The great Indian social network

Article by Chetan Bhagat in the Times of India Dec 19, 2010

It's been weeks since i saw the amazing film " The Social Network" and it still hasn't left me. The movie tells a semi-fictional story about the creation of Facebook (based on the book " The Accidental Billionaires"). Compare this to India's celebrated businessmen. The corporate czars we celebrate (with some exceptions) are second or third-generation tycoons who run huge empires comprising dozens of unrelated businesses. Traditional management theory will wonder how a company can be in food, telecom, power, construction and finance, all at the same time. However, in India such conglomerates thrive. The promoters of these companies have the required skill, which is navigating the Indian government maze. Whether it is obtaining permission to open a power plant, or to convert agricultural land for commercial purposes, or to obtain licences to open a bank or sell liquor – our top business promoters can get all this done, something ordinary Indians would never be able to. This is why they are able to make billions. We load them with awards, rank them on lists and treat them as role models for the young.


While the film is extraordinarily well made, the story it tells is even more amazing. Mark Zuckerberg, the founder of Facebook, at 26, is the youngest billionaire in the world. Six years ago, Mark started Facebook from his college dorm. Today, the privately held company could be worth $50 billion (Rs 220,000 crore). The movie is pathbreaking in that it is about talent, made by talented people and for a country that celebrates talent.

For, only in the USA, can a boy in his 20s, coming from nowhere, create a company worth billions in six years, and the country celebrates him by making a movie on him. Ironically, Mark never cared about making money when he founded Facebook. His main motivation was to do something innovative, entrepreneurial, and most importantly – cool. At one point, he states, "Money, or the ability to make money, doesn't impress anyone around here."




In reality, they are hardly icons. They have milked an unfair system for their personal benefit, taking opportunities that belonged to the young on a level-playing field. Indian companies make money from rent-seeking behavior, creating artificial barriers of access to regulators; thereby depriving our startups of wealth-generating opportunities. None of the recent technologies that have changed the world and created wealth – telecom, computers, aviation - have risen out of India. Yet, our promoters have figured out a way to make money from them, by bulldozing their way into taking their share of the pie, rationing out the technology to Indians, and coming out as modern-day heroes. In reality, they are no heroes. They are the opposite of cool, and despite their billions, they are, in what is known in youthful parlance, as 'losers'.

For if they are not losers, why have they never raised their voice against government corruption? Our corporates don't think twice before creating a cartel to fleece customers. Yet, they never have a cartel to take a stand against corrupt politicians. They scream about the Radia tapes being leaked but do not reflect on their disgusting content. None of our blue chips have the capability to invent technology like the cell phone but being opportunists, they jumped at the chance of making money in spectrum allocation.

International investors already know this, and while they see India's potential, they understand that the Indian corporate-political nexus is actually keeping India poor, not making it rich.

This can be fixed. Quite frankly, it has to be fixed if we want India to be the great nation our forefathers dreamed of. The net effect of this nepotism is high – it's often debilitating for startups in India, vital to the broad-based growth of any economy. If we want to set this right, there is a role to be played by corporates, the government and individuals.


First, the few corporates who really care, have to form a cartel against corruption and nepotism. If promoters take a public stand that their business group will not bribe, it will send a strong message. Compete on innovation, not the ability to bribe. That's what is cool. Meanwhile, the existing billionaires should stop flaunting their money and consider the 57 richest billionaires of America who have pledged to give away more than half their wealth to charity (yes, Mark Zuckerberg included).

Second, our government has to understand the meaning of protecting Indian industry. It isn't to protect the established fat cats, who could frankly do with a dose of healthy competition. Protecting Indian industry means policies that help new Indian companies thrive, an environment where startups are glorified and inherited princes are not put on a pedestal. Innovation is considered cool, not inheritance.

Third, we as individuals have to stop admiring and glorifying the parasitic billionaires of India. They may not be technically doing anything illegal, but there is definitely nothing cool about using connections to get something that you couldn't have if there were fair competition. We should not be celebrating money, consumption and power. We should be celebrating innovation and entrepreneurship.

Yes, these businessmen employ some of us, and we have seen increased affluence amongst some Indians. Maybe we have a million rich Indians now. It isn't enough. With the right business environment, India can be a dramatically different place, offering a better life to not just a few, but all of us. After all, to modify a dialogue from the film, "You know what's cooler than a million rich Indians? A billion rich Indians."