Friday, December 01, 2006

India Tanking Part 3: Where have the business ideas gone?

This will be a short rant.

The business story of this week probably was that the Bharati Group (owner of Airtel) was getting into retailing, in alliance with Walmart. Earlier, the Ambanis ( the two brothers, separately) started getting into areas like retailing. I can rattle up numerous other businesspeople’s names. Almost all our businesses are a collection of unrelated activities. Wipro sells coding services. Wipro also sells oil. Tata sell salt. Tata also sells coding services. The Reliance group was built out from the petrochemical cash cow. These got this big also because they use their coonection and avilable cash when the Indian economy opened up and the the long-suppressed demand for things like communication, houses, cars, education, healthcare, roads, power bloomed. Right people at the right time.

Wouldn’t it be great if the big companies started something new? Wouldn’t it be great if our media stopped fawning over these plans? What’s great about retailing? Sam Walton and my neighborhood Kirana wala perfected it long time ago. The margins are at 2-3%. All that Sunil Mittal has to do is to grab land in all the cities, employ grads as sales people, retired government servants as senior managers and voila, you are set.

It is sad when people say business houses (strange name, that’s what they call them in India) never think about starting something new. Smaller group have graduated from the earlier habit of diversifying into Pepsi/Coke bottling plants as well. All seem to follow the usual path – make your money in one field, use that to explore other fields.

If you are looking for Bill Gates or Steve Jobs type big startup successes here, you may come up short. There are many small level startup successes here. Eduaction and healthcare startups have found India a heaven.

Wouldn’t it be great if The Ambanis, the Mittals opened up universities and research institution? The Ambanis run a fancy institute of technology and a fancy school. The Birlas and Tatas also run some schools, throw an insititute or few.

It is time Indian Businessmen gave up their real-estate fetish and start something new. Brand new.

1 Comments:

At 4:40 AM , Anonymous Anonymous said...

Hello there. Very thought-ful post and a very thought ful blog.

Its not that Indian's don't lack business thinking or don't' want to start something new..the whole system is messed up. The people who can change it are not doing enough. The big companies have to think differently and invest in ideas/r&d

 

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