Nitin:

Hey everyone, welcome to The Industry Show. I’m your host Nitin Bajaj and joining me today is Amar Shokeen. Amar, welcome on the show. Thank you. It’s a pleasure to have you here. Let’s start with who is Amar?

 

Amar Shokeen:

Who is Amar? I’m an immigrant, migrated here to this country in 1994, mostly grew up in India. My father was in the Air Force. We lived all over the country in India and then changing place, changing locations, grew up in boarding homes. And so moving to this country was a challenge, but not really in that sense. I’m a father. I have two sons, a daughter, a grandfather now. My daughter has two sons. I was settled in this country and we feel this is it. We’ve been living in California and Los Angeles for past 30 years and we call this home and hopefully continue to be home for the rest of our lives.

 

Nitin Bajaj:

I know for a fact you’ve been an extremely positive change for the community here. So thank you for doing what you do. And with that, I would love for you to tell us about Apollos and also about the Welcome Group.  What is the vision, mission, and also a little bit of the size and scale of the operations?

 

Amar Shokeen:

Let me take a little bit of history here. We originally started the company in 1996 and it was not by design. It was by accident because largely what happened was the company that we worked with refused to do our green card. And they refused to do the green card. Not only the first company, but the second company refused to do our green card. And so essentially we said we’re going to get started. And those were the days of Y2K. And this is the year we’re talking is 1996. So I’m dating myself in many ways. But it was an exciting time and India was in forefront of everything. Indian world had just started. And my background, I used to work for HCL in India. So that was part of it, but not a whole lot of it. And Rita, my wife and I, we started the company in 1996. And then in the year 2000, nothing really happened. The whole Y2K world came and went and nothing really happened on 1st January 2000. And we lost a whole lot of money to our clients. Suddenly they stopped paying us.

Lots of our companies went bankrupt. And for those of us who remember that time, it was very difficult. And even getting a loan from the bank was very hard. As an immigrant, you can barely convince anybody that you’d be able to repay these loans. So we said, we have to do a real business. And so we ended up buying a small property in, it was a Best Western, I believe. And 1st January, first week of January year was 2000. And the interesting thing was we rebranded ourselves. We reconnected with the IT services business. We got into the SAP and Oracle world and kept both companies going for a long period of time. And they both currently, the revenues of Apalis are over a hundred million. We have about 7-800 employees here in the US and a similar number in India. In terms of hospitality, we have about 800 employees and about 14 hotels across the country. Almost half a billion in real estate. So it’s been fantastic.

 

For this year, for the first time in Welcome Group in hotel revenue, we’ve exceeded a hundred million in revenue, which we think is a landmark. And sometimes why do you care about the hundred million number? The hundred million number one cares is because then it’s a landmark that your business cannot die overnight, which is good for the employees, good for everybody in where they are.

 

Nitin Bajaj:

Well, Amar, first off, hearty, hearty congratulations to you. I’ve known you pretty much since the week I got here to this country and you have continued to remain extremely humble, extremely approachable. And even as you speak of these huge volumes and there is this notion of, yeah, we did well.

 

Amar Shokeen:

The reason is that I think there are companies that we generally read in the newspaper have done exceptionally well. People who started with us in late 90s are billions of dollars in revenue. But I think it’s a matter of, and part of the reason is that we have no partners in any of our companies, which was, it is unique in its own ways that we did not acquire partners or we don’t have any other investors other than family, which is just me and my wife. And we kept it like this because it was feasible to do it and overcome many of the challenges along the way. So we saw the financial crisis in 2001. Every 10 years, we see major crisis, right?

2008 to 2010 was another major crisis. And then we, again, we saw what happened during COVID. Businesses were affected. At least all the hotels were completely shut down for almost seven months. We thought we’d not survive it, but not having to squabble or not having legal issues attached to partners really helped us keep ourselves focused and not be challenged from not to get blindsided in any way. And so that has really kept us.

