AIRA: You are a Second generation entrepreneur. How has the journey been?

Tejash Shah: Being a 2nd generational entrepreneur is like a double edged sword. While the understanding of the industry is let’s say ‘genetic’, it could also lead into in a comfort zone of a running business. It takes the support of the 1st generation to prod and support the 2nd generation to chart a new territory within the same industry. In my case, my father was a well known CA in the film industry managing money, I chose to be an engineer leaning in the technical space of the industry. Though my father passed away very early, we had our roots in the film industry, making me aware of his inherent functioning. The industry we see today is very different. Looking back, it was due to my background, I have managed to do well, although I started from scratch in my area of work in the same industry.

AIRA: The entertainment industry has many ups and downs. How does it affect the business? How do you manage the business cycle?

Tejash Shah:
The Late visionary Mr Ratan Tata mentioned “Ups and downs in life are very important to keep us going, because a straight line, even in an ECG, means we are not alive.”

Ups and downs define our industry.
We at Accord Equips mitigated the risk by building multiple verticals and a diversified client base.
Our primary business is renting our professional camera gear.
As a forward integration we also run a production house.
We diversifed our rental house to provide wildlife gear to amateurs and enthusiasts.
We entered new technology like Live Streaming & 360 VR while they were still nascent to India.
So broadly we are in the same industry but have different verticals helping us balance our risks. Also when one has a first mover advantage, there is room to make mistakes as well as stay ahead of the business cycles.

AIRA: Accord Equips is an asset intensive business. How do you manage investments where obsolescence is the norm?

Tejash Shah: I’d say, obsolence as an advantage. When equipment gets outdated faster, users prefer to rent instead of buying. This gives them the nimbleness of moving to new technologies.

As regards investments, we broadly plan 30% investment in newer technologies and 70% investment in existing capacity / technologies. Our investment cycles tend to equal the depreciation for the year keeping the asset value constant while increasing inventory. Also given that we also do many commissioned video production like video podcasts, interview shoots, corporate Avs, event coverage. This brings in additional revenue without investments.

AIRA: The industry does not have ready-made professionals like traditional manufacturing business. How do you source and develop talent?

Tejash Shah: A great painting is created best on a blank canvas. Raw talent works best for us for creation of a tech crew. The selection is on the basis of positive attitude, readiness to work long hours and the readiness
to jump into the deep end. Most of the boys we hire do not come from strong or moneyed backgrounds. We take them on salary, train them till they are ready for the field. Also lets be real. Management graduates imagine a 5 day week with a so called ‘work life balance’ which is difficult in our industry.

AIRA: Film personalities are known to carry huge ego. Situations in the set may get volatile. How do you train your staff to manage such situations?

Tejash Shah: Any profession that involves creativity, eccentricities and time bound execution, tend to be volatile zones. Be it restaurant kitchens or shooting floors!

The brief to our crew is simple, if a situation goes out of hand, don’t answer back, become invisible for a few moments and let things settle. We all need to remember, everyone on the set has a common aim of getting a great shot! The frayed tempers are often at the situation and not the individual. More often than not, once the shoot packs up, apologies will be exchanged by the end of the day.

AIRA: What is the impact of AI on the entertainment industry. How is it likely to affect your business?

Tejash Shah: Impact of AI is quite strong already. My feeling is extremely talented highend technicians and low end crew will not be affected. Corporate films, ads Films, documentaries that would cost lacs are now being make for thousands. On the other hand, today everything is visual. So amount of content creation has multiplied means lesser margins but lot more work.

As regards our business, first the upside. As regards equipment rentals, we see it as an advantage to us as our new age digital cameras give far higher incremental output due to AI with a far smaller incremental costs. Besides filmmakers, our clientele includes mainly new age content producers like web content creators, podcasters, photographers, youtubers OTT producers etc. They use these digital cameras.
AI in our equipment means 2 things.
1 The raw talent we train, can go on the field faster due to AI creating smarter cameras.
2. We need lower investment for better quality output.

Now the downside, this year the industry saw a huge drop in production work due to AI generated content. In the next 12 months over 40% content could be generated through AI!

A lot of younger filmmakers who would been assistants turned independant as AI support decreased the period of learning curve. These the new gen of filmmakers work on far lower margins squeezing margins across the chain.

AIRA: How are you preparing Accord Equips for an era dominated by AI?

Tejash Shah: When you cant beat a situation you join it. We now have our inhouse AI film division where we make films starting at just Rs 1000/ second. We are a complete one stop shop. We are already seeing heavy growth in this segment as now everyone can afford to create a marketing video.

If you wish to shoot, we have the necessary equipment and crew. if you want an AI film without shooting, we have that too.

Once this AI wave settles, even films created with AI will need personalization by adding some interview of the company which means real shooting which again we provide.

We are one of the largest range of wildlife equipment on hire, to cater to a growing tribe of amateur wildlife photographers. I am sure, these animals cannot be replaced by AI (smiles).

AIRA: Making the business attractive for the second generation is a challenge many SMEs grapple with. What’s your view?

Tejash Shah: When elder kids play cricket in the building, they expect the newer junior entrants to do fieldling. If you make them field everyday, they wont come back. Same applies to the 2nd gen as entrants. The 1st gen makes them do mundane work while the 2nd gen also wants to get into the batting crease. It’s the responsibility of the 1st gen to give some freedom for the 2nd gen to explore, stumble and get up. When the 2nd gen feels that their presence is a value add to the business and feel the ownership, that is the time they feel the excitement.

AIRA: What is the one policy change you would advocate to ensure a favourable environment for SMEs?

Tejash Shah: 1. Decrease our paperwork. I have been seeing a steady increase in filing over the last few years. Every few months my statutory manager updates me about some new paper work.
2. Government should appoint official agents. Every department, whether offline or online, that has some paperwork and filings to be done by MSMEs should have a list of government approved agents handling that paperwork and filing. This way the entrepreneur pays a small fee and gets his filings done without wasting time and energy. The government get its requirements and employment in India goes up. Lets not forget we anyway use unofficial agents who are paid under the table to get paperwork moved.

AIRA: What would be your advice to other SME owners that are looking to scale the business?

Tejash Shah: Systems! Set up systems. You and me have had many discussions about this. You set up some systems for us. Which helped us get better reports leading to better decision making. Most MSME owners believe they know it all.
Also lets not underestimate the team. An empowered team delivers far better and helps the company grow.