Posted by : Sanjoy Sanyal How does a startup survive an existential crisis? By remembering that there is a bigger purpose to its existence.
Hemalatha Annamalai founded Ampere Vehicles in 2008. She and her husband, Bala Pachyappa, were working in Singapore when they came across the opportunity in electric bikes. They returned to India, with their two young daughters, and set up a factory in Coimbatore. Soon they were catering to rural and semi-urban consumers to whom electric bikes afforded a safe, efficient, and affordable means of transport. By 2019, she had sold out to Greaves Cotton, an Indian engineering company. But not before a crisis that lasted two years through 2011 and 2012 almost wiped the business out.
The crisis was in three parts. The Central Government provided a subsidy for end customers and the subsidy was abruptly withdrawn. The market virtually disappeared. Then in 2012, a power crisis hit Tamil Nadu with power outages often lasting 14 to 16 hours. Neither could the company produce vehicles nor could the customers charge them. And to top it all, the batteries, which Ampere used to buy from other companies, started to fail.
As Annamalai recounted the story she talked of four lessons.
Investing in technology frugally
The founders of the company knew from the beginning that they needed to ensure that the electric bikes worked in Indian conditions. They kept on investing through the crisis. They developed a chip-enabled battery and vehicle tracking system that allowed them to collect data on vehicle operation. They developed a charge controller which cut off the electricity after a full charge and an in-built voltage stabilizer that protected the battery from over-charging or voltage surges. When the batteries started to fail, the company brought them over and figured out a way to restore the plates so that the life would be extended for at least a few months. As they did this, dealers appreciated the company’s sincerity and technological capabilities
Even as Ampere was tacking investments in technology to tackle these tough problems they were still self-funded. They were working in a converted shed of a textile factory. Their engineers were led personally by Bala Pachyappa, Annamalai’s husband and co-founder, who had been always good at “solving engineering problems.”
Shifting from markets nimbly
Even as the consumer market disappeared, Ampere focused on business customers. They introduced an electric vehicle (which looked like a kid’s scooter) for use by workers in spinning mills. They introduced trolleys and carts that could carry bulky loads as cotton bales and poultry feeds. They adapted the electric scooters for use in the delivery of fast food and groceries. They won a government order for electric vehicles by the physically disabled. They supplied vehicles to local governments which replaced pushcarts used in garbage collection.
The company could shift to other markets quickly because it was already investing in technology and product development. It had developed a culture of not only listening very closely to customers but also observing how users interacted with the product. For example, they had a differently-abled person to work with them as they designed a special purpose vehicle. That allowed them to understand that the vehicle needed an option to go backward with the press of a switch, a robust clutch-holder, a low turning radius to prevent toppling (the bodyweight is not uniformly distributed), and extra shock absorbers.
Focusing on cash flows
But, even while doing all the right things of focusing on technology and on customers, the existential crisis arrived in Ampere’s life. This is not uncommon. At that point, Annamalai says the only thing to do is to “focus on your cash cycle”.
Ampere always insisted cash on delivery with the dealers even at the point when the market was tanking after the withdrawal of the subsidy. Then Annamalai “went further. She “boldly,” asked her international supplier of plastic parts for credit. She got a no for an answer, as she expected. The company never offered credit and Ampere was a very small customer. But Annamalai did not accept the “no”. She went up to the CEO of the company and explained to her the problem. The CEO – also a lady- heard her out and offered an 80-day credit. This helped Annamalai “turn the money twice”. Annamalai said she will be forever grateful to her supplier for having supported her.
Doubling down on impact
In the years when she focused solely on sustenance, Annamalai was inspired by her customers and her employees. The differently-abled woman who could go around because she did not have to go and fill up petrol every day. The woman in the spinning mill would not feel fatigued having walked twelve kilometers during her shift. The woman who did not have to push a cart with 80 kilograms of garbage. And her employees: several of whom were women for whom the company not only provided a job but also a family where they would be respected. Her engineers came from small towns in India and could not speak English “but could tinker around and solve problems.”
As she fought to survive, Annamalai realized that she was changing as a person. The role of a business could not be only a return on investment. It had to be creating jobs. “When the focus shifted from money to job creation, everything fell in place.”
Ampere speaks to all of us today
As businesses across the world face an uncertain future, Ampere has lessons for all of us. Adversity is not permanent. Troubles that seem unsurmountable go away. The only thing that remains constant is the entrepreneurial grit, the passion and the determination to see things to a complete solution. To Annamalai, faith was key. The belief in work and that people will come to help when the need truly arises.
At Caspian, we are privileged to have partnered with Ampere. Ampere first entered our portfolio in the financial year March 31, 2018. In the very next year, Ampere grew multiple times. Within a few months, Hemalatha Annamalai and Bala Pachyappa had exited the company.