It’s good and it’s different. This is how we saw it. This is how we felt we should be doing it.

 

Nitin Bajaj:

I really applaud both you and Rita, your vision and how you’ve stayed connected to it. And the one most amazing thing about you is you have led both of these businesses to major success, which is unheard of. So again, congratulations and kudos to both.

 

Amar Shokeen:

Yeah, thank you. And I think it was done with a very strategic thing in mind. What we did was when we had the IT business and we accidentally stumbled on the hospitality business.

This was when I’m talking about the year 2000. And so here comes 2001 when 9-11 happened. Again, there was this whole crisis of hospitality. People stopped driving and we saw that whole meltdown happen in 2002-2003. But one good thing that happened was we realized that there was an offset you could get. The revenues that you earned in one part of the business could be easily invested in the other part of the business. And that really helped us understand both businesses and keep them growing together for a long period of time. Now our kids are involved in the business and I hope they will take this as just a start of a journey and I hope they take it to the next level.

 

Nitin Bajaj:

Amazing. It obviously takes hard work, especially as you come in and as an immigrant, lack of resources and many other no credit and what have you, to not only be able to establish yourself in one generation, grow it to the size that you have, but do that in two completely different and unrelated industries. I’m in awe of you. So again, congrats. Now let’s talk about as you deal with a lot of these different challenges over the years, things have come and gone and you’ve not only weathered the storm, but come out stronger and ahead in each of these instances. At this moment, what is the one big challenge you’re facing?

 

Amar Shokeen:

So obviously the IT business is the most challenging. We’ve seen a significant drop in revenue the last year or so. 2023 was a very challenging year for professional services and IT business and several things that have happened and you can see it in every field of it.

One is AI is a dominant factor of what’s happening over there. Second is increase in interest rates has had companies pull back on projects and this is driving companies with a new focus on trying to find profit within their operations. So what are they going to do if they don’t have to find profit within the organization? They have to cut back on projects that they think are non-essential and if they’re non-essential, they’re holding their future for the moment and then they think that okay, let’s try to just drive profit in our business and if they’re going to drive profit with, it’s a holding pattern which is quite against a technology firm that is trying to do things. And this whole rapid adoption of cloud, earlier there used to be a lot of work that used to be done on premise. You needed a large number of consultants working on these projects. Now what does the word cloud mean? The word cloud actually means India. So what’s happening is that everybody is taking these projects, going to India, whether they’re in Bangalore or in Boston, it didn’t make a difference. And so we have seen this rapid adoption of India as a back office and look at the size of these companies, whether it’s Accenture, IBM or for that matter any US large professional services, PwC, they’re all having hundreds and thousands of employees in India, including Oracle, SAP. And so we were late in the game. As a company, we always focused on the United States.

We lived here, we wanted to be part of this ecosystem. And we had no, it is hard for Indians who live in this country to go and operate in India. Even though we had established ourselves in India in about the year 2000, I want to say 2006, we had set up our first office, moving accounting, back office, recruiting, admin, HR, but we had never really focused on trying to grow offshore business for our clients in India. And so I think we missed the boat in that in many ways. And I think a lot of companies who are here in the US, and this is one thing I want to say, if you are not taking on India in a big way, you’re missing out on something which was, which is essentially existential in many ways. If you don’t adopt that, you cannot raise profitability, number one. Number two, you can’t look at the next mission. We, over the last two years, bought a company in India, we’ve expanded our services in India. Yeah, we’ve refocused our sales team to sell offshore services. Currently, we have about 600 employees in India. We hope to grow that to 2000 over the next two years. That’s our goal mission. And this is how our sales team is geared to. And we’ll see how we succeed. That’s one thing that we think is an exciting opportunity and a challenge to how does somebody who’s based in here in the US scale up in India, because we all know that it is much easier just to for a foreign multinational company to operate in India than an Indian company to operate in India. I don’t know how to get that distinction in a polite way. But it is much harder for a smaller midsize company to go to India and settle itself and hire the right kind of employee because there’s a lot of backstabbing, there’s a lot of difficult questions to be answered, a lot of employee issues, whether it’s physically or just people willing to take on your vision. It’s a lot harder to do that.

