Lessons to be learnt from ‘perfect entrepreneurs' – Part II

The second and concluding part of the excerpts from the speech of Mr Subroto Bagchi, Vice-Chairman and Gardener, MindTree Ltd.

Understanding the 70:30 principle

The sixth great entrepreneur is Dr Devi Shetty. He saw opportunity at the bottom of the pyramid. People think you can build a great business if you sell a Mercedes or start a five-star hotel. Nothing can be farthest from the truth. The economic power is shifting to the poor because they may be individually poor but collectively they are rich. So Dr Devi Shetty started his hospital. He drew inspiration from Dr Govindappa Venkataswamy who started the Arvind Eye Hospital.

The hospital model was that 30 per cent of the paying customers took care of the 70 per cent of free customers. This number is huge because last year 2.4 million people were seen and 3 lakh people operated upon; 70 per cent operations were free. The same principle applies in Narayana Hridalaya. If you are a child below three, irrespective of your country of origin, you are operated free. In addition, Dr Shetty got the Karnataka Government to start an insurance scheme called Yeshaswini whereby every farmer in the State can get insurance for Rs 5 a month. You can get an open heart surgery done if you have a heart condition. In the US, it costs you Rs 40 lakh. In India a few lakhs. Here, it is for Rs 5 a month. It happens because of the principle of the bottom of the pyramid. When millions of farmers pay Rs 5 a month that pays for the cost of the surgery. Dr Shetty understood the principle of the 70:30.

Feelings

The seventh is of feelings. Nobody understands that better than Mr Harish Hande who founded Selco. It is a social enterprise, a profitable company. Mr Harish got his Ph.D from Boston University. When he was doing PhD, a chance visit to South America made him realise that there's a connection between poverty and darkness. Poor people do not have electrical connections. Forty per cent of Indians do not have connection to a grid, not electricity, but to a grid. They remain poor because they cannot do business in the dark. He came back and decided his whole life should be devoted to bringing solar energy.

To really understand what it is to live in darkness, he felt he must go to a country where he does not understand the language and must stay with villagers to see through their actions and not words what it is like to live in darkness. He went to Sri Lanka and realised that what they needed most was solar energy not for cooking or lighting but to keep the elephants at bay because every evening the elephants would come and devastate the villages.

He came back to India and has made this his life-long desire. He creates solar solutions for vegetable vendors, cobblers and small farmers in the remotest parts. His principle is nobody should buy his solutions with their revenues or profits but should buy it in such a way that it extends their business so that additional business is for the price of the solar solution. If you are a vegetable vendor, don't take away from your savings. Mr Harish brings the solutions and if you sell for eight hours instead of six, the additional two hours of business will pay for the solutions. If we have a future Nobel prize winner, it's Mr Harish for you. His starting point was not capital, nor was it was technological brilliance, but feeling. It was for people who lived in darkness.

Love and competence

The next thing to be a successful entrepreneur is you need to find the love and intersect that with competence and find your own path. Ms Anita Shah, who started Hibiscus, was a homemaker till her 40s. Her passion was gardening. She started attending trade shows when she was in the US. There she started Hibiscus. She found that lot of people would go to trade shows and buy ceramic urns. On her own, she went to source the ceramic pots in Thailand and Indonesia. She established contacts and made friends with local suppliers. Today, she is the most important destination for people who love gardening and other gardening artefacts. Because she loved something she went the extra mile and because the path was not available to her, she went to find her own path.

Customer service

Two other entrepreneurs, I chanced across – Printo, a place for doing photocopying, for putting photos on mugs and Tee-shirts. It is also a good quality place for documentation and spiral binding. Here I was talking to the sales person that I need so many copies and he said it would cost Rs 18,000. Since I was doing this for a school, I asked for a better deal. Who is your owner? I asked. He said it was started by two people. One is a lady called Ms Lalana Zaveri. He gave me the number and I had no hope that this number would get picked up. But she did and I explained to her in two minutes what I was looking for. She said if I could send that material by mail, she would call me back. At 10 she called up and said this is the best deal we can do for you. At 11 in the night she has given me a solution that works.

Integrity

The 10th idea is not finding a lot of currency in the world today. And that is integrity. Mr Azim Premji's father started an oil business in Maharashtra in 1947. Mr Premji was forced to come back to India. After the oil mill business was stabilised, he felt he must get into an engineering business where the input-output ratio is better and went into the software business. The rest is history.

At this time he needed to get out of Maharashtra as he did not want to have all the eggs in the same basket. He started an oil plant near Tumkur in Karnataka. The plant was all set to go into production, but the electricity authorities would not give the connection unless he parted with some money.

He would not give money and it became a tug of war. The plant was losing money every day as the capacity was not being utilised, the people were hired and there was no production as Mr Premji would not pay a single paise. This went on for one full year. Then one day out of sheer disgust the electricity guys said that this fellow will not pay any money, they came and connected the electricity.

