I just got back from my short vacation, opened The Economist and was flipping the pages when a picture of Sanjeev Aggarwal caught my attention. There is a nice profile of him, called Delhi Dreams, in the Face Value section of this issue. What a pleasant surprise!
The last Indian profiled was Narayana Murthy, the co-founder of Infosys. Other recent notables profiled recently have been Muhammad Yunus, Ray Ozzie and several CEOs like Fred Smith (FedEx), Henning Kagerman (SAP), Ed Zandar (Motorola), Alan Mulally (Ford), etc. So it feels nice to have somebody you know make it to the Economist Face Value section.
I spent two days with Sanjeev only last week as a co-jury member of the NASSCOM Innovation Awards 2006. He has a sharp mind and is open-minded. He is obviously ambitious but has certain humility about him. He also comes across as a person who would do the right thing by the customer even if he can get away with not doing it. I think he has an institution building mindset, which is essential, not optional, if one wants to create a truly successful organization. All this augurs well for Helion Venture Partners, the VC firm that Sanjeev and his partners have established.
“India-out” tipping point
For me Sanjeev represents an important new trend. I believe that we are close to a tipping point in seeing many more “India-out” ventures. Traditionally most intrapreneurs and entrepreneurs in India today are involved in “US-out” ventures. What this means is that their initial markets are in the US. In most cases this makes good sense as US customers and consumers are the early adopters for most product categories. But now, for the first time ever, an India-out strategy of starting local and then going global makes sense in a range of areas that includes, but is not limited to, wireless infrastructure or mobile content businesses.
In my December column in Smart Techie and Silicon India, Riding the India-out Wave, I list three reasons for this trend. First, CK Prahalad’s ideas about fortune at the bottom-of-the-pyramid (BOP) are finally catching fire within technology firms. BOP success stories like Nokia’s designed-for-India 1100 series handset, TI’s LoCosto chipset, and Tally’s million software license sales to micro-firms are having a tremendous motivational effect.
Second, there is again a lot of venture capital available in India which is happy, indeed keen, to pursue India-out deals. Helion Ventures personifies this changed focus.
Finally, there is a product ecosystem that’s coming together as a result of the US-out initiatives inside MNC captives and local startups. This ecosystem is not perfect but it does offer product management, product architecture and business building skills that can be re-purposed for India-out efforts.
India as the incubation-lab for BOP solutions
Will India become the incubation-lab for the world when it comes to BOP solutions? I see this as a distinct possibility.
Today BOP solutions are happening in India in a range of industries like wireless (Airtel), semiconductor industry (TI’s LoCosto), healthcare (Narayana Hrudayalaya), agriculture (eChoupal), and automobiles (Tata’s $2500 car will roll out in 2007). (I have covered some of these here). What’s driving this is the belief, in fact a counter-intuitive belief, that servicing micro-consumers and micro-firms can be profitable.
Delivering a BOP solution that has radically low cost and high quality is not easy. It requires rethinking the product architecture, process models, value chains, market structures and business models. This rethinking comes from an ability to re-synthesize. This ability to re-synthesize is one of India’s great strengths. As a culture, it has an almost unique ability to soak up what others have to offer and adapt it for new uses. Over the centuries it has done this to cuisine, music, architecture and even religion. So it’s not altogether unrealistic to dream that it will now re-synthesize products for the BOP market. What do you think?
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