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FEB. 25, 2007
 Cover Story
 BT Special
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Trading with ASEAN
In the recent Indo-ASEAN summit, ASEAN was, for the first time, on the defensive. India has agreed to bring down its negative list of imports to 490 items in the free trade agreement with the 10 ASEAN nations. But India’s step towards free trade was not matched by the ASEAN nations, as more than 1,000 items still figure in the negative list of the ASEAN. In 2005-06, India’s total trade with ASEAN was at $22 billion (Rs 99,000 crore), against just $7 billion (Rs 31,500 crore) in 2000-01.

Exchange Deal
Indian markets are on a roll. Global stock exchanges and financial institutions’ interest in the Indian stock exchanges goes to show the long-term growth potential of India Inc. The year has started on a positive note. The NYSE and three global financial institutions have each picked up a 5 per cent stake in the NSE. The deal will open exciting vistas in global co-operation for the NSE, and at the same time could improve the fortune of smaller exchanges in the country.
More Net Specials
Business Today,  February 11, 2007
Techies In The Kitchen
Stifled by a 9-to-5 existence, some code jocks are breaking free of their cubicled confines to try their hands in the restaurant business.

They have got their hands full: Mast Kalandar's Pallavi and Gaurav Jain




It's 1 p.m. on a sunny winter afternoon in Bangalore and code jocks from various multinational companies are beginning to leave the confines of their air-conditioned cubicles in search of lunch. Many of them stream into Mast Kalandar, an Indian fast food restaurant on a dusty street off the arterial Banerghatta Road in southern Bangalore, and grab a quick bite before heading back to work. Inside, Pallavi Gupta, Director, Spring Leaf Retail, the company that owns and manages four such outlets around the city, has her hands full directing traffic in the chaotic kitchen as orders begin to pile up. Ten minutes from Gupta's outlet, just past the 100-acre campus of the Indian Institute of Management, Jacob Peter, Country Manager, HayDirect, Hay Group, a management consultancy, (he worked earlier with Microland and Sun Microsystems), also has his hands full managing Dal Fryday, a 62-cover full service north Indian and tandoori restaurant.

These could be scenes from any restaurant in India's Silicon Valley, except that Gupta, Peter and several others of their ilk are techies who, bitten by a (fast-spreading) entrepreneurial bug, have metamorphosed into restaurateurs.

While these two prefer to focus on familiar cuisines, others such as Roomali With A View (specialty Kashmiri, Rajasthani, Awadhi and Punjabi) and Shiok (authentic far eastern) prefer to trod the road less travelled. "We serve the best of the north down south," declares Ashutosh Kapoor, Deputy gm (Brand and Strategy), IBM India, who set up Roomali With A View three years ago in partnership with his wife Deepali, who runs its day-to-day affairs, while he focuses his energies on his day job.

Tossing up a stir fry: Shiok's Menon

Kapoor and Peter of Dal Fryday continue to hold on to their regular careers, but others such as Mast Kalandar's Gupta (and husband Gaurav Jain) and Madhu Menon of Shiok have chucked up promising it careers to become full-time restaurateurs. "We always knew that we wanted to do something on our own and this gave us the chance to do it," says Gupta as she makes a brief appearance from her bustling kitchen.

A five-minute drive from Kapoor's restaurant, Madhu Menon, md, Shiok, is busy cooking up a far eastern storm for diners. Rather than delegate cooking to his chefs, Menon, a self-confessed 'web head', is enveloped in a mountain of steam as he tosses, cuts and dices an avalanche of orders for his guests. Menon's love affair with this kind of food started while he was studying in Australia. "We had to stop over either at Singapore or Malaysia on the way to Australia and I had my first brush with this cuisine there," Menon tells us the next day over a late lunch. In a market dominated by "Indian" Chinese restaurants that serve the usual cornflour-laden soups and heavily-spiced chicken and cauliflower Manchurians, Menon is trying to create a niche for authentic Oriental cuisine.

» Supply chain logistics are the biggest issue for restaurateurs, since they have to manage everything, including getting fresh vegetables
» Getting and retaining quality people is a major problem as the industry is growing by leaps and bounds and poaching is rampant
» Rentals are sky-high in most prominent locations across Bangalore and indeed across India; so, finding space is a huge problem
» Setting up a restaurant involves procuring dozens of licences and permits, which can be time-consuming and expensive
» Banks are hesitant to fund this business unless you can show them some collateral

Abhik Biswas, who has worked with TCS, Verifone, ca and Cisco, is another member of this tribe, and started Biryani Merchant in September 2004. "We wanted a one-stop shop for a unique biryani experience," says Biswas, who teamed up with his close friend Vishy Shenoy (former marketing head of the Maharaja Group in Sri Lanka) for this venture. For nearly a year prior to its launch, Biswas and Shenoy spent days sampling an assortment of authentic Lucknowi, Chettinad and other biryani in the bylanes of Lucknow and Chennai to get the taste just right. "We would try a couple of spoons of each, get a fix on its distinct taste and then replicate it on a large scale in Bangalore," says Biswas.

