Entrepreneurship in India – Rules for Spectators – Part 2*

Lessons from a close shave
In 1996, when I first returned to India, Ramani, my neighbor and friend, took me to the local barber. Harking back to the barber shops of my childhood, it was two barber chairs in a room the size of large shower stall. Prasad (all names changed to protect the privacy of individuals) the owner of the barber shop seemed barely in his twenties and full of life and great enthusiasm for the task at hand. He greeted my friend in Kannada, even as he cropped a customer’s hair, acknowledged me with a quick nod and kept a close eye on the other barber. My positive impressions of that first day were not only borne out but grew stronger, as over the years Prasad bought out the neighboring space and expanded his barber shop. Now renamed as Classic Hair Saloon (CHS), he added head massages first, then facials and subsequently full body massages, in an expanded back room.

Three years after my first visit to the CHS, several friends and I embarked on our own first startup, Impulsesoft. I relocated overseas as we set out to grow our business and in my frequent trips to India, I’d always make it a point to bring my hair cutting business to Prasad and the CHS. The half hour or thereabouts I’d spend on a padded chair having a luxurious shave or an oil-soaked head massage proved to be my own personal MBA class.

In 2000, our chosen market (Bluetooth technology) sputtered in the downturn and well funded competitors threatened to swamp us. Yet as I saw Prasad thrive in a market with nary an entry barrier, hiring more seats and hands, I learned the criticality of customer focus and personalized service. Subsequently when we set out to raise money, capital had dried up as the market seemed stillborn or delayed in 2002. Again the lessons of repeat customers, word-of-mouth referrals and growing existing customers by up-selling (cut to shave; a shave to coloring; to head massage) were apparent in Prasad’s growing business. And whenever we despaired that hiring, training, retaining and motivating software engineers was hard, Prasad’s challenges in ensuring service quality, even as he brought on more barbers, often with few other formal skills, made our own look small.

Even as I write this, the CHS has held its own against newer competitors (including a fancy upscale national chain and another barber shop that sprang up in the neighborhood) and has continued to grow. Prasad has demonstrated bootstrapping success, growth through hard times and sustained product and service innovation. He has built a strong and passionate customer base and seen good financial returns. In other words his business is an immense success by most measures, even though it has yet to figure in any mainstream story or have its own case study.

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