Thursday, March 23, 2023

Plinth, Pillars and Roof

Nothing to beat a story with a lesson in it. After all, many of us, if not most, have grown up listening to stories. Here are a few simple life stories that will be interesting to read as it  involves human thinking and behaviour and the role that others play in our lives in different situations.

There were three close friends who wanted to start a business. But they were from different backgrounds and financially inequal. Each had some strengths and they were confident that they would be able to work together synergistically. They needed a significant capital in those days. One of them could contribute Rs 5 lakh, the second one Rs 3 lakh and the third one was in no position to contribute anything at all for various reasons. Since they were close friends, the contributing friends did not have any reservations moving ahead with the project in equal partnership with each getting one-third share in the business and profits. The fact is that the initial seed capital of Rs 8 lakh is not exactly divisible by 3. So, an exact three-way division would be possible only by multiplying 5 and 3 by a factor of 3, leading to 15 + 9 = 24, and using that as the base to determine each’s share of contributions and distribution of profits in equal proportion of 8, 8 and 8.

Over the following years, the business did well consistently and the value of the business grew quite substantially; in excess of 1,000 times of the seed capital of Rs 8 lakh put in. The third person who had not contributed anything at all in the beginning, due to his then indigent situation, had grown wealthy in tandem with the growth in the business, along with his two other friends, who had been munificent towards him. Not only that, as a canny investor, he had turned over his wealth several times over and amassed  an estate worth over Rs 100 crore. Unfortunately, his health took a turn for the worst and he soon passed.

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Nagesh Alai
Nagesh Alai is a management consultant, an independent director on company boards, and cofounder of a B2B enterprise tech startup. He retired in 2016 as the Group Chairman of FCB Ulka Group and Vice Chairman FCB Worldwide. Elder care and education are causes close to his heart.

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