Home > Business > Interviews
The Rediff Interview/Ashok Jhunjhunwala
'Internet can transform rural India'
November 18, 2004
For the first time, a product developed in India has made waves in the world market. Bloomba, the search-based e-mail application when launched in the United States last year received rave reviews. Yet, there was no big name backing the product.
Although the man behind the Bloomba idea was Raymie Stata, son of Ray Stata who owned Stata Labs in the US, the product was developed completely by a team of 25 engineers belonging to a Chennai-based Indian company, iSoftTech.
Bloomba made waves once again this week when it was acquired by Yahoo. Under the agreement, Yahoo also took the entire team along with the product.
ISoftTech, the company that developed Bloomba was started in 2001 by Padmashree Ashok Jhunjhunwala, Professor, Dept of Electrical Engineering of IIT, Madras, and American entrepreneur Ray Stata with the intention of creating a top class India-US company for international markets.
Jhunjhunwala has incubated many companies that cater to the Indian market, especially the rural Indian market.
A few years back, in an interview with rediff.com, Jhunjhunwala had predicted that India would soon become the design house of the world. With the success of Bloomba, his words have come true.
In this interview with Shobha Warrier, he talks about iSoftTech, Bloomba and other significant matters.
What was in your mind when you incubated iSoftTech? Was it to explore the creative mind of India?
We wanted to experiment whether we could do complete product development for companies outside. We wanted to create a top-class product development team and participate in the construction and actual development of the product. That is what we had in mind.
We tried to create a start-up company and work with a team from the very early stage so that they could take care of the complete development process.
Your opinion of Bloomba, the product developed iSoftTEch? Did you expect it to be such a high profile product?
It is an absolutely top-class product. I have been using it personally. I would go on to say that I have not seen anything of this kind. The search engine they have built is fabulous. We have some patents too, and, in fact, I am also an author of some of the patents along with Raymie Stata.
What kind of impact will Yahoo acquiring Bloomba and the team have on iSoftTech and Indian creativity as a whole?
First of all, we were able to take a product from a start-up company to a certain level. But we knew if we really wanted to take it to a higher level, we wouldn't be able to do it on our own. For example, if we want to compete with Microsoft, I don't think we are capable of doing it with the kind of resources required (to do that).
We needed a big company to do that. Now that Yahoo has acquired our product, we can try it from a bigger platform. The whole idea of taking it to Yahoo was to make it into something very big.
Was it difficult convincing Yahoo? How did the deal take place?
Yes, it took a lot of time and the deal was done by Rahmie, not me. It was not difficult because the product was very powerful. Any deal requires a lot of work. It was a peculiar deal in the sense that the development work was done here. Raymie finished the formalities in three months. Anyway, it was quite an experience.
Bloomba developed by iSoftTech is a high profile international product while the other companies started by you develop products for the Indian market, especially the rural Indian market. Is it a conscious effort on your part to do both?
Yes. All the other companies are primarily for the Indian market. This is the first India-US company that we created for the international market. We have done a number of things for the Indian market. We wanted to see whether we could develop something for the world market.
Last time when we met, I talked to you about India becoming a design house for the world, and it is soon turning out to be a reality. Now, the world knows that we can make top-class products in India. That was what we were trying to prove, and eventually did.
Now, let me ask you about your Vision Statement. Why did you decide to come out with Vision 2010, that too for rural India?
Ten years back, we said we want to see 100 million telephones in India. Later on, we said, we want 200 million telephones. All this is happening now. The whole world knows 200 million telephones are happening in India. I need not talk about it now.
We came out with these tasks and now others have taken over, the country has taken over, and they are making them happen.
Three years back, we also felt the telecom revolution that was happening in India would not make a major impact on rural India. So, we decided to concentrate on rural India.
You decided to concentrate on rural India because you felt rural India is being neglected by the planners? Seven years ago, you talked about bringing connectivity to rural India through CorDect WLL technology.
Yes. Although I don't dream only for rural India, rural India comes first in our dreams. Rural India is where 700 million people live. India cannot be fully enabled unless these people get enabled.
In the eighties, till companies like Hindustan Lever after being beaten by Nirma decided to go to rural India and make FMCG products work there, the market for such products was only urban India. But after that, everything changed.
In the same way, the telecom market is largely in urban India, and in the minds of most of the operators, money cannot be made in rural India. We, on the other hand believe that it is possible to not just provide telephone and Internet connections in every village profitably but use that connection to drive not just health and education in the village but also the rural economy.
We believe that telephones and the Internet can have a larger impact in rural India than in the urban areas.