 

So we will see how this experiment works out. I’m very hopeful and very optimistic. So not only here in the IT part of it, but even in the hospitality part, we have actually taken a whole lot of back office work to India. All the accounting for hospitality company is being done in India, all the HR is being done in India, all the IT services being done in India, all the websites are being done in India. So we have taken as much as we can. Now we want to move all our sales back office work to India because it’s interesting that Marriott, IHG and Hilton have hired thousands of employees in India doing revenue management. So it is feasible for a smaller company to take all this work offshore and that can drive your profit, number one. Number two, it can also bring value to you in the long term.

 

Nitin Bajaj:

This is super exciting. And again, I have to applaud you for being so open about things that, as you kindly put it, you didn’t catch on or were a little late in. I personally don’t think so.

We all work on our personal schedules. Every company has its own life and moments. But again, it shows your humility and how open and transparent you are in your approach.

And no wonder your team loves you and has been with you.

 

Amar Shokeen:

Folks, I have known most of our employees have been with us for more than 15 or 20 years. Our employee number one, two, three are still with us. And we hope that they will continue.

It’s a good thing and a bad. It’s a double-edged sword because you want new ideas to come to the company and you want new visions to be adopted. As the next generation, Arjun comes on or Adi who comes on, I think they would need their own teams and how they would succeed. And it’s hard for them to choose to connect with the older part of the company. That becomes a challenge of transition. But hopefully, that is something that we shall overcome with technology. The more we adopt, the more it will be easier for somebody to take over. And so now we’re in construction. We’re building a hotel in Pasadena, downtown Pasadena. That’s already out of the ground. The one in El Segundo was built ground up. And we’re looking at a couple of other projects. Construction is a big part of it. But borrowing has become so difficult. As you directly mentioned, it’s much harder for us to find lenders who are willingly able to lend with this current mid-market crisis that’s in place with smaller banks. And large banks, interestingly enough, in spite of all the advertisements that you see of Wells Fargo and Bank of America and Chase, they don’t lend to small companies. They lend really at the micro level. Yeah, possible.

They would give you a home loan. They would do auto loan. But if you really want to get a business loan, it’s the smaller banks, the community banks, that would step up.

 

Nitin Bajaj:

So true. And I want to plug our supporter and your friend, Bank of California, that does an amazing job at helping these small businesses and mostly immigrant founders. So kudos to them and also to you and your team for showing that faith that these banks are putting in these small business owners is for good reason. Scaling from zero to 100 million and beyond is a true testament of success. So congratulations again. And thank you to Ash and his team for supporting small business owners like us.

 

Amar Shokeen:

Absolutely. As a matter of fact, Commercial Bank of California is one of our lenders, and we work very closely with them. And I know Ash and his whole team, and they’re fantastic.

 

Nitin Bajaj:

Now, as we look forward beyond these interim challenges and opportunities, I want to take a moment and have you look in the rearview mirror and tell us about two instances, one that did not work out as you had expected, was a failure and became a lesson. But then another one that took off beyond your imagination and was a success, multi-fold than you would have expected. And I know you’re not the kind to talk your own laurels, but I would urge you to boast a little bit. It’s okay sometimes.

 

Amar Shokeen:

So, as I was telling you, one of the lessons in life was, as we talked about the Y2K crisis, and soon after that, I want to just give you a little bit of, so we ended up buying an asset hotel in Dallas. And those were not the boom years of Dallas, and Dallas was not a very, it was a big city. It was doing exceptionally well. And when you’re starting off as an entrepreneur, one of the things that you always look at price, right? So, you want value for the money. If you’ve collected a million dollars or you’ve collected $100,000, you want to get the most value you can possibly get. But sometimes that value is not in the right place. It’s misplaced understanding, and you never learn it until you experience it. So, in this one particular case, we bought, and I wanted to say it was a La Quinta, and we converted that to a Ramada Limited, something to that effect. And the project just completely failed. We were losing $100,000 to $100,000 every winter. And at one instance, we lost half a million, and those were, don’t forget, 2005, 2006, and that was a lot of money there in that case.

