

The unstructured billion rupees firms of India - ashwin_krish
http://uncannydesign.wordpress.com/2012/07/08/the-unstructured-billion-rupees-companies-in-india/

======
kshatrea
I can unequivocally state that the conclusion you reach for many corporations
or companies in India may be true. But not for these two. The first company is
a family/friend owned company of the Karunannidhi empire, often called the
first family of Tamil Nadu. The second is owned by a very famous and
politically connected man in Tamil Nadu, and now in New Delhi. In India,
Bharti Airtel, Reliance, Bajaj and these are among the many companies that are
strictly profitable because of state capitalism, or as is more commonly known:
Crony Capitalism. I am not going to write an entire political discourse here,
and of course, just because they got the permits does not mean they would do
extremely well; but it is a significant hurdle. For a restaurant to operate in
any city of any state in India, you need 180 licenses, with 105 of them
renewed on a yearly basis. Do you know how many bribes that entails? For an FM
radio station to operate, as a public welfare concern, you MUST pay 65% of
your operating profit BEFORE tax to the government for the 'privilege'. These
crony capitalists pay over some money to the politicians, but these extreme
barriers to competitive entry in many fields allow them to rake in the
profits. Rahul Bajaj is one: any traveler to India must have seen ubiquity in
the autorickshaw. Ask the owners of Piaggio how quickly they were decimated
when trying to introduce a bigger and better auto, by the so-called
authorities, simply by having to get a bunch of licenses and also not being
allowed to compete in key markets because of union rules. The only area in
India where you can run an honest company without having to fork over bribes
incessantly is the internet.

~~~
aniket_ray
I completely agree.

Just to add to your last statement about internet companies being relatively
bribe free, I've heard pieces (rumours) from well places influential people in
the government that this is changing fast too.

Allegedly, the recent court cases against Google and Facebook asking them to
block content was an attempt to get them to fork over some money.

Also, the recent banning of websites of companies like dailymotion and vimeo
was our not so clean judicial system at work.

------
irahul
> cleanliness, serving speed and courteous behavior.

The author's definition of courtesy is very different from mine. When I am
dining out, here are my expectations:

1\. Let me settle down. Do not shove the menu in my face as soon as I put my
behind on the chair.

2\. Do not hover around my table after you have handed me the menu. It's not
rocket science to watch from a distance and see if I am ready to place an
order.

3\. Bring food in proper order. Do I need to tell you that you don't bring the
soup, appetizer, main course and dessert all at once?

4\. In between the meal, if you feel the need to interrupt me to ask "do you
need something else", do not just barge in. Wait for a pause in conversation,
and approach from where I can see you coming. If I am in midst of the
conversation, and you teleport behind me, and all of a sudden I hear "do you
need something else", that's bad customer service.

These aren't the things you can expect from Sarvana Bhavan. My experience is
you get in, there is a huge crowd most of the times, you try to get the
attention of a roaming wait staff to get a seat, the seating is too compact
and all expectations of reasonable privacy are null and void, the wait staff
will hand you the menu as soon as you sit down and many a times just wait
there while you go through the menu. Most of the times, you get your
appetizers and main course together(speedy service, eh). Once you are done
with the meal, the check magically appears - the restaurant is eager to get
rid of you.

Bottomline - visit if you are hungry and looking for someplace to stuff
something in your face and get out, or you have heard a lot about the place
and want to try it. Any other expectations won't be met.

Disclaimer: I was in Chennai for 4 years, and left about 5 years back. Things
might have changed since I left, though I won't bet on it.

~~~
idiot900
The staff at the NYC location of Saravana Bhavan is also not particularly
friendly or accommodating. The food is decent but the poor service has kept me
from returning.

~~~
mayukh
And you are not the target customer (neither am I). They know who their repeat
customer is and serve that segment well.

~~~
ashwin_krish
Very well said. They customers they serve are retained and expanded. The idea
of restaurants in India is very different from the ones in US or rest of the
world. Hence, there may be quite a disparity in the idealogy and system of
business.

------
Zenst
If india had complete structure then it would not recieve or indeed need aid
from other countries. It would also be hard to bribe anybody as it would be
very hard to hide said bribes.

That all said it gets down to the old issues - does it work then why change
it. If you have a process that works then however unstructured it is nomatter
how you define structure it stilll works. Could it work better, maybe, maybe
not.

Also saying something is unstructured is a viewpoint maybe not shared by those
in such a company. For them that would be the normal way of doing business so
for some it may be unstructured and for others closer to home it is the
culture.

If every country looked at a problem the same, it would be rather boring
though peacful. One mans idea of structure is another mans idea of extra
uneeded overheads and work.

Bottom line if there happy or in business fiscaly sound then nomatter how they
work, if there happy then so be it.

------
guard-of-terra
Any country have quite a few supermarket and fast food chains. And they never
seem to be the topic on hacker news. I think it ought to be that way unless
the businesses in question do something extraordinarily innovative.

Or else, we're headed towards calling some random car wash a start-up.

~~~
imjk
If there's an important lesson from that car wash/fast food chain/whatever
that can be applied to start-ups, then I'd encourage posting about it here.

~~~
guard-of-terra
I miss on the important lessons. Those two chains grew because they cared
about their customers above all else, we are told. But what about thousands of
chains all over the world that grow despite having no special focus on the
customer? Save marketing pitches.

What makes these two chains stand out? Do they, really? How would one prove
their success isn't random or fueled by some other factor?

~~~
ashwin_krish
The reason they stand out most is their consistency over the decade. The
consistency they have as they expand. India is a lot different scenario than
the rest of the world. Tackling innovation alone won't get you far. There are
so many factors starting from purchase of license, regular bribing the police,
rogues etc etc. Besides, this is a story of an uneducated person raising this
big a company. Gathering customers without use of a computer or internet. I
believe this is an important lesson for all startups for this reason. It shows
going beating the usual, taking the untrodden path can take you miles.

~~~
guard-of-terra
Most of those points stand for other fast food or supermarket chains as well.
And the cases of single place becoming a chain usually feature owner without a
formal business education.

------
raheemm
This story has an underlying theme shared by another story here on HN a few
days ago about a mobile app that reached a million users in a year without any
viral marketing (<http://news.ycombinator.com/item?id=4205571>). And that
underlying similarity is this - a relentless focus on customers can make up
for low marketing spend.

~~~
ashwin_krish
@ raheemm : Very true, lots of businesses in south india do work on that
basis. Word of mouth. No online presence, or social media presence, yet they
gather millions of customers. reply

------
senthil_rajasek
This article is devoid of any content except mentioning 2 companies which are
"successful".

Why is this article on the front page of HN?

These are privately owned companies. The author does not even quote sources
for the billion rupee "turnover".

~~~
ashwin_krish
Hey senthil, I think you are missing out an important point here. It is not
abt two successful companies, it is about how they got successful and their
success is an outlier,by not following the usual path. And how the current so
called corporate structure need not necessarily guaranty success. It is abt
how, sans marketing, they have managed to gather million customer base.

~~~
senthil_rajasek
Are you sure these companies have no structure? Where did the size estimate
even come from?

------
imjk
FYI: One Billion Rupees is $18 Million Dollars.

Edited to include source:
[http://www.wolframalpha.com/input/?i=1+billion+rupees+to+dol...](http://www.wolframalpha.com/input/?i=1+billion+rupees+to+dollars)

