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The Shattered Ceiling

Indian American entrepreneur Sashi Chimala.

Q&A with Sashi Chimala of Qwiky’s

Chimala started his career as a software engineer. He worked for Unisys in Detroit for five years before transferring to St. Louis in 1984, where he worked for another five years. In 1987, he helped his friend start Complete Business Solutions, which is now listed on NASDAQ. Five years later, Chimala founded Indigo Technologies in 1992 in Cupertino, Calif. After living in the United States for 20 years, he and his family moved back to India. After Indigo sold to SSI Technologies for some $12 million, Chimala and his family started their coffee chain, Qwiky’s.

Age: 45

Background: Born and raised in India. Moved to Detroit in 1979 as part of the first wave of foreign software engineers granted visas to work in the United States.

Education: Bachelor’s degree in mechanical engineering and post-graduate studies in computer science from Jawaharal Nehru N University, India.

AsianWeek: How did you come up with the idea to start Qwiky’s?

Sashi Chimala: Indigo Technologies, the company I started, was growing. Because I’m from India and India was opening up, I opened a large software development center there. I was traveling there a lot.

What happened was that Compaq computers took an equity in our company, so we had to consolidate all our operations and business. We had so many people in India, it was suggested I run the company from India. My children were born in the United States and hadn’t seen India before, but we packed our bags and came.

Just getting used to India was difficult, settling down with my family. At the time, Indian companies’ valuations were very high in the IT field. Then there was a local listed company, SSI Technologies, which made us a good offer to buy the company. We were building nice software that powers the stock exchanges.

Anyway, I sold the company, and NASDAQ did a joint venture with SSI. So they formed a company called IndigoMarkets, which uses the software we built to power the NASDAQ Europe and NASDAQ Japan exchanges.

There I was back in India. To me India looked like the late 1950s in the United States when retail branches were being created like McDonald’s. One thing that was obviously missing for me and my wife was a nice coffee place to go to. In San Jose we would often go to Starbucks and have a nice cup of coffee. That concept was nonexistent in India. The only place we could get that kind of coffee was at a five-star hotel. The whole culture of a coffee shop is that you go there to connect with community, but the five-stars were formal. So we were thinking this was a great opportunity — a country like India with a billion people, and it has one of the longest coffee-consuming cultures in the world.

AW: Most people are trying to come to the United States. You’ve gone back to India. Do you think that will be a trend in the future?

SC: I believe so. It’s not that one place is good or bad. But today in India, pretty much everything is available. India is becoming very livable and it has a lot more options. For example, the people who want to go to the United States are obviously looking for a job and good pay. But once you have a job, start a company, make some money, you could create a lot more things in a developing country like India. The whole idea of shopping malls is just coming now. For example, we couldn’t contemplate opening a new shopping mall in the United States, whereas in India the malls are coming up just now. So there is opportunity to create so many things.

AW: What cultural shock did you experience returning to India after living in the United States for so long?

SC: The first year was miserable. My children were getting sick. I was getting sick. All we could focus on was how dirty the country was, how bad the infrastructure was, how bad the telephone lines, power were. We could only focus on problems.

Had we not started Qwiky’s we would have packed our bags and left. But after one year, we had a vested interest in Qwiky’s becoming successful. We started focusing on the opportunities and the positive things here. Now after two years, we really, really enjoy it.

AW: What do you enjoy most?

SC: What I really enjoy is the freedom of time. Because the country has so many people, help is very cheap here. So, for example, we have two drivers, three maids. Initially, I was uncomfortable with this concept. But later we got used to being more productive with our time. We don’t have to worry about the traffic, pick-ups, the driving. You focus, for example, with working on the computer in the back of the car.

The other thing we enjoy is that now we’re in the public limelight, and we feel a lot more connected with the community than we did in the United States. We are attracting the 13 to 18-year-old crowd. For instance, we have a brand relationship with MTV. When we open a new coffee pub, the VJ’s come inaugurate it.

Back in the United States there were very few of our neighbors who we knew. We would go to the office at 7 a.m. and come back at 9 p.m.

AW: What are some of the problems?

SC: Things don’t get done as fast. If you want to get a license for a new restaurant, it is not easy. It’s very bureaucratic. But if you open one or two restaurants, you know how to take care of it.

AW: When did the first shop open? What was the process of opening it?

SC: We opened on Oct. 1, 1999. We have eight outlets throughout India now and we have another 10 under construction. My wife helped with the interiors. We hired consultants, but we had little knowledge about coffee, frankly. But my wife and I felt we were best judges because we had been on the other side of the coffee business as consumers.

It was difficult initially to explain the vision to the local people. It was almost like trying to describe an elephant to someone who had never seen one.