And so, we ended up selling the place a few years later at a huge loss. We had to write off everything because we just couldn’t. We just, in spite of best efforts, we couldn’t.

And one thing I learned in that was a power of brand. In this country, everything is about branding. You have to understand what is the power of brand and why you should get associated with a brand. And even if you have to extreme premium to be associated with a brand, it’s a Starbucks to a regular coffee shop, right? Why would people go to a Starbucks and not? People would go to a specialized or speciality coffee shop for a certain period of time, but if the taste move or something else happens, you’re too much at risk of losing everything that you have. So, in that case, it was a valuable lesson learned that how do you associate your dollars to a brand? And if you can associate your dollars to a brand, you can be successful without a lot of heartbreak. And so, we’ve never gone back from that vision.

We have to consider the value you pay for a brand to be the only reason why you would buy a certain thing. And keeping that in mind, it was never a second thought to pay a premium for getting something. So, we only associated with the best and we continue to grow in that direction.And we feel that brand is a partner. We feel that brand is something that brings value to the organization, to the employees, to the organization, and to everybody who’s associated with it. So, that was one.

 

Nitin Bajaj:

A lot of peace of mind too.

 

Amar Shokeen:

And a lot of peace of mind. Yeah, absolutely. And the second one, I want to say a real challenge was in the IT services business.

 

So, we became partners to SAP. And so, what happened was this was in the mid-teens, I want to say 2012, 2000. We used to resell SAP. We had a whole team. I want to say we had 30, 35 people working and selling, implementing SAP. We used to buy the software or we were implementation partners for SAP for a time. So, we would have a pre-sales team and we would go out and sell to all the mid-size companies that were here all across from Santa Barbara to San Diego. And sometimes you make the mistake of thinking that everything goes on forever and you don’t read the tea leaves right. And the tea leaves were, there was definitely this warning of cloud coming, that cloud will be the new thing, the cloud will be.

And we used to hear about it, but we never saw it or felt it in our business, right. We said, hey, we’re going to continue to get associated with these companies. We are important to them. They are important to us. There’s no reason why we should change our business strategy. We put our head in the sand and continue to do that. And there was plenty of work to go around. Even some of those clients are still with us. But as a company decided, we’re going to terminate all the partners and we’re going to go cloud. So, they adopted the cloud strategy just overnight. And not only did we lose that source of revenue, but significant portion of what we used to do. And this hurt us in a big way, I want to say 2016 to 2018.

It’s very important to understand and keep abreast of what’s happening in the marketplace. Just like now we are seeing AI going to take over and many companies would think, hey, this may not affect us. This is not going to affect us. But truly speaking, it is going to affect you. You are not just on your own. You’re part of this ecosystem. And so, that mistake taught us that you can never overcome or redo that part of it. But it did teach us that it is important to know who your brand partners are and what are they doing and what are their executives thinking and why we should follow the strategy of your bigger partner or incorporate that more into your business and less into your business because you are you’re part of the ecosystem. And so, once it went into the cloud, it was very hard to overcome. That strategy. And while we continue to do it, it became less and less important to us. We had to rebrand.

We had to replace the entire sales team. We had to figure out a whole new way of doing business once again. And that’s where and those are the big challenges that come.

And as far as every time we were faced with a challenge, we said, okay, we’re going to learn from this and try to take lessons from this and not repeat this. I think that is important. So, whenever there was a challenge, we decided we are not going to repeat this. And part of the decision making was because we don’t have any outside influence on our decision making, it was much easier to turn on a time and be able to incorporate new ideas quickly. Then get stuck with the old because sometimes legacy issues really hurt you a lot more than futuristic issues.

