply had to be the mainstay.
Sanjeev was very clear that they would not charge jobseekers. As I’ve already mentioned, at that time there were only around 14,000 Internet users out there, and it was important to get as many of these users as possible to land up on their website. Not only that, it was vital to make sure these users kept returning.
And this would only be possible if access was free. So that much was clear—they could not charge users. But since they had to make money from somewhere, they needed to charge companies. For posting their ads on the site.
Unfortunately, as you can imagine, companies were not really interested in shelling out money till they saw an adequate number of jobseekers coming to the website. And to get a large number of jobseekers, Naukri needed to spend on marketing. So it was a typical chicken-and-egg situation. Companies wanted lots of jobseekers before paying and to get jobseekers, Naukri needed money.
Fortunately, these guys started getting press coverage. You see, the Internet was an exciting new phenomenon and was growing rapidly in the country. And the media always latches onto such things. Yes, you already had Yahoo!, Hotmail and all the other popular Internet-based applications in the USA. But Naukri.com was home-grown. It was Indian.
Not only that, this one actually targeted Indians living in India, unlike other Indian websites such as Khoj, Samachar and Rediff.com, which were targeting NRIs in the USA, because that’s where most Internet users lived. And so, the Indian media happily latched onto it and started writing about it.
In fact, over time, Naukri.com gained massive media coverage. As a consequence, the number of users kept going up. The fact that it was free to use was another huge factor in getting users onboarded. And of course, word of mouth helped.
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And guess what happened next? That’s right. As the number of users went up, employers began to get interested and were willing to pay for their ads to be posted on the site. At that stage, Naukri was charging Rs 350 for a job posting, and they also offered their clients a larger package—Rs 6000 per year for unlimited postings.
During the first financial year, namely 1997–98, 80 per cent of the job ads were free. In this year, the company earned a revenue of Rs 2.35 lakh. Not a huge amount, but it was a start. In the second year, 1998–99, more businesses started paying and revenues jumped to Rs 18 lakh.
And that is when Sanjeev realized that this was no longer an experiment but a serious business. Which is when he decided to focus on the Naukri.com business and stop the salary surveys (Potential founders, please note: When you’ve figured out that one business is working out well and has significant potential to grow, that’s the time to focus on it.)
The following year, 1999–2000, was even better. Revenues ballooned to Rs 36 lakh. And—hold your breath—they actually made a profit of Rs 1.80 lakh. Yes, my friend, this is where Info Edge actually made their first profit. A start-up in the Internet space, which was notorious for all those (happily) loss-making businesses, actually made a profit!
This excerpt from Dhruv Nath’s ‘The Earnicons: Stories of Rare Profitable Unicorns’, has been published with permission from Penguin Random House.