Saturday, August 11, 2007

Abundance mentality and Entrepreneurship

Its time for a blog post on Entrepreneurship!

I was brought up in the north-west part of Tamilnadu, which happens to be the ‘textile-hub’ of south India. Most of the businesses are Small-And-Medium scale and are into producing textile products like cotton sarees, lungis, hankies and shirts. Also, there are numerous businesses in various aspects of the textile value chain -- dyeing, calendaring, bleaching, tailoring and printing. There are 24189 registered SSI units as on 31.12.2000 in the district besides 59 Large Scale Units. I have vivid memories of this business hub – dusty, vibrant and narrow streets, bullock carts carrying textile materials, chai and bhajji shops serving snacks, businessmen from the north and western part of India, daily wagers leaving their kids to nearby schools etc.

Most of these businesses are run by people who hardly have a university degree. Right from my school days I have always been spellbound by the entrepreneurial passion and hardworking nature of these people. These folks learn business from the streets and come up in a hard way. Compared to the high-tech entrepreneurial ventures, these businesses are extremely fragmented and commoditized. Due to high pressure and cut throat competition many of the firms have shutdown their business in the recent past. I personally know of friends, who have taken to a job as their family business is in vain. On the other side, the surviving businesses are operating on the same scale over decades. For quite sometime I was mulling over the reason for their ‘non-scalability’ and came up with some interesting observation:.

Most of these businesses are family owned businesses operating on ‘proprietorship’ model, where there is no concept of ‘equity shares’. All other people are hired as employees by paying salary and exploited to the maximum extent. Some of the high-performing smart employees are given more responsibility -– dealing with channel partners, getting new business, having a team built around them etc. These smart employees will slowly get contacts and open up their own shop in a matter of two to three years. The lower entry barriers added with strong channel relation built on the previous business helps these ‘recent-entrepreneurs’ to open up their shop in no time. They start competing with the ex-proprietor and the chain continues forever. Instead of increasing the pie, they cannibalize each others businesses.

The example I have mentioned above is a classic example for ‘conservative’ thinking instead of ‘abundant’ mentality. Any Entrepreneurial venture can scale up provided it has a core team working on a common vision with complementary skills. As the initial folks have totally different strengths, the business will start growing in multiple dimensions with each one of them leading in their area of expertise. When such people come together it is important to have properly defined profit sharing mechanism in terms of equity shares. This is one of the key factors to keep the core group as a ‘nuclear’ team and sow the seeds for long-term scalability. However this trait will not come easily to ‘normal’ people -- who want to have more power rather than profitability of the company. This is where the abundant mentality plays a major role as it has got to do with having a bigger heart. For example, having 80% stake in an Rs 10,000 profit is any day better than 2% stake in Rs 10,000 crore profits.

Most of the SMBs are not able to scale, mainly due to the ‘old-school’ conservative thinking. It is very critical to understand that the world is becoming more interdependent and knowledge oriented where looking for synergistic opportunities plays a vital role. Unless an Entrepreneur has the ‘new-school’ of thinking by shedding ego and craving for the power to control, the firm will not scale to a larger extent.

After all everybody understands the difference between water-gun and Niagara falls!

Monday, August 06, 2007

Why do I write blogs?

There are ample reasons for anyone to flock into the blogsphere. Recently I came across some blogs with gobs and gobs of ‘negative’ contents focusing on 'controversial' topics. They quickly become popular as they get high hit-rate and copious comments. These blogs mainly express strong 'opinions' against some of the burning issues in the areas of religion, sex, creed, caste, racism, nationality, politics etc. Naturally they catch attention of readers -- as it has got to do with an individual’s emotions. Readers quickly tend to take stands and tempted to express their counter arguments.

According to me there are enough avenues to discuss about controversial topics as they are very well known. Especially in countries like India -- the media is given complete freedom to conduct debates, opinion polls, panel discussions to discuss flaming issues. Also at an individual level, most of these issues are 'no-control' problems and finding a solution is close to impossible. I am not against expressing an individual's opinions but it will not make any difference to anybody.

When I was thinking in these lines, I asked a question to myself: 'why do I write blogs?’. After contemplating for quiet some time, I came up with the following points:

  • I feel happy when I write.
  • Blogs provides a platform to share my knowledge with a bigger world.
  • I always wanted to write about 'positive' things to 'influence' rather than critiques. For example, blogs like 'Emergic' has influenced me to a larger extent.
  • Connect with like-minded people rather than the general mass.

