Marico chairman Harsh Mariwala’s decades-long journey as an entrepreneur is dotted with learnings for startup founders. In this Outliers podcast with Pankaj Mishra from June 2018, Mariwala speaks about how he converted failures into learning opportunities, why every entrepreneur needs a support network, and on building brands and businesses to stay relevant in the digital age. Mariwala’s latest obsession is ASCENT, a peer learning platform for entrepreneurs he founded in 2012. Another obsession is in the area of mental health. It’s his way of giving back, he says. Read this lightly edited version of the conversation — credit to Kanika Berry for the transcript — for an insight into how Mariwala is building his legacy.

Pankaj: Welcome to Outliers. I am really excited to sit down with Harsh Mariwala, whom many of you would have definitely heard about and the iconic retail brands that have touched all of us at some point in our lives, Marico and different brands. Harsh, welcome to the podcast.

Harsh: My pleasure.

Pankaj: Usually, when I start such conversations, I ask people about where do they come from and things like that. But with you, I think I will flip it. A lot is known about what you have built and how. I would like to start with asking you about some of the biggest failures you have encountered in your entrepreneurship journey. And if you could pick one, two or three of them and the lessons they offered you.

Harsh: First of all, before I get into the examples, let me say that failures are part and parcel of an entrepreneur’s journey. There is a saying that sometimes you win and sometimes you lose. The same thing you can put it differently — sometimes you win and sometimes you learn. Any failure, any loss is a great learning opportunity. That’s happened to me many times because I am not a management graduate and nor has anybody mentored me in my whole journey or guided me. I have been a self-learner. Many times you take some steps without realizing because you have not had any experience since nobody has guided you. I think my learnings have come out of exploring some unchartered territory and realizing that I made a mistake.

My first learning was in the very initial part of my own journey, when I was less than 30 years old. At that time we wanted to get into some new products. We had identified an opportunity but we took some shortcuts in terms of product formulation because we we didn’t want to add to our overheads. We tried to do it in-house without knowing what it meant, and that backfired. We also didn’t invest heavily into quality systems and one other new product had some quality assurance problems.

So I think one key learning in the initial part of my career was that as you expand, you need specialist inputs in the area of quality, safety, legal, and you can’t take shortcuts. Quality, safety, legal, product development. You have to ensure that these things happen. That led me to establish quality functions, take safety far more seriously, establish legal function as well as the product development function. That really helped me in terms of focusing on my core but with a lot of support coming in from sides.

The second failure was when we entered a category that was very, very competitive, which had very strong brand names. We entered into a baby category and started competing with Johnson & Johnson. Mothers have very strong affinity to the brand but we thought we will be able to get some share of it. We entered a category which we underestimated in terms of the brand leader and what kind of franchise they had with mothers. Normally in the baby category, the mother uses a product for a few years and then once the baby is above a certain age, they don’t need to look at baby products. So the need to be continuously in touch with a new set of mothers every few years was very important, and you needed a certain critical mass to succeed. We did ok but it was not good enough for us. That led me to think through in terms of what categories we should invest in. Now we are very clear that any category we invest in we should have a very strong ride to win. That means we should be able to, before entering the category, we should have something either unique in terms of the product formulation, or we should be pioneering some product, or we should have a strong brand that will enable us to win.

One more example (of failure/learning). We thought that baked snacks had a very good future because health awareness was increasing. So we were very clear that because people are healthy, they will stop shifting from baked to fried snacks. Then we developed a product under the brand name Saffola, which was baked snacks, but we went little bit inside out. We said Saffola brand, the health benefits have to come more than the taste benefits. But in food, taste is the most important thing, followed by health. The product didn’t do well but our learning from that was that when we develop our next round of products for food, we should put taste first and health is equally important. So when we launched our savoury oats, we developed a product which was tasty and also healthy, and not health at the cost of taste. That has really done well.

So I think each failure has its own set of learnings. All I can say is that every entrepreneur goes through failures. We should not be afraid of failures, we should go on experimenting and it’s okay to fail.

Pankaj: What I really like about these examples is the learnings are very clear.

Harsh: I have many more examples.

Pankaj: You should write a book on failures.

Harsh: Yes, I am writing a book but failure is a part of that book.

