Ishwar Jodha started Triple Crown Shipping and Logistics (www.tcsldubai.com) a freight forwarding company in 2004. He started his entrepreneurial journey after having been ME Managing Director of APL. His conservative approach has enabled him establish a business in a competitive commoditized business. Along the way he sold his assets to sustain and grow the business.
Where did you get the idea of 3C?
I started my career in shipping in 1977 and did it for 20 years in Dubai. That is all I knew and this was the business I could start.
Your knowledge of the domain enabled you to start the company. But what unique value proposition did you envisage to serve?
There are numerous freight forwarders in the market. I had worked with many of them. There was no ‘product’ gap in the market. The gap existed in the service provided and experienced customers. I had experienced the gap first hand. I leveraged my experience with APL. APL focused on quality, trained staff in delivering a quality experience, and used IT effectively. I realized that if I used the practices that I had learned I could have an edge in the market.
Was market entry easy?
When I entered the market was highly fragmented. There were many large and numerous small freight forwarders. I needed to compete with the big guys but the real opportunity was in the market space occupied by the smaller players. That is where I could provide service and win business.
If I am an importer of goods, what would be the specific edge?
I had thought of some of the things before starting but most of the things I learned after entering the business. When I started the business, I was a novice, despite my years in shipping. It was like getting in to the deep end of the pool and learning how to swim.
We have developed responsiveness to the needs of customers. This has become the culture of the organisation. We are also able to track shipments and provide real time information access to customers via a website. This is an industry standard. The difference of TCSL is that when you call a person talks to you. The human touch we provide. I worry for how long we will be able to sustain it as organisation grows.
What prompted you to take the plunge, take a risk?
In 20 years I had become the Managing Director. Senior positions come with the need to take transfers. I did move out but the bug of wanting to come back to Dubai was real. A friend who is into freight forwarding convinced me to enter the business. His assurance was the tipping point. It became a perfect opportunity to also test the latent urge that every corporate executive has of ‘trying’ something on their own.
What was the family dialogue like?
I started the business when I was 50. Most of My family obligations were over. My wife was more matter-of-fact. She said do it if you feel like doing it. Though I feel that she was a bit concerned. Not only did the business start with my end of service benefits but I also had to sell some property to keep the businesses going in the first three years.
Did customers sense the difference of TCSL service?
I like to believe this. A lot of customers have stayed with us from the day we started. I have also lost customers. There are occasions where I let go of new customers or jobs that would require commitment of extra resources.
I am an intermediary between shippers and lines; often my service quality is dependent, and confused with the carrier’s service level. If the carrier messes up there is very little we can do to change the situation.
In terms of pricing, is TCSL at the market level?
We are at the market. I have not discounted to get business.
You were running a corporate outfit with sales people. When you started you needed to get back to selling. How did you do it as a person?
One has to decide to do it. It is not a time to think. It is time to get on.
How did you develop the business model of your business?
I was fortunate. I started with some business. I did not have to wait for six months for business. I had a contract before I had an office. The revenue stream helped me sustain the business and build my confidence that the business would work.
Has the business growth been as planned?
The business growth reflects my conservative attitude. I have grown steadily.
Why did you feel that starting the business was like being pushed in the deep end of the pool?
I was venturing into an unknown. There was tremendous uncertainty. If someone came to me for advice today to start a freight forwarding company, I would advise him to start with a couple of long term contracts in place.
I was surviving month to month. I was visiting customers who were giving me contracts but they were short term, usually with a six month horizon. There was an uncertainty about predictable revenue. I was unsure whether I would be able to meet my costs next month. This is why I had to sell my assets to build the business.
I estimated my fixed costs and went to banks that all declined my request for a loan.
Imagine my situation. I did not have a long term contract. I did not have deep networks in the shipping business. In my MNC experience we had offices everywhere. I did not know where to go whom to contact if I had cargo coming out of China. I got an email out of the blue requesting me to join a shipping network. Nobody in the local market told me about the network. I decided to join a ‘network.’ It was like a jackpot. I took a chance. More out of necessity.
