startups

Inside India’s Coder Boom

Code lead

Amid the deafening hype around billion-dollar tech startups, India is quietly counting down to a massive milestone: It will soon have more software programmers than any other country. Here’s why that’s not good news.

NASHIK, HOURS BEFORE SHAHI SNAN, the royal bath, an especially auspicious day at the Kumbh Mela. Ten million pilgrims are expected to turn up this year, 25 lakh of them for the holy dip. It’s an unfair burden for the bamboo barricades and police bandobast at one of the most hazardous mass gatherings anywhere in the world. More than 40 people died in fires and stampedes and close to three lakh went missing during the 2013 Allahabad Maha Kumbh. The Haridwar Kumbh of 2010 saw seven stampede deaths and two incidents of drowning. Nearly 40 died in the 2003 Kumbh, again in Nashik. Farther back, the 1954 Kumbh in Allahabad left close to a thousand dead by some estimates. None of this includes the toll taken by assorted infectious diseases at every edition.

A few kilometres from Nashik’s bathing ghats is City Centre Mall. A group of young people with backpacks is making its way to the grand ballroom on the mall’s top floor. Once inside, they take out laptops from their bags and fall into groups. They will spend the rest of the day writing code.

This is the mission command of Kumbhathon, a weeklong innovation camp run by the Massachusetts Institute of Technology (MIT) in association with, among others, Nashik’s engineering colleges, a couple of IITs, the Maharashtra Police, and a bunch of companies including TCS, Google, and Xerox. Where most see chaos, Kumbhathon’s coders see data. The kind spewed by the behaviour of massive shifting crowds, or germs. The idea is to use the data to unravel urbanisation’s most complex  problems. The ultimate goal: “Build multimillion dollar companies” that will solve those problems, and “improve millions of lives”.

In one corner of the room is the team that built Epimetrics, an app that tracks fast-spreading diseases and predicts epidemics. It’s been only a few days since its launch, and the app has already helped the city administration prevent an outbreak of malaria.

Two tables away, the crowd steering team is monitoring heat maps lighting up a Google Maps feed. The maps show the real-time movement of crowds at the Kumbh, data for which is pulled from mobile phone towers in the area. The team passes the data through a visualisation algorithm that converts it into an easy-to-read spectrum from green to red, signifying ‘not crowded’ to ‘chock-a-block’. The police use it to control the flow of people and prevent overcrowding in any one place.

Ingenuity of this kind has its limits; crowd-control tools couldn’t stop the ghastly death of over a thousand during the Hajj last month. But in Nashik, Kumbhathon is helping host the safest Kumbh in years. No one has gone missing. Barring stray reports of drowning, no one has died.

BENGALURU, A SUNDAY MORNING IN EARLY FEBRUARY. Ola, India’s largest cab aggregator, is hosting a 24- hour hackathon in its office. Most of the 200-odd coders are twentysomething men, carrying laptops plastered with Game of Thrones, Incredible Hulk, and Green Lantern stickers. The night before there was unlimited free food and Red Bull, a DJ, even an impromptu birthday party. Now, with hours left, everyone’s manic. The best coders will land jobs in the company that’s said  to be worth $5 billion (Rs 31, 585 crore). There are also cash awards.

The brief: Build anything that improves user experience.

Non-coders will be thrown by the vagueness of “build anything”. But if you want to rev up coders, you could think of worse problem statements. Ramesh Raskar, associate professor at MIT Media Labs and one of the brains behind Kumbhathon, would tell you it doesn’t matter whether the task is to prevent stampedes or make cab rides safer, as the Ola hackathon winner set out to do. To code is to change the world. “The biggest cab company in the world doesn’t own cabs. The biggest media company doesn’t own media. People are going to schools without buildings, transacting without cash. Soon they will grow food without farms,” Raskar says. “All this amazing transformation is because of code.”

There’s a profusion of ways in which others have paid tribute to code. Here’s Steve Jobs: “Everyone in this country should learn how to program a computer, because it teaches you how to think.” Tech news portal ReadWrite calls coding “the core skill of the 21st century”. Don’t trust geeks? Take it from former British education secretary Michael Gove, who unleashed the biggest reform in the country’s education system last year by making coding lessons mandatory in schools for kids aged 5 upwards. “Teaching pupils, over and over again, how to word-process, how to work a spreadsheet, how to use programs already creaking into obsolescence [is] about as much use as teaching children to send a telex or travel in a zeppelin,” Gove reasons. “Our new curriculum teaches children how to code … not just how to work a computer, but … how to make it work for you.”

Silicon Valley prophet Marc Andreessen sums up the urgency: “Software is eating the world.”

It’s the kind of futurism that feeds the “coders love Star Trek” jokes. Shailesh Nalawadi, former project manager at Google Maps and Streetview and co-founder of Mavin, a company that wants to provide cheap Internet in developing countries, says that’s because Star Trek is coding utopia. “Spock is the prototypical engineer. In his world, you don’t fight for money. You explore for the sake of exploring.” The job and the cash are incidental. The true coder says, I got into this because I can build anything. “Larry [Page] and Sergei [Brin] always asked us to solve the 10X problem,” Nalawadi reminisces. “Don’t improve by 20% or 40%. Make it 10 times better.”

"I just wanted to be part of something that has purpose." - Shashank ND, co-founder and CEO, Practo

“I just wanted to be part of something that has purpose.” – Shashank ND, co-founder and CEO, Practo

You don’t have to begin with grand visions. Shashank N.D., whose love of code grew into the health-care startup Practo, says all he wanted was “to be part of something that has purpose. I thought it was ridiculous that I could order a pizza in 30 minutes but not monitor my health records online in that time. Someone had to build a smarter algorithm.”

Now that he has a business to run, Shashank misses coding. He stays in touch through hackathons, like the one Practo conducted in March. “Congratulations @RahoolGads on kicking ass at Practo Hackathon. A brilliant hack on the Practo Tab. Can’t wait [for] the next hackathon!!” he tweeted afterwards.

That’s not just nerdy excitement: Practo Tab—a device for doctors to manage patient data and spare patients the bother of filling lengthy forms—is one of Shashank’s big bets, the kind that has got investors queuing up for a piece of his seven-year-old company. In a recent funding round, a group led by Chinese behemoth Tencent pumped in $90 million. Ola, which has coded critical new passenger safety features into its app since the February hackathon, is reportedly raising $500 million.

