SUCCESS STORY OF JUST DIAL
V.S.S.Mani, a first-generation entrepreneur, was born into a middle-class south Indian family. The eldest among three brothers and a sister, he began working early and attended an evening college to complete his graduation. The idea of setting up a local search service provider originated in Mani's mind in the 1980s when he began selling advertisements and listings for United Database India for its yellow pages in Delhi. He became an entrepreneur in 1992 when he set up search company Ask Me with two partners. The partnership did not last long due to differences of opinion and he soon sold his stake in Ask Me to his partners. In 1996, Mani set up Just Dial from a garage in the Mumbai suburb of Malad.
Just Dial started as a voice-based service. In 1999, at the peak of the dotcom boom, consulting firm PricewaterhouseCoopers (PwC) advised Mani to move out of voice and join the Internet bandwagon to grow his business rapidly. He didn't agree with PwC, arguing that the use of phones will grow faster than the Internet in India. He has been proved right, with the number of phone users increasing exponentially in the past decade.
Just Dial has a robust business model. It earns revenue from the customers who advertise with it. It had more than 221,000 paid advertisers as of June, and received more than 364 million search requests during the year ended March 2013. Its users are spread across 1,800 cities in India, though about 90 to 95 per cent of its revenue comes from 12 cities. The advertisers pay between Rs 3,000 to a few lakh depending on the location, and products and services they provide. "We have very high customer retention. That's one of the reasons for our high growth," says Mani.
As Just Dial receives the entire payment in advance from advertisers, it has zero debt on its books. It also has massive cash on hand - almost Rs 600 crore. While Mani, who along with other promoters controls 33 per cent of Just Dial, doesn't say how he plans to utilise this cash, an analyst from a foreign brokerage says on condition of anonymity that the company could use the money to accelerate expansion and to make acquisitions. The CEO of a wealth management firm, who does not want to be named, says the market is attracted towards companies that generate a lot of cash but it has yet to be seen how well Mani uses this cash in growing his business.