From a small town boy in India to US millionaire, Dr Shri Thanedar’s journey to success is a saga of grit and gumption which would continue to inspire entrepreneurs in the times to come By Sachin Jagdale
“Listen to the mustnt’s, child, Listen to the don’ts Listen to the shouldn’ts The impossibles, the won’ts Listen to the never haves Anything can happen, child, Anything can be”
These lines by Shel Silverstein, American poet, singer-songwriter may have inspired Dr Shri Thanedar, CEO, Avomeen Analytical Services, as he embarked on his educational and entrepreneurial journey to the US, from a small village in Belgaum in Karnataka, India. His life is a reflection of a journey that is filled with emotions, tragedies, struggles, celebrations and success. Today, Thanedar is one of the most sought-after analytical service providers in the US pharma and chemical industry.
Back to the beginning
Like many young ambitious students, Thanedar too dreamt of pursuing his education in the US. However, unfortunately he was denied the visa four times as he did not have the requisite bank balance and enough property to convince the US consulate that he will return to India after completing his education. Thankfully, after a lot of trials and tribulations, he somehow got the visa in 1979 and started pursuing his PhD in polymer chemistry at the University of Akron.
Thanedar’s life in the US was tougher than his experiments in the chemistry lab. In the initial days, he did not even have a place to reside. So he used to conduct experiments throughout the day in the laboratory and sleep there itself (going against the set protocols). He recalls an incident when after performing experiments till late in the night, was unable to wake up early the next morning and unfortunately his professor saw him sleeping in the seminar room. He had to literally run with his sleeping bag from there.
Overcoming all the difficulties, in 1982, Thanedar got his PhD and after that he pursued two years of post doctoral research at the University of Michigan. From 1984 to 1990, he worked as a scientist in a chemical company called Petrolite.
Being an entrepreneur
His entrepreneurial journey began after his stint with Petrolite. He informs, “In 1990, I decided to start my own business, and in the same year, in October, I purchased a company called Chemir for $75000 from Dr Clara Craver. It was a small enterprise and had only three employees. The revenue generated was only $150,000. Interestingly, I had purchased the company at a loan of $50000 from a bank and Dr Craver also offered me a loan of $25000. On my credit card, I had $3000 which I used as working capital. Thus, technically speaking, I did not start a business then, I acquired a business,” explains Thanedar.
Chemir was a service company which primarily were into non-pharma activities. The pharma work was hardly 10 per cent. If anything went wrong with any product, Chemir used to conduct chemical testing and discerned the problem.
Charting out Craver’s business model, Thanedar observed that although she had a sound technology system in place she did not have an efficient customer service. So, he decided to improve customer service and tried to deliver work as fast as possible. While speaking about how he managed to generate more revenue at Chemir, Thanedar elaborates, “The problem with Craver was that her focus was infrared spectroscopy. I decided that Chemir was not going to concentrate on just one technology. We had to encompass the entire spectrum of the available technological facilities. Therefore, I expanded on technologies like nuclear magnetic resonance spectroscopy, liquid chromatography, mass spectroscopy, TGA, DSC and a lot of other technologies as well, so that we can solve a wide variety of problems. As our customer service vertical improved, the company also started growing faster. From a revenue of $150,000 in 1990 it gradually grew to $4 million in 2000. In 2000, I bought another company called Industrial Testing Laboratories, located in St Louis Missouri, the same town as Chemir. At that time, this company was not faring too well, I merged it with Chemir.”
The ‘fix it’ guy
The company was earning substantial profits and in 2003, its revenue was around $8 million. When Thanedar did a revenue analysis, he was surprised to find that revenue worth $1 million came from pharma testing and the rest came from the chemical sector. Interestingly, this was despite the fact that Thanedar had never marketed the services to the pharma industry. At this time, he never realised that he had become famous in the chemical industry as a man ‘to go to’ whenever any company would fall short of resources and expertise. Pharma industry too was not an exception. In fact, there were quite a few instances where tricky chemical problems faced by pharma companies have been resolved by Thanedar.
