Ashutosh Garg in a candid conversation with Yash Gupta, a product of illustrious schools like Carnegie Mellon and Harvard Business School, and a man with years of rich corporate experience. Yash possesses a keen entrepreneurial streak that has lead him to envision and establish many successful business ventures specifically in the real estate sector. He talks about his early days as an MBA graduate working for McKinsey, moving back to the motherland and managing the family business and subsequently turning into an entrepreneur.Watch on YouTube
I chose to go to Carnegie Mellon because their tagline used to be ‘the professional choice’. I really liked what Carnegie Mellon stood for. The ethos was that you come, work hard, study hard and the school will help you develop a competence to be a professional who can stand on his own.
The traditional practitioner’s approach limits you to what you or your predecessors have learnt but you do not have access to new learning.
It is important to believe that even if you do not have all the answers, if you are committed to the process the answers will come. It is all about one step at a time.
I spent a lot of time developing a high level of trust so that people could understand that I was there to manage the interest of all stakeholders and not just my own vested interests. It was crucial to not just talk the walk but also walk the walk.
My mantra in life has always been that it is important to continuously challenge oneself to be all that one can be.
The three advantages of an MBA are the education, access to a rich alumni network which consists of very smart people all over the world whom you can seek counsel from, connect with and seek help to open doors, and finally a brand name that helps people categorise you as someone who has a certain amount of talent.
If you have access and the ability to bring good practices from the world, they do work in India.
What worked well for us was the philosophy that one needs to understand the need of the customer and cater to that need in a way better than others have done.
It is important to stay equanimous. Do not get swayed by the highs and do not be discouraged by the lows.
Right education can help you tide over many tough challenges in life. It can give you the breadth to help open your mind, allow you to acquire skills that can help you work better as well as reboot your world view to see what other paradigms exist. If you are thinking of doing an MBA, it is important to check if the business schools that you have been accepted to give you access to an industry of choice, or to a preferred geography, or help you hone skills that would allow you to pursue your chosen vocation.
In case you are looking at starting an entrepreneurial venture in the real estate sector, the time is now. With RERA, with an increase in land supply, as well as regulations that are making the sector much more professional and transparent, starting an enterprise in this sector has never been as lucrative and exciting ever before. Once you have your business plan figured out, think through some of the challenges that could crop up and plan accordingly but do not be afraid of taking risks. As someone rightly said – ‘A turtle does not make progress unless he sticks his neck out.’
As I was graduating from high school and thinking about college in the late 80s, the industry was going through a paradigm shift. In the past, your access to capital commandeered your ability to establish a business. Capital was scarce and opportunity or demand was plenty and so, only if you had the capital to build a supply you could dream of setting up a business. As India was opening up a little more, competition was being encouraged. There was an increasing emphasis on your capability and your competence as opposed to simply an ability to access capital. I chose to go to Carnegie Mellon because their tagline used to be ‘the professional choice’. I really liked what Carnegie Mellon stood for. The ethos was that you come, work hard, study hard and the school will help you develop a competence to be a professional who can stand on his own. My understanding was that if I am able to ‘professionally’ qualify myself through this journey it would stand me in good stead. I was proven right when I came back to Bangalore to handle the family business. I was able to work hard, think on my feet, and dissect complex problems in logical steps and, therefore, was able to run the business successfully for many years.
Those were very interesting years. I realized that the family business was going through some tough times and so out of a sense of duty as well as a sense of adventure I decided to come back and take over the reins. My learning curve during this period was off the roof. One of the things I quickly learnt was that one needs to have a lot of self-confidence. It is important to believe that even if you do not know all the answers, if you are committed to the process the answers will come. It is all about one step at a time. Trust is extremely valuable. I was the only North Indian in a 300-400 people setup which was mostly South Indians. I spent a lot of time developing a high level of trust so that people could understand that I was there to manage the interest of all stakeholders and not just my own vested interests. It was crucial to not just talk the walk but also walk the walk. I finally sold the company on one condition that the people who were employed with the company will continue to be with the company and they still are. Because of the trust a lot of people came and helped me because they trusted my intentions and my integrity.
