Professor Raj Reddy at Carnegie Mellon University first urged me to look at micro-franchise as a vehicle for economic development. Today, micro-finance has become a world-renowned phenomenon, especially with Dr. Yunus’ Nobel Prize two years back. [You can read my interview with Raj here.]
Micro-franchise is a relatively lesser known, but equally powerful model. In simple terms, it is a “franchise” business that has a centralized “strategy” arm that masterminds, trains and supports the building of a large number of small businesses that are replicas of the same concept.
I wanted to start a set of ventures in India using micro-franchise as a tool. The first of these was Bioscope.
There are approximately 600,000 villages in India. About 600 million people live in these villages. Needless to say, a large portion of this population is poor. The villages do not have many amenities.
I have been to some of these villages. In December 2005, we spent a vacation traveling in North Bengal. One Himalayan village that we spent a night in was Lava. At sundown, the village goes to sleep. There is nothing to do. Consequently, alcohol is often a friendly companion to pass time.
As I started thinking about Bioscope, alcohol versus entertainment was on my mind. What if we created an alternative entertainment vehicle, one that was more appealing than alcohol?
Thus began our journey of building a chain of “community screens” throughout the heartland of India in 2009.
At the heart of Bioscope was a media server that contained about 5,000 Bollywood movies with appropriate licensing rights, a projector and a screen. This was not a full-fledged movie theater, but more an elaborate home theater kind of set-up.
Our franchisees would rent a large room in the village that could seat about 35 people, and effectively run a small movie theater business. Three films were shown every day, and villagers were charged a small fee to watch them.
We made arrangements with several banks to finance these franchises with micro-loans. Bioscope was the guarantor for all loans.
In five years, we had presence in 100,000 villages.
Our business plan, however, was not to build a non-profit. We wanted to build a network that would give us a media channel to reach the few hundred million people of rural India who cannot afford television sets, and are therefore off the regular media grid.
Gradually, we hooked our franchisees up with a central server, such that we could transmit advertisements and other kinds of video clips to be shown before films and during intermissions. We were not streaming video, so the network connection did not need to be super high bandwidth.
We sold advertising to our network of rural viewers at a premium. As our penetration numbers climbed, the advertising rates we could command also improved.
Meanwhile, an interesting social dynamic was developing in the villages around Bioscope. Villagers started treating the screenings as their primary place to see and be seen. They would dress up, socialize, conduct match-makings.
We facilitated the process by introducing food and drinks at the screenings. We even encouraged potlucks.
As the community bonded, Bioscope’s power to influence word-of-mouth increased exponentially. Not only were our advertisers aware of this power, the politicians were too. We became one of the primary channels of political advertising. We were also an excellent channel for spreading educational messages about topics such as birth control, reproductive health, women’s empowerment, micro-finance, and micro-franchise.
In fact, we started collaborating with banks with significant micro-finance programs and other micro-franchise ventures, and made it infinitely easier for them to market and scale each of their businesses.
Of course, we had programs that tied into these ancillary ventures. For example, we started our own “citizen journalism” effort, where each village had a reporter who was trained to take a video camera and capture success stories about micro-entrepreneurs. Success stories from one village were played not only in that village, but in other villages, making celebrities of our micro-heroes. The entire program was financed by Citibank’s micro-lending arm as an advertising campaign.
We also created independent programming about the socio-political issues that citizens of a successful democracy should understand.
In 2020, having achieved penetration into 300,000 villages, we stepped back to take stock.
Bioscope looks a lot like the early days of the movie theater, except we had fused the format with modern concepts like the video library, digital storage, media server, portable projectors, user-generated content, citizen-journalism and a lot of other innovations.
In the last decade, we have helped groom almost 3 million new micro-entrepreneurs, and we have helped develop a socio-political consciousness in rural India.
A call to Indian entrepreneurs everywhere, Vision India 2020 challenges and inspires readers to build the future now. In this “futuristic retrospective,” author Sramana Mitra shows how over the next decade, start-up companies in India could be turned into billion-dollar enterprises. Vision India 2020, which encompasses a wide range of sectors from technology to infrastructure, healthcare to education, environmental issues to entertainment, proves how even the most sizeable problems can be solved by exercising bold, ambitious measures. Renowned in the business world, author Sramana Mitra conceived Vision India 2020 from her years of experience as a Silicon Valley strategy consultant and entrepreneur. Well aware of the challenges facing today’s aspiring entrepreneurs, Mitra provides strategies, business models, references, and comparables as a guide to help entrepreneurs manifest their own world-changing ideas.
This segment is a part in the series : Vision India 2020