This article about the rise of Los Grobo, an innovative farmer using a fully outsourced business model, introduces the term Jugaad, hindi for bootstrapping. Making things happen by any means necessary, using your own ingenuity to get around resource scarcity. It’s a great story, and a fabulous example of driving innovation out of nothing.
It brought to mind another story I heard recently from the CEO of what is now Brisbane Materials, a company making antireflective coatings for solar panels. In a previous incarnation the business used a lot of startup capital to fund the equipment that would apply their surface to solar panels,rather than partnering with firms who already made this type of equipment for a living. With little to show for their investment the firm were critically exposed to funding risk, and so a few jittery investors brought down the company. Having learnt their lesson (don’t invest in anything that isn;t going to add value to your business model), they now partner with EVG group – the people who build silicon wafers for samsung and the like.
What can we learn form this?
1. Only invest what you need to, you’d be surprised what you can make do without
2. If you are going to invest in innovation, make sure you are adding value to your business model
3. If at first you don’t succeed, try something different (there are no prizes for failing to learn from your mistakes)