Nidan Technologies Private Limited (NTPL): The Entrepreneur's Conundrum

Abstract

The case describes the situation faced by the CEO of Nidan Technologies Private Ltd (NTPL), a first generation entrepreneurial firm struggling to ensure the growth and survival of the new venture viz., SMS based railway enquiry system. Spectrum, Nidan's predecessor which was set up as a small office home office (SOHO) in 1996 had survived for over 8 years by doing small time software development for small and medium enterprises (SMEs) in Jabalpur. Given that everyone involved with Spectrum were first generation entrepreneurs, survival of the venture had given them enough confidence to keep going. In its search for bigger, better margin projects that would give steady income, NTPL had set its eyes on government and public utility projects. SMS based railway enquiry system was the first idea which NTPL believed would take it to the next level. NTPL was successful in convincing the Indian railway's Central West Railway zonal officials about the need for such a system. Though NTPL wanted to tie-up with all the cellular service providers in the circle to offer this service, it could convince only Idea, the largest cellular service provider in the circle in partnering with NTPL for this service. Everything seemed to go well during the nine months trial period. Following an open bid tender, in which NTPL was the sole bidder, commercial operations were started in January 2006. However a year later, it appeared that NTPL was back to square one with around 1.7% of the total rail enquiries in the zone being routed through NTPL's system, Rail Nidan. Breakeven was nowhere in sight. After deliberations, Vishal Karendikar had to decide on one of the following options that had emerged in the January 2007 meeting with his four other partners; a) Bid adieu to the project. b) Make the venture profiable. c) Sell it off to a prospective buyer right now or once the project is on the path to profiability?