It's well known how Harsh Mariwala, Chairman of Marico, turned his family's oil business into a full-fledged FMCG company. After handing over the reigns of the day-to-day operations of the company to CEO, Saugato Gupta, the 66-year-old spends considerable amount of time mentoring entrepreneurs through his platform, Ascent.
In a conversation with Ajita Shashidhar, Mariwala talks about the new age entrepreneur eco-system.
How is your entrepreneurship mentoring platform, Ascent, doing?
We started well. We began with 100 members. The initial feed back was positive and then we grew to 320 members. But we went through a learning curve. Some of the building blocks were not really in place in terms of our execution. In the last one year we have taken lot of steps to improve our execution. We had some resignations and that really opened my eyes. I realised that we have to be far more robust in our exection.
We hand hold each trust group much more, we track how are they doing. If they are not doing well, we dig deep and dive into the key issues. If individual members are not motivated then we deal with them individually.
How has entrepreneurship evolved in India?
We are seeing higher degree of interest among entrepreneurs to start new businesses. The start-up culture is far more active today than what it is was five years ago. Entrepreneurs are far more accepted by the society and most importantly, failure is accepted. If society doesn't accept failure, people will stop taking risks. So, it's ok to fail. If you are termed a failure socially, you will always be scared of failing. Also, technology is a huge disruptor. There is a realization that you have to grow. Just because you start doesn't mean that you have arrived. The growth challenge is very different from the start-up challenge. Start-up challenge is all about establishing a business model, what is your business, getting the prototype right, achieving a certain scale and so on. But the challenge comes in when you scale and when you can't do things all by yourself. The challenge could be in terms of talent, funding, leadership style and delegation. That's where there is realization that what got me here will not get me to the next stage. Entrepreneurs are realizing that they cant be static at the small level. If you are static you are actually retreating. So, you have to grow the topline, bottomline and if you have to change you have to grow from the way your are operating. That's another realization which is dawning upon entrepreneurs.
Why are so many start-ups folding up? Is it the wrong time to be around since the economy as a whole isn't doing too well?
There is no right or wrong period, as I personally think that lot of start-ups are based on innovations and pioneering opportunities. So, even in a bad market you will have opportunities to innovate. So, I don't consider that the environment is wrong or for that matter any environment is good for a start-up if you have created a strong 'right to win'. I differ with you on that front. But, yes, you need to have a strong 'right to win'. You cant have a 'me-too' proposition. Then the chances of winning in the market place are low.
But aren't too many start-ups closing down?
That's because of herd mentality. Someone starts and 20 other people jump into that without realsing that they have to have something different. Herd mentality has always been there with Indian businesses, but it is getting more with more competition coming in. So there is a stronger need for creating a strong 'right to win'.
There have been quite a few FMCG entrepreneurs, especially food start-ups coming into the fray. FMCG is a tough business, what's your take about the future of these businesses?
The biggest barrier in the earlier days for FMCG companies was distribution. But with e-commerce getting traction, the distribution bottleneck is easier. The cost of launching is also lower. The other big barrier is advertising, which one can now do through targeted interventions on social media , where the cost of launching is much lower. FMCG personal care and food brands will come up. They already have. We bought stake in a company called Beardo, which is making male grooming products.
How can a start-up attract good talent?
You need to create a good image for your company to attract talent. There is a war for talent. Then you need to recruit the right quality of talent, then comes creating the right culture, offering growth prospect and whatever else that engage that talent.
What is the biggest challenge for start-ups today?
In some of the sectors the valuation was high, so they got funding without them making profits. They were splurging money and were eventually questioned. You need to have some visibility of profit.