TO START UP Sarkaar To Start Up!

Syed Sabahat AzimGlocalCommon Service Centres (CSCs)—setup at an average of 16 centres a day inhis three years as CEO.When it was time to move on in2009, Azim confesses—citing theJudgement of Solomon—he wanted todo something that would not pitch himagainst his own creation, despite thestrong temptation to duplicate its success. A personal tragedy resulting fromthe over-priced but faulty mismanagement of a family member’s health ultimately nudged him closer to the healthcare industry. If this could happen to adoctor and an IAS officer who couldafford to pay, he thought, then what ofthe rest?With seed-stage investment fromElevar Equity and Sequoia Capital, and ahost of team members who left his firstA doctor from Aligarhventure with him, Azim quit the servicesMuslim University and an IIMin 2009—a year before his sabbaticalAhmedabad alumnus, Azimended—and founded Glocal Healthcaresays he is a rural India guyServices in 2010. It offers affordable andwho is easily bored to death,quality health care through an inteand is constantly looking forgrated model of block-level comprethe next challenge.hensive care hospitals, healthinsurance, skill development and technology. Having raised 58-crore ininvestments, latest annual revenues of 11.3-crore, and with over 500 peopleworking for Glocal, turning his back onthat restraining staircase has sureserved him well.A doctor from Aligarh MuslimUniversity and an IIM Ahmedabadalumnus—Azim says he is a ruralIndia guy who is easily bored to death,and is constantly looking for the nextchallenge. Serving as perhaps theyoungest secretary to the CM in justhalf a decade of service, with directaccess to the top offices, had made itdifficult for him to go back to a regular posting, he admits. Also, he hadrealised, “if you are an honest officer,hen Sabahat Azim decided to take a five-year sabthere’s not much left to you at the end of the day”. Glocal isbatical from his hard-won spot in the IAS, his firstpoised to add 50 new hospitals in six states providing secondarystop was an interview with a solar power major. Hislevel, quality rural health care at low prices. Other projects on theenthusiastic quest ended abruptly at a staircase sign in themove include a diagnostic tool for doctors; soon-to-be-launchedcompany’s offices that said “Please take one step at a time”.patient monitors; and a freshly-minted one-year managementInstead, he founded SREI Sahaj e-Village in 2006—a successprogramme with IIM Calcutta to train hospital administrators whoful pan-India PPP venture aimed at traversing the digital barhave the unenviable task of managing doctors.rier. Partnering with the government to bring e-governance toIndia’s villages, the company he led helped create rural entrepreneurs who provided a multitude of services via 18,000WPhotograph by Subhojit PaulJUly 2014 INC. 23

IAS officers turned entrepreneursContinued from page 22India’s remarkable capacity to embrace and“absorb” technology, critical for socialtransformation in the digital age.Profiting from bottomof the pyramid24 INC. JUly 2014With the economicliberalisation of 1991,Purohit realised thefutility of socialism asa delivery mechanismfor India’s growth anddecided to join theprivate sector in 1995.Gutter Credit hereWhat Azim puzzled over during hisIAS career was why a state that wasremarkably free of corruption, withgood administrators, running water andelectricity—all made possible by a largebudget for a small population—continuedto look like a shanty town. The answer, hesays, is that a good government is bad forpeople. Doling out welfare and freebies tocitizens simply does not work, as no onevalues it, which leads to a state being stuckat the lowest echelons of the developmentladder. The State can’t be your livelihood.Industries need to come up to meet thedemand and charge the right price foramenities, he feels. Just as a seemingly perfect state would collapse if governmentfunds are withdrawn, there is no substitutefor creating value if you wish to makemoney—the very lifeblood of a business.Glocal’s first hospital at Sonamukhi inWest Bengal was built on a theoreticalmodel that distilled 90 per cent of India’sdisease load into 42 conditions. Afterdevising a protocol for treating and managing these, the result was a 30-bed hospital that simply didn’t work! People maylike free things but they don’t trust them isthe turnaround lesson that the “phenomenal” failure of his first hospital taughtAzim. People simply did not trust something that was priced so low—borne by thefact that a 150 consultancy fee workedbetter than 50! Also, opinion of others inthe trade matters in the health care business. Apart from patients’ mistrust of lowprices, the new hospital threatened theexisting ecosystem, prompting muchrumour mongering in the small townabout its doctors’ efficacy. “People don’t goto a hospital because it is good; they gowhen someone tells them it’s good, whichthey never will if they themselves are

