The Genesis of Jobs

Speculating whether India can spawn innovative companies like Apple and Google is a favourite parlor game among venture capitalists and entrepreneurs.

It’s clear that there is staggering talent and creativity in the country, and it seems more a question of when and not if, provided the proper environment is created. Young entrepreneurs and engineers are bubbling with enthusiasm and energy and spending time with them fills one with optimism about the country’s future.On the other hand, a casual scanning of the daily news can be rather depressing. Riots, murders, suicides, mass protests, corruption, political scandals have become so commonplace that they are no longer a surprise. Human tragedies have been turned into mere statistics. While India is touted as a growth engine for the world economy, it also has the largest number of children suffering from malnutrition and among the highest incidences of crimes against women.

Businesspeople and entrepreneurs are said to make up “India” while farmers, laborers and other low-income groups form the other India, known as Bharat.

The government tries to put the interests of Bharat before India, calling for inclusive growth and championing job creation programs.

How can India and Bharat be bridged?

In a few days, Cupertino, California-based Apple’s hotly-anticipated iPad will hit the market. Led by the legendary Steve Jobs, Apple has upended many industries in the last decade, including personal computing, entertainment, wireless telecommunications and retail. His vision continues to guide strategy and product development at what is arguably the world’s most innovative company. His personal story is just as illuminating for how economic and individual freedom catalyze innovation.

Steve Jobs was born in 1955 to a Syrian immigrant father at the height of the post-War Baby Boom. Before co-founding Apple in 1976, Jobs dabbled in calligraphy, electronics and psychedelic drugs, even travelling to India in search of spiritual enlightenment in 1974 after dropping out from college. Back then, electronics and computers had no serious hope of becoming as mainstream as they are today, and were the exclusive preserve of hobbyists.

The vanguard of this group was a motley set of people who styled themselves as the Homebrew Computer Club, which would probably qualify as the first industry association for the computer and electronics business. Steve Jobs was among the early members. From unlikely beginnings, Jobs co-founded the company that became the vanguard of the computer revolution. He did not go to an Ivy League college, nor did he come from an affluent family. In fact, Jobs recounted recently how he’d travel to the local Hare Krishna temple every weekend while in college because he didn’t have enough money to eat.

It’s not for nothing that America is known as the land of the free. Steve Jobs is one of the best-known examples of how a culture of freedom and openness in America has allowed individuals to prosper based on ability and effort. That culture cannot be replicated quickly or easily. The first step is to boost economic freedom. Much to the disappointment of venture capitalists and others in India Inc., job creation and not economic liberalization has been high on the agenda of the government.

The distinction between job creation and income growth is not as well understood as it should be. Nobel laureate economist Milton Friedman once visited China at the height of Communism, and was taken to a construction site. He asked why the contractors were not using machinery and modern equipment, and was told that the project was part of a government job creation program. Friedman replied that the spades used by the labor force should be replaced with spoons, and that would increase employment even more! The lesson is that it is easy to “create” jobs, but harder to grow incomes because incomes rise only when productivity increases. Productivity increases when companies compete and innovate.If we are serious about creating jobs, we should focus on creating an environment where people like Jobs prosper. Bharat will become more like India.

In the current regime, India is being turned into Bharat. Well-intentioned policies that claim to employ the poor are distorting the labor market by incentivizing people to migrate back to villages from cities. The country must urbanize if it has to develop economically, it cannot continue to live in villages.

Much has been made of India’s demographic dividend. An average of nearly 1 million people will be entering the work force every single month for the next 20 years, a scale unprecedented in human history. The only comparable event is the post-World War II Baby Boom in the US. This is an opportunity, and can be a huge challenge, because all those people will want to be well-fed, educated and productively employed. It would be futile for the government to even try employing so many people. If harnessed properly, this talent pool can transform the Indian economy. If the creativity of this human pool is allowed to flourish, it can change the world. India can produce many Apples and Googles.

Otherwise, the country will remain impoverished and torn by social strife in coming decades, and will naively celebrate the success of its diaspora, for the best and brightest will simply migrate in search of a better life.

Dhirubhai Ambani, founder of the Reliance group, famously said once that it was imperative to manage the environment when doing business in India. The environment should be changed so that entrepreneurs like Steve Jobs can create jobs and businesses can focus on managing innovation instead of the environment.

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Not Just Luck By Chance

This is Part 2 in a two-part series on Bollywood and Entrepreneurship. Read the first part here

Conviction: In recent times, one of the best films about the film business was Zoya Akhtar’s Luck By Chance, released in 2009. It tells the story of Vikram Jaisingh, an aspiring actor, and his efforts to make it in Bollywood amidst cut-throat competition. Vikram believes that success and failure are simply choices people make. In a dramatic scene, his girlfriend breaks down when she learns that she has been overlooked for a lead role in a movie she had spent years chasing. Vikram tells her that so far you’ve believed in and relied on others, now believe in yourself.

