you never know what you can get

It’s always great fun to meet a veteran, from any business and at the same time it’s pretty irritating to meet a cousin (especially wife’s) who you have never ever met, but you have to and exchange pleasantries. So last week I was pretty unexcited at the prospect of meeting one such relative. But since my mom in law doesn’t normally ask me to come and meet, I thought of going nevertheless.

He was Jasmine’s cousin and a veteran in the old coconut oil trade from Cochin. It was quite nice and mentally I ate some humble pie. I judged before I met and if I don’t meet then how would I learn from others. There were a few things that he said that hit me. One of it was when he explained why the middle men in Cochin in the coconut oil business completely died. It seems Jasmine’s grand dad from her mother’s side was a kingpin of sorts in the business. The business died when Marico professionalized and bought directly from the manufacturers. The middle man was bound to die a natural death. He said that three things contributed to the death of the middle man. They were road, mobile telephony and banking. Bang on. These three improvements surely have contributed a large amount to the productivity gains and of course productivity can’t be enhanced without squeezing the middle man.

 14 years ago I worked as a sales guy in rural Guajarati. The mobile telecom boom hadn’t happened and I had to call up the Area sales manager in the evening at his home to get through to him. There was no contact possible when I was on the road and my ASM’s would have no clue what I was up to. I also used it to my advantage in those days by disappearing and fudging reports. I learnt later the power of diligently working and not bunking office. But at the time, I was shuttling between Gujarat and Mumbai, trying to squeeze every second I got by coming home. I wouldn’t recommend slacking off to anyone. But the point is that mobiles would have greatly enhanced our productivity. We would be in touch a lot more with each other in the sales system. I for one would not have gone missing. Though I did not see this one coming, it surely

Roads for sure would help. Rural Gujarat meant a lot of travelling. It was evident that road network needed improvement. I travelled all across the place to encounter bad roads. I travelled in buss, three wheelers, trucks, matadors, scooters and what not. It definitely screwed up my back completely. The lack of a road network would mean that we would not be able to transport goods cheap and fast across the country. Markets would remain inaccessible and the transfer of goods based on price movements would be severely curtailed. Roads are great and having roads is a greater leveler than what I had imagined.

Banking. I had got this one right. I remember my first cheque quite clearly. It was a non MICR cheque. In other words, Ahmedabad did not participate in MICR clearning – that is the cheques did not have the magnetic ink at the bottom. This is the number that helps the RBI in clearing the cheques. I found it highly amusing. Gujarat had a plethora of co-operative banks in every nook and corner. When we collected cheques from the distributor we had a list of approved banks. The thing was that for cash management services we had tied up with a third party provider. We used to have blank cheque leaves signed by the distributor at our end. We would send the stock and write the amount on the cheque and give it to the third party whose job it was to get the money. When I first heard the concept, I was quite confused. Why would you need someone to help you clear the cheque. Our deal was that I would get the money within two or three days of presenting the cheque and the third party would somehow get the clear funds from the banks in question. This is pretty stupid archaic concept. You present a cheque you should get the money, right? It seems there was a huge delay in banks clearing payments. Especially if it was a cooperative bank. Some of my distributors were the heads of the banks themselves and cheques would be held back for two weeks before being released. The third party would give us a list of banks they thought were acceptable and would accept cheques only from them. This was a system that was plagued with obvious difficulties and inefficiencies. During the 2000 dotcom boom, I knew that the banking industry would be able to add percentage points to a nation’s GDP by digitizing all their transactions and records all over India. Access to credit, access to creditworthiness and the ability to effect instant payments would be a huge booster to business and productivity. It had to work.

So banking, telecom and infrastructure were the three buzz words that removed the middle men in India. Well said ‘cousin of Jasmine’. Well said. I agree whole heartedly. Sorry Jasmine. Next time I will come without whining.