The post is about entrepreneurship in India where I have tried to put the views.
From the last couple of years Baba Ramdev, Kishore Biyani, Vijay Mallya and Govt. Of India has been making the news and there is lot more things common between them.
Lets begin with Baba Ramdev who became a household name by selling the benefits of yoga to the masses. He claimed that even diseases like cancer could be cured through yoga. Those who have seen his yoga DVDs will recall the line “karte raho, cancer ka rog bhi theek hoga”.He was doing very well in his forte untill he thought enough of Yoga and making political statements vowed to get all of India’s black money hoarded abroad back to India. The politicians in the government clearly did not like this (for obvious reasons) and went hammer and tongs after him. Stories were leaked to the media about the wealth he had accumulated over the years and that damaged his credibility as a yoga guru as well.
Ramdev has continued in his attempts to establish himself as a politician but with very little success.
Kishore Biyani: The man behind retail revolution in India. His retail businesses were doing decently well till he decided to get into a wide variety of businesses from launching an insurance company to even selling mobile phone connections. When times were good he accumulated a lot of debt in trying to grow fast. Now he is in trouble in trying to service the debt and rumours are flying thick and fast that he is planning to sell Big Bazaar, his equivalent of Wal-Mart. This, after he sold controlling stake in the cloths retailer, Pantaloons.
Vijay Mallya started Kingfisher Airlines in 2005, going beyond his core business of alcohol. Kingfisher now has accumulated losses of over Rs 7,000 crore, and has never made money since its launch. The lack of focus has hurt Mallya’s core alcohol business and United Spirits is no longer India’s most profitable alcohol company. That tag now belongs to the Indian division of the French giant Pernod Ricard.
Last but not the least Govt. of India which has been bailing out the troubled airline Air India over and over again. The pilots of the airline keep going on strike and the government keeps putting a few thousand crores every few months, to keep the airline running.
so Baba Ramdev politics ? Kishore Biyani Insurance and mobile connection ? Vijay Mallaya and the government of India trying to run an airline?
The expertise and the attention required to run a business has increased over the years. Hence, the moment a businessman tries to go outside his area of expertise, he loses focus, and the chances of the new business doing well fall dramatically.
You can list the no. of examples :
DLF real estate giant : trying to venture in to insurance and mutual fund business.
HCL : It giant selling insurance.
Sataym : An IT company into real estate and infrastructure space, trouble cropped up.
The only exception that I can recall is ITC who is trying to set up in FMCG business and did well.
Wanted to conclude the above in Warren buffet words : “Never invest in a business you cannot understand.”