From Jugaad to Start-ups

A few months back, RBI governor Raghuram Rajan, made very accurate points about “jugaad” (make-do solutions) that many Indians are so very proud of:
“Jugaad or “working around” difficulties by hook or by crook is a thoroughly Indian way of coping but it is predicated on a difficult or impossible business environment. And it encourages an attitude of short-cuts and evasions, none of which help final product quality or sustainable economic growth.”
Therefore, he said:
“We have to have the discipline to stick to our strategy of building the necessary institutions and creating a new path of sustainable growth where jugaad is no longer needed.”
I couldn’t agree more with Rajan.

The other end of the spectrum consists of start-ups. And boy, has start-up culture picked up in the country. Today, India is 4th largest on the start-ups list, after the US, UK and China. Remember the term “Unicorn” from an earliest post? It refers to software companies founded after 2003 that are valued today at more than $1 billion (yes, that’s billion with a “b”). Today, that list includes Indian companies like Flipkart, Snapdeal, InMobi, Ola, Zomato and PayTm among others!

In 2015 alone, over $8.7 billion was invested in start-ups in the country: Ola raised $755 million, Flipkart got $750 million and PayTm raised $680 million. Now you see why global giants like Uber and Amazon are pouring so much money into India: if they don’t, the local startups will win by default. Most of the start-ups for which you see ads (Snapdeal, Quikr, Food Panda, Pepper Fry and Saavn) all raised more than $100 million last year. And who are the investors? It’s a diverse mix consisting of Indian, US and even Chinese entities.

Did you notice the common theme in all these start-ups? They are almost all Internet/software based. Why’s that? Several reasons: software companies need very little money to get started as opposed to, say, steel or auto companies. It also helps that the Internet is one sector that doesn’t have too many entrenched players in many areas (e-commerce, travel, food, e-payment) who can kill new companies by sheer size. And this sector doesn’t need the institutions and systems that Rajan talked about: hell, they get their funding via venture capitalists rather than the banking system.

So while we build the systems and institutions that Rajan talked about, it’s good to see us moving along in other areas to build companies on a size and scale that would never be possible with just the jugaad mentality.

Comments

  1. Ramiah KumarJanuary 2, 2016 at 8:42 PM

    Sure. The point is well taken.

    We need to change our mindset like this in ever so many other aspects too. Our laws can be archaic, our bureaucracy is a huge system of very low efficiency, our ever willing to exhibit resigned indifference when something can be done etc. all of which are entirely due to our attitude.

    We can and should do for the better.

    ReplyDelete

Post a Comment

Popular posts from this blog

Student of the Year

Image
As a toddler, my daughter loved Alia Bhatt’s songs, esp. the ones from Student of the Year . (That movie did have many good songs and well-choreographed dances). Fast forward to present day, when she is 12 yo. She rarely watches Hindi movies now, but one of the few ones she likes of late, Raja aur Rani ki Prem Kahani has, yes, Alia Bhatt.   If I had any hopes that there was anything to be read in the name of her toddler-time favorite ( Student of the Year ), they have been dashed. Our conversations come exam time are perfectly captured by this photo and its caption: In fact, the pic below captures how she and I look at her answer sheets – me intently, she with an expression of “It’s over, so why are you even looking at it?”   Of late, we pull her leg and tell her that she isn’t showing any signs of academic prowess, she’d better find a rich guy to marry. Some time later, she showed us this meme on the Internet: “Me No Study, Me No Care Me Go Marry Millionaire If He Die
Read more

The Retort of the "Luxury Person"

Image
Coming up with biting and witty retorts. It’s something we dream of, but rarely manage to pull off. Worse, the more we stew over the offending remark, the more likely we are to come up with that dream retort, as Calvin ruefully points out: During our last holiday at the Taj Resort, seeing my wife carrying towels to our poolside chairs, one of the kids there mistook her for a member of the staff and asked for a towel. When my wife narrated this to us, I did not imagine that my 8 yo daughter would come up with her own retort. But a day later, my daughter recapped the incident, an incident that didn’t even involve her in the first place , and said, “You know what I’d have told that kid who asked for the towel?”. And without waiting for an answer, she told us anyway: “I don’t work here. I too am a luxury person who is living at this resort. Go get your own towel.” We were highly amused by the phrase she had coined: “luxury person”. It certainly captures the kind of holid
Read more

Animal Senses #7: Touch and Remote Touch

Instinctively, we think touch is based on contact. Not entirely true, explains Ed Yong in Immense World – there’s a more important aspect than contact: “These incredible feats are possible through movement. If you rest a fingertip upon a surface, you can get only a limited idea of its features. But as soon you’re allowed to move, everything changes. Hardness becomes apparent with a press. Textures resolve at a stroke.” As you run your fingers over a surface, they hit the tiny peaks and troughs and set off vibrations in the mechanoreceptors at their tips.   At the tip of its snout, the star-nosed mole has many pairs of hairless appendages. It uses them to touch things around itself. Alive or dead? Food or ignore? It does these movements at an insane speed. In the time it takes to blink our eyes, the star-nosed mole can probe, identify and swallow its food. “Light may be the fastest thing in the universe, but light sensors have their limits, and the star-nosed mole’s sense of
Read more