Pankaj: You talked about the entrepreneurial journey and failures, of course, will be a part of it. The other thing that’s part of it is loneliness. Most of the times you don’t know what to do with it, what to share. You said you didn’t have any mentor or anything and now you are doing something interesting in terms of peer network. So how did you cope with loneliness and what are you doing now?

Harsh: They say it’s lonely to be at the top because you can’t discuss many of the issues with people down the line. I have taken the courage to discuss this with my team, all the issues. To that extent, a lot depends on the quality of the team you have and the capability of the team. I also developed a set of friends who were willing to listen to me. Many a time you just want some advice but many a time you just want others to listen to you, your failures, your frustration, you don’t want any advice. So I think a combination of those who work below you and a combination of some friends, some other associates who can help you in this, has helped me. But I think it’s very important that any entrepreneur develops this network, it could be family, it could be anybody who understands you. You can’t talk to somebody who doesn’t understand you, so it’s very important to have that person understand what are the issues you are facing. Many a time that person may not give you all the advice but the fact that that person is willing to listen to you, it’s just very therapeutic.

Pankaj: The other issue entrepreneurs struggle with is managing criticisms or handling critiques.

Harsh: You have rightly used the word ‘critique.’ If I tell you that you are very bad at this thing, it is criticism, but if I tell you the same thing in a different way that, ‘if I were you, instead of doing it this way I would have done it this way,’ and the whole mindset changes. Your ability to hear me out is far better because I am putting myself into your shoes and I am using this language, which is very important. That, to me, is a critique. So if you put it in the right manner, I think the readiness to absorb that information or that critique is far higher. It’s very important how you give a critique and how the critique is received. Now if I give you that critique in the right manner and if you received it in a negative manner, then again I will restrain from giving critiques in future. It’s a two-way street. Critique is important because every one of us has blind spots, and many a time we don’t realize what we are doing.

Every individual needs to be critiqued because if you are not willing to be critiqued then you can have some very expensive failures. You may have overlooked something in driving a business and critiques will give you a more 360-degree view. I am a very strong believer in critique and bouncing of ideas with others. It could be your subordinates, it could be friends. We are now also providing that opportunity to entrepreneurs to critique through the ASCENT platform. The key thing is that every person has a blind spot and you need to bounce off your issues with others so that the blind spots are adequately covered.

Pankaj: Sometimes when you are at the receiving end — especially in the age of social media and the digital world, and you have close to a million followers on Twitter — that becomes very tough and then things start getting personal.

Harsh: There’s a larger benefit in getting critique. Sometimes some critiques may not be in the right spirit or they may be very direct and they may be confrontational but what are the options? Either you shut up all the critiques, which is not good. If you think something is not relevant, then just hear it from one ear and get it out of the other ear rather than saying, ‘I want to stop doing this.’ Every person will have some negative experiences but I think the benefit of critique far outweighs the negatives of criticisms.

Pankaj: You built your retail business over decades. Now how do you cope with retailing in the age of platforms like Amazon? How do you stay relevant in this new age?

Harsh: It’s reality that digital is going to disrupt each and every business. You have to understand where will the disruptions occur and that will depend on the type of business you are running. In our case, in FMCG (fast-moving consumer goods), it’s very clear that digital disruptions will occur through digital brands, digital distributions, and we have to proactively manage this rather than reactively react to it. Can you make that as a source of opportunity? Can you say that these disruptions are providing an opportunity rather than being perceived as threats? Proactively can you invest in managing the e-commerce channel? Can you launch your own digital brand? Can you acquire? In our case, we acquired a digital brand. So basically, can we look at it from an opportunist mind? And then you need dedicated resources because there are individuals, especially youngsters, who are far more savvy managing digital businesses rather than old people because for them it is part and parcel of their lives. So it’s very important that you proactively manage by investing in individuals who are digital-savvy and remove all the escape buttons and look at it from an opportunist point of view.

Pankaj: How do you learn new things?

