#3 Navroz Mahudawala - It's Not Glamorous

Navroz Mahudawala is an investment banker who has worked for the big ones, Lazard India, KPMG and Ernst and Young. He quit EY right after he was promoted to start his own venture.

If he hadn't, he would've remained just another cog in a machine.


Episode #2 

Sant Advani - World's Worst Engineer


Episode #4 

Sello Rathete - Champion Of Change


Navroz: As a youngster. You don't get it. You think it's very glamorous, but it's actually not. And then when you get in, is when you realize that it's a lot of hard work. It's not just doing meetings, which there is a perception that this is all about our meetings and negotiations. It's not actually. It's first, a lot of back end work in understanding businesses, working with people before actually even a transaction starts. 


Aamer: That was Navroz. Frankly, if you're under 25, Navroz is the person your parents would compare your life to. Navroz is an investment banker who works for the biggest lazarus, KPMG, Ernst and Young before starting out on his own. This is his story.


Hello there and welcome. I'm Aamer Khan and this is Zed Medium Podcast, a podcast that talks to people and about them, too. Simply put, we narrate people's journeys in the simplest way we can. So I would start from the first episode if I were you. It really gives a bit of context to what we do. And just this past Monday, we put out another episode. 


So please check that out as well. I'm going to keep doing this until I've reached like seven or eight episodes. I'm just going to lose eight minutes in the introduction in the first month anyway. 


Investment banking, right? I thought about it, doing it, becoming one, and I'm almost very sure many other people gave it a thought as well. 


But while the job looks extremely cool from the outside, there's a whole lot more to it than just people in suits, boardrooms with amazing views and intense meetings going on. That's just the tip of the iceberg. I mean, yes, at the end it might happen that way. You might get to make a grand entry into a room full of important people, but that's just the 5% of it. 


That's glorified and I'm talking a bit from personal experience with meetings and let me know if that's happened to you as well. And I'm talking to the men in the beards right now. You sit down for the meeting in a sharp suit, take off your mask and your beard is out of place. Nothing like it looked when you first left the house. You can't touch your face yet because Covid’s  got you paranoid. You're struggling to find the sanitizer, and when you finally do, sometimes the sanitizer is just too sticky. You fix your beard with sticky hands and then commence the meeting. Now, does that look like a pretty sight? But on a more serious note, there is a lot of research and an unbelievable amount of research that goes into it. 


And extensive research takes three things: patience, perseverance and pots of coffee. But I don't think Navroz needed those. Why? Because he did engineering in India, that's why. Let's dive right into it. 


Navroz: I know it sounds stupid when I say this, but let me go through it so I've done my schooling, I've done my 11th and 12th in science. And then it's the same traditional route, which at that point in time everybody went through because it was considered aspirational to become an engineer until the third year of engineering. I was under the impression that I will go ahead and actually wanted to attempt an exam, which was the Postgrad, the IIT entrance exam, because I wanted to think of studying further. But when you are somewhere in between the third and fourth year, when you're doing your training and you go into a site with it, or you work somewhere, when that cool realization comes, is this what you want to do?


 I think I picked it up very early that, no, I don't want to do it's been very fulfilling. I wasn't bad at it academically. But academically is not necessarily what shapes your thinking because it's fine that you will get a job, but then what will you do after that? Anybody who's done a traditional Indian engineering course, which is a private sector where you may get KTs, you get Vivas. Very miserable Vivas. If you go through that journey, what it gives you, the confidence is that if you can manage this, you can manage anything else. 


Generally, your analytical skill sets get on quite a bit. Your ability to look at numbers in a different way. In that sense, I actually honestly think that there are reasons why you always find a lot of engineers being very good at finance is because they can read numbers in a very different way. 


Aamer: So what does an engineer who is good at numbers do after his education is complete? We're talking only about Navroz here. Well, Navroz got into Lazar, India, right out of college. At this moment, if you're thinking about the rigorous interview process that Navroz had to go through to get into Lazar. You're not alone.


Even I thought about it, I asked him, and I could not have been more wrong. 


Navroz: I was very fascinated by most of these better broking houses. So what I did was, and this is actually a nice example to give up, if you try and do cold calling, it works. Many times I just shot off, which I realized most of my other batch placements had not done this. So I took print outs on a letterhead and my CD. I sent it to some 200 forms. This was a time when there was nothing like even actually couriers were expensive. 


So you posted to all these places. Don't go and hand deliver, but somebody will read it. You never know. And interestingly, at that point in time, the firm which I worked with wanted to have an intern. They wanted to have a research person to do service. Their amenities, like training. They didn't necessarily require somebody with basic knowledge, that's it. One of those guys, he picked it up and he said, why don't you come and meet me and I was quite surprised because Lazar was very well known. Why were they calling me? For some reason there was that slot available which was like a junior analyst kind of a profile. I was fine. 


