This Entrepreneur Built A $3.6 Billion Business In India By Disrupting The Future Of Auto Tech
Kishor Patil has dedicated his career to building a lasting company that has gone through an IPO, and is now worth over a billion dollars.
On the Dealmakers Show Patil talked about growing his business, evolving your company for longevity, focusing on the right niches and markets, the three things to make acquisitions successful, and employee retention.
Kishor Patil was born in a small town in India. In search of better education he moved to a bigger city. While many of his peers were pursuing careers in medicine and engineering, he chose accounting. A foundation that certainly helped with the numbers and financials of eventually running his own business.
Seeing the success of other global companies, and being ambitious, Patil found himself also aspiring to build an international business with scale.
Together with some like minded friends he started KPIT. Which he has now been running for three decades.
They began by focusing on finding a couple of solid clients. Strong brand names that would enable them to attract strong talent, and in turn further build their capabilities.
As with any corporation that has survived this long they’ve evolved their business along the way, making it through several economic cycles and disastrous times.
They began looking at different business models. Then began to hone in on services, and a few large clients that they could work with, and continue to grow with, as they grew those client’s businesses.
That started out with customers who were paying a few hundred thousand dollars, and are now $100M clients.
After initially trying to play it broad and opening their services up to all verticals they determined it would be more sustainable and give them a stronger value proposition to hone their focus. Even if this may have seemed counterintuitive for some.
As with many of their peers, they started off with a lot of banking clients. Which made up maybe 50% of their customers. They decided to do something different, and focus on manufacturing and automotive instead.
Specifically they saw the realm of automotive software as being ripe for disruption, and a space where they could stand out as a leader.
So, they made the huge shift in divesting 70% of their business, and focusing on just the 30% that fell into this bracket. Over the past 10 years they’ve seen that decision result in creating 10x more value, and 4x more profitability.
Kishor Patil and his company have used acquisitions to successfully grow their company. Though he says they’ve never made them purely to buy growth or metrics.
He says that there have been three keys to acquisitions being successful ventures, including overcoming the minefield of successfully being able to integrate them. These are strategy, organization, and the people.
So, an acquisition has to make sense and fit into their current and future strategy. They look for those with an opportunity to grow 3x and multiply the investment. This way, even if the integration doesn’t work out, then they should at least be able to recoup their investment.
Kishor says that you also need to find fit and alignment in organizational structure, and if things will mesh well.
A part of this is also deciding who will lead the acquired company after the acquisition. Will it be your leadership team? Or will you have the existing management team of that company continue to lead it?
KPIT now has a team of 12,000 employees. Some of them have been with the company for 15 years. A rare feat today.
A big part of being successful in this area has been transparency according to Patil. That is being transparent with their team, admitting mistakes, and banding together through adversity.
They also identified 300 people in their company to lead their culture. Investing in them to really take ownership of the tenets of their culture, to practice them, integrate them in operations, and live them out.
They make sure everyone is aware of, and focused on their mission and vision. Which in this case is working towards sustainability through zero emissions, and the electrification and autonomy of vehicles.
Aside from really focusing a clear vision and mission, Kishor’s other top advice for other entrepreneurs today is to focus on developing superior profitability and liquidity. It forces you to prioritise and decide what not to do . Also creates better capital for growth without dilution.It is not an outcome of everything else, it is something you need to have throughout the journey.
This can mean raising more money from private or public markets well before your need. As well as making the tough decisions to keep your business in good financial shape to adjust to market cycles.
Working through adversity to make your business stronger · Taking your company public · Investing the funds you’ve raised well