At Mast Kalandar, the aim is less lofty and more utilitarian. Gupta and her techie husband Gaurav Jain are content catering to the ever-burgeoning demand for clean, hygienic north Indian food from the hundreds of it companies around its four units. "We have used some retail expertise we picked up previously (Wipro Technologies, TCS and Vensys, an Australian it company where Jain worked closely with Pizza Hut) and have even put in place a retail matrix to run our business," says Gupta. While she manages the kitchen and back-end of the restaurant, her husband looks after marketing and customer services. The matrix allows them to keep tabs on each of their units and manage supply chain, logistics and even unexpected demand for extra staff easily. Kapoor even has a web-enabled system that allows him to log in remotely to check on Roomali With A View's operations.

Table's set, time to eat: Biryani Merchant's Biswas

Given the crowd at these outlets (when we visited Mast Kalandar at 1.10 p.m., we found the place packed; at Roomali With A View, patrons, ranging from large families to groups of techies, crowd the place in the evening), these code jocks have clearly got their strategy spot on. However, all of them are quick to admit that running a restaurant is a difficult business and that they are only just coming to grips with it. Biswas of Biryani Merchant, for instance, has tied up with Collabrant Incubators, a firm that specialises in taking over and scaling high-potential businesses, to try and ramp it up from just one restaurant and a handful of kiosks to 300 restaurants nationwide. Under this arrangement, Biswas will continue to be part of the management of this chain, but the responsibility of scaling up the business now lies with Collabrant Incubators, a Bangalore-based business strategy and incubation services provider. "In the long term, our business requires scale and some capital infusion to be successful," he argues, adding that he hopes to close around Rs 9-10 crore in funding soon.

Elsewhere, Peter of Dal Fryday had more mundane issues-involving money-to deal with when he decided to take a plunge into the restaurant business. "I did not have the required collateral to qualify for loans from most banks and financial institutions and my plans were rejected several times. As an MBA working for multinationals, you are used to travelling in luxury, staying at the finest hotels, having an expense account and face no problems setting up meetings with customers. The rejections made me realise that I had to succeed on the basis of my wits and determination," says Peter. All the techies in this report faced, and overcame, similar problems.

If code jocks can run a restaurant successfully, there is clearly no reason why venture capitalists can't. This may have been the train of thought for Kiran Nadkarni, who set up East West Ethnic Foods two years ago to get into the Indian fast food business. Nadkarni, who funded a clutch of start-ups when he ran the US office for VC firm JumpStartUp, has set up Kaati Zone just off Bangalore's Mahatma Gandhi Road. Though he initially thought of entering the ready-to-eat business, the growth of the retail market convinced him to set up Kaati Zone as a test project. "There are plenty of options for western fast food but nothing for clean, Indian food; that's why I started Kaati Zone," explains the 55-year-old Nadkarni. From his first test store on M.G. Road, he started two more outlets on the campuses of Infosys and HP and is now planning to expand that presence across other IT campuses around the city.
They had to climb other mountains as well. A restaurant requires dozens of licences and permits to function and getting them can be a nightmare. Bar licences, for instance, are no longer issued in Bangalore and entrepreneurs have to buy these from places that have closed, often paying up to Rs 30 lakh for each. Then, there is the issue of setting up supply chains and ensuring that there were no gaps in this, since even one missing link can cripple the business. "There's no place in Bangalore where I can get high-quality vegetables; so I have to get someone to go to the local mandi and haggle with wholesalers there," says Kapoor of Roomali With A View. For Menon, procuring fresh seafood was a huge obstacle and he found himself sorting through a mountain of seafood every morning to keep his restaurant in business. And, like every other industry, finding and retaining quality people is perhaps the biggest challenge these people face. "Keeping our staff is a huge challenge in the rapidly evolving industry, where everyone's on the hunt for talent. We have to treat them as family and keep them involved with the evolution of Mast Kalandar," says Gupta.

Naan, anyone? Roomali With A View's Kapoor

Despite these odds, these techies-turned-restaurateurs have ambitious expansion plans lined up. Perhaps the most ambitious is Biswas' plan for Biryani Merchant. He envisages having 300 outlets of all sizes-from small take-out kiosks to full-scale sit-down restaurants-over the next three years. Gupta and Jain of Mast Kalandar, meanwhile, plan to follow the IT industry to Tier-II towns such as Hyderabad and Pune, and Kapoor is planning to extend his reach within Bangalore. Interestingly, Peter of Dal Fryday is looking beyond the restaurant business and plans to foray into the resorts business in the long term. "We are just at the tip of the iceberg and the journey ahead promises to be a challenging, yet rewarding, one," says Jain.

And, that's clearly food for thought.