ET Family Business Dialogues: Freedom, family roots & patient capital are shaping India’s next-gen entrepreneurs

Experiential learning in an entrepreneurial environment and the freedom to pursue their own interests have helped shape the business choices of second-generation entrepreneurs, business leaders said at The Economic Times Family Business Dialogue in Bengaluru.

At the dialogue titled ‘From Inheritance to Innovation: The Next Chapter of Indian Enterprise‘, business leaders discussed how their family business roots helped them carve out new opportunities and chart their own paths.

The round table brought together Shruti Shibulal, executive vice chair of Tamara Leisure Experiences; Viren Prasad Shetty, executive vice chairman of Narayana Health; Arun K Chittilappilly, chairman and managing director of Wonderla Holidays; Ankit Kedia, founder and general partner of Capital-A; Tejas Goenka, managing director of Tally Solutions; and Vinay Ahuja, co-CEO of 360 ONE Wealth.

Freedom of choice

For Tamara’s Shibulal, the key was the flexibility to explore new ideas. “I did it simply because I loved hospitality and there really wasn’t a pressure that was put on me to go in a particular direction,” she said.

Shibulal said she had studied chemistry, worked in finance and then moved into hospitality. “I had this amount of support that came when I made that decision. I think there were questions asked, of course, like why are you doing this, how are you going to do it and things like that, but I was very well supported,” she said.

Narayana Health’s Shetty said his involvement in the family business grew organically over time. “Over the sheer amount of time spent, I watched it grow and played a small part in that journey and gradually picked it up as one,” he said. “I had always thought I would do something else. I always thought this is just here for now, but eventually I’ll figure out what I want to do. But as the work got larger and more interesting, and there was more of a role for me to play, that’s when I started to get involved.”
Shetty now pursues a tech-led expansion strategy. According to him, countries such as India should not simply replicate western models of healthcare delivery. “We sometimes take for granted that the western models of healthcare delivery, building hospitals, are how things should be done. We just copy-paste that when our environment is different, our genetics are different and the way people behave with health is very different,” he said.”There is much more beyond capacity additions. That’s why we said we have to move upstream and downstream, downstream into hospitals, clinics and care centres, and upstream not just into hospitals in India, but also in changing how hospitals are managed with technology,” Shetty said.

Exciting new challenges

For Wonderla’s Chittilappilly, the complexity of running an operations-heavy business inspired his choice to start out with the fledgling amusement park venture rather than join the family’s flagship electrical appliance business. “When I got into it deeper, I realised it was a very engineering, very operations-oriented business,” he said. “It’s like running a factory and a city at the same time. It’s very people-intensive, very engineering-intensive. I like complexity. My background is in industrial engineering and optimisation,” he said.

Kedia, who was a promoter director at packaging manufacturing firm Manjushree Technopack, said the opportunity and freedom to leverage his past experience were key factors while deciding on the next move after his family’s exit from the business in 2020.

About entering into venture capital investing, Kedia said he considered opportunities ranging from derivative products in manufacturing to businesses that could remain connected to manufacturing without being directly involved in production. “I think that’s the path that we chose,” he said.

Tally Solutions’ Tejas Goenka said his parents’ long-term vision of taking the business global inspired him to join the family business. His first-hand experience with small and medium enterprises (SMEs) adopting tech defies traditional assumptions about their reluctance to modernise, according to Goenka. “There is an idea that SMEs are laggards in adopting technology. In 16 years of serving them, I have never seen that,” he said.

A 70-year-old auto-parts customer asking what his company was doing on artificial intelligence (AI) illustrated how expectations around technology have changed, Goenka said. “That, to me, describes what the expectation is now,” he said. He also highlighted concerns over privacy among SME customers. Many businesses believe that their operating methods contain trade secrets and are cautious about sharing such information, he said. According to him that would be a major challenge to address when it comes to AI adoption.

The patient capital

Ahuja of 360 One said family businesses often have an advantage in the form of patient capital, which gives the next generation more time to build and experiment.

“In most cases the seed capital comes in from the family. So, there’s slightly more patient capital. It’s not capital that’s coming in from outsiders who are looking for immediate returns,” he said. “That becomes one big boon. The next generation understands very easily that they have a right to own and a right to win. The right to own and right to win are two different rights.”

With patient capital, the next generation can take a longer-term view and invest in businesses with extended gestation periods, Ahuja said.