An interaction that gave us insights into the unique challenges of entrepreneurship in India
While brainstorming the right format and choice of guest for a ‘Let’s Elevar’ event where our entrepreneurs constitute the target audience, we have stuck to a few core tenets. We have focused on inviting changemakers with significant execution experience while curating an environment that facilitates our entrepreneurs to engage and ideate alongside such ‘guests of stature’ on nuanced themes which are central to their businesses. With that in mind, we invited Nandan Nilekani to Elevar to come share his thoughts (in an informal and closed setting) on an array of issues including his life’s entrepreneurial work and the nuances of building successful organizations in an era where technology and automation are disrupting the delivery of products and services to consumers.
We believe the discussion format (a candid two-way conversation) did justice to Nandan’s entrepreneurial experience across the trifecta of private (co-founding Infosys), public (conceptualizing and leading the Aadhaar project) and non-profit (setting up the Ek Step Foundation) sectors. The interactive Q&A style discussion provided us with an opportunity to hear Nandan speak on handpicked issues that were mostly outside of the realm of the existing material available on his published views. As a result, the interaction offered our entrepreneurs unique insights which contextualized real life challenges in executing in a complex country like India – right from macro issues like buyer behavior nuances and the scope for disruption in certain sectors to more personal instances of entrepreneur mindset that needs to constantly evolve as organizations grow from early stage ventures to a large successful organization in just a few years.
The session got rolling with Nandan highlighting the positive perceptional shift around entrepreneurship in the last decade and noting that in some sense entrepreneurship had “truly arrived in India” with the growth of “venture capital” coinciding with an increasing interest among individuals to assess risk and take the entrepreneurial plunge. Drawing from his experience of operating across the trifecta of private, government and nonprofit sectors – scale, sustainability and speed were picked as the common elements which helped stitch together his many successful ventures. Irrespective of the entrepreneur’s focus sector, the need for identifying the lever of growth within an ecosystem is what would ultimately drive success: success in business can be achieved by focusing on business and market metrics, success in the government sector meant an ability to work with people within a large system and success in the non-profit sector depended on a more collective, collaborative framework.
While the rise of entrepreneurship is welcome, Nandan talked about the importance of being prepared for the era of automation where jobs will increasingly get lost due to automation – as is already evident in sectors such as manufacturing. In this context, the important role MSMEs play in creating jobs as employment opportunities gradually shift from manufacturing towards a “services” driven economy was highlighted. An inability to meaningfully rise up to the challenge that automation poses could ultimately cripple the benefits of the demographic dividend for emerging economies like India with a potential mismatch between people’s rising aspirations about their jobs and income levels and potentially, large scale unemployment and/or attrition. This was a good segue into Nandan’s view on management style and team culture which had a simple emphasis: constant reinvention and learning at the leadership level coupled with the importance of alignment of vision among team members so that material issues like ‘delayed gratification’ become accepted as part of a common organizational culture. Human capital, is a valued asset at any firm and the best way to fight attrition was through investing in skilling and training initiatives which ensure that an employee’s skills remain relevant and appreciated in the workplace. Clearly, ‘train to retain’ emerged as a potent tool in the war against employee attrition.
The case for achieving business scalability and sustainability for our companies through the use of technology and data was also closely discussed. We had the chance to revisit the Aadhaar project and the many ways in which its implementation defied the expectations of a government program and managed to tap into the advantage of scale which government networks provide by leveraging data and technology. Nandan recounted how he had been able to maintain a lean core team of around only 100 members and yet managed to enroll nearly 1.5 million people a day into Aadhaar by creating a parallel “technology assisted” environment of several thousand third party enrollment centers. Reflecting on some of the observable challenges today’s fintech players face with respect to having to resort to a part feet-on street model despite existing technology integration, Nandan felt that technology and human service intervention could co-exist provided the human component was also linked to a digital technology backbone.
“An inability to meaningfully rise up to the challenge that automation poses could ultimately cripple the benefits of the demographic dividend for emerging economies like India with a potential mismatch between people’s rising aspirations about their jobs and income levels and potentially, large scale unemployment and/or attrition”
Given our large portfolio of financial services companies, many of our entrepreneurs displayed great curiosity in understanding where the next phase of disruption in financial services would come from and about how well-positioned they need to be to be able to reap its dividends. Nandan’s broad overview of the sectors most susceptible to assimilate technology into their operating models was financial services followed by education and then finally healthcare. Not surprisingly, with respect to the disruption possibility in financial services, we received reaffirmation of the immense potential vested within the India Stack architecture namely eKYC, digital signing tools and UPI to redefine the delivery of services and products across the lending and payments ecosystems. The ability to capture additional customer data availability via smartphones and lower operating costs for service providers by standardizing and digitizing customer documentation requirements was something he dwelled on and felt, would ultimately help India move from ‘data poor’ to ‘data rich’ paving the way for individuals and small scale enterprises who are credit underserved to build their own data banks which could be utilized by financial institutions for lending activity – and banks and fast growing NBFCs that leveraged this change would succeed.
Elevar’s long term view of opportunities in the education segment has led to a strategy of focusing on companies building access and distribution into schools. We invested in Varthana as it offered a unique approach to building a “financial services” centric model for the education segment focused on financing affordable private schools which has helped it establish strong relationships with school entrepreneurs and overcome some of the inherent challenges faced by other education ventures with respect to distribution and achieving scale. Nandan’s decision to pursue the non-profit route to solve for early school learning inefficiencies is buoyed by a similar understanding of the space in terms of the challenges in meeting the needs of children and other stakeholders in the education ecosystem. In terms of healthcare, most technology interventions such as medical devices and artificial intelligence in diagnostics etc are expected to be a little ahead of the curve for an underserved healthcare market like India and the real opportunity for technology is in low-cost distribution of healthcare through a well-established primary hospital infrastructure – and in this context looking at technology interventions.
Overall, as the two hours of conversation flew by, the dialogue had clearly gone over a range of topics from discussing the everyday challenges of entrepreneurship to disruption while building scalable, customer-centric organizations. The larger macroeconomic picture of how an emerging economy like India might need to re-position its strategy for growth and job-creation in the future were reminders of the fact that though entrepreneurship is here to stay and there is a large market opportunity, it has the potential to transform given the forces of a digital economy – the strengths of which businesses need to be able to harness to survive and grow.