N.R. Narayana Murthy on Bootstrapping

Murthy's pre-Infosys career was technically rich but commercially frustrating. As a young engineer he helped build India's first time-sharing computer system at IIM Ahmedabad, wrote a BASIC interpreter for ECIL, then tried his hand at a venture called Softronics which collapsed within eighteen months before he landed at Patni Computer Systems in Pune.

Working in Paris for a French software firm in the 1970s prompted Murthy to re-examine his socialist instincts. He chose to return to India specifically to test whether entrepreneurship could improve Indian society, rather than chase a comfortable European career — a decision he frames as a duty of entrepreneurs to invent products and create jobs.

Infosys was launched in 1981 with Murthy and six co-founders pooling Rs 10,000 of capital, with the sum borrowed from his wife Sudha Murty. The seed money was the entire war chest for a venture that would, four decades later, employ well over a hundred thousand people and earn the label of father-figure of Indian IT.

His earlier Softronics failure in 1976, Murthy told McKinsey, was simply because there was no domestic software market — few computers existed in India and the government refused to outsource. The lesson he took was that timing the demand-side environment matters as much as having engineers and ambition.

His first venture, Softronics, closed around 1976 because India simply had no software market at the time — few computers existed and the government refused to outsource. The failure taught him that demand-side conditions mattered as much as engineering talent, a lesson he carried into the timing of the Infosys launch five years later.

He recalled India's early-1980s business environment as extremely hostile, with Infosys waiting a year for a telephone connection and three years for a licence to import a single computer. He quipped that half the country was waiting for a telephone and the other half for a dial tone — a wry summary of License Raj-era friction.

The original Infosys capital in 1981 was a mere two hundred and fifty US dollars, borrowed from his wife Sudha Murty. That sum kept the lights on only briefly, but Murthy's rule was simple: spend less than you earn. Founders slept in cheap hotels, used buses, sometimes walked to meetings — what he calls the early tough years.

Infosys's first client, based in New York, took a bet on an unknown Bangalore firm by hiring the founders to build and install a custom software package. Murthy saw the single-customer concentration as a feature, not a bug: delivering on competence, commitment and values for one client became the proof of concept that built the firm's reputation.

He frames entrepreneurship as a near-religious commitment: there is a fervour and dogma about it, in his words. Founders must bring persistence and confidence and accept that the early years are uncomfortable, with bus rides and cheap hotels as the price of building something that outlasts the founders themselves.

When Yale's Nayan Chanda interviewed him in April 2006, Infosys was about to mark its twenty-fifth anniversary and had grown from a 1981 founding on two hundred and fifty dollars of capital into a firm with a market capitalisation of roughly twenty-two billion dollars. Murthy attributed the rise to luck, timing, and an early bet on two converging paradigms: the PC revolution and globalisation.

Murthy defined entrepreneurship as the courage to convert a powerful idea into wealth. He told YaleGlobal that the 1981 environment in India was deeply hostile to business, but that Infosys rode two parallel shifts: the falling cost of computing power unleashed software demand, and the globalisation paradigm made sourcing talent across borders acceptable.

Murthy recalled the early 1980s pains: it took Infosys a year to get a telephone line, and two years to secure a Delhi licence to import a fifty-thousand-dollar computer. The stack of obstacles convinced him that if Infosys wanted to grow, it had to fight the system through alternative routes — including building relationships with multinationals willing to bring in equipment themselves.