A “Good” Business Model – An interview with CEO Sriram Raghavan, Comat Technologies
Loading ...
Comat Technologies has proved that mixing business with social good is an economically viable proposition in India. Described as a “social enterprise” – a business cum social organisation — the company has managed to be profitable while using technology to deliver services in rural India. CEO Sriram Raghavan talks to NASSCOM about this unique, but proven business model.
Comat Technologies has proved that mixing business with social good is an economically viable proposition in India. Described as a “social enterprise” – a business cum social organisation — the company has managed to be profitable while using technology to deliver services in rural India.
Comat has built up a network of nearly 2000 Rural Business Centres which deliver education, training (for greater employability), essential government services, and financial and insurance services to over 50,000 rural citizens every day. The company operates on the premise that all services delivered should “empower people and give them economic independence.”
Comat has touched around 10 million rural lives to date, in Karnataka alone. Besides making information readily available, the Business Centres also help create local economies that can provide jobs. A further proof of the viability of the company’s model comes from its investors, which include Omidyar Network, Unitus Equity Fund, Avigo and ENAM.
CEO Sriram Raghavan talks to NASSCOM about this unique, but proven business model..
Q. Suddenly we hear a lot about businesses going to rural India. What has happened to bring this change?
SR: People have always tried to do business in rural India. What has changed, however, is that the efforts are now gaining visibility. One reason is the obvious one – politicians have started to understand that rural India is important and when that happens, the action begins.
From the business point of view, two things are evolving. One, technology allows for cheaper delivery of services. What was delivered earlier through laborious paperwork can now be delivered electronically, bringing down both operational and transacting costs. When costs come down, the segment becomes attractive to businesses.
The second phenomenon that is happening is that telecom companies are working to bring connectivity and communication to these areas – and this brings in its own advantages.
Q. What kind of advantages has communication brought in villages?
SR: For one, information transfer is higher. And thanks to television and better communication, a demand has been created for everything – colour TVs, washing machines and so on. But it is still expensive to do business because the volumes are far lower and more widely distributed when compared to urban areas. At the same time, the basic infrastructure like roads is still very poor and that has kept businesses from expanding.
Q. Keeping all this in mind, how different should the business model be?
SR: Business models for rural India have to be different. Take telecom companies for instance. India has the lowest call charges because they understand that the economics of India work differently.
Similarly, rural people prefer small transaction fees. If you sell them something for Rs. 10,000 a year, they will not accept it, but if you charge Rs. 1000 per month, they will take it even if it means Rs. 12,000 a year. They just feel better about smaller transaction fees.
Businesses have to appreciate how people spend their money and also how they earn it. In a typical agrarian set up, income generation is a twice-a-year cycle – unlike in urban areas where we earn monthly salaries. It is important to bear this in mind as you have to position your product around this insight. Further, cash is the most accepted form of payment so you cannot structure payment around credit cards.
Q. Your own business is built around the Rural Business Centres. What exactly are these?
SR: It is a very simple concept. The rural business centre is primarily an access point for rural citizens, where we use technology to deliver different kinds of services – only those that help improve the quality of life in villages. We don’t want to sell soaps and consumer goods.
I’ll give you two examples. Take government certificates such as birth, death, land and property related papers. If you have to get one from the taluk or the district office, you have to go to that particular office, wait in a long line and follow cumbersome processes. We deliver it to the village directly – it takes about five minutes for the same cost, i.e., Rs. 15 per certificate. This makes a very big difference to the rural consumer.
The other area we are in is education. There are teachers in rural areas, but the quality of education is very poor. Our centres bring live classes from best teachers in cities who broadcast their lessons online, much like the erstwhile UGC programmes. Except that here, we have two- way interaction and the students and teachers can speak to each other.
Q. No wonder people call you a social entrepreneur. But are you also profitable from the business point of view?
SR: Yes. We are profitable. We have a turnover of over Rs. 55 crore and that is reasonably large. Comat is also testimony to the fact that you can make money by doing good. It is the same reason that our employees continue to work with us – they feel that they are not just making money but also doing something for the benefit of society.
Q. You have also managed to get funding from investors – proof that your model is working…
SR: We have likeminded investors investing in us. It is a long haul game and we are not here to make quick bucks for our investors. We have to work hard to create a market; there are no quick and easy steps to building trust immediately.
Q. Have you also had to deal with vested interests stopping you from entering the area?
SR:We offer over the counter services for Rs. 15 and this has resulted in the elimination of brokers, middlemen etc. People have attempted to try and stop what we are doing through powerful lobbies, but we stayed the course and they all go away after some time.
Our only objective is to benefit the citizens, to empower them by giving them access to information. All these years, rural India has been isolated; they have been “informationally disabled”. It is now time for a change and we want to ensure that.
Q. What kind of partnership do you have with the government?
SR: We help reach government services to the rural consumer through our rural business centres. There is no monetary exchange between the two entities. In fact, we take government records and digitize them at no charge. In turn, we get to sell the information to citizens at exactly the same rate that the government charges. We get to keep a part of fees.
Q. What else are you planning?
SR: We are focusing on three verticals – government, training and financial and insurance services. We have plans to introduce healthcare services too.
Interview for the Issue No. 17, NASSCOM EMERGE newsletter
Related posts
- Large Net for small Fish – Interview with Kishore Mandyam – PK4 Technologies PK4 finds the Internet an inexpensive and effective tool for...
- The Mc-D model I was browsing my favorite newspaper, “the Wall Street Journal”...
- Interview with Dr. Ganesh Natarajan (Global CEO, Zensar Technologies) @ Product Conclave Pradeep: What are the key challenges do you foresee for...
- Interview with Krishnakumar Natarajan, Chair – NASSCOM EMERGE Forum To mark the 2nd anniversary of EMERGE newsletter, the editorial...
- “Don’t be an Idiot, you can’t do business here” “Don’t be an Idiot, you can’t do business here” This...
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
GOOOOOOOOOOOOOOOOD