I think I took the step because to do business I needed to travel to many locations. There were costs involved. In a network I could engage with agents across the world. The network started generating business. Today I don’t spend too much time in customer acquisition. For which I have a team. I focus on nurturing the networks.
What unique steps you took that stand out?
My first focus was on managing the cash flow. I did what I had practiced as a manager. My second work practice was tracking month on month performance. I ensured that our performance was measured against a budgeted number. When the team is looking at a number they know whether they are ok and are able to focus on what we need to look at.
Did you create a compensation structure?
I did not give a performance bonus for achieving a target. I showed them where the company was, the growth plan, and the budget. Budget was higher than the easily achievable. The team was eligible for exceeding the budget.
When did you draw a salary better than your last job?
Not for the first eight years. I am there now. But importantly my company value and worth is what is encouraging.
Are you still worried about the momentum of growth of the business?
I am still a little tense; positively tense.
I am more confident that we are working with agents and regular enquiries are flowing in. I am not developing the business entirely alone. Customers also want to work with us. This is comforting.
I face the uncertainties of a small business. The team doesn’t have any fat. I have a person doing a job. If he or she goes on leave or is unwell, pressures builds up. Large organisations have specialized staff. A customer service person may only be serving customers. So I multi-task my team members by cross training them. They back up for each other.
When you started did you need to unlearn your professional experience?
As a professional I was used to a certain lifestyles. I told myself that it didn’t exist anymore. The first step was to curtail myself and not the organisation. I learnt to do cost cutting myself before doing it on the organisation. I have sustained this restraint through the startup and growth phases. I am today at a stage then I can afford to loosen up a bit. This has now become our culture. I have given salary increments to the staff. But did not take any. These are small signals to the team.
As MD of APL I was an avid golfer. As an entrepreneur my mind was occupied 24/7 by the business. I was always worried about how the business would work or thinking what had to be done next. I stopped playing golf. My Daughter was a budding golfer and I wanted to send her to golf school but at the stage was too expensive. This was a big personal sacrifice.
I did not take a holiday for the first three years.
Any slip-ups while building the business?
I was trying to keep a watchful eye on everything while starting the business. However errors did happen. Attention to detail is an important requirement in shipping. One of my team members authorized a delivery of shipment in India without collection of freight. That is a total no as far as shipments are concerned. I was not in office on an overseas trip. The customer had been with us for three years. He was not in Dubai, requested for release of goods confirming his return the next day. The customer got his goods and didn’t live up to his commitments. He also had an expired trade license. We had no recourse. I had to visit Mumbai searching for him trying to file a case in alien jurisdiction. This episode in hind sight made me realize the important of corporate governance. Today 3C is an DubaiSME 100 company.
Taking / checking a trade license of a business is now an integral part of the process. We run the risk of dealing with businesses, giving credit, where the owners can just skip the country and fly away. For a small set up, this is a big deal.
I have to pay much more importance to detail in my business compared to what I was used to in APL where every detail was embedded in operating systems. In my company I was building bottom-up. I am always alert worried that have we checked everything.
Growth plans are a function of opportunity and costs. Geographic growth is a good idea based on markets where we do good business. In 2008 I did think of warehousing and distribution. We are currently outsourcing warehousing. And it is expensive. So it was a make or buy option. Now with the boom back in Dubai getting a warehouse is expensive.
What worries you about TCSL?
Succession planning. My son and daughter are in totally different careers from freight forwarding.
There is always the uncertainty of a small business. We have not reached a stage that nothing will happen.
How have you changed as a person in the last 7 years?
I have become a lot more conservative than I ever was in expenditures and controls because I think have experienced uncertainties and I want to be very cautious. I have had to dig deep to make ends meet. I have seen difficult times and now I feel that overcoming challenges one needs savings and surplus.
In APL I was a part of a corporate culture taking large capital decisions. To decide I had to manage getting lots of approvals. As an entrepreneur I decide. I take smaller steps but a lot quicker.