THE DELUGE OF FUNDING FOR TECH STARTUPS may have lionised the coder at the heart of it, but not everyone is chuffed. Bhavin Turakhia, 35, learnt to code when he was 10 and was so good that his teachers were soon taking lessons from him. At 18, Turakhia started a web-hosting business with his brother, which grew into a conglomerate of 13 companies, “all profitable”—without raising a penny by way of funding. Last year, he sold three of the companies to a Nasdaq-listed firm for $160 million. And yet, chances are you’ve never heard of Turakhia or his company Directi in the noise around big bang deals.

So we expect him to be upset when we ask him about the zeitgeist in Indian tech. He is, but not why we thought. “It’s annoying and frustrating that China, Canada, even Poland, beats us year after year,” he says. The reference is to India’s plight in the International Collegiate Programming Contest (ICPC), the world’s oldest and toughest competition for coders. Indian coders have struggled to break into even the top 50.

Turakhia says coding is a life skill in a world where people communicate more with smart devices than with other people. Not everyone needs to be writing complicated algorithms. But if, as Michael Gove says, you want to make technology “work for you”, working knowledge of its lingua franca is a must.

“Millions of people are getting access to intelligent and completely programmable devices. If they learn how to maximise their potential, they can fundamentally transform the economy,” argues Turakhia. Going by the ICPC results though, revolution via coding is a far cry. “Nasscom keeps touting that India is a software powerhouse,” Turakhia says. “There’s no way that can be true if we can’t beat countries 1/20th our size.”

NASSCOM’S CHEST-THUMPING ISN’T BASELESS. India is producing coders like never before. In 2013, California-based market research firm Evans Data Corporation estimated that by 2018, the country will have 5.2 million coders—by far the highest in the world. Rishi Das, CEO of Bengaluru-based recruitment firm HirePro, says India’s population of software professionals has jumped fivefold in the past decade alone, driving a technology and services industry that is on track to hit $225 billion in revenues by 2020 and $350 billion by 2025, per a report by McKinsey and Nasscom. They also fuel the Prime Minister’s catchy marketing campaigns—Digital India and Startup India—which seemingly wowed Valley mavens during his recent tour.

But here are the other numbers you ought to know: Over 90% of Indian computer and IT engineers have poor domain knowledge, says talent development firm Aspiring Minds, meaning that they lack “the ability to apply basic principles of engineering to real-world problems”. Little wonder that not even 2% of the glut of Android apps built in India make it to the top 1,000 globally. That’s actually a benign problem compared with what recruiters have to face: a shocking 3% of India’s engineering graduates are employable (read: job-ready) in IT product roles, less than 8% are fit for design roles, and about 18% for IT services roles (see graphic).

To be sure, warning signs for the Indian software industry began with the slowdown in outsourcing, which can no longer absorb lakhs of coders in low-end testing and maintenance work, leading to oversupply.

"I just wanted to be part of something that has purpose." - Bhavin Turakhia, co-founder and CEO, Directi

“It is very annoying and frustrating that China, Canada, even Poland beats us year after year.” – Bhavin Turakhia, co-founder and CEO, Directi

The legendary cost arbitrage of the Indian coder is also on the wane. Compounding matters is the tidal shift that has IT firms everywhere scurrying: Legacy expenditures—think infrastructure, traditional application development, and packaged software—will see a 20% to 25% cut, as demand soars in newfangled areas like the Internet of Things, analytics, and cloud.

“The software market is becoming increasingly crowded as large, multiline firms transform their portfolios to focus more on solutions that have a direct business impact,” says C.P. Gurnani, vice chairman, Nasscom, and CEO and managing director of outsourcing major Tech Mahindra. The upshot: an urgent need to upskill 5 million-odd people.

Aruna Jayanthi, CEO of IT consultant Capgemini India, argues that in terms of pure programming skills, Indian coders are on a par with their global peers. But being competitive today is not only about writing code—“a programmer must be able to visualise how scalable the code is, and in what environments it can operate”. Truly good code is the result of holistic thinking, Jayanthi says. She finds support in American economist Tyler Cowen, whose book Average Is Over talks about the future of jobs. “Take Mark Zuckerberg who, of course, has been a great programmer,” says Cowen on learning portal 99u.com. “[But] there is much more to Facebook than that. It’s appealing, it gets people to come back, and he was a psychology major. It’s that integration that’s important.”

underengineered

India’s bias for rote learning and lack of application orientation leave little room for such thinking. “Even when we recruit engineers from the best colleges, it sometimes takes months of retraining before their skills are up to speed. That’s far too long,” says Chandan Chowdhury, former dean (academics) of the National Institute of Industrial Engineering and managing director of Dassault Systèmes India, a subsidiary of the French industrial behemoth. As a contrasting case, Chowdhury tells us the story of his daughter who went to Stanford for a computer science degree. “They were asked to learn a new language and deliver a project in a week,” he recounts. “It’s not about learning a specific language, which will anyway become obsolete. It’s all about learning how to learn.”

THERE’S A SENSE OF DÉJÀ VU in any story on India’s ramshackle skill situation. By the government’s own calculation, only 2% of the workforce goes through any kind of formal skills training. The rest turn to jugaad, the peculiar Indian skill of getting by. But the failure to gear up for a whole new world, ruled by specialised software that is expected to do dramatically new things, could be setting India up for its worst-ever skill disaster.

What’s scarier: The jingoism around our tech prowess—Indians head Google, Microsoft, and Adobe, after all—could be blinding us to it. The danger is more than just economic—it’s psychological. The narrative of post-globalisation India relied heavily on its rise as the world’s technology vendor. More recently, the country has been in the throes of an image makeover: a cornucopia of tech startups with Valley-esque aspirations. The degradation of programming skills blows holes in that image (and adds heft to what haters have been saying in anti-outsourcing forums).

It also signals a potentially huge missed opportunity: For instance, the U.S. Bureau of Labor Statistics says there will be 1,240,600 programmer jobs by 2022, a 22% jump over 2012—double the growth rate of any other job. The uptake of programming as a career among Americans, on the other hand, is slowing. “The shortage of engineers is a global crisis, and India’s large engineering population could be a big hope,” says Naomi Climer, president of British industry body The Institution of Engineering and Technology, “provided there is committed focus on quality and professional standards.”

unskilled india

For the media, the quality of coders is far too abstract a subject compared with funding or valuation. But from time to time, the malady outs itself. In May, Snapdeal co-founder Rohit Bansal spoke to the Wall Street Journal about the company’s travails with local programming talent. Flipkart’s Sachin Bansal tore into him on Twitter: “Don’t blame India for your failure to hire great engineers.” The episode was a cue for the tech press to start a meaningful debate, but few went beyond bluster.