Request: Can you please post your reasons for blogging?

Sunday, August 05, 2007

BOOK REVIEW: The Argumentative Indian (Part – I)

Author: Amartya Sen

Price: 690 INR

This classic book has been in my reading list for quiet some time now. I have finally started reading it, in a phased mode. Unlike my other book reviews, I am planning to write a series of reviews for this book. This is mainly because of the sheer density of the material that author Sen has presented in this book. At the outset this book illustrates a vivid perspective of the Indian mind.

To start with, Sen explains the ‘argumentative’ nature of India, for which it is very vital to understand contemporary India. The very nature of Indians is to get into arguments or lengthy dialogues whenever they get an opportunity. Ranging from weekly status meetings to the cauvery tribunal, I can quote numerous examples for this nature. This is due to ‘dialogue’ based approach existing in our culture for a very long time. For example, Arjuna, in Mahabharatha, gets profound doubts in the battlefield. In order to get clarifications he takes up the dialogue based approach with Krishna. The author also gives examples from ‘Brihadaranyaka Upanisad’ and ‘Kiratarjuniya’ to illustrate the argumentative nature of Indians. Allowing arguments makes lot of sense in today’s democratic India. As India is the biggest democracy in the world, providing freedom of expression by allowing arguments is a very crucial element to sustain it. In today’s globalized ‘flat world’ India scores against China mainly because of its vibrant democracy and expressive media.

Next, the author starts his viewpoints about secularism and diversity. Unlike any country India is much diversified -– in terms of language, food, culture, rituals and literature. The long history of heterodoxy of India is a basis for its diversified views, which is in alignment with scientific way of thinking. The more diversified any system becomes, it inherently becomes more resilient. I have written my viewpoints on ‘celebrating diversity’ as a separate article.

The political ideology of such a diversified country should be mainly driven in an inclusive way by collectively addressing consensus of all the people. Whichever king or government or dynasty failed to understand this important point has had a hard time ruling India and has eventually failed. Among the mughals, Akbar was the only king who understood this and created his own religion ‘Dhin-ilahi’. Apart from him Akbar, Ashoka was the other king to understand India in a detailed manner. In the contemporary India this concept has evolved as ‘secularism’. Even though other countries like France can claim that they are secular, it never allowed any religious symbols in the workplace. After independence the Indian constitution points to the importance of taking issues in an inclusive way for which the ‘secular’ viewpoint is very vital. In a way designing a political ideology for a country like India is extremely challenging. This is mainly because every other country in the world is uniform in someway or other.

On contrary to ‘secularism’ the ‘Hindutva’ ideology was created by Veer Savarkar. Fundamentally the Hindutva is based on two main points:

  • In India more than 80% of the population are Hindus. The political ideology should be based on this religion.
  • Tracing back in history (from Indus valley civilization) – Indians are primarily Hindus. So there is nothing wrong in looking at India as a ‘Hindu-rashtra’ or ‘Bharat-varsha’.

This Hindu political moment was fuelled by ‘Hindu-mahasabha’ and organizations like RSS, VHP, BJP and Shiv-sena are some of organizations spawned from this ideology. In this book Sen argues, looking at India with this myopic view will create religious fanaticism. He gives examples of Ayodhya and Gujarat riots when this Hindutva ideology got the political backup.

I am of the opinion that, religion cannot be ruled out of the political arena completely. Given India’s diversity there needs to be a common ‘bonding’ factor to bring people under one umbrella. Let me throw some of my questions:

  • If religion can act as that umbrella why can’t we accept it? If Sen can substantiate for secularism by taking riots as example, I can argue for ‘non-secularism’ with bomb blast examples.
  • If terrorism can be justified as a way to protect a religion, why can’t we justify ‘religion-based-governance’ for a better tomorrow?
  • If the so-called ‘open-society’ Americans cannot accept Bobby Jindal as Louisiana state governor without converting himself into Roman Catholic, how can only India accept every religion by giving all sort of freedom?
  • The real rural India is fragmented in all possible factors. What sort of progress the ‘secular’ governments in the past have brought so far? How much % of real ‘inclusive’ growth has taken place in the past 60 years?