 

Nitin Bajaj:

True. I don’t know if you remember this, but we were talking around that time when this transition was happening.

 

Amar Shokeen:

I know.

 

Nitin Bajaj:

And what I remember is you were not worried about the revenues or what’s going to happen next, which obviously people think about as you’re a fairly large team, even back then. What I do remember was bothering you is people may have to change. What are we going to do about the people we have?

 

Exceptional leadership quality that you think about your people first. And again, we have the data to prove that the people that have joined you have still stayed with you because they know you have their interest at heart. And so to me, it was very heartwarming that here you’re looking at a possible shutdown of your entire company. To you, the most important thing is how do I make sure my people, several of which were in the process of getting their green cards and their families depended on it. And to me, that was something I have remembered and I will about you.

 

Amar Shokeen:

So going back to the green card story, I do have to say this. I hope there’s a two minute thing for this. So I remember the first two instances where they refused. So the first company that I came with, they wanted to keep me on this green card and they said they had done our H1B. I had migrated from India with two kids and they were very young at that stage. I was like 30, 31 years old, two kids on a small salary and he refused to do a green card.

And I said, no, that’s not possible. I cannot have a green card. And I switched the companies, moved to another company and that also refused to do a green card after years.

They just wanted me to work for six years before they started the green card process. And then we started our company and became and this technology company, we must have sponsored over 2000 green cards. And most importantly, we start the green card process on the first day the employee joins us. We give them that option of, hey, if you want to do a green card, we learn from our lesson. We learned those sleepless nights we had when we could not get a green card. And I was literally every day would think, OK, now we could get deported or have to go back to where we came from. And we had broken ties with what we had in India. It was important to me personally and professionally to make sure that this did not happen. And for that reason, we kept our company debt free. We have kept Apollo’s debt free for the last 30 years, 25 years. And that’s the only way that we were able to survive most of the challenges that we have. Grow at the cost of what you’re doing, but keep yourself as debt free as possible.

 

Nitin Bajaj:

That’s amazing. And again, this is unheard of in this space. People will keep you for at least a year or two before they even start the process.

 

Amar Shokeen:

Before they even start the process. And that’s why we attract so many good people. And we don’t even expect them to stay with us after we have done their green card.

Or sometimes in many cases, they move on to other jobs and they come back to us. And we also have another program which we started and that we hire postgraduate students from colleges. So people who have done in computer sciences and in all over the country.

And so we would hire them. We would make them interns for six months and then find the position. So every year, we probably intern and train more than 100 people across the country. And interestingly enough, the trainers are ex-people who have been trained in the past. And so it’s a trainer kind of a program. And it does extremely well.

 

Nitin Bajaj:

Yeah, it gives them an opportunity to pay it forward. So that’s a good thing. Nice.

OK, so I would love to thanks for sharing that again. Thanks for sharing those historic moments and allowing me to really some of those conversations that we’ve had over the years. I’d love to bring us into my favorite part of the show, which we call the one line life lessons. I’d like you to share a few of yours.

 

Amar Shokeen:

I think one of the life lessons I want to say is that somewhere in 2007, 2008, in the middle of the crisis, I took some time off from work, went to Harvard Business School, did an owner president management program for about three years. And one of the lessons that we learned, and I think we have adopted it ever since, is to see how you can work on the business rather than in the business. And even though we are part of the time we are in the business, it is very important to have routine tasks transferred to somebody else.

That’s how we are able to do multiple companies, multiple projects, find the best person that you can find in the company or hire that person and try to transition that work to him or her. And make sure that once a week you do a follow up, once a week, you have a good understanding of what they’re up to and what they want to do and what they’re hoping to achieve. And if you can somehow find that balance of working in the business and on the business, you will, you will be.