Meanwhile, at least one aspect of the market speaks to Rohit Bansal’s point: Salaries for employable coders have  gone through the roof. Peeyush Ranjan, Flipkart’s chief technology officer and head of engineering, gives it the usual “investment in talent” spin. Shashank of Practo acknowledges spiralling wages but says it is only fair. “Coders have been underappreciated. If you are writing products that can change the world, you better be paid for it.” Even legacy companies not known to be generous paymasters have had to increase pay for freshers, and keeping up is becoming onerous if you don’t have access to big money, says a Bengaluru-based early-stage entrepreneur.

Britain introduced coding to kids who can barely spell, partly as a response to tech firms spooked by the talent crunch. We ask Geoff Smith, head teacher of Kehelland Village School in Cornwall, what schools are making of it. There are big challenges, Smith says. The curriculum isn’t based on the latest industry practices, teachers are at sea, and infrastructure is a concern. But the policy “will hopefully leave children with skills that will be valued in the industry. Children also seem to take pride in the coding projects they have completed,” Smith adds. Codecademy, an American startup that is helping British schools build capacity, calls it a visionary move. “Change can be frightening,” the company’s 25-year-old CEO Zach Sims tells us over Skype. “But if you think of coding as the backbone of the modern economy, the return on investment is huge. Even if all those kids don’t become programmers, problem solving through coding can make them better at whatever they choose.”

In India’s schools, computers occupy a limbo. “Most parents are fixated with making their children software engineers. We are forever talking about software being the future. But our education boards relegate computers to just another elective,” says Arghya Banerjee, an IIT-Kharagpur and IIM-Ahmedabad graduate who founded The Levelfield School under the Central Board of Secondary Education (CBSE) in Suri, a tier III town in West Bengal. Data from code-learning and competition platform HackerRank shows that a little over 20% of CBSE students at the Class 12 level opt for either of the two electives, Computer Science or Informatics Practices, with an overwhelming absence of non-science students. (In a rare piece of good news for diversity votaries, the number of Indian women enrolling for computer science courses at the college level has been inching up, but that’s the subject for another story.)

“Programming is a fundamental skill and you have to start in school.” – S Ramadorai, chairman, National Skill Development Corporation and National Skill Development Agency

The lack of preparation hurts industry. “We recruit people from different streams, not just computer science, and sometimes we find that the fundamentals are not very strong with people from these other streams,” says Jayanthi of Capgemini India. Compulsory computer lessons at the primary level, before a kid is pigeonholed in ‘science’, ‘commerce’, or ‘humanities’ silos, is one way to correct this, but that isn’t even a conversation. To break free, Banerjee’s school, which has won awards for its focus on skill building, is thinking of dumping CBSE and enlisting under an international board.

MATCHING STEP WITH technological disruption is a hairy problem for most governments. India has the right person for the job: The guardian bodies for skill development in the country—the National Skill Development Corporation (NSDC) and the National Skill Development Agency (NSDA)—are chaired by S. Ramadorai, former CEO of TCS, India’s No. 1 software firm. “Programming is a fundamental skill for everything from industrial prototypes to cybersecurity, and you have to start in school,” Ramadorai agrees. “But we can’t copy-paste solutions from elsewhere without ensuring critical infrastructure like broadband.”

The hope is that kids will train themselves once they are given the infrastructure. “These days there are so many online tutors. Not all learning needs a classroom,” Ramadorai says. What about making programming a part of the skill development framework, often accused of being stuck with old-world technical skills? “In all honesty, things are still in the early awareness stage,” he says.

NSDC’s managing director and CEO Dilip Chenoy says programming is only one piece of the puzzle. “More critically, we need to train people on using what the programmers build, from smart grids to smart homes to smart cars.” That also means upskilling vast numbers of professionals—electricians, plumbers, mechanics—who were the product of a blue-collared paradigm of skilling and may find themselves left out in the cold.

The private sector is getting a move on. Turakhia, for instance, funds CodeChef, which he claims is India’s largest code contest website. In five years, CodeChef has signed up over 2 lakh users who have submitted 6.5 million solutions to all sorts of challenges. Now Turakhia wants to make CodeChef part of the curriculum in colleges. The plan is to run a year-round skill assessment programme in the college and score students at the end of the year. The college can convert that score into credits. “We tell them that students with better algorithmic skills end up earning four to five times more than the rest. The good news is, anyone can get better at it, just like languages or math. Colleges have been very receptive,” he says.

Then days before we went to press, American online education company Udacity, founded by Stanford professor and the inventor of the autonomous car, Sebastian Thrun, announced that it will bring its Nanodegree courses in Android development to India in partnership with Google and Tata Trust. This is Udacity’s first overseas venture. What will help such programmes gain momentum among people from all backgrounds is programming itself getting less geeky. “The last few languages that have been launched read like English,” points out Harishankaran K, co-founder of HackerRank.

HackerRank also represents the growing breed of coder-discovery platforms that help companies locate talent. The premise: Many coders are self-starters who may not be found through traditional recruitment channels. “Also, pen-and-paper tests don’t work here”, says Hari. “A resume can only state that this person knows Java, it doesn’t tell you how good and clean the code is.” HackerRank has placed coders in companies like Facebook and Palantir and raised some $20 million for its troubles.

BUT WHAT IF THE FUSS AROUND CODERS in idealistic startups is just selection bias? Where’s code in our primordial industries, we ask Chowdhury of Dassault. Couple of months ago, Chowdhury had visited the Fortune India office to showcase Dassault’s 3D technologies. The pièce de résistance was the Living Heart, a giant 3D simulation of the human heart. Doctors can walk inside it, study and predict problems, and prescribe personalised treatments. Dassault says this kind of computational modelling is the future of medicine and the end of luck and intuition. Now, Chowdhury tells us about a different world where luck and intuition loom large: mines.

Most mine owners are clueless about the capacity of their mines or the quality of their reserves, because mines, typically located in remote areas, offer terrible visibility, Chowdhury says. “Worse, many miners don’t know the boundaries underground and get into trouble for encroachment.” That’s when they get caught. When they don’t, it costs the country thousands of crores. Ask the Shah Commission, which is investigating rampant illegal mining across states.

In spite of the mess, which has led to the industry being portrayed as “lawless” and “out of control”, mine owners have had it good. Labour is dirt cheap. Prices were on steroids. “Most of them would be happy to spend millions on earth-moving machines rather than efficiency-enhancing software,” says Chowdhury. But then came the crash in prices and the slowdown in China. Suddenly, everyone is chasing efficiency. Dassault has just the thing: 3D, of course.

