The Wealth Wallahs

by Shreyasi Singh

  ‘It depends on what wealth is, and how the rest of the organisation and the people who work for it also see their wealth. For me, that is an indicator, and that is more important. Everyone’s appetite and expectations of wealth is different so if my workers aren’t slightly better off than their peers, or from what they were before, then they will resent my success. But, if they are better off than their peers in other organisations, they would take pride in my success and in my wealth. I live within my factory premises, and all my 800-900 employees pass my house and the high-end cars I have parked in front of that when they come to work every day. But, because they have bought their own bikes, or upgraded to buying cars themselves, they don’t resent my wealth,’ Dave said.

  ‘Dichotomously, the truth is that the act of entrepreneurship is admired but the rewards of it still aren’t,’ says Paytm’s Sharma. Even today, he said, his relatives who don’t live in metro cities, and not many do, believe emphatically that if you are a businessman, you must somehow be “twisting” things to suit your purpose. ‘You’re considered okay as long as the money you have isn’t too much,’ he believes.

  If how wealth is earned or gathered influences perceptions, does it also affect the behaviour of those who possess it? Also, do certain businesses attract more judgment than others?

  Chapter 5

  The colour of money

  In 1988, JC Chaudhry, a botany schoolteacher, started Aakash Institute (now Aakash Educational Services Private Limited or AESPL), a network of coaching institutes for medical and engineering competitive exams. The company has over 130 coaching centres across India and caters to over 1,50,000 classroom students every year. Chaudhry comes from a middle-class background and his early success wasn’t easily palatable to the extended family and the social circle of their very middle-class Delhi neighbourhood, his son Aakash Chaudhry, AESPL’s director and the person who the company is named after, tells me.

  ‘I think it’s an evolution. When you first start making money, most people either think you’re doing something wrong and fleecing people or you are just lucky to have things fall into your lap. They are sceptical that hard work can lead to wealth; hard work isn’t tangible evidence because everybody thinks they work hard. Respect comes slowly, after a certain tipping point when people begin to realise that your growth is sustained and has come from providing a genuine service. It takes people a while to accept that somebody else is deservedly wealthy,’ believes Chaudhry.

  Many of those I spoke to while writing this book said they have a simple filter for judgment: Where they could be assured that a rich person had an obvious, identifiable source of wealth, perceptions weren’t as negative. The disdain was nullified if the origin of wealth could be easily ascertained.

  It’s when one can’t figure out how somebody is making their money that they are more likely to believe those people probably came into that money with less-than-legitimate means.

  If there is a supporting source of income, people don’t look at the money as suspiciously, said a technology entrepreneur who lives in an upmarket neighbourhood in south Delhi where the glut of wealth does make one stop.

  He admitted that he often wonders how people who seem to have nothing to offer and don’t have a business to show for their lifestyles drive the luxury cars they do, or have lavish farmhouses to spend weekends in.

  You can’t help but look at that kind of money with some negativity, he stressed. ‘For entrepreneurs, people don’t think like that because there is a transparency in the source of the funds; you can see a business at the back of the wealth,’ he believes.

  Chaudhry believes that it’s not just the source of the wealth but the nature of the business as well that often influences perceptions towards wealth.

  Coaching, for example, he believes is looked at being a local service, not a corporate business that is looked up to. Consequently, wealth from a business such as theirs wasn’t considered admirable. ‘We’ve had to try hard to break out of that image and showcase ourselves as a corporate entity with a brand, systems and processes,’ he adds. Building their venture into a corporate brand has led to a social legitimacy of the business as well as the family’s assets.

  ‘Legitimacy is a justifiable filter for perception because people still don’t entirely look at those with wealth without scepticism, especially if they are in business,’ says Keki Mistry, vice-chairman and chief executive officer of Housing Development Finance Corporation (HDFC Ltd), and one of India’s most respected bankers.

  But, once that is verified, he adds, being rich should not be considered a crime. Nobody should feel bad or be ashamed of being rich if they have become so legitimately.

  Legitimacy often becomes a hydra-head concept, combined with social judgment and the kind of moralisation, mentioned earlier.

  ‘For me, legitimacy is if a person has built a business, earned profits and given the prescribed taxes to the government. If you’re still wealthy after putting money aside in taxes for the developmental work of the nation, you shouldn’t have anything to worry about,’ said Mistry.

  Taking the sting out of ambition

  When seen as a tool for upward mobility and economic growth, creating wealth shouldn’t carry a stigma, believes IIFL’s Nirmal Jain. For him, it was important to eliminate the suspicions that feed the stigma, if India was to create the number of entrepreneurs and jobs it needs.

  In a capitalist economy, wealth was but a quantifiable measure of performance, he says. ‘It’s a score similar to how you compete for marks in school. Just like a classroom, there will be some students who will stop at nothing to get those extra two marks. Others may argue with the teacher on why they lost out on some marks. But the ambition to get full marks or more marks itself is not wrong,’ says Jain.

