27 Oct 2016
Paying It Forward
Early business success paves the way for helping those in needby Margie KelleyTopics:
(photo by Neal Hamberg)
Ask Malay Kundu (MBA 2003) about StopLift Checkout Vision Systems, and he’s more than happy to talk about his thriving software company, which deploys video and scanning technologies to stop retail theft.
The company’s award-winning ScanItAll software prevents significant inventory losses by alerting retailers when items are given free-of-charge to friends and family by purposely not being scanned by a clerk (called “sweethearting”), when barcodes are covered, when items are left in a shopping cart, or when scales are circumvented. The sophisticated video analysis software works by interpreting patterns in the pixels of digital video images that signal attempts to override or skip checkout scanners. ScanItAll can also detect fraud at self-checkout counters, a growing problem in retail worldwide.
“Retail inventory shrinkage is a tough problem to solve,” says Kundu, who started StopLift in 2003 after studying the problem as a student at Harvard Business School. In fact, it was one sentence in a case he read about Walmart, in his first year at HBS, that sparked his quest for a solution.
“It said that inventory shrinkage amounted to $1 billion in losses a year,” he recalls. “I made a note of it, and then came back to it in my second year. I led a field study on the problem with Professor Walter Salmon.”
Kundu discovered that every retail company faced the problem of inventory loss but that, owing to the thin margins on which they operate, a solution would have to be affordable.
“From day one, we said we would use common, off-the-shelf hardware—regular PCs and security cameras—to figure out how to solve the problem,” says Kundu. “We wanted to avoid the classic mistake of creating technology in a vacuum and then having technology in search of a problem. So everything we’re doing is based on providing affordable solutions for our targeted market. It’s a different approach, and not how technology guys typically think.”
Kundu would know, as he himself is a technology guy. After earning his bachelor’s and master’s degrees in technology development from the Massachusetts Institute of Technology (MIT), he briefly had a job creating facial-recognition software for airports. An entrepreneur at heart, he then launched and ultimately sold a successful instant messaging software company.
That sale, in 1999, allowed Kundu to take some time to think about what would come next.
“I didn’t think I needed business school at first,” he recalls. “But, you know, there are two ways to learn things. One is experience, where you do things. And the other is through war stories. So when I heard about the case method at HBS—that in two years we’d go through something like 800 cases—well, I was dying to do that. And it was a good bet because that was what led me to launch StopLift. Before HBS, I knew nothing about retail.”
Almost 14 years later, the Cambridge, Massachusetts—based StopLift now employs nearly 200 people and serves multinational retail chains as well as small retailers on four continents.
“People find us—despite very little marketing outside the United States—because everyone has the same problem,” says Kundu. “I see that we’re having an impact. What we are doing is becoming the standard for retail security. Inventory loss can equal profit margins, so getting rid of that problem can mean retailers make their profit, or even double it.
“It’s been motivating to create something out of nothing, and make a step change in things, as opposed to just optimizing what’s already being done,” he adds. “I personally really like to change the game.”
As a student at MIT, Kundu took time out to volunteer as a science teacher in rural India.
Kundu is also changing the game outside his industry—for children in India, especially—thanks to the success he’s had in his business life.
When he was a student at MIT, Kundu took time out to volunteer as a teacher in the slums of Kolkata (formerly Calcutta), where his father had survived an impoverished childhood. There, he taught science in the form of magic. “I would do all these science experiments and present them as magic to keep the children interested in staying in school,” he says, “and then I’d explain the real science behind them all.”
The experience stayed with Kundu, and just prior to enrolling at HBS, he created the Kundu Foundation, a charity devoted to helping people in need, both in the US and in India.
“Ever since I started working after college, I’ve put away 10 percent of everything I make for charity,” he explains. “My thought was that if I could do this, even when I’m making very little, then certainly it would be easier to continue when I’m older and making a bit more.”
Through the foundation, he has supported projects for disaster relief—in Haiti, the Philippines, and West Africa, and the One Fund in Boston, following the Boston Marathon bombing—as well as funding organizations that help the poor in Kolkata.
Most notably, since 2006 the Kundu Foundation has provided the lion’s share of funding for Antyodoy Anath Ashram, an orphanage in Kolkata that has saved the lives of hundreds of children since it was first established nearly 30 years ago.
“It’s an amazing story,” says Kundu. “A man named Balaram Karan was working in a village one day when he found an abandoned baby on the road. Despite having four kids of his own, he took the boy home, and he and his wife raised him. Over time, people in the village who heard what he did would send other orphans to him. He had such a big heart, he would just take them in. Then more children came, so he started an orphanage. Every day he would go around the village and hand everyone a bowl and ask them to give rice to feed the children. That’s how he fed them at first. He’s really amazing, a hero.”
With help from his parents, who retired and moved back to India, Kundu’s foundation took on major support for the orphanage, which, at the time, served 30 children. With Kundu’s help, the orphanage now serves nearly 100 children, employs a staff of 30 caregivers, teachers, and administrators, and runs ancillary services that include a school, tailoring training, a small farm and greenhouse, a pharmacy, and a shrimp farm, all meant to give the children education, vocational skills, and food.
“We fund 75 percent of their ongoing expenses, so they can have some stability,” says Kundu. “We’re involved for the long term. We also expanded another school in the area, and we support things like medical clinics, eye-centers for cataract screening and surgery, a home for the blind, and an old-age home.”
Kundu is thrilled to be able to have such a significant and sustained impact on so many people.
“I fully appreciate the opportunities I’ve had, and the good luck and good fortune,” he says. “Being born in the US, starting a company—all these things you can take for granted. But I’m acutely aware of how fortunate I am, especially in light of my dad’s history. I’m also happy that my son Ricky has started taking an interest in helping too. For example, he led a workshop introducing the kids to Scratch programming, and donated his own laptop to the orphanage.
“The opportunity to help people makes me feel good. It gives me a higher purpose,” he adds. “It’s hard to put into words. The real heroes are people like Balaram. He’s doing the real work. I’m helping him. I’m grateful to be able to help.”
Class of MBA 2003, Section J