“Someday our programmers will model the planet.” – Chandan Chowdhury, MD, Dassault Systemes India

“Imagine if you could make a mine completely transparent. You could see exactly how much coal you have, and of what quality. You could predict safety issues—before you build the mine. You could avoid breaking laws. Imagine how that could transform the industry.” The pitch is working. The who’s who of the trade, from Tata Steel, NTPC, and Reliance, to Lafarge, ACC, and UltraTech, are clients of Dassault’s mining software, Surpac for iron ore and Minex for coal. The company’s Indian R&D team, which forms the majority of its 2,000 employees here, plays a key role in such projects, cutting through one of our last dark industries. “Modelling mines is the start. Someday our programmers will model the planet,” Chowdhury tells us. “Imagine that.

(First published in the October 2015 issue of Fortune India; co-authored with Nirmal John; illustrations by Nilanjan Das; graphic source: Government of India, Aspiring Minds)

The Spin: How a disparate set of individuals, NRIs, entrepreneurs, who-have-you, is changing the India narrative.

the spin coverTHE YEAR: 2007. Hari Kiran Vadlamani, then 45, had secured a big exit from his energy business KSK Energy Ventures (then called KSK Power Ventur). That was when he began to seriously contemplate his Indian identity. “I saw that every successful nation had a sense of its civilisational greatness—from American exceptionalism to Chinese economic power—but India,” he says. “There was some blip about a rising GDP, but absolutely no sense of where we came from and what we had achieved.”

By the end of 2010, even the rising GDP part was in trouble, with a series of financial scandals and internal squabbles plaguing Prime Minister Manmohan Singh’s government. Sanjaya Baru, who served as media advisor to Singh, says 2009 was Singh’s poll victory, but everyone in the Congress party pretended it was Congress vice president Rahul Gandhi’s. When Singh realised that the party was not with him, he let go of the India story. There was a void for someone else to fill. Led by Narendra Modi, scores of Indians like Vadlamani sought to do exactly that, giving the story what British economist and Labour Party peer Lord Meghnad Desai calls “the new-old spin”.

“I remember being on a panel with Montek Singh Ahluwalia (the last deputy chairman of the now-defunct Planning Commission and a close confidant of Singh), where I said the British didn’t open India for global trade. India had been trading successfully with the world for hundreds of years. But he didn’t want to hear that,” says  Desai. “Oddly, the Congress felt that talking about Indian achievements was somehow ‘Hindu’ and ‘communal’. All of this fed into the ecosystem that found Modi as its head, and he harnessed it to tell a new story of India, which wasn’t new per se but was being retold in a vigorous way for the first time in decades.”

What exactly is this new story—the spin if you will? Desai breaks it down to one simple but powerful idea: India was a rich country and could be rich again. The Congress with its socialist leanings wasn’t interested in pushing this idea, he claims, but that’s what people wanted to hear. To be sure, every political dispensation has brought its own spin to the India story—for instance, late Prime Minister P.V. Narasimha Rao (of the Congress) had, in the afterglow of liberalisation, proclaimed “India Means Business”—but sweeping discontent with the previous government and deft exploitation of mass-media platforms that simply did not exist in such potent form earlier turned Modi’s pitch into a tidal wave. It created, as Vadlamani says, “a palpable sense among Indians around the world that here’s a man speaking our language”.

That’s the take-off point of the dominant narrative of 2014, by all accounts the most momentous year for India since the economy opened up two decades ago. In this version, armed with the spin, Modi proceeds to deliver a hysterical bump-up in “sentiment” (possibly the year’s most overused term) around all things Indian. Its most visible manifestation: the 42% spike in the Sensex between September 2013, when the Bharatiya Janata Party (BJP) announced him its prime ministerial nominee, and December 2014, roughly into his first six months in power.

Latent in any spin is the idea of excess, and it is so here too. “[The market is Modi-fied, defying] the growing chorus that nothing on the ground can change overnight from the bleak economic realities of the United Progressive Alliance (UPA) rule,” Rajiv Bhuva warned in ‘The Birth of a Bull Run’ in Fortune India’s July 2014 issue. But as the spin—first around Modi’s $100 million campaign, then his spectacularly choreographed global roadshows—gathered momentum, such nuances became trivial. (As we write this, the Sensex is up nearly 40%, and some project the bull run to continue till 2030.)

To put things in perspective, this was also the year when India reached (and tweeted from) the Mars orbit, the first country to do so at the first attempt, invoking awe worldwide. (Modi didn’t make it to Time’s Person of the Year shortlist, but Mangalyaan came second on its list of 2014’s greatest inventions, beating wireless electricity, nuclear fusion, and 3D printing.) Bellwethers of modern media—Quartz, BuzzFeed, and The Huffington Post—opened shop here, underlining the India story’s growing cachet. Facebook’s Mark Zuckerberg came bearing drone-beamed broadband, while Amazon’s Jeff Bezos visited with a $2 billion cheque, apparently to counter rambunctious desi e-commerce upstarts. And finally, manufacturing indicators hit a two-year high in December, even as, fatefully, China stuttered for the first time in a decade. Most commentaries on the year’s milestones, however, converged on one image: that of Modi, the teaseller-turned-PM, pulling the strings as sutradhaar (narrator), with ‘Swachh Bharat’, ‘Digital India’, and ‘Make in India’ his chosen epiphanies.

It is a compelling image, except it glosses over the complex constellation of forces in a year when, as Twitter’s India and Southeast Asia market director Rishi Jaitly puts it, “something about India changed permanently”. Hindsight might yet prove that assessment disproportionate, but there is a feeling that in this India, spin—or, to put it differently, raucous exuberance after a period of sterility—is valid proxy for real change. The means, in other words, is the end.

THE SPIN: OR HOW A DISPARATE SET OF INDIVIDUALS, NRIS, ENTREPRENEURS, WHO-HAVE-YOU, IS CHANGING THE INDIA NARRATIVE.

Modi is a prime catalyst in this, but to call him the only one does disservice to three much larger factors—each breaking away from the usual narrative of India and adding to the spin—even as they are strengthened by it. First, the emergence of a distinct right-of-centre idea of India, born out of disenchantment with the country’s self-image in the Congress years. Then, a dramatic power shift in the business community, with a new breed of first-generation entrepreneurs upstaging the elite establishment. And finally, the unfettering of public opinion brought about by social media, Twitter in particular.

