Vigyan Gadodia From Banking to Dairy Farming

What prompts a graduate from IIT/IIM , excelling at a banking career to move base to rural India. To start his business studies afresh in some really challenging circumstances ? What challenges does one face in the drastic transition from a city based-corporate-salaried role to a rural-startup-entrepenurial one ?

Get some insights into these questions as Vigyan Gadodia shares his story and that of his venture – Sahaj. Vigyan is a MBA from IIM Calcutta and an engineer from IIT Delhi. He joined Rabo and then got deputed to YES Bank, where he was part of their early team. He was the first EIR at YES Bank when he started off his current journey. You can see his LinkedIn Profile here.


Tell us a little about your venture. What is Sahaj all about?

Vigyan: Our business is about creating sustainable and scalable businesses out of rural India. Key focus areas include

  • Agri & Dairy – We are starting with Dairy business and this will be the key focus area for the group to create a commercially viable business.
  • Tourism – This is a supplementary income source and a surrogate marketing tool to connect customers to agri producers.
  • Education – We have started with Primary education and this will be a sustainable business and a capacity building exercise in rural India. Rural Indians are willing to pay a premium for quality education.

That’s an interesting mix, can you tell us the story behind these verticals? Why did you choose these as your focus areas?

vigyan

Vigyan: For the first 5 years of our venture, we did anything and everything under the sun. Really, anything that came our way. For instance, we did agri-procurement, organic farming extension services, CSR services, agri BPO and a whole lot of other activities.

We also studied the technology and economics of different agri activities practiced by farmers. Based on all this learning, we felt (and still do) that integrated farming is the best way to create sustainable growth in Rural India. We started going into further depth of this and to model the specific individual business components like

  1. Cereals/ pulses & Vegetable growing pattern, market price fluctuations etc)
  2. Commercial tree plantations
  3. Dairy farming activity (to support natural inputs and provide daily cash flow to farmers etc)

We undertook a detailed SWOT analysis, identified the financials, and the set of competencies needed for each of the businesses.

In doing so, we realized that Dairy on stand alone is more compelling than any other business and can be the best starting point for the larger rural dream. Once dairy farming becomes the “cash cow” for a farmer, we can start extending the other components of integrated farming at individual household level.

Tourism came about because of our eco-system. We got a query from our NGO partner (Morarka Foundation) for help in hosting a student group from US in 2007. It was good fun, and we realized that it earned a very good return for the host farmer families as a supplementary income. We (Sahaj and Morarka) together decided to float an independent company to focus on developing products in Rural Tourism space.

 

Education is key to address many issues in the rural set-up. Around 2008, I was getting frustrated witnessing the callousness with which the rural youth treated their careers. A friend called from Mumbai and I was discussing the same with him and he suggested me to start a training school. I started researching the subject , trying to assess the rural education sector specifically and felt that the education system needed a more fundamental solution. The conditioning & basic learning abilities start at the primary school level and there is a significant quality (not Supply) gap in that area. So we started the school with a clear intention to make it a self sustainable school and are very close to achieving the target.

 

How did you move from banking to dairy farming? What really prompted this?

Vigyan: Somewhere in 2004, I felt that I had experienced the good parts of banking life. The comfortable life was not satisfying enough at a personal front and I wanted to challenge myself into something tougher (at an intellectual / operational level) . Hence I started reading up on social ventures and related areas. From then on, one thing led to another. I started microfinance in the bank in 2005 and in 2006 took the entrepreneurial plunge.

You spent a lot of time in Ringus in your early days of the venture, why so?

Vigyan: When I quit YES Bank, I only knew that I want to be in Rural India and develop businesses that can help me explore the “Demographic Dividend” offered by rural India. The first step was to find out where I can settle down. I started with doing a research on Hindi speaking states. Amongst them I liked Rajasthan the best to start.

I wanted to start from a place close to the major city. Ringus was (and is) a relatively prosperous belt close to Jaipur, so it offered a chance to experiment on new business models with farmers.


Watch out for the remaining part(s) of this interview with Vigyan Gadodia of Sahaj Group.

Business Case Study # 1: What should the Indian Farmer do?

Indian FarmerWas on a road-trip when I came across a possible biz dilema that is faced by most mid-sized Indian farmers.

– Our man-HariRam has been able to save enough to either buy some more land or a tractor

– Hari like most other farmers is not sure about credit- either the rates are too high or the micro-credit firms have not really reached his village yet- This means that he cannot really buy both the tractor amp; the plot at the same time

– HariRam’s current plot size doesnt really need him to buy a tractor

– If he decides to buy land- he will have to stretch himself really hard for 2-3 years before he can afford a tractor.

– if Hari buys the tractor-he sees a high rate of depreciation on his asset which will not see full scale utilization

What do u think the Indian Farmer should do?

I suggested Hari to find a few other such farmers in his community & then

– Either pool the money amp; buy a common tractor

– Or buy a tractor & start lending/leasing to these other needy guys also. He rejected my 2nd idea rightaway- saying “If i start making money by lending tractors to others- these other guys will also buy it &  I would not see the ROI on my investment”.

So put on your strategic mgmt caps & tell Hari what he should be doing.