Text of a Note I sent to my students at MDI today:
Achal Bakeri, Learning Machine
In July 2015, I delivered a talk in which I profiled Achal Bakeri — founder and CEO of Symphony Limited as a “learning machine.”
Next week, Mr. Bakeri will deliver a talk in your class where he will share with you some of the most important lessons he learned as an entrepreneur.
This talk is not going to be about the valuation of Symphony. Rather, it will be about the journey of a very successful entrepreneur who learnt a few key lessons and who has generously agreed to come to MDI to share them with you.
You should regard Mr. Bakeri as a role model. But to get the maximum out of your interaction with him, you must spend time reading about how, over the course of a few years, he transformed Symphony from an unfocused, asset-heavy, highly leveraged, unprofitable business to an extremely focused, asset-light, debt-free, and one of the highest return on operating assets businesses in India.
There are two methods by which you can do this — the long method and the short method. The long method involves reading the past annual reports of the company slowly while making notes about improvements led by Mr. Bakeri to the company’s business model.
If you use the long method, try to relate business improvements in fundamental operating performance with specific business model changes by focusing on key words like “asset-light,” “debt” and “learning.”
You can get the annual reports from here.
The short method would be to simply read recent media coverage about Mr. Bakeri and Symphony. Here are three links:
I urge you to use the long method. It’s a lot of fun to learn directly from source documents than to learn from media coverage where you rarely get to read about success stories before they have been recognized by the world out there. So, clearly, it’s in your interest as an investor to take the long road.
I have never met Mr. Bakeri before and so, like you, I will be meeting him for the first time next week. Together, let’s learn whatever we can from the accumulated wisdom of a learning machine.
14 November, 2015