SHASHI SHEKHAR, CEO OF NITI DIGITAL, a digital information company, understands the power of ideas. Niti Central, the flagship of Niti Digital with the tagline ‘Bold and Right’, was funded by serial entrepreneur Rajesh Jain (himself a Modi votary) and became a key online resource for the Modi campaign, including its now famous Mission 272+ platform. An IIT-Bombay and Infosys alumnus (the typical profile of Modi’s backroom managers), Shekhar says he first began to think about a different idea of India when, in 1993, authorities at IIT-Bombay refused to let a cut-out of Swami Vivekananda appear in saffron clothes, which the monk wore for most of his adult life. “We finally had to show Vivekananda wearing blue clothes,” says Shekhar.

“I was clear that one day one would have to do something about this.” Niti’s pitch is simple—a different India is possible. “Before the elections, we were clear that only Modi could deliver what we wanted,” says Shekhar. “Now that he has won, we are not looking only to be cheerleaders. Our commitment is to anyone who will create a prosperous India and speaks the language of prosperity.” That has created for Modi what Baru calls the clarity of agenda that Indian parties rarely have—economics, economics, economics. “Without that, all talk of the glory of India is futile.”

Sanjay Anandram, serial investor, was looking to back a vehicle that would speak this language. In 2013, he chanced upon two techies, Prasanna Vishwanathan and Amar Govindarajan, who had been running a blog called Centre Right India, and had bought the rights to the Swarajya magazine for Rs 40,000. Swarajya was started by C.Rajagopalachari, who fell out with the first Prime Minister Jawaharlal Nehru and his Soviet Union-inspired economics. (Rajaji, as he was called, also started the Swatantra Party, promoting free-market economics, in 1959.) The revived edition has roped in veteran journalist Sandipan Deb, economists Bibek Debroy and Surjit Bhalla, and entrepreneur Jerry Rao on its editorial board.

Anandram says: “We realised that in order to change politics and the discourse, entrepreneurial capital must come  in.” This had happened with companies like the Birlas that supported Gandhi. But over the years, private money only came into politics to fix the system. “We did not want that. We believed that first-generation entrepreneurial money must come into the political discourse to alter it.”

Vadlamani, for instance, is an investor in Swarajya and has funded the Creative India Foundation, which has several verticals on arts and culture, and patron of India  Facts, a Right-leaning portal to promote research and opinion “countering the common socialist narrative of India”. He has also funded works by 25 Indian visual artists, and is the founder of the Advaita Academy, which promotes Vedanta. Vadlamani says he sees his work as he would any other start-up, asking what is the opportunity, what is the market.

“The idea is to support a bit of India wherever we can,” he explains. “Is there a literary festival happening somewhere in the world where we can place an Indian writer? Let’s then pay for their travel and stay. Is there a food show happening? Can we put Indian food in it? Let’s pay for that. As we do this, we are tracking incremental gains on the impact of Indian soft power.”

Each of these platforms has found its niche. India Facts publishes pugnacious rebuttals of Left-leaning opinion (‘Charlie Hebdo or the nuanced intolerance of our liberals’),  while Swarajya is more sober (‘When will the NDA government reform the aviation sector?’). Niti Central, meanwhile, is everyday politics-focussed (‘Kiran Bedi joins BJP —will hurt Kejriwal’). All this, says Meghnad Desai, changes the way the world looks at India, at least temporarily. “It also changes the way India looks at itself,” he says. At least temporarily.

FAR FROM POLITICS, another bunch of entrepreneurs is  using the spin to wrest control of the India story from an exclusive set.

Take Shradha Sharma, the hyper-animated 34-year-old founder of Bangalore-based YourStory, a leading media platform for startups. To our point that despite all the feelgood around the new government, India’s elite corporations failed to produce a single breakthrough moment last year, Sharma asks us to reorient our vision. “Look at what entrepreneurs achieved, and you’ll realise [that there wasn’t one but several] breakthroughs.”

In fact, if Modi permanently changed the course of India’s politics in 2014, there is a feeling that startups and entrepreneurs did the same to business. That’s the theme reverberating from the Financial Times (‘India’s startups are pulling in Silicon Valley’s big hitters’) to HuffPo (‘India On The Verge of a Tech ‘Gold Rush’’)—fuelled by Flipkart’s $11 billion valuation, JustDial’s Rs 950 crore IPO, SoftBank’s $837 million investments in Snapdeal and Ola, and Zomato’s overseas acquisition spree.

While the stars of the new economy derive their power from the sheer heft of the Indian market rather than coziness with the day’s political masters, Sharma acknowledges that the Modi effect has helped. “When I started YourStory six years ago, people said, ‘Nobody will come to a website that only glorifies startups.’” Now, with the Prime Minister rooting for entrepreneurs on Twitter (Sharma calls it the “startup-ism in the government’s lingo”), the game has changed. Last year, YourStory’s social following grew by over 400% from under a lakh in 2013. Sharma says people often accuse her of romanticising the new India. “I tell them, look around. This is real.”

Bangalore, India’s startup central and, some say, the challenger to Mumbai’s position as business capital, crackles with this feeling. Sitting in his office that also doubles as a godown for products under development, Rajiv Srivatsa, COO and co- founder of online furniture retailer Urban Ladder, sums it up: “Success breeds confidence, and confidence just spreads.” He says thanks to a blowout year for the Internet and mobile in general and e-commerce in particular (sales reportedly crossed Rs 1 trillion), entrepreneurs can now take bolder bets at a bigger scale.

Srivatsa reacts sharply when we bring up  the suspicion in some quarters that all this is one gigantic bubble. “This isn’t the dotcom era when people invested blindly without real demand,” he says. “We now have actual data that points in one direction: crazy growth.” He does, however, concede that there’s a sudden, unforeseen glamorisation of the entrepreneurial journey, denting the country’s obsession with “success”.

Mukesh Bansal, who sold his fashion retail site Myntra to Flipkart in the most high-profile deal of last year, puts it more earthily. “Until now, people would look at the same guys and say, ‘taxi chalata hai (drives a taxi), kapde bechta hai (sells clothes), travel agent hai.’” Technology and exponential growth, says Bansal, have given these careers a new spin. It is hard to miss the echo of Modi’s chaiwallah persona, first used as a pejorative by the Congress, only to be spun by the BJP’s propaganda machine into a badge of honour.

