The policy should be a multiplier, a lever in making SMEs 10X or 100X: Vivek Bhargava
India is the 3rd largest start-up hub in the world with about 50,000 start-ups in 2018; around 8,900-9,300 of these are technology-led start-ups and 1,300 new tech start-ups were born in 2019 alone, implying there are 2-3 tech start-ups born every day. A decade ago, Unicorn valuations were almost unheard of, but today we have 22 Unicorns.
In conversation with Adgully, Vivek Bhargava, Head, dentsu Performance Group, envisions a future where the “22 Unicorns created out of India become 100 then that means 10,000 $100 million companies are going to be created and probably lakhs of $10 million dollar companies are going to be created.”
Bhargava is speaking at the Internet and Mobile Association of India (IAMAI) India Digital Summit to be held on January 19 and 20. Watch him and other speakers address key digital initiatives that will cover policies, business, investment, advertising, digital commerce, the start-up ecosystem, emerging tech, eSports and other digital trends.
What are the needs of Indian SMEs from a policy and infrastructure perspective?
We put a lot of emphasis on the ease of doing business in terms of start-ups. There are enough people who can help you set up your start-up and the Government has provided a lot of benefits. Setting up a company that was there 10 years ago compared to what it is today is much easier today. I look at the policy infrastructure to address the fundamental problems that SMEs have and let me give you some examples.
Digital is the age we are living in and almost all SMEs have realised that they need to go digital. But in terms of infrastructure, what do they have access to that allows them to go digital? Let’s say there was a digital marketing tool, hosting space, or ability to send an email, SMS, WhatsApp as the first point of call. Can the Government fund Rs 10,000 worth of email, SMS, WhatsApp? I work closely with Netcore and we would be happy to provide this service to millions of SMEs. There are 53 million SMEs in the country and everyone would receive Rs 10,000 for free. Once they get the first few customers via messaging, they learn how to use the platform effectively. There is no education platform for SMEs where they can learn digital marketing, CRM, and the basics of doing business in a digital age.
In policy infrastructure, a lot of people focus on infrastructure that they understand. But today, to be a successful business you must learn digital and there is no platform available to them to learn digital.
There are courses on entrepreneurship offered by a lot of reputed universities like Harvard and Columbia. Can we convert them to regional languages, take Harvard license to India and give it free? That would be policy instead of creating a Rs 10,000 crore fund where nobody knows how it would reach SMEs.
The policy should be a multiplier, a lever in making SMEs 10X or 100X.
How to foster competition within the digital ecosystem so that SME brands have a fighting chance against the larger platforms?
Every single large company was a small company at one point in time. If small companies crib that large companies are not helping them survive, that’s not going to help. Every company needs to find a niche and within that niche become the best in the world.
Today, a lot of Software-as-a-Service (SaaS) companies in India are able to go global. Anybody in the world can use them. But to subscribe to their services you need to register using a One-Time-Password (OTP). The clients in the USA and Europe had never heard of OTP. If you asked them to enter an OTP to subscribe to my service, you lose a customer. Do they crib about clients not knowing about OTP or pivot their subscription model?
I’ve been buying my electronics from this small vendor in Tardeo, called Radiant Electronics. He gives me a phone a few days before it comes on Flipkart or Amazon, he delivers it to my house and if it has a defect, he takes it back. He may leave the device on Saturday and come and collect his money on Monday. The fact of the matter is that he is an SME catering to customers who may not buy large electronics from Amazon. So, he can compete with Amazon for 100 million customers or he can compete for 1,000 customers.
Every SME will have to find an area where they can innovate. Innovation can happen in three areas – resources, where resources can be talent, technology, capital; processes/ culture, where the kind of an SME can have they can provide service which is 10X compared to a larger company; innovation in your profit formula and business model. Lastly, I think SMEs have a huge play in hyperlocal. The large companies can never compete with SMEs in the hyperlocal area. SMEs have to find niche areas where they can be the best in the world and then they can become a large organisation. There are even small companies that are world-class.
What are some of the SME brands that you admire and why?
Speaking on the brands that are very large and built from scratch, Mamaearth and Epigamia are two such brands that I admire. But I’ve invested in about 20 companies that are in the B2C consumer branding space. A friend of mine who was at Shine.com started this company called ‘Anveya; which is into cold-pressed oils for hair growth and he has done well for himself. I wish I had invested more in that company. I’ve also invested in this company called Sarva Yoga, which is trying to build a global world-class brand out of India. Sarvesh Shashi is an awesome entrepreneur and very passionate about the cause. One of my very close friends is this guy called Rizwan Amlani, brother of Riyaz Amlani of Socials, who is building a very interesting coffee brand called ‘Dope’. I love their coffee and am a passionate coffee connoisseur. A person from Dentsu Webchutney quit and founded a company called Everpret, which makes workbags.
If the 22 Unicorns created out of India become 100, then that means 10,000 $100 million companies are going to be created and probably lakhs of $10 million dollar companies are going to be created.