Two Indian shopkeepers turn a $100 loan in 1963 into a $400 million electrical company in 2007.
Here’s the crazy story of how they built Anchor and sold it to Panasonic👇👇👇
Here’s the crazy story of how they built Anchor and sold it to Panasonic👇👇👇
1/ Jadavji and Damji Shah grew up the sons of a shopkeeper in Mumbai, India.
Entrepreneurial to begin with, the two brothers took a $100 loan to start a shop of their own.
Selling convenience goods for one year, they posted immediate profits.
But neither was content.
Entrepreneurial to begin with, the two brothers took a $100 loan to start a shop of their own.
Selling convenience goods for one year, they posted immediate profits.
But neither was content.
2/ Fortunately enough, they were given one opportunity for growth.
And sure enough, they grabbed it.
A family member was selling their tool room and the two ambitious brothers were never afraid to reinvest their gains.
And sure enough, they grabbed it.
A family member was selling their tool room and the two ambitious brothers were never afraid to reinvest their gains.
3/ Having bought the tool room, the brothers used moulds to build switches.
Building switches for L&T and Bajaj, they would carry bags full of it, on their shoulders, to a wholesale market.
As salesmen, they would constantly pitch to shopkeepers.
Building switches for L&T and Bajaj, they would carry bags full of it, on their shoulders, to a wholesale market.
As salesmen, they would constantly pitch to shopkeepers.
4/ More often than not, the brothers were rejected and even disrespected by the shopkeepers.
Frustrated by the ill-treatment and constant stream of rejections, J & D needed to do something more lucrative.
They were eager to improve their work and livelihoods.
Frustrated by the ill-treatment and constant stream of rejections, J & D needed to do something more lucrative.
They were eager to improve their work and livelihoods.
5/ So, they went back to the tool room and that’s where they found their first chance.
After repairing a mould for a switch, the two brothers started producing a switch of their own.
With no orders and no longer salesmen, Jadavji and Damji now worked for themselves.
After repairing a mould for a switch, the two brothers started producing a switch of their own.
With no orders and no longer salesmen, Jadavji and Damji now worked for themselves.
6/ But what was different about their switches?
The three foundational aspects of Anchor:
• Quality, but everyone had that.
• Quantity: production in large volumes.
• Distribution networks: Anchor cared for its distributors like no other entity did.
The three foundational aspects of Anchor:
• Quality, but everyone had that.
• Quantity: production in large volumes.
• Distribution networks: Anchor cared for its distributors like no other entity did.
7/ The founders noticed a gap in the market: the distributors for every district were underpaid, craving opportunity.
So, they reached out to distributors in the wholesale market individually.
Offered them opportunities to earn and grow along with Anchor.
So, they reached out to distributors in the wholesale market individually.
Offered them opportunities to earn and grow along with Anchor.
8/ Focusing on distribution, Anchor reached every corner of India - and in bulk.
Jadavji believed that if he filled up stores with Anchor switches they would sell.
While Anchor did generate immediate and large revenues, this approach also drove a demand for land & labor.
Jadavji believed that if he filled up stores with Anchor switches they would sell.
While Anchor did generate immediate and large revenues, this approach also drove a demand for land & labor.
9/ The brothers constantly bought land in the Bombay Talkies area.
While other companies had 2-3 production units in the area, Anchor had 10-12.
But this large-scale production was put at severe risk with a riot that broke out in 1975-76.
While other companies had 2-3 production units in the area, Anchor had 10-12.
But this large-scale production was put at severe risk with a riot that broke out in 1975-76.
10/ Furious workers and shut-down factories - production was at a standstill.
But Jadavji & Damji had no patience.
They slipped into the factory at night, retrieved all their items, and drove a truck to Gujarat.
Just like that, Gujarat was Anchor’s new center.
But Jadavji & Damji had no patience.
They slipped into the factory at night, retrieved all their items, and drove a truck to Gujarat.
Just like that, Gujarat was Anchor’s new center.
11/ With the distribution channels & the favorable production conditions in Gujarat, Anchor took off.
From 1963 to 2007, the company grew from:
• 2 brothers to a ~1,000 workers
• ~$1,000 in revenue to more than $120 million
• a local startup to an international market leader
From 1963 to 2007, the company grew from:
• 2 brothers to a ~1,000 workers
• ~$1,000 in revenue to more than $120 million
• a local startup to an international market leader
12/ So, when Anchor was on the market to sell, several companies lined up.
From Schneider to Panasonic, Anchor was in demand for its well-established brand and growing numbers.
It was now the largest producer of modular and non-modular switches in India.
From Schneider to Panasonic, Anchor was in demand for its well-established brand and growing numbers.
It was now the largest producer of modular and non-modular switches in India.
13/ But why sell?
After almost 50 years of work, there was too much on their shoulders.
Jadavji and Damji wanted a change once again, and given Anchor’s $400 million valuation they felt it was worth it.
After almost 50 years of work, there was too much on their shoulders.
Jadavji and Damji wanted a change once again, and given Anchor’s $400 million valuation they felt it was worth it.
14/ Most importantly, however, here’s what Jadavji had to say about the sale:
“We can make another Anchor with just 10-15% of what they are giving us.”
And guess what? That’s exactly what they are doing today.
“We can make another Anchor with just 10-15% of what they are giving us.”
And guess what? That’s exactly what they are doing today.
15/ The Shah family is currently building Greatwhite Electricals.
Leveraging old connections and industry expertise, Greatwhite has shown amazing growth and promise.
Might be too early to say but do we have the next Anchor on our horizons? Only time will tell.
Leveraging old connections and industry expertise, Greatwhite has shown amazing growth and promise.
Might be too early to say but do we have the next Anchor on our horizons? Only time will tell.
16/ This story is a reminder that:
• don’t be afraid to reinvest in yourself and your company
• distribution matters, especially when no one else is paying attention
• no point waiting when you can pivot instead
• after you’ve done it once, you can do it again
• don’t be afraid to reinvest in yourself and your company
• distribution matters, especially when no one else is paying attention
• no point waiting when you can pivot instead
• after you’ve done it once, you can do it again
17/ Sources:
The thread is based off conversations I have had with my grandfather (Jadavji Shah) & father (Mehul Shah).
The thread is based off conversations I have had with my grandfather (Jadavji Shah) & father (Mehul Shah).
18/ If you enjoyed this thread, follow me @abhishekshah173
I tweet about the psychology of business and learning every week.
Also, please spread the story and inspire others by retweeting the first tweet.
I tweet about the psychology of business and learning every week.
Also, please spread the story and inspire others by retweeting the first tweet.
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