Extract | Take Me Home4 min read . Updated: 19 Jan 2014, 02:33 PM IST
A new book by Rashmi Bansal looks at 20 entrepreneurs who found their business opportunity in small-town India
Connecting the poor to the rich
Author Rashmi Bansal has documented the journeys of 25 entrepreneurs who graduated from the Indian Institute of Management, Ahmedabad, in Stay Hungry, Stay Foolish; 20 entrepreneurs who made it without the stamp of an elite business school in Connect the Dots; and 25 first-generation businesswomen in Follow Every Rainbow. Now she turns her attention to businesses that laid their foundations in small-town India in a new book, Take Me Home.
In the chapter “A Few Good Men", on Jaipur Rugs, an exporter of hand-knotted carpets, Bansal talks about how founder Nand Kishore Chaudhary decided to leave the family business and set up his own venture; and the challenges he faced while working with artisans. Edited excerpts:
Ilay Cooper was commissioned by INTACH to document the monuments of Diu, a former Portuguese enclave on the coast of Gujarat. He also travelled extensively across
Gujarat, including the tribal belt.
“Can I get weavers in Gujarat?" Nand Kishore asked his friend.
Ilay replied, “Yes—why not. Tribals are artistic as well as loyal, if you treat them with respect and love."
Leaving his 200 looms in Rajasthan in the hands of trusted lieutenants, Nand Kishore shifted to Valsad. Work took Nand Kishore to distant villages, where the tribals lived. But, initially, it was not easy. “Tribals are not very friendly towards outsiders. But I remembered Ilay’s words and I knew, slowly, I will be able to win them over." It took three years to develop a rapport.
Working in far-flung villages also brought practical problems. Without a phone, fax or Internet, how do you keep track of production? The solution came in the form of a wireless set which Nand Kishore spotted at an exhibition in Ahmedabad.
“We installed one repeater (tower) on top of a hill called Sapatura and 15 wireless and fixed stations were set up, costing approximately ₹ 6 lakh."
To carry quality inspectors over rocky terrain, he invested in two jeeps and 20 motorcycles. As in Rajasthan, the supervisors went from loom to loom, delivering raw material and payment to weavers. Gradually, production scaled up, with a truckful of carpets being despatched to Jaipur every week for inspection, prior to export.
But now, there was another problem. Nand Kishore’s success in working directly with weavers was slowly eliminating the role of the middleman.
One morning, a politically powerful contractor came to his office, waving a gun.
“You better leave Gujarat!"
Nand Kishore did not take the threat seriously.
“I knew it was the frustration of his failure… I was doing good work and had support of the tribal community."
By 1999, Nand Kishore had trained 10,000 tribal weavers with over 2,000 looms in Gujarat. That same year, Nand Kishore and his brother decided to go separate ways.
“Phir shuru hua jo main bolta hoon…University of Hard Rocks of life (laughs) (that’s when I entered a phase which I call University of Hard Rocks of life)."
Nand Kishore started a new firm by the name “Jaipur Carpets".
The trouble was he had spent his whole life working with the weavers at the grassroot level. He had little idea about how to run the business. All he had were some looms in Jaipur, the looms in Gujarat and 20 years of goodwill.
“There are 60 processes in carpetmaking, right from buying raw wool to the final delivery… we have a quality control at each level."
“Mera weaving ke kshetra mein bahut naam raha...uska market mein kuch fayda mila (I enjoyed respect in the field of weaving and that helped me)." From a blank slate, Nand Kishore was able to take the exports to ₹ 4 crore in the first year itself. But then, problems began piling up. Finance and HR were Nand Kishore’s two biggest bugbears. To handle these aspects, he hired professional managers.
But handling their expectations and egos was another new headache.
Established in 2004, the “Jaipur Rugs Foundation" receives a percentage of profits from the Jaipur Rugs Company. These funds are employed towards the welfare and training of weavers. “We came to know that weavers can benefit from many government schemes if they have an ‘artisan’ card. So, we helped them obtain these cards." Benefits of the artisan card include group health insurance and bank loans. The foundation also conducts medical camps and literacy classes for weavers and their families. But, it was only in 2008 that Nand Kishore realised—this is “CSR" (corporate social responsibility).
It started with a telephone call from America.
“This is C.K. Prahalad," said the voice at the other end.
“I know who you are," Nand Kishore was surprised, wondering why the management guru was calling him.
Prahalad explained that he wanted to do a case study on Jaipur Rugs.
“I am a simple man doing a simple business. If you ask my neighbour, he probably has no idea what I do. Who will read about me?"
Prahalad explained that he was interested in Jaipur Rugs for its complex grassroots-to-global supply chain. “You are connecting the poorest with the richest…there is a lot to learn from you."
Prahalad’s students came to India and studied Jaipur Rugs. In 2009, a case on Jaipur Rugs was published by the Ross School of Business, University of Michigan. This was a turning point for Nand Kishore. The work he had been doing all along had a name—“social entrepreneur".
With a turnover of ₹ 104 crore in March 2013, Jaipur Rugs is India’s largest exporter of hand-knotted rugs. The company employs over 400 people directly and 40,000 indirectly, including 28,000 weavers.
“My vision is to have 100,000 people working with me by 2020."