The unstructured billion rupees firms of India | Hacker News Reader

The unstructured billion rupees firms of India

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68 pointsashwin_krish25 comments

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.

@kshatrea : Very true. I cant agree on that more. The angle I was looking for was more on how one can achieve heavy success rate without the modern corporate structure or the contemporary methods of marketing. reply

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.

> The first company is a family/friend owned company of the Karunannidhi empire, often called the first family of Tamil Nadu.

While you make a good point, I have to that guy and ask for some sort of a citation on this. I've lived in Chennai for 5 years and never heard anything of the sort. (that Saravana Stores is part of the Karunanidhi empire)

> 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.

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.

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

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.

I must try out the NYC branch sometime!

Well, sometimes what matters is not how good you are on an absolute scale, rather how better are you than the rest. Also, I agree courteous is more of a subjective point. Hence I did not expand on it much.

This is how majority of the Indian restaurants work.

1. You find the first empty table around and sit. No one takes you to your table. Sometimes, you even share the table with another person if you are there without family. Many don't mind unless they are there with friends and want some private conversations (but then, the Indian restaurants are not the right place for this)

2. The menu is on the table or stuck on the wall. Most times, there are no menu. Someone comes to you and recite the whole list of available items.

3. Soup, appetizer ?? That is not part of the South Indian menu. If you order meals, you get all in one plate.

4. If you need something, you call the waiter nearest you. If required - shout or whistle. No one would mind you doing so.

The places are often crowded specially during lunch and dinner time. If you need some calm place, you have to go to upscale restaurants.

EDIT - As someone below said, you are not their target customer.

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.

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.

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.

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?

All valid points that could make for great discussion. Perhaps this story isn't the greatest example, but I've seen much less related submissions that have made for great discussion and applicable contributions to startups/technology.

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.

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.

Well, the point I was trying to make was how a small retail chain can get successful to an extent that make any one awestruck. Innovation need not be the revolutionary or apple kinda innovation. Even a small innovation can make million user base. Besides, i agree, they are not start ups per se. The definition of startup itself is a bit loose so going along that line won't get us far. The important thing is to be successful. Innovation is a way to success. If you need to be innovative for achieving million user base, so be it. Else, even the out of the world innovation can be shunned by the customers. The blog points out that serving customers are far more important than spending loads on marketing etc.

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.

@ 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

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".

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.

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

FYI: One Billion Rupees is $18 Million Dollars.

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

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