Creative Disruptions: Story of Indian Entrepreneurship, Aug 23-28' 2015

Five years ago, I had an opportunity to visit Indian Institute of Management, Bangalore (IIMB) to attend a one-week residential course. Recently, I came across my notes, so thought of sharing them.

First, about the program: IIMB had organized a one-week residential course, and had invited MBA students from 18 top universities around the world. Course included lectures, guest speakers, panel discussions and company visits. In addition, students across universities formed teams and provided consultation to startups being incubated at NSRCEL.

Here is the high-level summary of the program –

Key Takeaways

Interestingly, there was quite a commonality among entrepreneurs as well as among investors as they shared their experience.

Entrepreneurs’ Experience:

Entrepreneurs didn’t see a problem, but instead saw an opportunity. Being new to the field they had jumped into; they were ignorant about the scale of the problem. “How hard it can be?” – they asked. Their passion inspired them work day and night to make their dream come true. While hiring, they focused more on attitude than on skill-set. An ability and willingness to learn, and a passion to carry out tasks to completion were more important than any other skill-set one might have acquired through prior experience. This was reflected in their workforce which was comprised primarily of young people who are more likely to have these traits.

Investors’ Strategy:

Investors applied different criteria based on the phase of the company. During early phase, investors looked for team history and potential. Rationale – "it doesn’t matter how great the idea is, because if not executed well, it adds no value." Once team performs and the company is ready to move to the second stage, then VCs look at numbers, potential market, new applications etc. In addition to ‘typical-profit-driven-investment’, there are dedicated funds which focus on ‘social impact investing’. These funds expect low returns and are made available for longer terms (10 years plus).

Notes on India’s macro economy:

• Consumption is the largest component of India’s economy. That is, internal demand is high enough to consume products manufactured internally as well as those imported. ‘Make in India’ campaign to boost internal production and enable India to export products.
• Agriculture industry amounts for less than 15% of GDP, but employs more than half the labor force. In contrast, Service industry amounts for 2/3rd of GDP, but employs less than 20% of labor force. This is one of the explanations of inequality within respective workforce. How to improve ‘Agri’ productivity? Should unused labor be diverted to ‘Industry (Make in India)’ sector?
• India is reaping ‘demographic dividend’ (in 2020, the median age of India is 28 vs. that of the US is 38 -- Wikipedia). This not only provides a huge workforce but also offers a huge consumption market. And when we talk about market – just like China - the numbers are massive!
• India faces many challenges. Among them are underdeveloped infrastructure (roads, electricity etc.), unskilled workforce, too many government regulations and corruption. But when viewed from an entrepreneur’s angle, these challenges pose opportunities in disguise. [Note: Indian government has made significant changes to the policies and infrastructure to address it. Presently, Ease of Doing Business ranks India at 63 which is an impressive achievement given that it was ranked at 134 five years ago.]

Notes on Bangalore’s ecosystem:

• Bangalore’s ecosystem includes high-tech industry, esteemed universities, government as well as corporate R&D centers, and infrastructure that connects to the international world. The pool of talent and presence of VCs make Bangalore a startup hub for high-tech industry.

Notes on inclusive business model:

• More than 800 million people still live below $2/day. As spending power improves for this bottom of pyramid, a rightly priced low-margin item -- thanks to the massive volume -- could yield huge profits.
• Even if your goal is social impact, you want to give enough attention to profit such that your business becomes sustainable.
• City or village economy – should it be a city-focused-economy where rural people move to nearby developed or developing cities – or – should it be a village-focused-economy where villages are developed with necessary infrastructure (schools, hospitals, proper sanitation etc.). Note that more than half of India’s population live in villages.

Summary:

In summary, it was a great learning experience. Speakers had the subject knowledge and spoke with authority. Amagi, Inmobi, Uniphore and many others showed how a small team has a potential to disrupt the market by making a big impact if executed well. Fear of failure might stop one from venturing but as it’s said, it’s a failure only if you don't learn from it. Dedicated session on social enterprise segment was insightful. Finally, the exposure to and interaction with such a diverse and strong cohort – from 18 top universities around the world -- was a big plus! If someone gets an opportunity to attend, I would highly recommend this program!

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Our cohort from the 18 top universities around the world

Our accommodation: Executive Block. Later I learnt that it’s the same place where Rancho et al. stayed during ‘3-Idiots’ movie shoot. How awesome was that!

Serene IIMB Campus gives a false impression of the city of Bangalore which otherwise hosts crazy traffic. Side note: I visited a friend of mine after the course was over. It took us two hours to drive through about 1 mile of distance. Could I have walked faster? Nope. Typically, traffic is edge-to-edge. That is, there’s no place to walk!

Food served by IIMB was delicious! Special touches like samosa-chaat and banana-leaf-lunch were sone pe suhaga!

Michael Kasprowicz's visit was a pleasant surprise. He was there on behalf of some Australian university. We remembered Sachin's innings of Sharjah ;)

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