The people who take bribes see if you are willing to give bribes and people who take bribes test out like beggars at the intersection. I'm deliberately making the comparison. They will not waste time if you don't seem like one who will give money. Bribe takers are highly optimised. Rather than waste time, they will take the next victim. This was a game of nerves. And Mr Premji was willing to play it. When we don't walk the path of integrity we think we should have a special red carpet welcome.

Actually you will get a welcome on a bed of thorns. But when you take two steps on the bed of thorns, a whole new world will open up before you. The same Mr Premji in a day and age that criticised the government was also given the Padma Vibhushan award. People like Mr Narayana Murthy and Mr Premji actually tell you even in this corrupt society if you stand by your own principles, the same people will also stand up and respect you.

It takes vision, displacement, self confidence, you need to find your passion, and your passion will not find success, you have to find other ways by which your passion can bloom into success, capacity to postpone gratification, look into the future, connect the dots, the future does not come in stereophonic sound, but in low whispers and only some people can hear the whispers of the future.

The whole world is changing and the man who can do business with the poor can be a rich man, but for that you must have feelings. Mr Premji says being good in business is not for charity. It makes good business sense if you are good because good people will work for you, good customers seek you out in a world where good people are becoming scarce.

(This article was published in the Business Line print edition dated February 28, 2011)

Lessons to be learnt from ‘perfect entrepreneurs' – Part I

Mr Subroto Bagchi, Vice-Chairman and Gardener, MindTree Ltd, speaks about lessons from 10 entrepreneurs of Bangalore. These people offer different facets to entrepreneurship, he says during the course of his speech at an event organised recently by Business Line in Bangalore. This first part covers the first five entrepreneurs and the lessons learnt from them.

Excerpts from his speech:

Vision

First and foremost, I think entrepreneurship is about vision and every vision creates displacement. It is best exemplified by Mr V.G. Siddartha, who started the Café Coffee Day chain. He departed from the family business of growing coffee and went to Mumbai to learn what investment banking is all about. His father gave him Rs 5 lakh and said “May you do well and if you don't do well, you can come back.” He did not invest the money in the stock market. Instead, he bought a piece of land for Rs 3 lakh and put aside Rs 2 lakh because he felt that the money given to him by his father should not be invested in an area that is uncertain.

The key thing is you should not do things that you do not understand. He took a bus to Mumbai and hired a room with a shared toilet to understand the world of investment. He understood that coffee growing was not the most lucrative of businesses and for its true value to be unlocked it is important to get into retailing. When he wanted to get into it, people wondered who will pay Rs 40 for a cup of coffee. When he insisted, his marketing team said that it's your money and maybe the whole of Bangalore needs three Café Coffee Days. Now there are more than 1,000 all over the world and 300 in Bangalore. Mr Siddartha represents the spirit of vision.

A lot of people may have wonderful ideas. What they don't have is the preparedness to displace themselves. When he went to Mumbai in search of knowledge he was entering a place he did not know. He was far more comfortable in Karnataka but he necessarily displaced himself. All great entrepreneurs have vision and pay a price for vision by embracing displacement.

Self-confidence

The second entrepreneur from this city who's a great example is Ms Kiran Mazumdar-Shaw. Vision is not enough. You have to have self-confidence. She wanted to study medicine but she could not make it because she fell short a couple of marks in the merit seat. She went to her father and said she would at least study medicine by paying donation. Her father did not support the idea. She said, look if I was your son, you would have given the money. He said this argument will not cut ice with him. Then she came again and said you will get me married and you will give me money and gifts. Instead give me money to study medicine. This didn't work.

Ms Kiran then studied zoology and then brewing in Australia and became the first brewmaster of the country. When she came back she was completely shattered as nobody offered her a job as the country was not ready for a female brewmaster in a male-dominated field. She didn't get a job. While waiting, somebody offered her a proposition to grow enzymes from papayas and that's how Biocon started. Now, when I ask Ms Kiran what is the secret of her success, she says it's about the ‘can-do' attitude and self-confidence. She needed to prove to the world that had rejected her for being a woman that a woman entrepreneur can not only build great business that women are as good as men. She's the biotech queen of the country today.

Passion

The third quality is about following your own passion. Mr Narayan Manepalli is a man who started Bangalore's first micro brewery. I know this is a wrong example to give in an educational institution. Mr Manepalli found his partner in Standard 4. Sometimes you find business partners as early as that. They graduated together and both of them studied engineering in two different places.

When he was in the West Coast, he stumbled upon micro-brewing. When he came back to India, he met his old friend and decided to start. Here's the catch. You may find your passion and the world may not be interested to support it. You could make beer but cannot get into micro-brewing. They did not give up. They exported the formula to Belgium, got the product made there and imported it. The law said they cannot start micro brewery in the country, but it did not say that you cannot import beer.

It meant that when you pay the customs duty, a beer that costs you Rs 40 costs you Rs 400. Both of them thought that it is important to establish the brand. It is called Geist. Mr Manepalli found his passion and it is the capacity to hang in there that makes you a successful entrepreneur.

