Sanjiv Goenka On Billionaires, The Next Big Opportunities & Building Wealth | FO553 Raj Shamani

• The podcast episode features Dr.
• Sanjeev Goenka, Chairman of the RPSG Group, who shares insights and stories from his entrepreneurial journey.
• He begins by addressing a common question: how do billionaires identify opportunities before others?
• He explains that it stems from early access to data, connections with high-level individuals and consultants, and personal experience.
• This allows for the evaluation of numerous ideas, even if not all are suitable.

The podcast episode features Dr. Sanjeev Goenka, Chairman of the RPSG Group, who shares insights and stories from his entrepreneurial journey. He begins by addressing a common question: how do billionaires identify opportunities before others? He explains that it stems from early access to data, connections with high-level individuals and consultants, and personal experience. This allows for the evaluation of numerous ideas, even if not all are suitable.

Dr. Goenka then discusses his primary sources of information, which include reading on areas of interest, utilizing social media, and leveraging AI tools like Claude for data. He emphasizes the importance of validating promising business propositions with experts like McKinsey or BCG.

When asked about the top three ideas for future big businesses, Dr. Goenka highlights renewable energy, encompassing solar, wind, and hybrid solutions, especially when combined with battery storage. He praises the Prime Minister's initiative for floating solar panels, which conserves land. He notes the enormous energy requirements of India and the need for an entire ecosystem to support renewable energy, from transformers and turbines to panels, modules, cells, and batteries. He believes India has the capability but needs to scale up significantly in these areas.

His second major opportunity is data centers, observing the entry of major players and India's potential to become a global hub for data crunching. However, he acknowledges the massive scale of investment required, making it more suitable for large conglomerates rather than young entrepreneurs.

Dr. Goenka expresses admiration for unicorns but cautions against businesses that perpetually incur losses, stressing the eventual need for profitability. He cites UrbanClap as an example of a successful, profitable model. For young entrepreneurs, he suggests exploring Ayurveda-inspired pharmaceuticals. His group has launched herbal/flower-based products, backed by clinical trials, in modern, easy-to-consume forms like infusions and toffees. He sees a significant global opportunity in Ayurveda, provided there is proper documentation of its successes through clinical trials.

The conversation then shifts to Dr. Goenka's reputation as a "Transformation King," contrasting with his father's "Takeover King" moniker. He explains his approach to acquiring struggling businesses by identifying fundamental problems and opportunities that others overlook. He recounts the acquisition of the power business in Calcutta, a city plagued by 14-15 hours of daily power cuts. He saw an opportunity to solve this critical problem, despite his father's initial opposition.

The transformation of the power business was a Herculean task, involving not only fixing low generation, poor distribution, and faulty metering but also changing the mindset of both employees and the city's residents. He describes the widespread pilfering of electricity, where individuals would tamper with meters or draw power illegally. This led to social stigma and organized opposition, including media campaigns and fake consumer associations. The company had to fight multiple battles, including legal ones, to establish a culture of paying for consumption. The initial investment of 10 crore rupees has grown into assets worth 40,000 crore rupees, with ongoing investments of 54,000 crore rupees. Dr. Goenka attributes this success to changing the company's culture from suspicion to confidence and pride.

He recalls an embarrassing incident where he was blamed for a power cut at a restaurant, highlighting the thankless nature of a utility business where good service is taken for granted until a single glitch occurs. He explains the process of electricity generation and distribution, from power stations to individual homes, noting that his company manages the entire chain in Calcutta. He identifies dealing with consumers as the most challenging aspect, requiring constant communication and education. He shares an experience in Greater Noida where employees faced violence from residents unwilling to pay for electricity, but the company eventually turned it into a highly successful operation.

Regarding power cuts during rains, Dr. Goenka dismisses weather as a direct cause in well-managed cities, attributing it instead to events like cyclones uprooting trees or, more commonly, overconsumption by users. He explains that transformers can burst if they are overloaded by consumers drawing more power than they have requested, affecting an entire area.

Next, Dr. Goenka recounts the acquisition of Saregama by his father for one rupee, along with its liabilities. His mother, a music enthusiast, recognized the company's value as a "treasure." The business evolved from records to cassettes and CDs, facing significant challenges from mass piracy. Dr. Goenka sought legal counsel from Arun Jaitley, leading to successful court battles against counterfeiters. The digitization of music distribution eventually eliminated the piracy menace.

Saregama generates revenue by owning copyrights to a vast music catalog, monetizing it through platforms like YouTube, Spotify, and Gaana via AdSense revenue, and through societies like PPL and IPRS that collect royalties for concerts and performances. He notes that while T-Series initially posed a threat, Saregama has re-entered the new Hindi film content market and now boasts many of the biggest hits. The biggest challenge in the music business is the unpredictability of hits, necessitating a portfolio approach. Factors like film storyline, director, producer, and star cast influence the probability of success. Saregama also invests in independent music and artists, like Mahi and Arjun Tawar.