We strongly believe that the per capita GDP of rural India can be doubled in the next 8-10 years using Internet as the starting point.
In what way do you feel Internet can be a source of power to the rural economy?
With Internet as the starting point, we can promote a large number of enterprises which can enable the rural micro enterprise flourish.
Take, for example, how PCOs worked and flourished in India. When you make a solid business plan and fulfil certain needs of the people, entrepreneurs can drive that.
The same way, we have started Internet kiosks in villages, and we believe that a large number of micro enterprises can be made to flourish there. I mean, in the areas of agriculture, food processing, small industries, IT-based services, trading, commerce, et cetera.
What is needed for rural micro enterprises to flourish are four very important components. One is finance. Here, what we are planning is using the Internet kiosks in the village to bring banks to rural India. That is our first job, and that is where our ATM machines costing just Rs 40,000 as against the ones available in the market now for about Rs 900,000, will play a role.
Second important thing for any micro enterprise to flourish is, training, information and support. Here, our video-based training can be used to train rural youth.
The third thing that they need is, buying, selling and delivery of goods; that is, logistics. We are looking at using the Internet again to not just buy and sell, but provide logistics support.
The fourth thing that is required is sharing of risks. It is here that insurance schemes that share risks will play a major role. I will give you an example. ICICI has developed a product which links repayment of loans based on measurement of only rainfall in a district.
These four components will significantly enhance rural India. So, all that we are developing now, the Internet kiosks, the ATM machines, the medical diagnostic kit, etc. are directed towards achieving what we dream of; that is doubling the rural GDP by providing education, health facilities and promoting entrepreneurship.
Have people from rural India come forward to run Internet kiosks?
Yes, they have. A kiosk in a village is completely operated by a local operator. Anyone who puts up Rs 50,000 can set up a kiosk. We help them get a bank loan. This Rs 50,000 includes wireless equipment, computer, multimedia speakers, microphone, camera, printer, and power back-up.
We also train the person to start earning a minimum of Rs 3,000, hopefully more, at the earliest. The kiosks provide telephone service, Internet service and standalone computer services.
For example, children can learn to type paying Rs 50 or Rs 40 a month to the kiosk operator. Added to all these are the video-based services, health diagnostic kit and later on the ATM machine.
I strongly believe that the face of rural India will change when we provide all this.
Is it the mind of a concerned Indian that is working or a shrewd businessman?
It is the mind of a concerned Indian combined with that of an entrepreneur and a business/technologist! It is a combination of all the three. The TeNet group (that Jhunjhunwala has floated) presents all the three.
When did you start looking at rural India with such concern?
I have spent a reasonable amount of time in rural India when I was a child. But I don't think that it was the childhood which made me look at it seriously.
I think it was my days at IIT-Kanpur. That was the time two major movements were taking place in India; on the one hand the movement started by Jayaprakash Narayan, and on the other the Naxalite movement. I was fortunate to be in college during that period.
Both the movements were teaching us and telling us something. Then, a lot of reading also contributed to my thinking. I realised then that you can't change India without changing rural India.
How much change can an individual bring about?
It is not one individual that is bringing about change. Today, the TeNet group consists of 16-17 faculty members. We have floated 14 companies in the last 10 years.
We have 1,300 to 1,400 engineers working in these companies. Twenty-five per cent of them are IITians. All share this dream. So, I have a very strong force working with me.
Then, there is so much of goodwill from so many people.
Do you feel involvement of the government is also needed to realise your dream?
Of course, anything like doubling of rural GDP, etc. will involve the government and the whole country. The problem with the government is that it is inconsistent.
Is it receptive to new ideas?
Sure, it is receptive to ideas. Again, it depends. There are people who are receptive, and there are people who are not. What is more important is, we shouldn't look at government participation; it is very inconsistent. Sometimes it can help; but a lot of times, it can also hurt.
But I have found that when something starts functioning in a certain manner, government programmes will gradually shift in that direction. Till things move up to a certain direction, governments will keep on going all over. But I have seen some state governments more receptive to this than others.
Who are the more receptive ones?
Almost all state governments are receptive! (laughs)
How much could you pull your colleagues and students in this direction to realise this dream?
Like I said, around 1,300 people are working for us. However, I haven't been able to involve the undergraduate students of IIT into this program. Probably, I have not tried enough. I think they come here for a very special purpose; to get their degrees and then go off. We don't push them into this.
This is our work. I believe what we are doing is our dharma; and we have to do it.
Well, I think a lot is happening in India now. India is standing up and that itself should motivate students to do their best. I don't think India has ever had it this good! In the last 12-15 years, India has transformed itself.