Aamer: Cold calling. Cold calling. Even though that's not something that would necessarily work in today's day and age. You never really know. Could you get into an Amazon, a PwC, A Tata today just by cold calling? Well, let's say you got in. You're in a place where thousands of people would love to trade with you for the job. Would you leave after only a year and a half? 


Navroz: There was one of my bosses whom I used to work with. He was actually starting a small advisory. We didn't know yet and a half of where I was when I did my first job. And he actually said, Why don't you also join me? I was, for them, the first employee. I think at that point in time, maybe that decision was fine for me because I just wanted to learn whether it's a small setup or a big setup. A lot of my friends kind of had issues when I changed because they said, you're going from a brand to a non brand. But I was looking at it as if it'll be learning and it will help me understand, maybe if I have to do this later, it may help me understand how to do it. 


Aamer: Well, that actually makes sense. While he was taking the decision, he would have not known what the right thing to do was. No one actually knows a good decision from a bad decision until much later. But he did learn from that job more than he could have learned from a multinational. That was the time he honed his basics in investment banking, sometimes putting in 16 to 18 hours work days which were taxing but rewarding at the same time. This was actually one of the defining moments of his career because it was a relatively new business and so Navroz made for most of the workforce that they had. They relied on him and he got work done. Sometimes big is not always better. Who knows? But the point is he had the ability to foresee himself doing this all on his own in the future, which is why he was confident in leaving a well known organization for a startup. And he did start his own firm and is doing quite well, so there's that. But there are some decisions that really don't make sense when you look back at them. The decision to quit the job at Lazar, yes, made sense. Same line of work, only more hands on. But leaving that to start something new because of the ongoing trend, does that make sense at that point? 


Navroz: It was the peak of the.com time, the year 2000, when we started a chemicals B2B exchange called processindia.com. The idea was that we will create content based on which some communities will come up in different process industries. So this could be the coatings industry, this could be the construction chemical industry, this could be the floral industry. But we were actually very late on the funding cycle, so when we started it.com had already peaked. 


It was a one and a half year wave where anything and everything was getting funded. When we actually went live, we took literally four months to create the portal and then we went live and we started approaching investors. It was already kind of a town cycle had started, things where in the US had gone down. 


Aamer: The one year old startup had failed because of a lack of funding.  Now, Navroz didn't want to borrow money from his parents and so started looking for another job. Coincidentally, some of his Lazar colleagues were now at KPMG and so he applied for a job there and got in. 


Man is a master of getting jobs at big companies. All this had happened within a month. And if you find that surprising, Navro spent four and a half years at KPMG before moving on to Ernst and Young. I can guess what many of you are thinking. How is he doing all of this? Well, the answer is simple if you get to know the person he is. 


Well, to be honest, he definitely made the right connections in life who helped him propel his career, the power of networking and leveraging those networks, as they say. But more importantly, he was really cut out of an investment banker cloth. 


Navroz: I used to always look up to an entrepreneur. I used to never look up to a professional. For whatever reason, it was for me while you learn, but I used to always go and meet even the smallest of businessmen and it could be a very small man, it could be a trader sitting somewhere. I think I used to always get fascinated that how is he running his business? And for me that was always very inspiring. How is he running his business? Successfully, right? 


More than the business, it was the way the business was being run and how is it being run is what I was to try and grasp. I guess one of the reasons for me to start also was that I was very fascinated by my own clients. In many ways that is how they start and how they manage to create enterprises. The way I look at our business is that it's a way where we may not be the entrepreneur, but we are actually part of his ecosystem. 


Aamer: To help him achieve his goals and his dreams, Navroz spent five years at Ernst and Young. Give or take, he described the experience as amazing and he did get to apply and perfect everything he had learned so far. We discussed the advantages of a small firm, but an EY gives you the confidence to work with the bigger players. Mistakes for a company like EY or KPMG for that matter, are very high for even the most minor mistakes. And so perfection is needed in everything that they present to a client. Work without flaws. That's what he learned in EWI. The perfect life. It was all going well for Navroz, but he didn't have one thing that he wished more of. 


Navroz: And the reason again of starting Candle Partners was that fulfillment doesn't come when you are working with larger companies. Because what essentially happens is that when you work with some of the larger companies you end up working with similarly the client list is also the larger companies. 


So you will generally work with companies which are maybe 5000 rows, 10,000 rows in helping them buy businesses, right? So you will work with multinationals, you'll work with larger Indian corporates and then actually in that process is where you realize that the same skill set that you are bringing on the buy side, you can actually bring it very nicely to the sell side and make something happen and that's more fulfilling. 


