Narayana Murthy On Startups: Entrepreneur's Master Class

NR Narayana Murthy is a legend, a living embodiment of achievement, a visionary, and one of India’s most celebrated entrepreneurial minds. We cannot fully define this man in words. As Ratan Tata once said, "Narayana Murthy is a visionary who saw a very different India from what we all saw. He saw an India which could be a great contributor to the world’s software development."

Mr Narayana Murthy is a contrarian who established Infosys with just USD 1000 in his bank account at a time when few Indians dared to become entrepreneurs. He dared to develop software services made in India for export at a time when the world hardly had trust in India's capability to build high-tech goods.

Murthy co-founded the USD 9.5 billion IT giant Infosys in 1981. The self-made billionaire with an estimated net worth is $1.87 billion led Infosys as its chief executive for over two decades, until 2002.

What Can Startups Learn From Narayan Murthy?

So, what is his mantra for success? What made this legendary co-founder who he is today? He says it's "respect". Time and again he has said that his aim has always been to be India’s most respected company.

Narayana Murthy has been inspiring generations of techies and leaders with his brilliant mind and great business acumen. India’s burgeoning startup ecosystem is often compared to Silicon Valley. With the changing dynamics of India’s economy, the startups need to have a vision like the man known as the “Father of Indian IT” to lead the race.

Let see why he puts Respect at the top of his lessons for the startups. 

Murthy considers respect as the most important ingredient for any individual, any community and any nation.

At a Nasscom event, Kunal Bahl, Founder of Snapdeal referred to Murthy’s Speech in Colombia Business School in 2009, in which he said Respect is more important that money and power. He asked N Murthy to explain how this principal guided his decisions in life as this he said would be as relevant for young entrepreneurs as it was 14 years.

The Padma Vishuban and Padma Shree Awardee says, “Respect to me is the most important ingredient for any individual, any community and any nation because let me just take the case of a company.”

According to him Respect from customers, employees, investors and society – all are important for entrepreneurs. 

The duo were talking at the 31st Nasscom TLF held in Feb-March this year. The title of their discussion was 'Building a Resilient Organisation that Scales Beyond Founders'.

Why Narayan Murthy says Respect from Customers is important for Startups? 

“If you earn respect from customers, what it means is you have fulfilled your obligation to the customer on time, within budget and exceeding their expectation of quality. That leads to more and more repeat business. And as you know repeat business is very important component of growth,” he elaborates adding that there will be a sense of pride of ownership in the minds of those customers that you have satisfied and they will become your messengers, your ambassadors.

Why Narayan Murthy says Respect from Employees is important for Startups? 

Narayan Murthy tells the young entrepreneurs, “If you seek respect from employees more and more high-quality employees will come and work with you and they will talk about their being part of your dream with their parents, their friends and others  and that attract more and more employees and these employees will show longevity. Therefore, attrition will be lower.”

Why Narayan Murthy says Respect from investors is important for Startups? 

Its Investors who help startups convert ideas into business. So, if startups obtain respect from investors, Narayan Murthy says, “…you will get more and more long-term investors because of your transparency with the investors, because you will bring bad views by the elevators and the good views by the stairs, they will trust you more than otherwise. And you know what happens when people you trust in any institution.”

Why Narayan Murthy says Respect from Society is important for Startups? 

Murthy places Respect from Society as the highest form of respect an entrepreneur can earn. He opines, “If you earn respect from the society, then it is perhaps the highest respect you can earn because society contributes customers, society contributes employees, society contributes investors, they contribute vendor partners, bureaucrats and politicians. Therefore, if you earn respect from the society, then all the stakeholders will enhance their trust in you and therefore, they want to associate with you, they want to leverage what you offer and the corporation is likely to grow even faster than anything else.”

That’s what I realized very early in my life, he adds.

What Did Narayan Murthy Tell His Friends in 1981?

Sharing his story, the legendary co-founder recalls how in May 1981, he with his six other friends crowded into the tiny bedroom of his rented apartment in Mumbai, decided to quit job and start a software company. The seven friends had a meeting to develop our vision for the new company. 

One of us suggested that we should try to become India’s largest software company. Someone else said that our goal should be to become the country’s biggest job creator. A third opinion was that we should strive to be the software firm with the highest market capitalization. When Murthy’s turn came, he pushed back on those ideas, saying, “Why don’t we aim to be India’s most respected company”.

This is how seven engineers, mostly hailing from lower middle-class background, were able to build a multi-billion-dollar IT services firm that serves most of the Fortune 500 companies.

In the startup era, by setting ‘earning Respect from Customers, Employees, Investors and Society’ as their milestones to achieve, will help startups live the Infosys Way.