I made a trip to Italy and took a lot of pictures of coffee bars. The only way I could communicate my idea was through pictures. Like a crazy man, I would go and take pictures of trashcans, light fixtures, because I wanted perfection.

For a country that doesn’t know anything about coffee, it’s easy to do a mediocre job. That would have been great for them. But I knew it wouldn’t last long because sooner or later a better coffee shop might come. So I said let’s take the best of the world’s coffee shops and then better that.

AW: How much did it cost to start and where did you get the money?

SC: It was my own savings. My first outlet cost $200,000 in Chennnai, one of the five large metros in India.

AW: How many employees do you have?

SC: 70

AW: Is the company making a profit?

SC: Yes. It has been hugely profitable. The day we opened we were not sure what the response was going to be. We were actually half ready, frankly. We didn’t have all the menu items. But it caught on like wildfire.

I’m very brand conscious. I wanted to create a strong brand and also put a lot of unique things with the brand.

We put a bell at the entrance door, so on the way out if you had a good time at the coffee bar, you ring the bell. Then the staff stops and shouts, ‘Thank you.’ That has become a cultural icon here. That bell broke twice because people were using it so much.

When we completed the first year, we had a retirement ceremony for the bell. We had a live band. We had the CEO of Ford India retire the bell.

Similarly, there is a graffiti board. People can express any message. That was again new to India because from a consumer point of view India was very restrictive. The retail revolution is just starting. The idea that the consumer is king is only sinking in now. Coming from the United States, we know how you have to treat customers.

On the graffiti board, some people write poems about barastas — that’s Italian for bartender. We wanted to define them not as waiters and waitresses but as a dignified job called barasta. You can talk to them if you’re in a good mood or bad mood. So again, that’s another thing that people had tremendous reaction to. People started writing poems to them, they get discounts to the discos if they show their Qwiky’s card. They have become like local heroes.

This place created innovative dimensions, the place itself, the people, the way we treat people. It has been hugely successful.

Our plan was that we would sell 100,000 cups of espresso in 12 months. The actual sales have been 365,000.

AW: Do you have plans to expand into the United States?

SC: Yes. Actually, we’re negotiating to open a couple of them in the middle of next year in the Bay Area or North Carolina. We want to first test a couple.

AW: Are you worried about competition from Starbucks or other large coffee shop chains?

SC: We anticipate brands like Starbucks coming into India. We anticipate even local competition. But I believe it’s actually very healthy. In a way we are all alone in creating this category. That’s not good. If more people invest money into this category, more awareness will come. I actually believe we will expand into neighboring countries like China and Singapore, then we can become one more option for people, next to Starbucks.

AW: What is unique about your coffee?

SC: We are introducing the whole espresso culture. In India coffee was limited to one way of drinking. They call it de-concoction. It is filtered coffee. They make the thick coffee — de-concoction — and then mix it with sugar and milk.

The predominant coffee, though, is instant coffee — Néscafe. In India coffee is called Néscafe. It is not the best coffee.

At Qwiky’s pubs we grind the beans after you place your order, so it’s the freshest coffee you can get.

Also we offer 101 varieties of coffee. We add natural flavors. We get syrups from Seattle from a company called DaVinci Gourmet. You name it: We have toasted marshmallow flavor, tiramisu, Irish crème, all the way to scotch, rum, brandy.

AW: What is the most popular?

SC: The most popular is a snow coffee, which is a coffee slushy branded by us under the name Friazzo. It’s like a Starbuck’s Frapaccino, but we have so many variations. For example, we have one with crumbled cookies on top called Friazzo Biscotti. We have Friazzo Mocha. We have Friazzo Gelato.

AW: Can the average Indian citizen afford the coffee?

SC: The average Indian citizen is an oxymoron. There is no average but all kinds of spectrums. You have the poorest of the poor and the richest of the rich.

We are priced as a premium coffee. We are priced at 30 rupees for a cup. A dollar equals 48 rupees. So our average coffee is about 60 cents. That’s a good value compared to the U.S. point of view, but compared to other places in India we are about twice as expensive. We are marketing coffee as an indulgence — an affordable indulgence.

AW: Where do you see the company in five years?

SC: In five years we will be in at least five more countries. We will have 155 units.

AW: Do miss the IT industry?

SC: I’ve become an angel investor in small IT companies. So I’ve not lost touch. I’ve invested in a few companies, helping young entrepreneurs go through the learning curve I went through. Secondly, we put a lot of IT in Qwiky’s. The point-of-sales system connects all the Qwiky’s, and we’ve built a database of the guests’ preferences. So we’re building a lot of information technology behind Qwiky’s. One of the rituals is that when you place your order they ask for your first name and then put it into the database. We have a little shop for people while they wait. When your order is ready the barastas will shout your name. If you don’t want your name, you give them a name like Mickey Mouse.