Startups like Team Indus that are in geekier businesses—it is best known for building a lunar lander for the Google LunarX Prize (see ‘India’s Unknown Moon Mission’ in Fortune India’s August 2014 issue)—don’t see the buzz as a post-2014 phenomenon. There’s always been a belief simmering in India’s entrepreneurial ecosystem, argues Rahul Narayan, the team’s founder, which has nothing to do with the highs and lows of the Sensex. He bats for the need to preserve a sense of continuity. “We, for example, were inspired by what the Indian Space Research Organisation (ISRO) had already achieved.” Bansal too points out that while market sentiment ebbed in the past few years, consumer sentiment, especially in e-commerce, has been consistently on the rise.

There’s also consensus that the roots of the startup boom lie in the IT revolution long before Modi. (More than one entrepreneur says startups mushroomed in Bangalore because software engineers working in the city’s big IT companies were disgruntled with their day jobs.) That said, most are happy to play along with any kind of spin that keeps the current euphoria going. Srivatsa admits that the media has made the startup story look bigger than it is, so that old-fashioned corporate results no longer monopolise the news.

The media’s love of course has its own loaded context. “There’s a lot of you-scratch-my-back-I-scratch-yours that goes in reporting on big companies,” says Anant Goenka, the 29-year-old director of new media at The Indian Express Group. “I’m not suggesting paid news, but ‘If you cover my launch on page 1, I’ll give you an exclusive with my CEO’-type conversations are increasingly rampant in the business news space.” Goenka says writing about startups is an easy route to humanise and be less dependent on corporate India’s mighty public relations companies.

To a smaller set, the likes of Rohin Dharmakumar, an early-stage entrepreneur and ex-Forbes India (competitor to Fortune India) journalist, the constant race to stay in the limelight is reason for worry. Somehow spinning a catchy story has become the primary goal for many, he says. “There’s this concept of hustling, that anything goes, so long as you are able to sell your story. Ethics and solid numbers have suffered.”

HUSTLE IS ONE OF THE words Twitter’s Rishi Jaitly invokes to describe his impression of India in 2014. “I remember sitting on a conference call in 2012 (the year he took the job) and telling my colleagues, ‘2014 will be big’.” With 56 million election-related tweets in the five months to the polls, that prophecy came alive.

Technology was a key part of Atal Bihari Vajpayee’s 2004 campaign (‘India Shining’) too, with pre-recorded voice calls and the promise of holding online rallies of 100,000 people every day. But in 2014, the message morphed into the medium: Modi’s campaign accused mainstream media of jettisoning his voice; Twitter embraced that voice and amplified it. The PM’s three Twitter handles (@narendramodi, @PMOIndia, and @narendramodi_in) have a few times the readership of the largest newspaper in the country,” says Raheel Khursheed, Twitter India’s head of news, politics, and government. That’s why eight months into the job, he hasn’t felt the need to appoint a press advisor.”

Does Modi’s inescapable clout on the platform—@narendramodi has the second-largest following (9.6 million) among politicians worldwide, second only to @BarackObama (53.5 million)—give his narrative an unfair edge? “We do not take a moral stand on what kind of content becomes big on Twitter,” says Jaitly. The audience will gravitate towards you if you can offer highly personal, authentic, interactive storytelling. “Whether you are an election candidate or a brand, the formula remains the same.”

Khursheed suggests that one of the reasons the Congress was swept away in the elections was that it failed to use that formula (read: juice the social web as effectively as Modi). He insists that rather than centralising power, Twitter’s two- way microphone allows everyone ownership over what ought to be the agenda in public conversations. That also means while you can craft a clever message, you cannot predict or control what spin it will end up acquiring. A big part of Khursheed’s job is to help users like Modi deal with the constant public demand for new content. This is the meme culture, where the importance of a message is decided by how quickly it spirals into a #trend, and how long it stays there.

Modi can learn a thing or two from Obama about shouldering this burden. “He’s done Reddit AMAs; he’s appeared on web comedies; he’s smiled for a slew of behind-the- scenes photos and GIFs, all tastefully filtered and posted to Instagram. The Obama White House is on literally every mainstream social network except Myspace; there are people employed at said White House who are paid to turn Obama’s policies into ‘shareable’ memes”, the Washington Post wrote days before the President’s India visit.

The pressures on Modi are not yet so severe, but that looks temporary given the legacy he has built for himself. It’s now a fading footnote that the BJP’s ideological parent, the Rashtriya Swayamsevak Sangh (RSS), was far from certain about Modi for PM to begin with. Some argued that the momentum was already with the party, and even if a different name
(L.K. Advani or Shivraj Singh Chouhan)—or no name—was announced, it would still win. But the famed booth-level network of the BJP and the RSS, the panna pramukhs, refused to work without Modi. “His image management,” a senior BJP leader told Fortune India, “was always grassroots-focussed. It was so for 10 years, but no one really got it until before the polls.”

Khursheed shares a story. On Modi’s birthday, as he acknowledged the wishes of the hoi polloi on Twitter, one follower went unnoticed. “Why are you ignoring me? Have you blocked me?” he demanded of the PM. In another India this guy wouldn’t stand a chance, says Khursheed. But Modi, whose image as a grassroots Prime Minister is at stake, placated him with a smiley face.

M.G. Parameswaran, advisor to Mumbai-based ad firm Draft FCB+Ulka (which created the ‘India Means Business’ campaign for P.V. Narasimha Rao), spells out the obvious risk: confusing Modi’s relentless PR for the real deal. “That’s merely the scaffolding,” he says. “It will have to come off when he starts the real action, whether it’s tax reforms,  and reforms, or stronger anti-corruption measures.”

Modi of course knows the perils of overdoing a spiel courtesy BJP’s disastrous ‘India Shining’ campaign in 2004, which Chintamani Rao, a strategic marketing expert and former CEO of Times Global Broadcasting, describes as a hollow manufacturer’s claim. In contrast, ‘Make in India’ is a proposition. It provokes the question, “Why?” If that is answered effectively, it will work. If not, it will be another vacuous slogan, Rao says.

FOR NOW, CONTRADICTIONS are swirling. December 2014’s Fortune India 500 analysis revealed that revenue growth of India’s elite corporations fell to 9.5% levels from 11.5% in 2013, while profit growth dropped to 4.5% compared with 5.85%. The same month, a report from financial advisory firm Grant Thornton painted a far rosier picture. It said Indian companies closed merger and acquisition and private-equity deals—a barometer for business appetite and optimism—worth $50.5 billion in 2014, a 32% jump over the previous year. Staggering returns by any measure, more so compared with the 11% fall in 2013—except that view obscures another crucial nuance. Many of these deals were already on their last legs in 2013. They were held up because good economic data had dried up, says Prashant Mehra, partner at Grant Thornton. “The money started flowing as Modi brought the hope of change … though in terms of fundamentals, nothing really changed.”