IAS officers turned entrepreneursSanjay PurohitiProfSanjay Purohit joined the IAS inthe late 80s just as a “confused” India as he calls it wasentering a dark socio-economicphase, soon caught between theMandal agitation, a ballooning deficitand petrol rationing. With the economic liberalisation of 1991, hequickly realised the futility of socialism as a delivery mechanism forIndia’s growth, where the government had no business being in business. Suddenly the IAS was no longerthe only place to make a difference.After taking a study leave in 1993 andsubsequently graduating from IIM-A,he joined the private sector in 1995.Multiple roles within the telecomboom beckoned, and were followedby a long spell in the US helpingbusinesses in trouble. A self-confessed “reconstruction specialist”,Purohit served as a CEO for businesses as diverse as manufacturing, BPOs and textiles. He facilitatedthe turnaround of the 600-milliontextiles firm Dan River—now taughtas a case study at the University ofNorth Carolina. Finally, this smalltown boy from Rajasthan realisedthere were others like him backhome who could benefit from a betContinued on page 26Photograph by Subhojit PaulJUly 2014 INC. 25

IAS officers turned entrepreneursContinued from page 25threatened,” he says. Glocal’s hospitals arestill priced low, but by moving into secondary-level care, not easily available insmall towns, they avoid threatening thelivelihoods of primary care providers.Azim also realised the location was allwrong—patients found it easier to travel toneighbouring towns than to Sonamukhi. Ithas since found its feet, and the other sevenhospitals that followed broke even withinmonths and were turning profits in under ayear. Glocal aims to make health care lesscapital intensive with modular scalablearchitecture that allows faster and frugalhospital build and a strong IT backbone forcheaper health care delivery.Purohit stresses on creating lastingvalue, saying that frugality is the key to survival and every penny matters if you wishto tap into and benefit from the bottom ofthe pyramid. There is a very thin linebetween viable profit margins and failurein a highly price-sensitive market likeIndia, where a 10-cent ice cream conebrings in more footfalls than anything else.Nowhere else has McDonald’s priced anything as low, with the Mercedes A-class andHyundai Santro being other cases in point.Magic mantras for successArmed with his experience of working in31 different countries, Purohit admitsthat India’s bureaucratic process is probably the worst. Not so the bureaucracy, allthree insist. “There are more great people ingovernment than there are outside,” feelsAzim, “but being honest is not enough; youmust also be competent.” Bribing ensuresthat you meet only the bad ones, he adds.When Purohit imported the first set ofdevices for iProf, customs officials mistookthem for video players. Against shortcutadvice from friends to just hire an agentwho will get the job done, he chose insteadto take his appeal higher to the customscommissioner to create a new category ofimports. Cutting corners in a business youare in for the long haul will prove detrimental, he warns.26 INC. JUly 2014ter education delivery mechanism. Outof this churning was born iProf—a company that employs 185 people withannual revenues of 150-crore.Steve Jobs’s unveiling of the touchscreen iPhone in 2007 was the Eurekamoment for his new venture. Strugglingto find the best way to transform education delivery in India’s schools—especially outside of metros—he was lookingfor inspiration, having dismissed the laptop and keyboard as unviable options forwhat he had in mind. He opted instead toimport 1,000 pieces of a seven-inch Personal Education Player (the word tabletwould only enter the lexicon later withthe iPad in 2010), having found the rightfit for his ambitious entrepreneurialexperiment in 2009.Later, another tablet, which was notquite as successful, would help iProfgrow. The Indian government’s Akashexperiment, which failed to take off asexpected, generated enough awarenessKulkarni, who comes across as endearingly old school, believes in doing a fewthings well rather than doing too many atonce. Growth, not untrammelled expansion; absolute honesty when dealing withcustomers; attention to little personaldetails; sensitivity to cultural nuances andPurohit admits thatIndia’s bureaucraticprocess is probablythe worst. Not sothe bureaucracy, allthree insist. “Thereare more greatpeople ingovernment thanthere are outside,”feels Azim.and hype about the medium of deliveryto help Purohit’s iProf make inroads intothe education sector. Five years after itwas founded, more than 5,00,000 students are now using the iProf product.The country’s largest personal education tablet provider via Android-basedapps, iProf combines imported hardware with an Indian software platformto provide educational content that isprocured by partnering with the rightacademic institutions and content providers like McGraw-Hill and Macmillan.After launching in Gujarat and Bihar,iProf did its first big state-wide rollout inMeghalaya in 2012 before winning asecond big, nationwide contract forMauritius. Market leaders with morethan 80 percent of the market share, theB2C-turned-B2B company has raised 96 crore in investments and hasrecently won a nationwide contract toprovide a Learning Management Solution to CBSE’s 15,000 schools and 1.5crore students across India to helpthem leapfrog into the digital era.due process—an ingrained habit he attributes to years of meticulous “filing” in government—are the cornerstones of his workethic. Like him, Purohit also cautionsagainst obsession with a looming quarter’srevenue and stresses on ensuring that oncea product reaches the end user, you mustalways know whether it is being used.Azim learnt well from the mistakes hemade the first time around. Focus on supply chain management and don’t allowinventory to pile up, he advises, somethingthat had made it difficult for him to liquidate when he quit his first venture. Moreimportantly, in a word-of-mouth marketlike health care, you can’t disturb the localequilibrium. It will only trigger a butterflyeffect that will benefit no one. Glocal hasnow found a way out; by turning to secondary care instead—“hospital quality atnursing home prices” and has changed anadversarial relationship with entrenchedinterests to one of co-option by not threatening local livelihoods. Sticking to a guiding philosophy is alright, but alwayskeeping an ear to the ground helps, he says.