End of the day there needs to be a law of the land and everyone should follow them. If that can be brought by using religion, I welcome that. At the same time I am not arguing for religious forces, which will vandalize the societal harmony. We are singing too much of this ‘secular’ song for the past 60 years, whereas India continue to be ‘pseudo-secular’ in reality.

Am I sounding like an ‘argumentative’ Indian now?

Related blogs:

New Blog on Tech trends, Impacts and Innovation

Looking at my blogs in a critical mood a few days back, I was both happy and a little guilty. Happy for the fact that my blogs cover a variety of topics, but guilty for the fact that they do not provide much of my views on my love for technology. Wanting to keep pace with the happenings at the technology arena, I have started co-authoring an exclusive technical blog- 'tech trends, impacts and innovation', with some like minded people. It has proved to be an immense pleasure for me and has provided me with a sense of fulfillment to be a part of this blog space. It would be wonderful to hear your views about the blogs.

Long way to go

No doubt! The 1991 economic reforms brought magnanimous changes to Indian economy. Indian companies are going ‘global’ by acquiring foreign firms, getting into joint ventures, reporting consistent profits and become much more professional. What about public sector organizations? By virtue they have long legacy by creating a good brand image among average middle class Indians. On the other side they are facing stiff competitions from their private counterparts and ‘somehow’ learning to think about customer satisfaction. Recently I came across a couple of interesting observations.

The first one was with getting landline and internet connectivity,when I moved to a new house. I chose BSNL without doing much research and initially got a good impression by looking into their website – well designed contents; downloadable application forms, electronic billing and payment facility, rate plan details etc. Added to that, I got the landline in a week’s time without any issues. But the real face of the public sector got exposed after some time:

  • The broadband internet connection was not given. When I called up all the support numbers provided in their website (except their toll free 1500), no-one answered the phone. Finally (after much frustration) I was able to get hold of one officer who routed me to another number. But again no response from the new number.
  • I opted for electronic clearance of my bills but it was not done. When I called up their billing department I got the answer saying it will be done from the following month. Finally it was never done.
  • In order to get the status of the internet I visited the BSNL office but got one uniform answer: ‘your connection is not yet approved’. It was as if I am at their mercy and they are doing a big favor by ‘approving’ my application. When I asked the ‘why’ and ‘when’ questions, nobody was able to give any answer.

As internet is a must have especially for me to surf endlessly , I decided to cancel my landline and application for a BSNL broadband and approached Airtel. The experience was totally different.

  • The connection was provided within 48 hours of submitting the application forms. The support engineers reached my home at 9 PM in the night and did the installation. They were totally professional -- explained the operational manual completely, installed all necessary software in my laptop, provided their mobile number for immediate support.
  • The next day I got a call from their support desk asking for the feedback about installation and support engineer. After a month they called me again and explained every minute details of the first bill.
  • The line maintenance is always done in early mornings (3 AM to 5 AM) and Airtel notifies its users of the same by sending an SMS well in advance. Even though there is very little probability of using the line during that time the user is not in for a rude shock while on the net at that time.

I am a more satisfied user by opting for Airtel!

Coming to statistics, India’s teledensity (number of landline telephones in use for every 100 individuals living within an area) is 19.26% as of May 2007. Given the one billion Indian population, this presents a mammoth opportunity for telecom companies as rural India is not connected, and needs reliable connectivity. The BSNL might have got the early mover advantage in landline (by having 78% of the market share) and but has already lost ground in mobility. As remaining 80% of population needs to be connected, public sector companies like BSNL need to become extremely competitive.

Now let me move out of telecom! I wanted to enable electronic clearance for BESCOM (Bangalore Electricity Supply Company) and checked my e-banking website. I got the following information, which shows the number of days required to enable this facility:

Organization

Number of days

BESCOM

65

BSNL

45

Airtel

2

Reliance

2

Here also public sector’s reality got exposed!


In summary words like -- competition, customer satisfaction, professionalism, reliable service, adopting technology is ‘new’ to these public sector organizations. They are used to operating in the old-economy style with bureaucratic mindset. Now all of a sudden they are asked to change their mindset and operate in globalized world. They are learning in their own phase, which may not be acceptable in today’s world. They have a long way to go to attain world class excellence and I hope will not be too late.