When you are working on the sell side, you are working directly with the entrepreneur because that decision is very critical to him. He, in all property, doesn't even have a CFO. You are a very core part of this business also. So in that sense, you are understanding business far better than what you go and try and do on the buy side. You don't need to understand when you're doing a buy side, you don't necessarily need to understand the business as much as you do when you end up selling a business. 


Aamer: Oh, and one more point. Navroz’s career wasn't stagnant in EY. He was a director for a very long time and was about to be promoted as a partner the year he quit. Higher pay, definitely better title and more autonomy. What more could you ask for? Navroz analyzed the situation differently and I don't know of many who could look at it the same way he did. 


Navroz: If you are a leader in a large corporation, or you're working with a multinational, right, you are used to a certain quality of life, you are used to a certain cash flow and unfortunately you start equating businesses with that. I went through that thought process in my mind and I realized that the financial kicker is so high that I will always then refrain myself here. What is my opportunity cost? And in most cases in entrepreneurship, if you just do up your financial calculations, it will never match it for a professional because in his mind he's always looking at opportunity costs and then the opportunity costs would have gone to a very different level. 


And I realized that at the end of the day, we are all human beings. And after two years, if I did that calculation in my mind, is it worth it? The answer would have definitely been no. I think the gut call also helps most of the time because if you make everything based on all your decisions based on rationale and planning then I think most entrepreneurship would have never happened in life. Most of those if you actually look back most guys have taken entrepreneur not based on some great lifelong planning. They did it because they just wanted to do it. In fact, some of these were very insane decisions, right? It never made sense at that point. 


Aamer: So in 2010 Navroz quit and started his own firm, Candle Partners providing investment banking and advisory services for mergers and acquisitions, private equity and venture capital fundraise. He believes in playing a key role in companies that will help make a big difference in their lives rather than being yet another cog in yet another machine. The job is not easy, the success ratio is underwhelming and failures indeed take a larger chunk of what investment banking entails. 


Navroz: I guess some of what I would say are clear failures is that I have sometimes over-analyzed past professional failures and not moved on. So maybe to some extent what actually takes the emotional toll is that in our business success probability is very low. You actually work on 20 things out of which two or three things will finally happen. 


So failure is an inherent part of our process itself. When we are professional most transactions will fail now but what essentially happens is that thanks to that you become cynical. I think that is where maybe in some time part in my life I've become cynical of a few things. Either a person, either a sector, either a transaction, either a company and I think that's been the biggest learning that you need to detach yourself. And sometimes that gives you the correct message because when you reexamine that you actually may look at it in a very different way. Everything at that point in time is right or wrong but I think at different points in time that you could change. 


What essentially happens is in our transaction we typically have a six months to a one year journey of a deal. Okay? Sometimes it's even more because if you fail in one you sometimes become judgmental on something else right now that should never happen because you're actually taking the baggage from one place to another. 


You have to do justice to that second process which is going simulating. You do justice to the third process also and give it equal importance and that's fine as long as you're given the relevant importance and respect to that process the people who are behind that will also respect you. So there are a lot of things when things have not worked out but these are friendships for lifetime because those guys still knew that you at least did your best. 


Aamer: Navroz is great at what he does and he enjoys it. Combine your passion and something you're good at and that's what he has. His journey is not as simple as it was made out to be. The cold calling would have never led to anything. The failed startup could have taken off. EY or KPMG would have rejected his application. But there's a path that's written for you that no one can interfere with. 


Aamer: For all the aspiring investment bankers and finance professionals out there, Navroz has this to say to you. 


Navroz: So it's a great career. It's a career which gives you what I call distilled wisdom. Very rarely people are fortunate enough to get distilled wisdom because you could be an analyst or an associate in our business and you'll be sitting in front of an entrepreneur who's done this for 30 years and he'll tell you something about his business. Typically understand that we are coming in at a slightly more mature lifecycle of the entrepreneur. 


So he's raising capital when he's growing the business to a certain level and his understanding is very high of that business. Or he's selling the business where he's at his peak. Right. So what you get at that point in time from him about his company, about his business, is potentially something which you will never get, even if you read 200 hours in the 1 hour discussion. 


Aamer: If you like that episode and want to receive the latest updates, go on to Instagram and LinkedIn and follow us Zed medium. 


And yes, please share this with others because next up we have Sello Ratathe, a well known businessman from South Africa. And here is a snippet from that conversation. 


Sello: When I grew up, I wanted to be a medical doctor, but things did not go the way I wanted or I thought I would be. We grew up under different conditions in South Africa at that time was under apartheid government. You could not have gone to the institution that you aspire to go to and then you end up doing what's available to you. And most of the black children of our age or youth end up doing things that they would never ever thought of laying their hands on. But God is always gracious. There are some who succeeded and some who ended up getting in.


Stay tuned and goodbye for now. Bye.