John Mullins, Associate Professor of Management Practice in Entrepreneurship and Marketing at London Business School (LBS), was in Mumbai recently with a team of MBA students to study entrepreneur practices in emerging markets. In a conversation with BT's Ajita Shashidhar, Mullins talks about Indian entrepreneurial stories that he finds truly impressive. Excerpts:
Q. What made you choose India of all the emerging markets?
A. There is much to learn from India. Twenty years from now, all the growth will not come from Europe and North America. It will come from emerging markets such as India. Therefore, it is a critical market to understand.
Q.Are there any Indian entrepreneur-driven enterprises that you particularly admire?
A. My students are currently touring rural India with the sales team of Dharma Life. I find their model impressive. The company caters to the basic needs of rural people by creating a distribution network for products such as cycles and stoves at affordable prices. By doing so, Dharma Life has also enabled several rural people to earn a decent livelihood by selling these products.
Q. How important are entrepreneur-led businesses for a country like India?
A.Entrepreneurs are the future of India. The country needs to create 10 million jobs a year for 10 years to address the menace of unemployment. Big companies can never generate as many jobs. Entrepreneurial opportunities are abundant in this country. There is scope to set up ventures in the areas of education, power, logistics, infrastructure, the list goes on. The downside, of course, is that it is difficult to do business here as there is too much corruption.
Q. A lot of Indian entrepreneurs have been bitten by the e-commerce bug. While there are many success stories, several e-commerce ventures have gone bust too. How viable are these businesses?
A. There are too many people pursuing dot com ventures, which have no future. The key thing one needs to do is step back and ask oneself if their model is going to work rather than ride on the fact that India is a growing economy and that anything and everything would work here. It is important to explore the market attractiveness and industry attractiveness of the business.
Q. Is there any Indian e-commerce business which, according to you, has done a smart job?
A. I quite like the model of Myntra.com. It is a business which failed initially, but the promoter was smart enough to have a distinct backup plan which he implemented when he realised that the original business model was not successful. Myntra started out as a mass customisation business, offering personalised products such as coffee mugs, key chains and so on. Mukesh (Mukesh Bansal, Founder, Myntra.com) was quick enough to alter his business plan and turn into a lifestyle retailer, and the business is doing extremely well.
In fact, Myntra is a lesson for all those who have entrepreneurial ambitions. It is important for entrepreneurs to find an alternative course rather than bang their head on a wall and fall down if their businesses failed. Mukesh altered his existing business model and he did well.
Q. The other entrepreneurial trend in India is setting up social enterprises. How viable are these?
A. It is incredibly difficult to build these businesses. However, as I speak to you, my students have gone on a bus ride with Reality Tours. It is a tour operator which takes people to visit Indian slums such as Dharavi (in Mumbai). Reality Tours had a challenging run initially as no hotel concierge would entertain it because it focused on slum tourism. But they are successful now. In fact, 80 per cent of its profits go towards education and health projects in slums.