  It was pure ambition, after all, that had got him started on an entrepreneurship journey and ended up giving him an opportunity to build a legacy within a lifetime. Others should want to do so as well is his hope.

  India is one of the youngest nations in the world with more than 62 per cent of its population in the working age group (15-59 years) and more than 54 per cent of its total population below twenty five years of age. Our population pyramid is expected to bulge across the 15-59 age group over the next decade; during the next twenty years the labour force in the industrialised world is expected to decline by 4 per cent while in India it will increase by 32 per cent. Eleven to thirteen million Indians are estimated to come into the job market every year till 202513.

  To both absorb the growing bulge in India’s working population, and to speed up the overall economic growth, India will have to create jobs in the primary, secondary and tertiary sectors at a brisk pace. Sparking entrepreneurship across all sectors will be crucial for this to happen.

  Smart and ethical business builders had a big role to play in giving this a fillip, and to become role models and heroes of society to make way for the high-potential entrepreneurship we needed, believes Jain.

  When society saw professionals create wealth by building useful companies as was demonstrated by the first wave of entrepreneurs from the IT services industry, it both legitimised the ambition for wealth and encouraged others who otherwise wouldn’t have aspired to dream and act.

  These changes are slowly evident with the brightest students from top engineering colleges and business schools now choosing to become entrepreneurs, rather than corporate managers, as was Jain’s main ambition in the 1990s when he graduated from IIM Ahmedabad.

  Jain may have hit the nail on its head when he says that even as societal attitudes had begun to change, the political and bureaucratic establishment in India still looked at wealth with condescension. ‘It’s a pity that they still perceive wealth and profit to be bad words. Many of India’s crippling and illogical regulatory frameworks emerge from this bias,’ he says.

  Yet, the complex social judgment isn’t an easy puzzle to solve. Much like the kind of scepticism that we talked about earlier, there are pocke
ts of wealth that not all new, first-generation wealthy necessarily associate with. The wealthy judge each other too on their different kinds of wealth.

  Over the past two decades, or at least till a few years ago, the sharp escalation in land prices had forged many millionaires in valuable real estate markets of Delhi-NCR, Greater Mumbai and other metropolitan areas. Every house in a south Delhi colony, for example, became a goldmine; the next generation owners of these houses could both unlock the wealth by giving out the land to build multi-apartment units, or earn huge rents.

  Region and city-specific attitudes to wealth reveal themselves to be a fascinating study that combines geography, history, demography and cultural mores, and one that could easily be a book on its own. Research for this book didn’t allow a thorough exploration of these but in Delhi, for example, the massive upside of real estate appreciation has allowed a group of people to become rich only because of the land their parents and grandparents had been fortunate to acquire cheap in a young capital in the 1960s and 1970s.

  Both within the city, and certainly outside of it, it’s easy to see the condescension for this kind of wealth. Essentially, even amongst India’s new wealthy, people don’t have great respect for rent-seekers or those who have inherited rent-seeking businesses. The first generation entrepreneurs and senior corporate professionals definitely turn their nose up at this species of the affluent. They believe their wealth is superior to this — the colour of their money is brighter, shinier and fairer.

  Yet, even when the source of the wealth is transparent and the success self-scripted, attitudes can be baffling. ‘My parents complain that fewer people come to visit them after I came into money,’ quips Aprameya.

  This is at a time when entrepreneurship is both more accessible and celebrated than it was even a few years ago.

  Wealth as a barometer of success

  In 1992, Rakesh Verma founded CE Info Systems, popularly known as MapmyIndia, a leading digital maps, GPS navigation, location-based apps and GIS-solutions company for governments, businesses and individuals. An engineer from the Birla Institute of Technology and Science (BITS), Pilani, Verma was an unlikely entrepreneur of his times when he began his digital maps company with his wife Rashmi Verma, after moving back from the US where he worked at General Motors and she at IBM.

  Yet, the Vermas were excited about mapping the chaos of India, a monumental task. They also saw the potential of digital maps as a critical value proposition in the information technology space. Today, the company employs more than 750 people. In December 2015, Flipkart acquired a minority stake in MapmyIndia, in a transaction in which the mapping company was reportedly valued at 1,600 crore ($240 million). Flipkart is reported to have shelled out 400 crore ($60 million) for 34 per cent stake.14

  ‘Wealth is in creating something, not in multiplying money. Entrepreneurs such as I have been creating wealth for the country by producing jobs and investing in technology. Money by itself is not fun for me. It’s a by-product, not the end-goal. Not that I hate money, I enjoy what money can provide me but it’s not what I work for,’ explains Verma.

  Nearly seven in ten people interviewed for the book, especially first-generation entrepreneurs, said that wealth was a by-product of their achievement, especially after a certain benchmark of achieving financial security had been met.

  In any case, the vagaries of business are such that no wealthy first-generation entrepreneur could have determined the outcome; most say there were so many points in their journey that could have tilted the story in another direction altogether.

  Chasing wealth can’t serve as a goalpost in the world of entrepreneurship, at least, where so much is out of one’s control, most seem to believe.

