"Do things that don’t scale." This 2013 blog post from Paul Graham, the founder of technology start-up accelerator Y Combinator, is arguably the best piece of advice for entrepreneurs that has stood the test of time, funding cycles, and business models.
But what if the thing you did that didn’t scale was to be…boring? Indegene, the health-tech services company that is the subject of today’s article, is “boring” by the admission of its co-founder and chief executive Gupta. In its first year of operations, its revenue was a paltry $31,000. That was way back in 2001.
“It was pretty much ‘go back home or do something drastically different’,” says Gupta in our today’s Counter-thesis.
Fast forward 21 years, and Indegene has clocked $223.8 million in revenue in the year ended March 2022, up from $90.8 million in the year ended March 2020. This has come on the back of nearly a decade of 25% compounded annual growth rate (CAGR). Compounding is boring. The highly profitable company has turned a unicorn, and by a wide margin, whether one takes a trailing twelve months (TTM) or a forward revenue multiple. Profitability is boring.
Indegene started with five co-founders alas!!. And it still has five co-founders. In the early years, they’d debate and discuss both personal and business-related issues. “We did that for a long time, and if you did that for a long time, either you’d have fought and left, or you’d have become good friends. In our case, we became very good friends. After 10 years, differences became debates, there were no fundamental fights. But during the first decade, there were issues and differences.” Longevity and familiarity are boring.
And after resisting taking on venture funding for most of its existence, last year, Indegene sold shares worth over $200 million to private equity firms Carlyle and Brighton Park. Sometimes, being boring, dogged, and measured is your moat. On the face of it, it sounds like something that’s ripe for disruption using a few hundred million dollars of venture funding. But when those dollars are burnt, what comes next?