It may seem pretty weird when I start an essay with a title like "Who are we?" But unfortunately, I've often had to re-visit this question, start from first principles, to settle disturbing doubts in my mind. By "we" I mean the company, Merce Technologies.

When I see the challenges our company is facing, the fight we are fighting to grow our business, and the constant cash flow pressure, it sometimes feels like everyone else (all other companies) is having a cushy ride and we are the only fools fighting for our very lives.

I see other companies with one-hundredth of our technical ability but with larger, better offices, larger numbers of senior members (read: high-cost employees), more overseas projects, higher-paid engineers, and I wonder: what the hell are we doing?

Gradually, over the last couple of years, some very basic principles have begun to become apparent. These have helped me understand who we are.

The Law of Size Inertia

One of the most basic patterns I see all around in the corporate world is: small companies remain small. Big companies remain big. I call it the Law of Size Inertia.

Take the case of Tata Steel. They acquired Corus. This acquisition placed intense pressure on their cash flow. At the same time, there was a global recession, coupled with smaller setbacks elsewhere (the Nano plant in Bengal faced political opposition, etc). This intensified their cash flow pressures. The Tata group as a whole began cancelling contracts, keeping plants closed, sacking temporary workers, scrapping projects, etc. Some of these measures were so drastic that the Tata group has never been known to do these in anyone's living memory. The entire industry watched, uneasy and afraid.

Did this make them reduce in size? No. They still remain as important and as powerful a giant as they always were. Yes, some large companies have occasionally gone under when faced with such pressures. But maybe one in 100 large companies which face such downturns actually buckle. The rest fight and remain where they were, in spite of losses, cash flow pressures, etc.

On the other hand, take the case of small companies. Any company of less than Rs.50 crores of turnover qualifies as "small".

How many such companies have grown to be market leaders, category definers, darlings of the stock exchanges? Why are Dhirubhai-type stories so rare? Why does a small company remain small? To answer this, I tried looking at small companies which did grow a hundred times or more, from my circle of acquaintances. In all those cases, I found exactly one common thread: capital infusion. In all the cases, spectacular growth has been fuelled by infusion of serious capital ('00s of crores, sometimes '000s of crores). In the absence of such capital, the world of business seems to respects the Law of Size Inertia.

I was chatting with a senior manager of IBM India. He said that he's seen plenty of software product companies in India (in IBM's language, these are ISV or Independent Software Vendors. Merce Technologies is an IBM ISV.) He said he's never seen any Indian ISV larger than a turnover of Rs.10 crores per year.

Why isn't there a single exception to this rule? Because the Law of Size Inertia is hard to break.

A growing company

Who are we, then?

We are trying to break the Law of Size Inertia. We want to grow. We refuse to remain "an ISV of Rs.10 crores".

But is this possible? We have no illusions. We know it's going to be incredibly difficult. What will it take?

• Hard work. Each of us needs to work a few times as hard as "normal" people. Each junior engineer needs to do in one day what a junior software engineer in a large IT company does in two. Each senior manager needs to five times as productive as a similar-age manager in a large company. We cannot have a "normal" life. We are in a battlefield.
• Technical supremacy. Our products have to be better than the rest, because we need to reach in two years where others have reached in ten.
• Market knowledge. We need to deliver services and solutions much better aligned with the Indian market, because that's where big companies fail. For instance, Microsoft is still trying to sell MS Exchange licences, but we need to realise that offering a T&M-type contract for a mail service is going to sell much better than a one-time purchase of expensive licences. What works in the US can't work here, most of the time.
• Tight management. We need to control times and costs much more tightly. Where the big and rich companies pay their officers five-star hotel costs, we will work on roadside budgets if necessary. When their projects have schedule overruns, we have to finish before time.
• International penetration. Unless we can sell abroad, we will be forced to tolerate the Indian rate of penetration and growth. Entering a foreign market costs money. But more important than that, we need to take our products to the level where perfect strangers can buy and use them, without our engineers having to rush to Vapi or Worli to do every little thing. We can download and use VMware. Can anyone download and use Merce? What will it take to achieve this?
• Resilience. We need to have staying power. There will be downturns. There will be lean periods. Orders will get delayed. Key employees will leave. Clients will postpone projects. We will have to keep fighting and winning.