Harsh: I was learning first through various mechanisms. Failures and successes also have learnings. I read a lot, so I kind of critique a lot through interactions with other individuals. Now in the digital side you can see a lot, you can hear other people on social media, whether it is Twitter or Whatsapp or YouTube. So I think a combination of all these things. I think every person has to have a learning mindset and that learning mindset reflects through desire to learn. If I meet you, what is the new thing you have in life? Then that’s a learning mindset. Can I learn from you, by telling you that I want to learn what is new in your life, what is new in your business. I am not saying that I want to get into gossip. The whole objective is to actually know what is happening in the environment at your end. If you are in a different business can I learn something from you? I think learning has to be at the back of whatever you are doing and whenever there is an opportunity, learning will create an opportunity.

Pankaj: What does wealth mean to you?

Harsh: Initially, when we are small, I think wealth means a better lifestyle. But once you reach a certain stage, then you are a trustee of the wealth. I mean you are not going to take the wealth when you leave this world. The key thing is, how can I add value to others? There is a separate element to ownership. If I have to manage a company, I need to have a certain stakeholding in the company. Otherwise I have a vulnerable takeover. But that’s not to say that if I have certain wealth, I need to spend money. I still feel that in the last 10-15 years, the wealth must have multiplied manifold times but my lifestyle has remained more or less the same. I am not the kind of person who will splurge on, say, buying a plane or things like that. I am always very conscious about value for money. It’s very important that you don’t get swayed by wealth in terms of ego and or splurge your wealth in terms of lifestyle. If I find that the cost of a business class seat on a Jet Airways flight is very, very high compared to Indigo, I would not mind taking an Indigo flight. I have traveled multiple times, hundreds of times on Indigo.

Pankaj: It’s a great point about being like a trustee of your wealth at some point. Last question. Everyone talks about the legacy they want to leave behind. What will be your legacy?

Harsh: It’s very important that every person at some stage has to identify what that person wants to be. You can call it a purpose in life. They say the first 25 years is for education and learning, the next 25 years is for earning, and the next 25 years is for giving. So I think it’s very important that you identify what you want to give back. To me, it emanates from what I like and what am I strong in. I am not the kind of person who wants to give some donation to somebody. I want to be clear that… it is beyond financial, it is actually spending time, energy in helping others.

I have two initiatives that I have started in the last few years. One is in the area of mental health, wherein I help organizations, fund them, and also help them in terms of scaling up, in terms of taking it forward. We are working with four or five mental health organizations. We are working with TISS (Tata Institute of Social Sciences) in running a helpline, called iCall. So anybody having some issue in terms of mental health or depression or suicidal tendency can make a phone call to the helpline or send a mail and it will be treated in completely confidentially. It’s free advice. We are a 14-member team working full-time from morning 10 am to 10 pm, helping others. Every month we get about 1,500 calls and emails and we help them. We are working in some rural areas in terms of mental health, in slums, and in some rural areas in Gujarat.

I also spend a lot of time on ASCENT, which is helping entrepreneurs scale up and nurturing them because I strongly believe that entrepreneurs add a lot of value to society. My own initial experiences as an entrepreneur has taught me a lot of things. When I see many entrepreneurs, they falter when they have to grow from small to medium to large. The biggest issue they face is in the changes that they bring about in shifting from small to medium to large in terms of the role of the entrepreneurs, delegation, trust, attracting the right quality of talent, partners, stakeholders.

I started ASCENT 4-5 years ago. We have created mechanisms where they learn from each other. It’s a peer learning platform. also spend a lot of time in meeting entrepreneurs. We also have events where we tell them how to raise funds, what are the options of raising funds from different routes. These entrepreneurs are selected, there is a selection process and currently there are about 350 entrepreneurs associated with ASCENT, aggregating to a turnover of Rs 16,000-17,000 crore. Out of that, about 10% are women entrepreneurs and 90% are men. We select them and put them in what we call a Trust Group. They learn from each other. In addition to that we have a lot of educational events, lot of huddles, mixers, conclaves.

The objective is that if we are able to help entrepreneurs scale up they will be able to add value to all stakeholders, including themselves, their employees, society, to the government. So they are wealth-creators. India needs more wealth-creators and employment-providers. This is funded by me but I think the key thing is we need entrepreneurs who are a certain size. Ultimately, my dream is to have 10,000 entrepreneurs and that will take time.

Pankaj: Godspeed with everything, Harsh, and stay curious. Really enjoyed talking to you.

Harsh: Thank you.

(Kanika Berry has a Masters in Business Administration and has been a communications specialist for over eight years.)

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