IAS officers turned entrepreneursspeaking upOn leadership and buildingwinning teamsCut the decision-making layers to amaximum of two; improve the qualityof performance by training the hell outof your employees; and then trust them todo their job is what Kulkarni believes. Hesaw an opportunity where others usuallysee an expiry date. Brickwork Ratings hasno retirement age, choosing instead to harness the power of India’s nifty public sectorbankers whom he credits with the successof his ratings agency. Their collective wisdom trickles downward, and respect, inturn, comes easy from the youngerbunch—who may just be naturally inclinedto think they are smarter than their bosses,he adds with a laugh.All three agree that public administration offers unique lessons in teamwork—the most crucial being that even thoughyou can opt for large teams, you almostnever get to pick them and must learn towork with what you have. “The wholeestablishment is a queue”, says Kulkarni,where both reward and punishment areout of your hands. Salaries are fixed andappointments, transfers and promotionsare determined by somebody else. That’swhere tradition, training and relationshipscome into play, making the governmentvery good at crisis management. Little happens due to just one person’s work and thejob at hand often trumps the search forpersonal glory and one-upmanship. Purohit, while admitting that the private sectormay theoretically offer you flexible hireand-fire powers, feels the dearth of goodtalent—a rare commodity—is still a constraint. The government prepares you well,he agrees.In any case, the biggest drag is the number of people around you, admits Kulkarni.As IT secretary he chose the support oftwo, while opting for only one in the biotechnology department. As Glocal grows,Azim also warns against allowing corporate headquarters to bloat up. “WhenKulkarni staunchlyadvocates delegation.Train, trust and delegate—Kulkarni believes in keepinghis employees in anempowered state of mind tobetter unveil their innerstrengths.Vivek Kulkarni,BrickworkOne of the most importantlessons Azim learnt as a youngofficer was from a districtmagistrate, his boss, who toldhim that he would have alifetime to learn the law, butonly that one moment to dothe right thing in the field.Syed Sabahat Azim,Glocal HealthcareSanjay Purohit,iProf“The good thing about thebureaucratic process is thatthere is always a higher levelavailable for appeal,” saysPurohit. The lower echelonsare tied up in a repetitive dayto-day process and cannot beexpected to solve, or grasp, acomplex problem.JUly 2014 INC. 27

