What is cultural entrepreneurship?
The term cultural entrepreneurship applies to the creation of any product or service that primarily targets our tastes, and that is an expression of our tastes, whether it’s our taste in fashion, movies, music, stories, games, cuisine, or opinions. A newspaper is part of media; but I’d say a magazine like People or Vanity Fair would be part of the cultural industry.
What we have to understand is that culture, more than almost any other industry, is almost always in the private domain; only in very unfortunate countries is culture significantly done by the public sector. So, culture is produced by private individuals who spend effort creating it, marketing it, and try to make a living by selling it. These industries are well set, though most run on low margins and the companies involved are primarily small, and universally cash-strapped. So, culture is a hotbed of entrepreneurship.
How is cultural entrepreneurship spreading in India?
India has had a few mature, advanced cultural sectors for a while. Film and music were both enthusiastically adopted very soon after Independence and those industries have grown to be world-class. Restaurants were also universally present, along with iconic eateries in every city. The change that we are seeing now is the growth of new cultural sectors: an explosion in publishing, breakthroughs in animation, a revival in comics, a bit of growth in fashion, a slow boil in gaming, and very importantly, a massive influx of recreation spaces which was led by the incredible growth experienced by cafes in the last decade.
We have to understand that India is severely underserved with regards to cultural consumption. Let’s look at a great example – children’s culture. Children are great cultural consumers, and it’s important to have great content for kids, because they learn as much (probably, far more) through stories and play than they do by sitting through Geography and History classes. They certainly learn a lot of ethics through the stories they imbibe.
That doesn’t mean that we make preachy, boring stories. But generally, the world over, children’s content mixes the adrenaline rush of adventure and danger with the basic good vs evil, heroes vs villains aesthetic, and with messages of positivity, hope and courage. And they build great and profitable brands, great businesses, doing so.
Has that happened in India? Hardly. Are Indian kids any different? Don’t they want great stories, awesome heroes? Till now, we have one indigenous kid’s brand – ChottaBheem. That’s it. One, for the 300 million children of this country. And ChottaBheem is everywhere now, in every toy store, in malls and McDonald’s.
So that opportunity exists. In fact, this is the industry which personally excites me the most, where I plan to start-up myself.
How is cultural entrepreneurship different from normal entrepreneurship?
There are many similarities, and one crucial difference. The difference is this: since cultural products deal with the taste of the consumer, there is every possibility they will fail. You just do not have a model to predict success, and the difference between a hit and a flop is so large that you can’t build a proper NPV/ROI calculation. This scares away institutional investors, not because the risk of failure is so much more than, say, internet technology, but because they feel like they cannot predict it, that they don’t have control.
In every other way, it’s very similar. In fact, it’s more hard-core entrepreneurship than in sectors where there is easy money flowing in. You need to get a team together, understand your customer, get financing, make your product or service, find a way to distribute or scale up, find a way to market and sell it. You probably won’t become a billionaire through it, but you will have to find a way to make profits to keep doing it and reach the audience that you want.
There is one important advantage to this industry too. Unlike most other industries, you have the concept of a fan base. If you are a cultural creator who has succeeded once, your chances of future success increase exponentially.
What’s the state of cultural entrepreneurship around the world? How is India different from the rest of the world?
Cultural industries the world over make less money than technology and industrial goods. It’s the same in India. Bollywood’s entire industry turnover is less than Rs 3,000 crore, which is less than the annual revenue of a mid-sized industrial house.
However, cultural industries play a disproportionate part in forming the identity of a country. And apart from a few large companies, most of this is done by small groups of people, small entrepreneurs. Most of Japan’s anime starts off as individuals publishing their own comics. Most American music starts off as small bands finding an audience. Most of the companies that are pushing the envelope in technology, in creating games for Playstation or Xbox, only have a few hundred employees.
India is actually not badly placed in terms of cultural products, since there is a lynchpin industry which actually makes some kind of big money – the movie industry. Some people see that as a threat, but I think that is a great strength, since smaller, more nascent, less profitable industries can link to the movie industry to thrive. For example, books don’t make money; but if more books start getting made into hit movies, both industries thrive. Similarly, the movie industry can greatly push forward the development of gaming, animation, and comics. It already provides a bulwark for dance and music.
Of course, in some way, the movie industry also throttles smaller industries; for example, independent music thrives in Pakistan, but not in India. But, overall, I think it gives us leverage as cultural entrepreneurs.
What will help this growth? What kind of support can be given?
I am always suspicious of the word ‘support’, since it somehow implies that someone else will help solve problems. I don’t think that works. Especially if we are talking about government measures, I am a firm believer that the government should stay out of cultural industries. What they should do is just provide the kind of safety every citizen deserves. No one should be able to threaten MF Husain and drive him out of the country. The rest will be done by individual creators.
There are two other things that would help. One, industry recognition is important, since otherwise banks can’t lend. This really helped Bollywood, and as more industries open up, the same would apply.
Secondly, private investors – especially VCs and angels – have to understand that they are over-investing in technology and e-retail, and a few other sectors, and ignoring the vast whitespace of consumption that culture represents, more because of a difficulty in valuation and predictability rather than actual higher risk of failure.