At this year’s Vibrant Gujarat, a business summit started by Modi himself in 2003 and played up these days as the Davos of the East, CEOs seem cautious. Piyush Gupta, CEO of Singapore-based DBS Bank, says all that the spin has done is to  change “the real disillusionment about India under the last government. Everyone woke up to the fact that the Indian reality had little to do with the India story,” he says, adding that the new government won’t have forever to start executing. “Ordinances to push reform show resolve, but that’s just the beginning,” Gupta says. Where things go from here will determine whether DBS goes ahead with its plan of opening 80 branches in India in the next five years from its current six.

Richard Lancaster, CEO of China Light and Power, says even though his company is committing $2 billion to build new coal-based power plants in Gujarat, it is in wait and watch mode. Walmart India CEO Krish Iyer is hoping to have 70 stores by 2020. That means a lot of investment (he will not say how much). “Investment needs momentum and goodwill,” says Iyer. “The climate needs to support it.” Has the climate changed? “The move towards administrative reforms is useful; we are hopeful,” is all he says.

Don’t such middle-of-the-road statements signal a comedown from the frenzy a few months back? Diane Farrell, acting president of the powerful U.S.-India Business Council, in India as part of Obama’s visit, argues that’s an unfair way of looking at things. “This government is clear that it will not make flashy, big-bang decisions that grab the headlines. It is going about its work quietly,” she says.

She finds support in a JP Morgan report, aptly titled ‘India and Mr Modi: After the honeymoon’. “So far, the majority of policy measures tabled are neither surprising nor breathtaking,” it reads. “But unlike his critics, we see this as a major strength of the government’s approach, not a weakness.” What of the expectations of a miracle that 2014 engendered? “That’s a real challenge,” Farrell admits, “but [hopefully people understand that] it’s actually incremental change rather than an earthquake that leads to tectonic shifts.”

Meanwhile, Farrell  would have you believe there’s little fear of Modi getting carried away by his own spin. “He doesn’t allow himself distractions,” she says.

(First published as the cover story of Fortune India‘s Feb 2015 issue; coauthored with Hindol Sengupta; photograph by Bandeep Singh; illustration by Nilanjan Das.)

Brilliant Ideas Are Not Enough

Debjani Ghosh, vice president, sales and marketing group, and managing director, South Asia, Intel, reflects on the zeitgeist in Indian tech. 

Debjani

Debjani Ghosh says coming back to India in 2012 unsettled her, since she had just built Intel’s Southeast Asia operations into one of the company’s best-performing assets. “We were having a magical time,” she says. “So I asked my bosses, why India?”

Three years on, Ghosh has established herself as one of India’s most committed technology evangelists, championing programmes like the National Digital Literacy Mission (NDLM), and now, Innovate for Digital India, to build awareness of technology and its applications ground up. Last month, she was named the first woman president of the Manufacturers’ Association for Information Technology, the apex body for hardware, training, R&D, hardware design, and other associated service segments of the Indian IT industry. Along the way, she has found powerful allies in the government as well as the private sector, which she says is the only way to scale any change initiative in India. “I also had to convince the Intel HQ that they cannot tie us down to quarterly sales targets,” she says. “I cannot project return on investment for market-creation programmes because there are no tangible metrics available.”

What then does she make of India’s frenetic tech startups, which also insist on freedom from RoI, albeit for very different reasons? She spoke to me on this, Intel’s ground-up innovation push, and the value of partnership-driven problem-solving. Edited excerpts:

“In India, we have had a history of sitting back and commenting on whatever is wrong, and placing the onus of change on someone else. But the country is really changing. What our ongoing Innovate for Digital India challenge has shown us is that people have the confidence to speak up and share ideas; they are not worried whether the ideas are good or bad.

The first phase of the challenge, which invited innovators to submit ideas that address ground-level problems, has been fantastic. We got 1,900 submissions; our goal was 1,000. We were pleasantly surprised that the participants did not come from any one predominant group. It’s a healthy mix, though we are yet to crunch all the data. All our partners, from MyGov.in to the Department of Electronics and Information Technology (DeitY), have played a stellar role in spreading awareness about the challenge. Now comes the difficult part: selecting the top 50 ideas. The Centre for Innovation, Incubation and Entrepreneurship (CIIE) at IIM Ahmedabad is working on that. Following that, the participants will go through an elaborate pitching process, where they will present their ideas to an expert panel. The top 20 from there will go through a three-month mentorship programme in Pune.

I am excited that many of the best ideas are targeted at people who do not speak English, and maybe aren’t even literate. If we can pull it off, these ideas can make a big difference. Most innovation challenges in India end with identifying great ideas. They don’t take the ideas right up to the product stage. We are looking at not just how good an idea is but how solid the productisation plan is. We will make sure that the products are tested and are market-ready before we announce them to the world.

We have taken a lot of learnings from NDLM. From a technology-adoption perspective, India has been a laggard compared to even Indonesia or Vietnam. My bosses told me, “go and figure out why”. One of the things that stood out to me was that if you move out of cities like Delhi and Mumbai, the use of technology becomes more and more superficial. Forget computers, that’s the case even with phones, which everyone in India is so crazy about. If I ask a lady in Indore what she uses her phone for, the maximum she might talk about is watching cooking videos on YouTube. Even the teenagers are restricted mostly to Facebook and WhatsApp. Everyone says IT will transform education and healthcare. But how many people are really using IT for all that? If I am a lower-middle class family, is there a compelling enough case for me to spend money on technology beyond such superficial use? The answer is a big ‘No’.

NDLM’s goal was to create awareness about [what technology can do for you]. The biggest learning was, forget sales, this is about market creation. It is not about brand building and marketing, because then you would want to do it alone. And alone you cannot even begin to make a dent.

That’s why with NDLM, we didn’t even use the Intel name. It was a painful decision, because the company was spending a lot of money on the programme. But I managed to convince my bosses. I also told them that we cannot predict RoI for such programmes, because there’s no existing data to prove it will work. It’s all in good faith. In hindsight, it was the right approach to take. The government took it up in a big way because it didn’t threaten anyone.

It also helped us win the trust of industry partners. For the innovation challenge, for instance, we have partners like TCS, Capgemini, Lenovo, and Micromax. These are all innovation leaders in their respective industries. Top leaders from these companies have committed their personal time to mentor our participants.