An instance that deserves a mention is that of an aspirin manufacturer who encountered a problem where aspirin tablets started showing small black specks. Customers were unable to find out what went wrong despite having in-house lab. These black specks were tiny in dimension and could be seen only under a microscope. They came to Chemir and inquired whether the company could identify the problem and suggest a solution to eliminate the contamination. Thanedar explains how he resolved the problem. “We used a sophisticated technique called infrared spectroscopy that has microscope attached to it. We obtained a chemical finger printing of that black particulate material. With proper analysis we inferred out that the contamination was chemically equivalent to rubber. Not only this, we also identified that there were a large rubber gaskets used at the manufacturing plant, some of which were degraded and were the source of that black contamination.”
Awards conferred to Thanedar
- Ernst and Young “Enterprenuer of the year”, 1999
- Outstanding Teaching Assistant, 1981, University of Akron
- “Overseas Business Person of the Year”, Government of India, 2000
- “Inc 5000 Fastest Growing Company”, Inc. Magazine, 2015
- “Outstanding Entrepreneur” White House, Washington DC, 2001
- “Fast 50 Growth Companies” Regional Chamber of Commerce, St. Louis Missouri, 2000, 2001, 2002, 2003, 2004, 2005
He narrates one more episode where a contact lens solution provider noticed that a batch of his eye drops started causing eye irritation. “The company told us to do reverse engineering of good product and bad product and find out what is causing eye irritation. We solved this as well. In fact, we did a lot of similar work. There are not many companies like us which can do investigational work for the pharma industry. Most of the pharma companies had routine labs.”
Birth of Azopharma
Looking at the prospects offered by pharma business, in 2003, Thanedar split Chemir in two companies. While one remained Chemir, the other became Chemir Pharma Services which later became Azopharma. However, getting into the pharma business was not a cakewalk.
He informs, “In the case of Azopharma I decided to grow through both acquisitions and organic routes. There were several small pharma companies that had innovative ideas and scientists but were lacking resources to reach up to the final product. This was where Azopharma’s role started. When these pharma companies began approaching me I understood that I could only conduct analytical studies for them, not studies like animal studies, as I was unable to analyse blood. So, I needed a full service lab to take the molecule from early discovery stage to clinical trials.” With the pharma business growing faster than Chemir, Thanedar approached the Bank of America. Now, he was heading an extremely successful company, Chemir, a testimony of his business acumen. “I knew that in order to grow my pharma business, I needed to have a lot of investments in place. I needed to buy several equipment as well as acquire smaller companies,” he explained. He managed to get a loan of $24 million for the period of 2003 to 2008. Thanedar bought six different companies and merged them with Azopharma. Eventually, Azopharma’s revenue grew from $1 million in 2003 to $55 million in 2008. Azopharma was considered as one of the leading laboratories in the US that take part in drug development. So, till early 2008 everything was going well.
Thanedar was doing very well professionally. He decided to take some time off for nurturing his hobbies as well and dedicating more time towards them. He wrote his first book in Marathi called ‘Hee Shrichi Icchha’, which narrated the tale of his struggles. This book became so popular that the former US President Bill Clinton even requested Thanedar for an English translation so that American youth could get inspired by it. In addition, Thanedar started receiving invitations from different colleges in India and the US to give lectures on entrepreneurship. In the mean time, he started taking more interest in Marathi culture. He used to organise shows of Marathi theater and films in the US. Leading Maharashtrian personalities from different arenas in India frequented his residence in St. Louis. However, somehow Thanedar felt that he could not give much time to Azopharma and he decided to sell it.
“In February 2008, I wanted to sell my pharma company and focus on Chemir. So I hired a company from Chicago called William Blair who could act as middleman in selling the company. William Blair then started marketing Azopharma to Private Equities (PE) and other strategic pharma companies. They sent out information to 200 odd companies of which 65 had showed interest in purchasing Azopharma. And out of these 65, approximately 21 companies had sent letter of intent to purchase Azopharma. They offered approximately in the range of $70 and $90 million. Even India-based major pharma company was one of the potential buyers,” informs Thanedar.
Thanedar’s investment bank suggested him to go back to potential buyers and ask them for their best offers. So out of 21, six buyers responded with a revised proposal that valued from $90 to $132 million. The highest offer came from Boston based PE firm. They offered $132 million. Thanedar signed their letter of intent in August 2008.
Testing times
However, he was unaware that tough times were lying in wait for him. Within two weeks the American economy started going down. Stock market started sliding. Eventually, the highest bidder was unable to arrange the money and withdrew its offer. Yet, accustomed to adversities and struggles in his initial days in the US, Thanedar remained undaunted and decided to face up to the tough times.
