reflections

A GREAT ARTICLE BY CHETAN BHAGAT. The great Indian social network
19 Dec, 2010 0508hrs IST [ Chetan Bhagat ]
It’s been weeks since i saw the amazing film
“The Social Network” and it still hasn’t left
me. The movie tells a semi-fictional story
about the creation of Facebook (based on
the book “The Accidental Billionaires”).
While the film is extraordinarily well made,
the story it tells is even more amazing. Mark
Zuckerberg, the founder of Facebook, at 26,
is the youngest billionaire in the world. Six
years ago, Mark started Facebook from his
college dorm. Today, the privately held
company could be worth $50 billion (Rs
220,000 crore). The movie is pathbreaking
in that it is about talent, made by talented
people and for a country that celebrates
talent.
For, only in the USA, can a boy in his 20s,
coming from nowhere, create a company
worth billions in six years, and the country
celebrates him by making a movie on him.
Ironically, Mark never cared about making
money when he founded Facebook. His
main motivation was to do something
innovative, entrepreneurial, and most
importantly – cool. At one point, he states,
“Money, or the ability to make money,
doesn’t impress anyone around here.”
Compare this to India’s celebrated
businessmen. The corporate czars we
celebrate (with some exceptions) are
second or third-generation tycoons who
run huge empires comprising dozens of
unrelated businesses. Traditional
management theory will wonder how a
company can be in food, telecom, power,
construction and finance, all at the same
time. However, in India such conglomerates
thrive. The promoters of these companies
have the required skill, which is navigating
the Indian government maze. Whether it is
obtaining permission to open a power
plant, or to convert agricultural land for
commercial purposes, or to obtain licences
to open a bank or sell liquor – our top
business promoters can get all this done,
something ordinary Indians would never be
able to. This is why they are able to make
billions. We load them with awards, rank
them on lists and treat them as role models
for the young.
In reality, they are hardly icons. They have
milked an unfair system for their personal
benefit, taking opportunities that belonged
to the young on a level-playing field. Indian
companies make money from rent-seeking
behavior, creating artificial barriers of
access to regulators; thereby depriving our
startups of wealth-generating
opportunities. None of the recent
technologies that have changed the world
and created wealth – telecom, computers,
aviation - have risen out of India. Yet, our
promoters have figured out a way to make
money from them, by bulldozing their way
into taking their share of the pie, rationing
out the technology to Indians, and coming
out as modern-day heroes. In reality, they
are no heroes. They are the opposite of
cool, and despite their billions, they are, in
what is known in youthful parlance, as
‘ losers’.
For if they are not losers, why have they
never raised their voice against
government corruption? Our corporates
don ’t think twice before creating a cartel to
fleece customers. Yet, they never have a
cartel to take a stand against corrupt
politicians. They scream about the Radia
tapes being leaked but do not reflect on
their disgusting content. None of our blue
chips have the capability to invent
technology like the cell phone but being
opportunists, they jumped at the chance of
making money in spectrum allocation.
International investors already know this,
and while they see India ’s potential, they
understand that the Indian corporate-
political nexus is actually keeping India
poor, not making it rich.
This can be fixed. Quite frankly, it has to be
fixed if we want India to be the great
nation our forefathers dreamed of. The net
effect of this nepotism is high – it’s often
debilitating for startups in India, vital to the
broad-based growth of any economy. If we
want to set this right, there is a role to be
played by corporates, the government and
individuals.
First, the few corporates who really care,
have to form a cartel against corruption and
nepotism. If promoters take a public stand
that their business group will not bribe, it
will send a strong message. Compete on
innovation, not the ability to bribe. That ’s
what is cool. Meanwhile, the existing
billionaires should stop flaunting their
money and consider the 57 richest
billionaires of America who have pledged to
give away more than half their wealth to
charity (yes, Mark Zuckerberg included).
Second, our government has to understand
the meaning of protecting Indian industry.
It isn ’t to protect the established fat cats,
who could frankly do with a dose of
healthy competition. Protecting Indian
industry means policies that help new
Indian companies thrive, an environment
where startups are glorified and inherited
princes are not put on a pedestal.
Innovation is considered cool, not
inheritance.
Third, we as individuals have to stop
admiring and glorifying the parasitic
billionaires of India. They may not be
technically doing anything illegal, but there
is definitely nothing cool about using
connections to get something that you
couldn’t have if there were fair competition.
We should not be celebrating money,
consumption and power. We should be
celebrating innovation and
entrepreneurship.
Yes, these businessmen employ some of us,
and we have seen increased affluence
amongst some Indians. Maybe we have a
million rich Indians now. It isn ’t enough.
With the right business environment, India
can be a dramatically different place,
offering a better life to not just a few, but all
of us. After all, to modify a dialogue from
the film, “You know what’s cooler than a
million rich Indians? A billion rich Indians.”
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