A second, and related, learning was the importance of choosing the right partners. The government is the best example. A lot of people say public-private partnerships don’t work in India, but we have had a mostly positive experience. There’s no way to scale in India without involving the government. The challenge is to find the right departments to partner. For instance, the Department of Science and Technology (DST) is chartered with innovation. It has great industry partnership models and is a very professional outfit.

[People also say decisions in this government are all driven from the top,] but I think the bureaucrats, at least in DST and DeitY, are quite empowered. They are equipped to react quickly to  new ideas. Innovate for Digital India was a new idea, and DeitY already had its set priorities. But it agreed to come on board and was ready [with the rollout plan] pretty much at the same time as us. DeitY secretary R.S. Sharma has been working on projects like this since his Aadhaar days. Gaurav Dwivedi, the CEO of MyGov, is another extremely tech-savvy leader. I don’t see these people saying no to a good idea.

Yes, the vision is set at the top, but that’s how it is in any corporate setup as well. And you need that: The kind of stature the Prime Minister has, he is the only one who can articulate big goals like ‘Digital India’. Having set the goals he also has to keep talking about them, become its biggest champion. And credit to him, he has been doing that.

There is a lot of buzz about technology in India these days, which is great to see. If you wait for things to happen sequentially, nothing will ever take off. You have to take a leap of faith. But you need to follow certain foundation-building processes. You need to have standards, security, interoperability. This is the conversation I have the most with the government: You have built tonnes of platforms, what if they don’t talk to each other? It’ll be a nightmare. I think the government gets it. The Prime Minister also spoke about these challenges in his Digital India inauguration speech.

An exciting development is, of course, the rise of so many tech startups. But today too many people seem to be talking only about “brilliant ideas”. No one seems to care whether these ideas will ever give returns. It’s all about pushing that next app out into the market. That’s a scary model. I get that this kind of push was needed to stimulate startup growth, but it looks like that stimulus has been going on for far too long. Investment discipline must come back to India.

For companies like us, the challenge is to resist the temptation to do everything, since these days every company is in every business. India is like a toy shop, it is actually some 30 different countries. How do you prioritise where you want to play? That’s going to be one of the toughest questions.”

(Photograph by Bandeep Singh; first published in the August 2015 issue of Fortune India)

The Third Space: Business and the Culture of Coffee in India

India may not have a Silicon Valley equivalent just yet, but something’s been brewing amid the hum in its coffee shops.

coffee

Harpreet Grover, 30, says half the techies his company employs have permanently shifted base to cafés. “In the office, people bug them with random questions,” the CEO and cofounder of Gurgaon-based assessment and campus hiring startup CoCubes (backed by Infosys cofounder N.S. Raghavan’s Ojas Partners) tells us. “They concentrate better in a café.” He adds that in some of CoCubes’ other locations, like Pune, there are no offices at all. “Instead, we give people a Rs 2,000 monthly café allowance. They can work from anywhere, so long as it’s somewhere inexpensive—mostly a CCD [Café Coffee Day]!”

Till 2012, Grover’s tribe would have fitted the stereotype of startup junkies allergic to formal workspaces. But research published that year by Ravi Mehta, who teaches business administration at the University of Illinois at Urbana-Champaign, hints that their café love reflects something more universal. “We found that ambient noise”—like in a coffee shop—“induces distraction, and a moderate amount of distraction helps you move away from very focussed thinking, which in turn enhances creativity,” says Mehta. “Previous research has argued positive correlation between creativity and risk-taking. That speaks well with innovation and entrepreneurship, which involve the willingness to take risks.”

Risk is a word Grover and his co-founder Vibhore Goyal understand well: Both are IIT-Bombay grads who left promising jobs at consultancy Inductis and Microsoft Research Centre, respectively, to start CoCubes,which has been adjudged one of India’s ‘Top 10 Emerging Companies’ by Nasscom. Many in their 40-member team (average age: 27) are of the same mould.

MEHTA’S RESEARCH finds prominent mention in online chatter around the mushrooming of portals which recreate the café hum for those who need their fix on the go. Coffitivity, one such portal, even made it to Time magazine’s best 50 in 2013. While Mehta studied predominantly North American individuals, he says the creativity-boosting effect of the sound is a “human phenomenon” that should be just as valid in the Indian context. But the marginal status of the creative type—innovators and entrepreneurs—in India meant no one here had time for such trivia.

The attitude is now changing, with the rush of big money and media attention sparking unprecedented interest in the anatomy of the entrepreneur, a la Silicon Valley. And, intuitively, cafés are emerging as a key symbol. It’s not just about eccentric geniuses though. “Cafés are a blessing for sales guys, who need to park themselves somewhere between meetings,” says Grover.

“I conduct most of my meetings in coffee shops—including with investors and clients,” says Arpit Gupta, the twentysomething cofounder of Piquor, a startup based in Gurgaon that helps companies connect with their target audience through branded selfies. “They are accessible, comfortable, and no one bothers you if you sit for long hours. Importantly, they are cheap.” That last point resonates loud and clear within the entrepreneurial community. “That’s why we love CCD. Startups can’t afford Starbucks,” says Grover.

The accent on affordability is a departure from the origins of the coffee culture in India. “It was triggered during the late 1990s and early 2000s, when India’s upwardly mobile middle-class was thriving on the IT boom,” says Ankur Bisen, senior vice president (retail) at consultancy Technopak. But for patrons like Grover and Gupta, it’s all about the idea of coffee rather than an indulgent drink.

“IN THE GLOBAL NORTH, people still go to a café to drink coffee first,” says Ravi Murugesan, former vice president at Mumbai-based language services startup Cactus Communications and consultant with an HR startup in Wisconsin, who now works in the development sector and shuffles between Africa and India. Murugesan says in India—where per capita coffee consumption is a measly 90 gm compared to 4.2 kg in the U.S.—it’s the third space between work and home, a space occupied by pubs in the West. “The few places in India that have a homegrown coffee culture, like my hometown Chennai, don’t have the same buzz around cafés. Everywhere else, the label on the mug matters less than familiarity and vibe.”

The café’s informal vibe is finding use in traditional businesses too. Vipin Clement, senior talent development executive at the Bangalore office of British risk management, reinsurance, and human resources solutions provider Aon, talks of “no-obligation meetings” which are increasingly popular at mature organisations. “As part of succession planning, more and more organisations today encourage business heads to meet prospective talent at cafés. Both parties know there’s no immediate intent to hire; such interactions just won’t work in a typical office.”

(Published in the October 2014 issue of Fortune India, with inputs from Anjali Kapoor. Artwork by Nilanjan Das.)