He tells her that opportunities are not found, they are created. Apne raaste par chalte raho, chalte raho…dheere dheere saari duniya tumhare raaste par aa jaayegi (Keep traveling your chosen path, gradually the whole world will start following you on that path), says Vikram Jaisingh. Played expertly by Farhan Akhtar, Jaisingh goes on to become a superstar. The movie keeps the viewer guessing whether he was just lucky or “created luck” by sheer hard work, drive and conviction.

Conviction is indispensable for entrepreneurs, particularly the truly innovative ones. Success is elusive and hard to come by. When starting out, family, friends and everyone around you wish you well but they also harbour doubts. Personal conviction is paramount, but it is also very important for entrepreneurs to have a mentor and guide who has unfailing conviction, someone who can advise and course-correct when required while believing in the dream. While it’s difficult justifying a stressful lifestyle and long work hours indefinitely without showing some accomplishment; as an old saying goes, the distance between madness and genius is only bridged by success.

Contentment: Clarity, confidence and conviction mutually reinforce each other, eventually leading to breakthroughs. A hint of success and achievement can alter public perceptions. The idea of the personal computer was considered outlandish, but the entrepreneurs who pushed its development are part of business legend today – history is replete with many such examples.

Success and recognition are accompanied by pitfalls, and they can breed a sense of contentment. Contentment breeds a stasis that can destroy an organization. Again, the role of a mentor who helps maintain the entrepreneur’s focus and passion is critical. Contentment can quickly undo the positive effects of the other three Cs. The biggest risk is not taking enough risks.

The hunger and drive never really dies in effective entrepreneurs. In the movie Guru, Gurubhai asks his shareholders whether they want to become the largest company in the world, now that the company is the largest in India. Vikram Jaisingh describes a friend working in theater as “content” – after working in theater for several months, he had achieved some success and was unwilling to rock the boat.

When entrepreneurs combine the first three Cs and ward against the fourth, stars are born.

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Guru, Deewar and My Lessons From Bollywood

I’ve written earlier about the parallels between film-making and entrepreneurship. Much like management guru Philip Kotler’s 4 Cs for marketing, we can also define 4 Cs for entrepreneurship, and these can be illustrated with scenes from Bollywood movies.

 Clarity Intellectual and operational clarity come from continuous effort and relentless application. In Mani Ratnam’s Guru, which is an unofficial biopic of Reliance founder Dhirubhai Ambani, the protagonist Gurukant Desai, also known as Gurubhai, is asked to defend himself from charges of tax evasion and bribery in front of a government investigation panel. Gurubhai begins his speech by asking, Khada ho jaaoon, ya iske liye bhi license chahiye? (Should I stand up, or do I require a license for that too?). He goes on to question the very legitimacy of India’s now-infamous license-quota-permit Raj and government interference in the economy, which strangulated entrepreneurs through the 1970s and 1980s, and continues to constrain entrepreneurial activity today:

In the full glare of the media and a powerful, antagonistic government commission, Gurubhai unapologetically explains why he did what he did, and how his actions were necessitated by government policy. He is able to hold his own and emerges triumphant because he has an uncommon clarity of purpose. He rejects the charges of government, saying he does not feel the need to apologize for building a world-class business. Agar paisa ban sakta tha, to maine banaya hai (If money could have been made, I made it), he says.Confidence Kishore Biyani, founder of Pantaloon Retail, was asked at the TiE Entrepreneurial Summit in Mumbai last year what he felt like when deep-pocketed companies like Reliance Industries entered the retail industry. Mr. Biyani gave a pithy reply – he recalled the confrontation scene between Amitabh Bachchan and Shashi Kapoor from Yash Chopra’s classic Deewar, released in 1975. Amitabh Bachchan chastises his younger brother for being impractical and idealistic. He tells him that his honesty and commitment have earned him no material gain, to which Shashi Kapoor delivers one of the immortal lines from Indian cinema, Mere paas Maa hai (I have my mother).

Kishore Biyani, known to be a movie buff, invoked the scene in the context of his response to seemingly unbeatable competition. He paraphrased Mere paas Maa Hai to Mere paas Indian consumer ki understanding hai (I understand how Indian consumers think and behave). That was his competitive advantage, and he was quite unperturbed despite the perceived threat to his business because he knew his strengths and weaknesses well.Entrepreneurs typically don’t have enough resources, they have to be resourceful. Just money doesn’t always do the trick – and this applies as much to startups as it does to large companies attempting to do something path-breaking. It has been several years since Reliance and others entered the retail industry – while Pantaloon has managed to scale and grow profitably, the deep-pocketed contenders continue to struggle.This is part 1 in a 2-part series on Bollywood and Entrepreneurship.

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