“If you want to be in business, you must be business minded”
Hari Bhakta Sharma, Founder, Deurali Janta Pharmaceuticals
This is a summary of the Last Thursdays gatherings at Dwarika’s Hotel jointly organized by Entrepreneurs for Nepal and Samriddhi, the prosperity foundation. To stay updated, please join the group here.
My father wanted me to become a doctor, and had very high expectations from me. I used to score very good in the school so he wanted me to pursue the most honored profession at that time. I joined undergraduate program in medical science at Teaching Hospital in Maharajgunj. In those days it was called Institute of Medicine and it was the only institute where you could get very good medical service. I completed the undergraduate program and was among the good student, securing 5th position in the class. At that time, I had only two choices, either to go for clinical science or to go for enterprise management. My inner heart said clinical science is not my cup of tea. On the other hand, I was keen on enterprise management.
I started studying management- back then it was called B.Com, and also completed MBS. Since I had undergraduate level qualification, I was asked by the institute of medicine to work for a medical project in Pokhara, which was built by US-AID. I went there and worked for three years as an instructor.
After working there, my mission to build my own enterprise was strong because that was the reason for me leaving the MBBS program. I started collecting money. The primary reason why I worked was to put together the basic resource that is required to be in the business, i.e. money, the financial resource. While I was working for that project, I came across two very good professors from Stanford University. I told them my dream of wanting to start an enterprise. In those days garment was the sunshine industry in Nepal and everyone was involved, including the ex-king and his brother. So, I thought it was a good idea and that I will have a small garment factory in Kathmandu. But the professors suggested that I should go for pharmaceutical industry instead, because there were so few pharmaceuticals in Nepal and it was a great opportunity for me. I was convinced. That is how I came to pharmacy business.
I started searching for the name of the pharmaceuticals and had several ideas. But finally I decide to have exclusive Nepalese name. That’s the reason why we kept “deurali janta”. “Deurali” means peak and “janta” means people, so the name means people living in the mountain. So we had a strong base for a good brand name. In the initial phase, many doctors and friends were not satisfied with the name and it took two-three years to convince that this is a good name.
(Lesson #1). It’s really difficult to convince that it doesn’t make any difference what the brand name is, as long as the product is good.
As long as you have the right type of product, as long as you produce good quality. Today I am happy that Deurali Janta is now an accepted brand, but it was not like this twenty years back. There was huge resistant in the medical field to write products produced by a company they’ve never heard of. So you can imagine how important it is to maintain your business ethics, your principles.This is how the story begins.
Lesson #2, you have to persevere through difficult times to be successful.
After persevering through the early years, I went to Stanford University to study executive management program. There I realized how I am working in Nepal and what is the difference of having the knowledge of the western world.
(Lesson #3)I realized in Nepal we need technology. If you are thinking about starting a business, think about what you want to produce, what type of business model you want to develop and with whom you want to compete. Once you identify your competitor, it becomes your target, a goal for you to achieve. I wanted to compete with Glaxo, so we targeted few products used by them and some of other companies too, which is very fair to copy now a days. This is how we moved with our objective and we realized that if you are really dedicated and sincere in your heart, you will be able to achieve it. There is nothing that cannot be achieved, but if you think too big which is outside your ability , then it’s your mistake. You have to understand what is your ability. You have to understand in which market you are working you also have to understand how much resources you have- resources doesn’t only means financial resources, it may be innovative resources, it may be science, it may be your productivity management techniques, it may be managing people, you have to look into the strength of resources you have and then try to co-relate how much you can gain out of that. If you are swimming in a pool, you can swim only in that pool, don’t think you can swim in the Indian Ocean. If you want to be international player think about how you can compete with international players. If you want to compete in your local market here in Nepal think about how you are going to compete with your local competitors. This is how we made DJPL.