  The clichéd notion is that the people who come into money for the first time tend to be more conspicuous in their spending or are brasher about it, says the head of a private equity major in India. ‘But I don’t see that in our portfolio of founders at all. Actually, I find that for the guys who’ve really worked very hard to create wealth, the wealth becomes incidental to the success beyond a certain benchmark lifestyle. It’s a nice-to-have but I don’t think it’s what has necessarily driven many of them to get to where they are. Wanting to be successful has, but being wealthy is only a part of that.’

  Why we are more like the Americans than we think

  In her fascinating book Money, Morals and Manners: The Culture of the French and the American Upper-Middle Class, sociologist and author Michele Lamont explores the nature of social class in modern society. Through interviews with 160 successful men in the United States and France — managers, professionals, entrepreneurs and experts — she has revealed a collective portrait of the value and attitudes these men consider as setting them apart from others.

  On the topic of money, she draws interesting contrasts between her French interviewees’ ambivalent-to-condescending attitude towards money, and its lesser importance in determining class than in the United States where professional success is measured more by income level than by nomination to prestigious positions. The Americans also see money as an essential means to control and freedom, a way to emphasise self-actualisation and interpersonal relationships without belittling money the way the French often do, Lamont writes.

  Surprisingly, the American mindset seems to be mirrored by many interviewees of this book as well. The new Indian wealthy has much in common with the portrait of the well-to-do American that Lamont has sketched.

  Even for those reluctant to talk about their wealth, there is no ambivalence about having made the money. Yet, while wealth does determine success in some measure and liberates them from fears and limitations, it was neither the end-goal nor the sole currency of social status. So, even as the new-generation wealthy conceded that in social settings and business events, people might size each other up on the basis of their personal wealth, their status in a group wouldn’t come only from that.

  Successful first-generation entrepreneurs, especially when they have built mid-size or large businesses, often find their business expansions, acquisitions and fund raising rounds, reported in the media. It helps others have better approximations of how much someone is currently worth — intelligence an extended social circle might not have earlier. Yet, even then, their social currency isn’t solely determined by that.

  If not cash, what is success?

  ‘In our circle of friends, respect or admiration comes more from the intellectual capacity and the ideas you talk about. If at all you judge each other, it’s on that. The quantum of wealth doesn’t matter. For senior professionals and entrepreneurs, the average wealth is so much higher that your lifestyle can be as good as the inheritors of industrialists, but are you smart and passionate? Do you have great ideas? That will make you stand out,’ stresses Kedaara Capital’s Kejriwal.

  Several people told me that in a vastly-aspirational society, people are only taken in by your wealth if they think it will directly help them. In cases where that wasn’t likely to happen, people are much more indifferent because it doesn’t impact them.

  ‘In our generation, the big change that has happened is that we are not in awe of those who have wealth,’ says Neeru Sharma, co-founder and director of e-commerce portal, Infibeam. ‘I don’t even notice people who are wealthy, those who drive a BMW or Mercedes, something that might have stood out to my parents, for example. There is an intellectual appetite that I want to satisfy in the community that I want to be in, rather than only be branded as being wealthy. Our generation of entrepreneurs doesn’t judge people by the amount of wealth they have, we judge people by the human capital they carry, the intellectual weight they have.’

  In the run-up to their listing at the stock exchange in March 2016, Infibeam’s office had been abuzz with excitement. The opportunity to create wealth seemed real and within reach for the founders as well as a small core group of senior employees who held stock options. Yet, co-founder Sharma said the team’s joy did not come from the fact that so
me of them would be rich. The sentiment came from the pride of having built a company that had changed an industry.

  ‘In any case, you shouldn’t be an entrepreneur if your prime objective and measure for success is to be rich. The mortality rate of businesses is so high that you never quite know what is going to happen,’ she reiterates a sentiment that comes up often when speaking to founders.

  Bain Capital’s Amit Chandra, whose philanthropic initiatives over the past decade have led him to interact with many wealthy people across the many projects and causes he supports, says society doesn’t measure success one dimensionally and people, at the end of the day, are driven by two things: What they feel as individuals and what society feels.

  What people aspire for, and what they value, is shaped by these parameters although many people often aren’t able to differentiate between the two. Most people actually mirror society, very few people are truly individualistic, fuelled completely by their own motivations, believes Chandra.

  Societies evolve continuously as does what they consider success and achievement. At the turn of India’s independence, only people who fought for our freedom were considered the builders of society — our only heroes. Today, society reacts to a combination of wealth, power and individual brilliance such as that exhibited by sports heroes and film stars, explains Chandra.

  In mainstream business media, entrepreneurs have begun to occupy some of that space as well — admired for their disruptive ideas, ambitious drive and a new interpretation that they are nation builders as well.

  Paytm’s Sharma says that his early encounters with wealth and his family’s suspicious scepticism of it, despite him paying off their crippling loan and buying the family’s first television set in 2000 taught him a valuable lesson: That wealth wasn’t always a recognised currency of achievement.