All these things are not easy. And they are not enough --- we also need capital. Since there is no partner waiting to give us a hundred crores as investment, we will need to build our size and our installed base inch by inch, fighting every step of the way, and we will need to demonstrate results to get funding. Money will come in smallish chunks, and multiple rounds. But that's the reality, and we'll have to work accordingly.

Have companies done this? Yes, they have, both in India and abroad. And this is what I want to do. I see no point in a professional career for myself unless the size of the battle makes it worthwhile.

Are we a startup?

We are not a startup.

A startup has cash flow pressures like we do, but they do not have the product and management maturity that we have. They don't have a management team which has a combined experience of 30 years in running the current company. They don't have a product with an installed base the way our Merce suite of products has.

We are a growth-stage company. A growth-stage company has clearly understood what it's building and who it is selling to, and is now fighting to get market share and increase its penetration. A startup is like a little boy, figuring out how to walk and talk, and a growth-stage company is like a young man in his first job, intelligent, ambitious, cynical, driven, fighting to make sense of the corporate world.

If you still have doubts, you should sit with Hemant and Jignesh one day and just look through the UI of Merce v3. No start-up can build, or even visualise, a product like this in less than a few years.

What's in it for you?

Each of you need to know who "we" are.

If you want a normal nine-to-five job, don't be a part of a growing fighting team. You will only bring unhappiness on yourselves and friction with others.

So, each of you needs to ask yourself: why are you in Merce? What do you want from your life? Do you want to join a team which dreams of engaging in a battlefield and winning big? Or do you want a "stable", "secure", "structured", life? Do you define your dreams in terms of earning enough to buy a fridge in your first year, a car in your third year, a flat in your fifth --- like all middle-class people wanting to "settle down"? If yes, a growth-stage company is not for you.

What will you get in exchange for this battle? If you stay long enough, and can actually deliver what it takes, you will get a resume no one can dream of in a large company. You will get stock options and bonuses which will be tied to the growth in company revenue. And most important of all, you'll get the opportunity to grow from a boy or girl to an adult, like no employee of large cash-rich companies can dream of growing.

What's the downside? First, can you survive for a long enough period in this culture? A growth-stage company demands extreme productivity and competence from its team. Secondly, we may not make it. Our attempt may fail to grow --- the company may not become large at all. In that case you will spend a few valuable years of your life having a tremendous experience but you'll not get the rewards of success, financial and emotional. Thirdly, you may burn out along the way. Remember what I said about this not being a "normal" or peaceful nine-to-five life. In a large cash-rich company you'll be assured a higher salary, less technical challenge and pressure, more respect from relatives and friends ("Oh, you work for Infosys? Wow!") and more leisure.

So, think carefully. Do you really want to be part of a battle team?

Why am I in this?

All my friends with comparable education and comparable or less intelligence who are working in India are earning five to ten times what I'm earning. I have one friend who earns more than a crore a year in salary plus bonuses. Many friends earn more than Rs.40 lakhs a year. Couple that with bigger apartments, two cars, vacations abroad. Et cetera.

Why am I doing Merce? Because if we win, the outcome will be worth it.

I believe in Merce, the product suite. I believe that a company's information systems should be structured and managed the way we are trying to do, through an integrated, intelligent management system which holds together hundreds of servers and lakhs of users in a single console. I believe that every alternative product from IBM or Microsoft is inferior in conceptual architecture and vision, compared to Merce. (There is no single product in the world which does what Merce does, today.) And I want to fight this battle so that we can demonstrate to the world how to manage their messaging and information systems better. It will make their lives better --- I am sure of it. And I want a large part of Merce's contribution to go to India, the country which needs such information systems the most.

Does the struggle scare me? Yes it does. When I know my credit card is blocked, or my home electricity bills are pending because I don't have money in my bank account, it scares me. But I know that if I want to lead a team to change the way people work or live, such revolutions are never comfortable. I would have loved it if I could have got a super-fat pay-cheque, and worked in a big, stable, cash-rich company, and headed a project which would bring in a new way for my customers to manage their information. But there's no such option. :)

That's why I find it worthwhile being at the front line of this battle, instead of earning a salary in a large company which does not make anyone's lives better.

Why are you working in Merce? What's your reason?

Think. :)