Monday, November 27, 2006

The strange Indian entreupreuner

A groan escaped my lips yesterday as I read about this guy called Kishore Biyani and how he was adding a chain of hotels to his portfolio of an existing 100+ businesses. This guy is into everything; he has retail shops in every format (I love this meaningless MBA word), trouser stores, kids wear, Indian ethnic wear, grocery stores, discount stores, music stores, stores selling financial products, duty free shops blah blah; then he has random businesses like movie production, real estate development, health care, insurance, contract farming, beauty, gymnasiums, etc etc etc etc hahahahaha...all under the name of Future Group, a stock exchange listed company

When you goto the stores of this company, you get bland, boring and less than optimum quality products. I bought some trousers once and they were awful, though the shirts I bought weren't as bad. But when I returned another time to buy shirts, they were not carrying the same brands anymore. An epitome of Indian chaos.

One of their marketing managers interviewed with me. I asked "What is the brand positioning of your no. 1 brand Pantaloons? Why do you have a campaign that says 'Fresh Fashion' and shows sexy girls when you just mentioned it was a family store?", he answered "We are basically emulating the Zara model of getting clothes from the factory to the store fast, so we say 'Fresh Fashion'" hahahahaha. For those of you who do not know, Zara is a very successful Spanish clothes chain gone international and their brand is to bring runway fashions to the youth at budget prices, a brand position that has nothing to do with the speed of the supply chain; though Zara is renowned for its fast and optimized supply chain, but the customer dosen't care about that.

But Future Group is not alone. Every other group is similar. Tata, the famous & largest Indian business group, is again into everything, from hotels to steel to soaps and software. Bharti group, India's no. 1 cell phone provider also recently started farming (!) and retail stores !!!!!

And there is this guy I know...into everything, Internet websites, mobile downloads, franchisee shops, movies, software development, bookshops and now into compute hardware. He recently raised some cash from VCs...the merchant banker who worked on his project described him as the "finest entrepreneur he ever met"

Ok all this fine. Or appears fine.

But tell me something, please tell me, where is the talent in all this? Is entrepreneurship only about recruiting people, managing capital, undertaking strategic tie-ups and working the legislative environment? I thought entrepreneurship was about innovation, passion, product...

In these Indian entrepreneurs I see size, but I see no innovation...I see nothing of the entrepreneur in the Microsoft I see Bill Gates, in Sony I see Akio Morita, in Skype I see Janus & Niklas, in Oberoi Hotels I see M.S. Oberoi...when I say I see, I mean I see the difference they made to the product, the service, the execution, the company culture...

Maybe the group system worked in non consumer categories like steel, petrochemicals; or it worked in protected and closed India. But will it work today & tomorrow? Are there any Indian electronic brands left? The Indian electronics industry was opened up 7 years back. What happened to BPL, Godrej, Onida, Videocon? Two are bankrupt & extinct and the other two have become discount brands...

So will Indian entrepreneurs survive? What will happen once the Indian economy opens and the real enterprises with domain specialty come in? What happens to Kishore Biyani when Zara comes? What happens to my friend when seed money becomes available in India and real Indian Internet entrepreneurs arrive?

Can companies and new products be built by management students? By smart capital allocation? By non specialty?

Can there be enterprise without entrepreneurs?

Maybe they can in India. When VCs can't spot the difference between innovation talent and capital allocation talent, is when they back the guys who give this diversified my diversified entrepreneurs, make hay while the sun shines...


Anonymous said...

well written

Anonymous said...

You talk about strange entrepreneurs? What about corrupt entrepreneurs like the likes of Reliance...more like mafiosi entrepreneurs..unless laws and education in India improve we can keep expecting more of this! Even with the entry of the likes of Zara our master politicians will in the name of 'saving' the country 'protect' Indian companies.