My mantra in life has always been that it is important to continuously challenge oneself to be all that one can be. I see this far too often in Indian family businesses, once the business is profitable and doing fine, room for growth ceases to exist. Many future generations with legacy family businesses tend to reconcile to the fact that they have profitable businesses that make decent money and can help them afford a decent lifestyle without much growth or challenge. I believed that doing an MBA would give me the breadth to help me open my mind, reskill and reboot my world view to see what other paradigms existed.
The three advantages of an MBA are the education, access to a rich alumni network which consists of very smart people all over the world whom you can seek counsel from, connect with and seek help to open doors, and finally a brand name that helps people categorise you as someone who has a certain amount of talent. An MBA school should be chosen based on what you want to do. If you have an industry in mind the school should be able to give you access to that industry. If you have a vocation in mind the school should be able to deepen the skills that you would require. If you have a geography in mind does the school place you there. If the school is not ticking these boxes I would think twice as an MBA has both a time commitment and a monetary commitment.
McKinsey picked only one out of every ten students who applied from Harvard every year. I wanted to prove to myself that I was competent enough to stand my own with the best of the world and so, I chose McKinsey. Besides, McKinsey is one of the best places in the world to learn how to break complex problems down, how to think them through, and how to take them to a logical conclusion.
I always wanted to come back to India. I moved back to McKinsey in India and continued with them for about five years. In the year 2003-2004, the country was just opening up to FDI and there was a very interesting inflection point in real estate. Real estate is the largest asset class in the world. It allows you to make an impact in a very broad and meaningful sense. As the Indian middle class was growing, they were the biggest consumers of real estate from the homes point of view. The corporate sector in India was growing too and they were the largest consumers of office space in India. Despite such high demand, the real estate sector never attracted the brightest minds because it was seen as an area where non-transparent practices were followed. I moved into real estate because it is very entrepreneurial and I believed that the professional competence would seep in as the market changes. When the market changes, it forces the supplier side to follow suit.
After I moved back to India, I set up a real estate venture known as Hines. It is today one of the top five real estate groups around the world with 110 or 111 billion dollars of assets under management. We opened the office in India to bring the best of professional competence into India as well as operate without any of the customary bad practices prevalent in the sector in India. We had some great partners like DLF who helped us a lot. We build assets like One Horizon Centre and Sky View Corporate Park and people appreciate them for their quality. The team that we put together did not come from the real estate industry. They were hungry, smart, and committed people who drove the venture to success. We were also able to use professional practices that are used in other parts of the world to make our buildings faster and cheaper than the competition. It just proves that if you have access and the ability to bring good practices from the world, they do work in India. The market appreciated the integrity that we brought to the table with our franchise.
In real estate, the biggest raw material you are most particular about is location. We were fortunate to get the opportunity to build One Horizon Centre at such a pivotal location, thanks to our partners. The concept that we wanted to play with was that we do not want to push a product, we want to feed a need. If we could create a real estate format where people would come, that by itself becomes a landmark and then the area around it increases in value. We spent a lot of time looking at customer behaviour, unmet needs, and what people wanted. We rolled out a retail format which balances different cuisines, different price points, and different wait times. Even though we had a premium offering on our rentals, we were confident that the Indian consumers are willing to pay if they see value. What worked well for us was the philosophy that one needs to understand the need of the customer and cater to that need in a way better than others have done.
With advancements in medical science all of us can hope to live longer than our previous generations. That gives us almost 20-30 years post retirement. You can maximise the impact of your life by staying gainfully employed and occupied. Being an entrepreneur allows you to be productive as long as you like to be productive. I created YGR to give me and like-minded people an opportunity to stay productive for as long as we want, to make as much impact as we can make, and to further the passion or the cause that I am very focused on – ethical, high integrity, real estate development.
My favourite quote on this subject is from the book ‘The Pursuit of Perfect’ by Tal Ben-Shahar – ‘If you want to be successful in life, you need to double your failure rate. In my lifetime as an entrepreneur I have faced ample failure and as a result, have learnt some valuable lessons. My failures have taught me way more than all of my great wins put together. My first and most important takeaway from some of my biggest failures is that it is important to stay equanimous. Do not get swayed by the highs and do not be discouraged by the lows. Secondly, it is vital to prepare for both eventualities when embarking upon any new project.