IAS officers turned entrepreneursbureaucracy grows, people only generatemore work for others,” he cautions. If it’snot lean, it will only slow you down.Besides, more energy will be spent in managing internal dynamics than focusing onbusiness outside the office, he adds.Kulkarni staunchly advocates delegation. Train, trust and delegate—Kulkarnibelieves in keeping his employees in anempowered state of mind to better unveiltheir inner strengths. Meticulous feedbackand ratings from clients are used as metricsfor compensation. “Keep a close watch, butdon’t over-manage, for if you are able todelegate your work, then consider 95 percent of it done,” he says, happily admittingthat he really doesn’t have much to do! Heis an advocate for natural justice whendealing with under-performing employees.Citing a government clause that says actiontaken in good faith will be protected, heoffers it as a remedy to absorb well-intentioned bad decisions.“There is no right or wrong decision”,adds Azim, “So just take one the heavens won’t fall!” One of the most importantlessons he learnt as a young officer wasfrom a district magistrate—his boss—whotold him that he would have a lifetime tolearn the law, but only that one momentto do the right thing in the field. It’s thisdecisiveness that has helped him defeatthe difficult and challenge the impossible.He firmly believes that completing something is more important than startingsomething brilliant, while admitting thatthe need to start something new for anelusive sense of satisfaction before beingtransferred is the reason behind MoUsand foundation stones outstripping completed projects in India.The private sector may offer an opportunity to build incrementally, somethingthat is sorely lacking in the governmentwith its transfer roulettes but Kulkarni saysan individual-neutral, institutionalisedapproach is the way to go. Purohit feels thatthough the government is great at recruiting and retaining great minds, the private28 INC. JUly 2014Azim warns against listening toexperts who have no fieldknowledge, choosing instead toembrace his own ignorance, own itand then just turn to Google.“If you want to do something well,do it yourself,” he says adding thatif he had to build a temple itwould house Google.sector sure knows how to train them, providing a critical edge.Azim also warns against listening toexperts who have no field knowledge,choosing instead to embrace his own ignorance, own it and then just turn to Google.“If you want to do something well, do ityourself,” he says, adding unabashedly thatif he had to build a temple it would houseGoogle. Glocal, he adds, is a local enterprise built on the collective wisdom of theworld—whether it is making medicaldevices or software or designing, buildingand running hospitals.insider tips on breaking thatbureaucratic barrierKulkarni is quick to admit that when acitizen or someone from the privatesector complains about the government, he tends to believe the former at least99 per cent of the time. Government canbe impersonal, he says, and there is usuallyno penalty for not working. Combinedwith countless systems and processes andaccounting for corruption, the State can bedaunting to deal with. “Every entrepreneurwho needs any approval or clearance fromthe government should know that there areabout 15 layers in each department. Even ifeach layer takes three working days, yourfile will take about 60 days on its way upand 20 days on its way down. Those whowould rather pay speed money to get aquicker decision must remember that onceyou start, the department continues toexpect it from you and might deliberatelydelay your file.” He advises tremendouspatience and perseverance, and developinggood relationships with officers at all levelsas well as the clerical staff.“If not getting government clearances isfrustrating you, frustrate the individual sitting across the table by following up somuch that people get to know that theonly way to get rid of you is to clear yourfile”, is Azim’s advice. “The good thingabout the bureaucratic process is that thereis always a higher level available forappeal,” says Purohit. The lower echelonsare tied up in a repetitive day-to-day process and cannot be expected to solve, oreven grasp, a complex problem. Thehigher bureaucracy possesses exceptionalintelligence to spot opportunities and canbetter evaluate a problem and offer theway forward or out of a jam.Preeti Singh is a Delhi-based writer, and wasthe editor of iGovernment.in till recently. Shecan be reached at @TruthAbtNobody.

ViVek kulkarni Brickwork V ivek kulkarni was the proud harbinger of the it boom to Bangalore as the dynamic it & Biotechnology secretary to the Government of karnataka. he chose to leave the accolades behind to join the pri