Vinod Gupta, the IIT-back bencher NRI businessman, has donated millions to charity at home
HE had his first visitation of technology when he was in his seventh grade in the village of Rampur Manhyaran, 166 km north of Delhi, near the city of Saharanpur. A friend had smuggled into school a transistor radio and as Vinod Gupta poked and caressed the dials he was smitten by this something that buzzed without electricity and had come from some distant land called America, which as far as he was concerned was somewhere on the moon.
The son of a local doctor, Gupta vowed that moment to someday breach this mesmeric citadel of technology. He got his chance in 1967 after a B. Tech degree in agricultural engineering from IIT Kharagpur. Slipping through in second division and with horrible grades, he went against advice and applied to 14 American universities. Says Gupta: "People told me not to waste my time and money but I have never cared for what people tell me." Against all odds and to his utter surprise, Gupta received offers from five. In the summer of 1967 he flew to Lincoln, to join the University of Nebraska with $58 in his pockets. Today, 30 years later, Gupta heads American Business Information (ABI), his own holding, worth $260 million. Three decades down the line, he's also one Indian businessman who hasn't forgotten his roots.
On a visit to India this month, Gupta donated a million dollars for a women's polytechnic at Rampur. In 1991, he had donated $2 million to alma mater IIT Kharagpur to start the Vinod Gupta School of Management. The institute now offers an MBA programme to engineering graduates with five years work experience.
For Gupta, the road to business success started rolling in 1971 when he joined Commodore Corporation after his MBA, a course which "fitted well with his baniya background". At Commodore, a mobile home manufacturer, his first advice to his bosses was that the company would be in trouble if there was a slump in the market. The bosses didn't like it. They lumped him with the task of updating the list of every mobile home dealer in the US. Gupta ordered the 5,000-odd yellow page phone directories. The directories flooded Commodore's reception and earned Gupta an ultimatum—move the directories out by 4 pm or face the sack. Gupta relocated them to his garage. A few weeks later, working in his spare time with a partner, he painstakingly compiled his list and gave two options to Commodore. Buy the list for $9,000 or get it free but allow him to sell the list to Commodore's competitors. Baulking at the cost, Commodore chose the latter option, allowing Gupta to land orders worth $36,000 within three weeks.
Says Gupta: "At that time I was broke. I was importing brass products from India and owed my bankers $8,000 because of a Teamster strike." His bankers lent him $100 for his mailers. Within a year Gupta broke from Commodore and ABI notched a turnover of $80,000. "We went to town with a philosophy of identifying the needs of customers and adding more industries to our databases." Motorcycles, boats, automobiles, tractors, radio dealers were amongst the first targets. By 1986, ABI had the entire US yellow pages in its database, ready to be accessed in any manner—type of business, brands, franchises, employee size or sales volume. Clients could access them for market identification and analysis, sales lead generation, direct mail, customer profile analysis, telemarketing and competitive analysis. Their only competitor at that time was Dun & Bradstreet. Recalls Gupta: "We took care of the small customers. When a company is big like D&B and making money as well they become fat and lazy. They don't come down to the level of the small customer." In fact, 70 per cent of ABI's turnover comes from small clients who buy $20 CD-ROMS. The rest from businesses who spend upwards of $100,000 a year with them, the biggest being the First Bank which spends close to $9 million every year.
GLEANING information from directories, company annual reports, trade journals, business magazines and newspapers, ABI has a database of 11 million US and Canadian businesses.Says Gupta: "One of our USPs is that we telephonically verify each of our 11 million listings every year, a task involving 120 employees making 55,000 calls each day. With 20 per cent of US businesses shifting location each year, verification expenses are essential." There's also been a running battle with publishers of yellow pages over the use of information from those directories. Says Gupta: "We won a legal battle with Bell in 1994. The court ruled that information in yellow pages are facts and are not proprietary information." With growth, however, Gupta realised that the company needed professional management. Says he jokingly: "I reached my level of incompetence four years ago. One of my problems is that I have been very autocratic. That kind of management doesn't work anymore." So, he resigned as CEO, and appointed Scott A. Dahnke in his place in September. Dahnke had been advising the company for six months as a McKinsey consultant.
While this enabled him to squeeze out time to play golf with the likes of film star-producer Michael Douglas, it has also channelled his energies to charity. The IIT donation came in 1991, making him a hero. Says Kharagpur alumnus Tilak Sarkar, CEO of an info-tech company: "Gupta's donation woke the alumni up to the fact that they should do something for their alma mater. It sparked a spurt of donations, but none has matched Gupta's generosity." This time, it's his village Rampur. Says A.D. Sharma, chairman of Quest V.C. Pvt Ltd, the Indian company with which Gupta has a tie-up to key in the entire white pages in US telephone directories: "He grew emotional when the villagers asked him to do something for education." In the US, Gupta's philanthropy includes a scholarship fund at the University of Nebraska for minority students.
A registered Democrat, he has also recently acquired the distinction of becoming the first Indian to be appointed head of an American mission—as US consul-general to Bermuda. He has been friends with senator Jim R. Kerry for 27 years and thinks he's presidential material. The thing, however, he loves most about America is the way they "lap you up if you are a successful businessman".
A two-pack smoker till a couple of years ago, Gupta's now given it up, taking instead to muscular sports. He is a certified scuba diver, plays tennis, runs, has a golf handicap of 15 and, short of bungee jumping, has done all adventure sports. He likes to vacation at Hawaii where he has a house and has three jets to fly him around, one of them a Hawker 1000. Says he: "I live up pretty good. I admire Mahatma Gandhi but I am not him."
He also married at Rashtrapati Bhavan (his father was a batchmate of ex-president S.D. Sharma) last year for the second time, and has three sons, Jess, Ben and Alex, from his first marriage. He didn't give them Indian names because "there was no point in creating more curiosity about them. They already have brown skins". Quiet, self-effacing and with an untainted North Indian accent, Gupta has a politically correct view of wealth—it's something you have got from society and must give back. One thing he might not be giving back though is his yacht Kashmiri Princess. But that, Gupta might tell you, is his therapeutic way of getting out of Dahnke's hair. Makes it easy for Dahnke to jack him to the rarefied air of Fortune 500.