This ADVENTURE CAPITALIST Column by U. Mahesh Prabhu was first published by BUSINESS GOA. This is an unedited copy.
Once aroused by another’s success it’s pretty easy to desire ones’ own; but the temptation of imitation could be catastrophic not just for individuals but institutions as well – especially at a time when organizations are facing extreme competition as well as economic stagnation.
Let me put this in perspective: I was brought up in a little known coastal town on western coast of Karnataka called Udupi. The place at the time was significantly simpler and look much more like the fictional town of “Malgudi” created by legendary writer R K Narayanan. Until 1990s the place had little places to buy what we now called “luxury goods”; you had few schools and fewer colleges to choose from. The nearest place where one could afford the best education was over a hill called Manipal. For ages the only way to connect with the city was by road. There wasn’t any highway and the nearest aerodrome was 60 kilometres south in Mangalore. Railways weren’t heard by many. Yet everyone cribbed about poor KSRTC bus service which was worse than useless and was often crowded to the brim.
It wasn’t that people didn’t have money had someone started a luxury bus service. Most of the people in Udupi were enterprising. Not many may know but two of India’s finest, and now nationalized banks, came from Udupi; namely, Syndicate Bank and Canara Bank. The idea of pygmy banking too was pioneered here by the architect of Manipal – Late Dr TMA Pai. All these wouldn’t have been possible if people were poor. Yet for many reasons until 1987 there weren’t even luxury bus service.
Somewhere in 1988 (not sure) CPC – a legendary goods truck operator from the region decide to take a huge gamble and start a luxury bus service between Udupi & Bombay (now Mumbai). It was indeed a great gamble because not many wanted to try “new” – strange, but true! Udupites’ adaptation to change was often slow. However, after significant efforts, in the coming months, the bus service from Udupi to Mumbai became a hit. The company minted money. Pretty much sooner every landlords with hard cash decided to try their hands in the business but perished sooner or later.
In 1988, yet another local business family decided to start a “showroom” for “consumer durables” which went by the name of Harsha. People were apprehensive, as usual, at first. But when Harsha succeeded and began to expand – many tried to do the same, a great many failed.
What happened in Udupi, I eventually realized, is a standard norm in any Indian city or town. A recent financial survey by RBI reveals that borrowing by SMEs has been down by over 10%! None want to try their hands in business. Why? Because “it’s risky”. But what’s the essentially component in business that makes it “risky”? Strangely none seem to ask. Temptation to imitation in business is a perfect recipe for doom. Don’t start a business just because some else has started and thrived. If you can’t offer any difference – like better cost, superior quality or personalized service – that which could make a long term impact – your business is sure to meet its fate. Here’s a brilliant tale from Panchatantra that’s worth recalling to put this in perspective:
There once lived a merchant named Manibhadra, in a town called Pataliputra (modern day Patna, Bihar). He was charitable as well as enterprising. Yet somehow, probably due to misfortune, he lost all his wealth and became a pauper. His status in the society gradually decreased and eventually, consumed by business pressure, felt dejected and depressed. One night, as he laid in his bed, he started cursing his fate and thought of committing suicide by starving himself to death. But soon he fell asleep. A monk appeared in his dream and said, “Don’t worry! I’m wealth, gathered by your forefathers. You are the legitimate heir. It’s your legal right to possess me. Tomorrow, I shall come to your house in guise of a monk. Just hit me on my head with a stick and I’ll turn into solid gold.”
When he woke up in the morning the merchant didn’t believe much about his dream. In the meantime, his wife had called in a barber to cut his hair. Soon after the arrival of the barber, a monk came to the merchant’s house. The merchant welcomed the monk, offered him seat and a glass of water. Then he hit the monk’s head with a stick. The monk fell down and turned into gold from head to toe. The merchant picked up the gold and hid it in a basement room. The barber, who was a witness to all this, stood there feeling confused. To make sure he didn’t make any noise the merchant handed him handful of coins and sent him home.
On way back home the barber went to a monastery enroute and invited all the monks there to his house to dine with him. They agreed! As soon as the monks entered the house, the barber hit them on their heads with a heavy stick. A few monks died, whereas a few others were badly injured.
As you can see the sheer temptation for imitation caused severe consequences for the barber. Make sure you don’t do it, either.
Writer is Hon. Director of CGRI, Consultant with BW | Businessworld and President of Technoved Consulting Pty Ltd, Australia.