I recently visited a jewelry shop in my native town. Even though I have been there quite a few times - i observed some interesting thing. The shop was more than 100 years old. Its larger than most of its neighbors. I have heard about the quality products (gold and silver obviously) they offer. They have loyal customers who extend for generations. You see the cashier's place in the front - there is a person who is easily in his sixties - and you can guess he is the owner. The politeness and attention to details on everything happening around him cannot miss anyone's attention. Behind his chair is photos of this great grandfathers - at least six generation photos. A simple glance at them would reflect they 100 years they were in this business. Their traditional commitment to business and track record is impeccable. There is jewels all over the place. I am sure they pack everything everyday end of business, put it in an iron locker and next morning come again and put them all on display. There has to be some procedure like that to ensure the assets are all safe every single day. A careless mistake on a day, might ruin the whole business in one day.In India - it is very common to see family businesses like this that have been run for centuries. It is not only big entities - even small eateries are run over generations. Even though they had the might and intelligence to spread the business to other parts of the country - it was not a norm to do that. They often restricted themselves to their own cities and towns. They services their community with their needs. It is also very true that they employ people from successive generations. They provide livelihood to families. There is no corporate ascending ladder that you jump fast - it is a stable, slow, efficiently run businesses.
I was in a corporate meeting in my office today. There was a business proposal for a start-up company and someone was explaining the sales pitch to get some investors in. The way it works - you have some idea typically using the internet. You explain the idea to people with money. Make them invest some of their money into your firm. You use that as your seed funding and take your idea to the next level. During the presentations, I just saw something that caught my eye and left me completely mind boggling. Trying to show-case the new start-up in good limelight - they have introduced a notable silicon valley investor as a board member. The intention is to communicate that he is part of the board and his past qualification - it goes on to say investor who has made "successful exits". It left me wondering - why would someone exit his successful business? He should continue to run it, expand it and satisfy his customers. instead why would someone exit (sells) that too multiple times? Can someone be so good at so many businesses. As it turned out - he is just an investor who throws in money at prospective companies only to sell it to someone who can afford to pay more than you had invested. The investor cashes out of that business. In corporate financial sense - this is perfectly rational. The investor provides capital, flips it on a profit when things are good. Wonder - when things are good, why not stick to it and make it bigger? Probably the answer to it is - why take risks when you could sell it and take a handsome return. The whole mentality of buying / selling stocks in the open market has taken a step forward and crept into buying/selling "service" companies. People just do the flips - wonder if they are real businesses that help the society.
In the above two examples - we have seen both edges of capitalism in play. In corporate America - the usual rule is to start a business, take it to the next level where it can be sold. Move on to the next big idea. This is very prevalent in service based companies rather than manufacturing firms. The concept of customer loyalty is organization based. It is the corporate mentality of doing business. In western countries - it is also very common to keep expanding your business. You read business newspapers - every CEO would say they want to multiply the business by 10 times by next year or something similar. Needless to say - you need to talk like this to be a CEO.
It just turns out the whole mindset of an Indian business is completely different from their western counter parts. Ethics and culture are embedded into their business models.
I was in a corporate meeting in my office today. There was a business proposal for a start-up company and someone was explaining the sales pitch to get some investors in. The way it works - you have some idea typically using the internet. You explain the idea to people with money. Make them invest some of their money into your firm. You use that as your seed funding and take your idea to the next level. During the presentations, I just saw something that caught my eye and left me completely mind boggling. Trying to show-case the new start-up in good limelight - they have introduced a notable silicon valley investor as a board member. The intention is to communicate that he is part of the board and his past qualification - it goes on to say investor who has made "successful exits". It left me wondering - why would someone exit his successful business? He should continue to run it, expand it and satisfy his customers. instead why would someone exit (sells) that too multiple times? Can someone be so good at so many businesses. As it turned out - he is just an investor who throws in money at prospective companies only to sell it to someone who can afford to pay more than you had invested. The investor cashes out of that business. In corporate financial sense - this is perfectly rational. The investor provides capital, flips it on a profit when things are good. Wonder - when things are good, why not stick to it and make it bigger? Probably the answer to it is - why take risks when you could sell it and take a handsome return. The whole mentality of buying / selling stocks in the open market has taken a step forward and crept into buying/selling "service" companies. People just do the flips - wonder if they are real businesses that help the society.
In the above two examples - we have seen both edges of capitalism in play. In corporate America - the usual rule is to start a business, take it to the next level where it can be sold. Move on to the next big idea. This is very prevalent in service based companies rather than manufacturing firms. The concept of customer loyalty is organization based. It is the corporate mentality of doing business. In western countries - it is also very common to keep expanding your business. You read business newspapers - every CEO would say they want to multiply the business by 10 times by next year or something similar. Needless to say - you need to talk like this to be a CEO.
It just turns out the whole mindset of an Indian business is completely different from their western counter parts. Ethics and culture are embedded into their business models.
No comments:
Post a Comment