Rational Expectations

Aravind8217;s a non-profit organisation, but Prahalad8217;s studied it8217;s numbers and they show a 115 percent return on capital invested in the surgeries. Aravind offers lots of free surgeries, but think of the profits if this was done commercially India has 6 million totally blind and 12.5 million commercially blind, who can do no useful economic work. Similarly, imagine the opportunities of extending this model to clinic-hospital chains for treating the scores of diseases India is afflicted with 8212; work out compensation packages with the government for each TB case treated, for instance, you8217;re talking of secured cash-flows few businesses in India have today.

Similarly, as Prahalad points out, it takes a real visionary like Dr Kurien to realise the great opportunity in lakhs of small families milking their cows at home 8212; Amul has got 6 lakh families contributing milk to it each day, pro-cesses this centrally, and is today one of India8217;s best-known brands. The decentralised supply-chain helped Amul cut costs dramatically, and helped create a huge dairy operation at a time when the rules didn8217;t permit large-scale corporate dairying, and has given Amul the kind of advantage that no one has, or ever envisaged.

Prahalad8217;s style of hooking businessmen at CII was to show pictures of a blind woman or of a family milking a cow, and asking them if they saw any opportunity in this, as did Aravind and Kurien. Well here8217;s another, very common one: men and women easing themselves on the roadside through the day. A common sight, but no business opportunity here, is the reply Prahalad would have got if he8217;d presented this at CII.

One man, Dr Bindeshwari Pathak, however, thought differently in 1974. From that emerged Sulabh Sauchalaya, which has already built 4,000 public toilets and 10 lakh home ones for municipal authorities across the country and has a turnover of roughly Rs 100 crore today 8212; all fixed investments are made by municipal bodies, and Sulabh charges a 20 percent consultancy fees on the total cost. And while Pathak is replicating this in Ne-pal and Bhutan, some NRIs are emulating him, building more upmarket public toilets in places like Janpath and Khan Market in the capital, to begin with. While the land belongs to local authorities, the NRIs are putting in their own funds, and hope to make money from the advertising they8217;ll be allowed to put on the walls.

There are scores of such examples, essentially all relate to just thinking differently. Koshika Telecom, which has run into lots of problems with the government for not paying its license fees, for example, came up with a concept truly revolutionary. To increase its subscriber base, it decided to use its cellphones as mobile STD booths, with people taking it to the homes of villagers who wished to use it. This fell foul with the authorities who pointed out that this was misusing the license, and the jury is still out on this. The point, however, is that the idea was innovative. Interestingly, this is one idea being used now by the Grameen Bank in Bangladesh, to help rural women increase their incomes 8212; the Grameen Bank, incidentally, is the first in the world to come up with the idea of using local communities to provide collateral against loans to those who would normally never be considered loan-worthy. Citibank, according to Prahalad, is trying to emulate Grameen Bank8217;s methods, to increase its lendingbase in India.

Apart from the tonnes of money to be made by thinking differently, what else strikes you about what8217;s been said so far? None of these examples relates to the current craze 8212; the internet and e-commerce! That8217;s not to say that there8217;s no great opportunity to be made on the net, but that in a while, even the net will have so much competition that there won8217;t be any great opportunities unless you think differently. Think!