He says, “I assured myself that I will run the company again. I will wait for the recession to get over and then will try to sell the company again.”
Though Thanedar’s resolve was strong, the situation appeared grim. Revenues of companies in the US were going down but Azopharma’s revenue was falling much faster. Azopharma lost almost 60 per cent revenue over a one and half year period. Azopharma suffered to a great extent because of the strategies. He explains, “All the customers of Azopharma were small innovative biotech startup companies that were funded by either venture funding or owned by PE. These companies were involved in early stage drug development. During such recession venture funding dries up because nobody wants to invest in such an economy. Further, early drug development is a long and expensive process. Companies stopped investing in early stage drugs which was Azopharma’s speciality. Thus, if one wants quick money then one wants to invest in late stage drug development in such a period.”
Azopharma started losing its customers as the focus shifted to late stage development instead of early stage drug development. In addition, it was difficult to predict when the recession will end and the economy would become healthy. Thanedar assumed that most recessions last for months or a year. So he decided to retain his employees. Azopharma had around 400 employees and Chemir had around 80 employees. In 2008, Chemir’s revenue was around $12 million.
However, Thanedar’s optimism was marred by the harsh reality. With time, he had to let go off Azopharma’s CEO. He owed the bank a sum of $24 million. These banks had the rights to acquire assets of such business and sell them to recover their loans. Bank of America intimated Thanedar to repay his loans. “I requested them to have patience and promised to create value again. But, the bank wanted to sell off my assets, which I refused. I did not want my employees to lose their jobs. Bank saw that Chemir was doing well. I had some real estate that was faring well. However, I could not stop the bank anymore and in April 2010 they took all my assets, Azopharma, Chemir etc. So within months, my net worth of hundreds of millions of dollars came to nothing,” narrates emotional Thanedar.
Never say die attitude
Though he lost most of his fortune, Thanedar still had some money left with him. However, the risk of the bank taking away even that money was constantly haunting him. Yet, Thanedar was not ready to throw in the towel. He came up with a stronger plan this time.
Thanedar says, “For three-four months I was unsure whether I had the zeal to fight. But I decided to start another innings and in December 2010, I decided to start a new company, known as Avomeen Analytical Services. I actually acquired assets of a company in Michigan that had gone out of business.”
It is said that fortune favours the brave. This proved true in Thanedar’s case. In March 2011, the bank found a buyer for Chemir for $23 million. It sold Azopharma for $2 million. They also sold other real estates and recovered a sum of $30 million. It is noteworthy that even in the grim situation, Thanedar’s personal assets remained untouched. This helped him to start Avomeen. “Today, Avomeen is more than a $10 million company with more than 50 employees. I purchased a 25,000 sq ft facility and established it into a modern laboratory. Now my business is growing three times compared to what Chemir used to be. I am thankful that my company is faring well again. I am back again mentoring people. I am writing my second book where my fall and rise will be narrated,” says Thanedar. Thanedar’s goal for Avomeen is to increase its revenue to around $100 million in the next three to five years. The company currently serves approximately 300 clients spread across the US in a year. Thanedar informs, “We have some clients in India and Europe but 95 per cent of the clients are in the US. Now Avomeen’s work is a combination of both Chemir and Azopharma. Currently, I also have less loan. So, even if recession comes, I will not get affected like before. My source of funding is my own assets, profits generated out of Avomeen, and minimum bank loans.”
Mentoring young talent
Thanedar strongly feels that it is his duty to encourage young entrepreneurs in their struggles to live up to their own highest ideas. According to him, youth should leave the mindset of doing mundane jobs. They should take risks. However, these risks should not be blind in nature, they should be calculated risks. Starting a business requires lot of preparations and ideas. They should hire efficient resources. Thanedar is not just a role model for young entrepreneurs but he also epitomises Indian talent and potential which will continue to inspire many budding entrepreneurs in India and across the world.
An inspiring persona
“The battle of life is, in most cases, fought uphill, and to win it without a struggle were perhaps to win it without honour. If there were no difficulties there would be no success; if there were nothing to struggle for, there would be nothing to be achieved”
— Samuel Smiles, Scottish author
These words exemplify Thanedar’s life and success. His journey from a small place in Belgaum to a palatial home in the US is a result of strong determination, great resolve, unceasing hardwork, tremendous self belief and perseverance.
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