Dr. Goenka observes a revival of old songs, driven by retro trends, reality shows, and radio play, significantly boosted by the success of Carvaan. He describes Carvaan as a technological marvel designed to serve older generations who found modern music consumption inconvenient. Inspired by an old Murphy radio, the device's simple, knob-based interface made it accessible and non-intimidating. A viral, emotionally resonant marketing film further propelled Carvaan's success, contributing significantly to the revival of old songs. While vinyl culture is returning in the West, he believes it will remain a niche market in India.

Saregama's next big move is a 50% stake in Sanjay Leela Bhansali's production company, a strategic step to enter big-budget film production. Dr. Goenka explains that after a failed deal with Karan Johar's Dharma Productions, the opportunity with Bhansali arose. He views regional cinema and music as the future, with significant growth in Telugu, Punjabi, Bhojpuri, and other languages, anticipating their eventual global reach. He believes Hindi music is also gaining international traction.

Discussing his acquisition strategy, Dr. Goenka explains that he looks for companies with potential, not heavily indebted or loss-making, and values them cheaper than their potential. He cites First Source, a BPO company acquired for 400 crore rupees, now valued at 25,000 crore rupees, as an example. He emphasizes the importance of managing the company, understanding the business, and relentlessly driving margins. He typically retains existing CEOs if capable, providing them with motivation, direction, clarity, and security.

He admits to making mistakes, such as the acquisition of AquaFarm, a chemical company, where the philosophy of retaining the entire family management proved flawed due to a lack of professional management. This led to a year of lost business before new leadership was recruited.

Dr. Goenka recounts his biggest crisis: when the state electricity board, his competitor, also acted as his regulator, creating an unfair environment. The power minister, who disliked his father and him, forced his company to back down its power stations and buy expensive electricity from the state board, then criticized his company for inefficiency. This led to a five-year legal battle, which they eventually won in the High Court and Supreme Court, despite opposition from industry lobbies and the government. He acknowledges the immense stress of this period and his momentary thought of selling the business.

He asserts that in "Narendra Modi's India," it is impossible to change ministers with money, emphasizing the country's transformation towards transparency, efficiency, and competitiveness. He acknowledges that in the past, false narratives could be sponsored, but truth eventually prevails. He states that while political pressure existed in the past, it does not now.

Reflecting on his family's 220-year business legacy, Dr. Goenka identifies three core values: reinvention, fairness, and compassion. The family has consistently diversified into promising industries and divested from sunset ones, without emotional attachment. Fairness in dealings and compassion towards employees have fostered loyalty and support. He admits to making some emotion-based decisions, such as investing in a school, a hospital, and a mall in Calcutta, driven by a desire to give back to society. He also acknowledges that getting into media was partly emotion-based.

He attributes Kolkata's past economic stagnation to 49 years of successive governments that were not pro-business or pro-development. He expresses optimism about the current government's pro-business stance and the visible signs of development. His own growth from a 4,000 crore rupee inherited business to over 1 lakh crore rupees was largely achieved through investments outside the state, though he plans to invest more in Kolkata now.

Dr. Goenka identifies confidence as a key personal trait that has driven his success. He explains that he and his cousins were raised without knowing the extent of their family's wealth, fostering a sense of discipline and a lack of indulgence. To instill hunger in his own children, who are more exposed to wealth, he emphasizes constant communication, earning respect, creating value, and enhancing the family legacy. He believes children should earn the right to a luxury life.

He shares his personal coping mechanism for anxiety: performing puja and reciting the Hanuman Chalisa, which provides a sense of security and strength. He also believes in destiny and past life regression, which has helped him understand his own motivations and fears. He recounts an instance where his negative thoughts towards someone led to a similar, more intense negative experience for himself, reinforcing his belief in karmic retribution.

The cost of being Sanjeev Goenka, he explains, is the pressure of expectations. Personally, this often translates to taking out frustration on his wife, a cost he deeply regrets. He has learned to manage this by consciously shifting his energy when returning home. Another cost is the need to be mindful of what he says in public, as he has often been misquoted. He has learned to be more reserved in less intimate social settings. He believes that those who matter now understand him for who he truly is, and malicious campaigns have dissipated.

He concludes by sharing a personal trait he doesn't want his grandkids to inherit: his reliance on instincts. While he believes instincts will remain crucial, he acknowledges the increasing data-driven nature of the world and the potential for AI to diminish the role of pure intuition. However, he also believes that original thinking and creativity, which stem from instinct, will always be essential.

The episode ends with a lighthearted request for jal muri, a local snack, before Dr. Goenka departs.