Postpone gratification

The next important quality is the capacity to postpone the gratification. These individuals who can postpone their desire are successful. Infosys will soon be 30 years old, TCS 40 years old and Wipro was established in 1947. It is not possible to build a sustainable high performance enterprise in 5-10 or 15 years. It takes at least 25 years to build a company that will not fade away after the founder has gone. There are great examples of postponed gratification, sometimes for 25-30 years.

Work has to be done, the results will come later. A man who symbolises that best is Mr N.R. Narayana Murthy. If Mr Murthy had thought of making money, buying an apartment, buying a second apartment when he started Infosys, he would not have been able to build one of the most memorable companies, an institution that is globally respected. The important requirement to build a great organisation is the capacity to postpone gratification.

Connecting the dots

The other great entrepreneur is Capt G.R. Gopinath. His capacity was in terms of connecting the dots as he looked into the future. The future does not present itself as a clear picture. It presents itself at best as a pattern and you have to have the capacity to connect the dots in the pattern and certainly the pattern emerges and you see something that others do not.

Capt Gopinath was an organic farmer. In Bangalore, he met his old friend Sam who was an ex-army pilot. They used to play squash together. Sam did not have a job after retirement. Helicopter pilots do not get jobs that easily after they retire. One day he told Capt Gopinath that he found a job as a regional manager in a courier company. Capt Gopinath was shattered. He thought, we really need airlines and pilots and here was a pilot joining a courier company. Shortly after that Capt Gopinath went to China. He read a newspaper report on a Vietnamese woman who was returning to Vietnam. On seeing her country, she started crying. “Oh my God, my country is shattered. What can I do to rebuild that country.” Maybe I should start a helicopter company.

Capt Gopinath was in China and suddenly he had the capacity to connect the dots. If Vietnam needed a helicopter company, India needed it 10 times over. With liberalisation, the country will need air connectivity. He put the two things together and said I'll start a helicopter company. When he started it, he did not even know the price of a helicopter.

He said thank God for that, because if I knew, I would have never gone into the business. One day when he was flying to Goa, he saw every village had a dish antenna. Then it occurred to him that this is a not a country to be subsidized and fed. This is a country where a billion people can fly. He saw how the dots connected into the future and that's how he started the first low-cost airline of the country. He had the capacity to connect the dots.

…to be continued

Source: This article was published in Business Line, Feb 13^th 2011.

Twelve Management Lessons from "3 Idiots" Movie

Came across a forward which had these lessons. Thought it fit to share with you all.

1. Never Try To Be Successful
Success is the bye-product. Excellence always creates success. So, never run after the success, let it happen automatically in the life.


2. Freedom To Life
Don’t die before actual death. Live every moment to the fullest as you are going to
die today night. Life is gifted to humankind to live, live & live @ happiness.

3. Passion Leads To Excellence
When your hobby becomes your profession and passion becomes your profession. You will be able to lead up to excellence in the life. Satisfaction, pleasure, joy and love will be the outcome of following passion. Following your passion for years, you will surely become something one day.



4. Learning Is Very Simple
Teachers do fail. Learners never fail. Learning is never complicated or difficult. Learning is always possible whatever rule you apply.


5. Pressure At Head
Current education system is developing pressures on students’ head. University intelligence is useful and making some impact in the life but it cannot be at the cost of the life.




6. Life Is Emotion Management Not Intelligence Optimization
Memory and regular study have definite value and it always helps you in leading a life. You are able to survive even if you can make some mark in the path of the life. With artificial intelligence, you can survive and win but you cannot prove yourself genius. Therefore, in this process genius dies in you.

7. Necessity Is The Mother Of Invention
Necessity creates pressure and forces you to invent something or to make it happen or to use your potentiality. Aamir Khan in this film, 3 idiots, is able to prove in the film by using aqua guard pump at the last moment.



8. Simplicity is Life
Life is need base never want base. Desires have no ends. Simplicity is way of life and Indian culture highly stresses on simple living and high thinking, and this is the way of life: ‘Legs down to earth and eyes looking beyond the sky’


9. Industrial Leadership
Dean of the institute in 3 idiots is showing very typical leadership. He has his own principles, values and ideology, and he leads the whole institute accordingly. This is an example of current institutional leadership. In the present scenario, most of the institutes are fixed in a block or Squarish thinking.


10. Love Is Time & Space Free
Love is not time bound and space bound. It is very well demonstrated in this movie same love was demonstrated by Krishna and Meera. Love is border free, time free and space free.


11. Importance Of One Word In Communication
If communication dies, everything dies. Each word has impact and value in communication. One word if used wrongly or emphasized wrongly or paused at a wrong place in communication what effect it creates and how is it affected is demonstrated very well in this movie.


12. Mediocrity Is Penalized
Middle class family or average talent or average institute is going to suffer and has to pay maximum price in the life if they do not upgrade their living standards. To be born poor or as an average person is not a crime but to die as an average person with middle class talent is miserable and if you are unable to optimize your potentiality and die with unused potentiality then that is your shameful truth. One should not die as a mediocre. He/she has to bring out genius inside him/her and has to use his/her potentiality to the optimum level