There are few question like how we have been able to take DJPL to this level and how we manage our finance. In the very beginning with four-five people, we invested five million rupees as seed money. Today we are about 650 million rupee company, with independent research laboratory that is worth about 225 million rupees. This is my contribution to the next generations of people. This is not only my company, as there are about seventeen investors today in this project though I am one of the largest investors. I have dreamed for this project so I have given lots of time and energy to make this particular project successful. In a country where load shedding is a curse, in a country where you have to deal with different political parties, extortion, people in neighborhood who are not happy with what you are doing, they believe that you are making too much noise, you are polluting, or you are making something else. So, you have to satisfy all those issues because in this country if you want to work you have to be prepared to handle all this type of problem. It’s not like in foreign countries.
Do you have a failure story, where did you fail?
Before I started this particular project, I had something very wild in my min. I decided to open a theater in Kathmandu. In my young days, there were very limited cinema hall in Kathmandu and the technology was very old. Even the people in Kathmandu have not seen movies when I was young. For the first time, about thirty years ago I went to very small narrow lane in Bansbari, at about midnight, to watch a video movie and the technology was worse. So I opened home theater type of video lab in Kathmandu. I hired one guy as a manager and I brought very new movies from India. We even imported from Karachi- that was the place where you could get pirated movies. Initially the income was very good and I was happy. But I got lenient on my supervision. Six months down the line, our bank balance was nil and I was in a loss of about 30,000 rupees in cash and about 150,000 in kind. But that investment taught me some lessons. From that unsuccessful attempt I realized that how important it is for you to look into your own business or to give at-least the right amount of time and energy to evaluate, to supervise and also to get information.
(Lesson #4) So, if you want to go a the business, you need to be business minded. If you are little bit out of track, the probability of you not succeeding is very high. For me if you ask failure is a part of success, you cannot be successful every time.
As your sector is very technical, how did you manage to train your staffs in terms of research and technology?
We worked with one of the popular company from Bangladesh on the technical side. We asked them to transfer the technology; this is how our people have learned the right type of knowledge and skill. And we also learned to assure quality in the medicine. You have to be pro active to bring in the technology. We were at the stage of bankruptcy when we bought technology, but in long run it is the reason we are a successful company.
What about exporting your product?
We are preparing to compete in world market. The four big markets in the world are USA, Japan, United Kingdom and Germany. First of all you have to develop the product that you want to export; then you have to develop a capability- marketing ability, technological ability. There are many standards and procedure that you have to overcome to export medicine, which need lots of technology. We are working with best universities in the United States. So, this is how we are trying to equip ourselves before going into the international market to compete. Except these four markets, we cannot go other places because we cannot compete with the Indian and Chinese price.
How did you go about initially raising that five million rupees?
We started to discuss how many people are interested to invest with us, and seven of us decided to invest in the beginning. I and one of my colleagues invested two million rupees total. As it was insufficient, we approached some banks. After a few rejections, finally NIDC agreed to invest money in us as a loan and we became the first company in that time to pay cent percent back to NIDC with interest.
What are your corporate social responsibilities?
In case of corporate social responsibility side, I talked with different medicine expertise to know what the causes of deaths in rural areas are and we decided to make those products. We have made four such medicines at very reasonable cost. We are selling those medicine subsidized rate at the cost of production.
What are the competitions you are facing in Nepal?
Competition is everywhere; I think competition is important for you to grow. In case of Nepal, by looking at our success, many companies are entering in Nepal. But we are not worried because we are confident that we will find ways and means to compete. Fundamentally in my business our strength is that we know how to produce quality goods in cost effective way.
There are two guru mantras:
- (Lesson 5) You have to trust your co-workers, your colleague, with whom you are working every day. Give him/her 100% trust. Before you hire them, you can interview them ten times, take written exams, invite their parent to your office to discuss about the type of career you want to give to the person. But once you hire him or her in your organization, you have to trust them.
- (Lesson 6) Improve your technology to stay competitive and survive.
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