“Congratulations on the funding by Ratan Tata!” the twenty-something waiter says with a wide grin. It takes me a few seconds to figure out that he is addressing us. To be precise, that he is addressing Hugo Barra, the then Head of Global Business at Chinese smartphone sensation Xiaomi, and one of Fortune’s 40 most powerful business leaders under the age of 40.
It is June 2015, and I am in the middle of my startup tour, a pilgrimage through the most exciting new companies in the country. I have met Barra at a hotel near Xiaomi’s office in Bengaluru’s Cessna Business Park, where he is grabbing early dinner before flying to Delhi for a product launch. He must be a regular here, so it wouldn’t be odd if the waiter recognised him and thought it fit to engage in a bit of polite banter. But as Barra looks up from his food, it is clear that the waiter’s message about Tata’s investment in his firm—hardly a layperson’s ice-breaker—has caught him by surprise.
“Thank you,” Barra says, searching for an appropriate reply to his unexpected interlocutor. “Are you a Xiaomi user?”
“Yes, and I am very happy with my phone!” gushes the waiter, pulling out his white Mi 3. “But, sir,” he adds, just when I think the conversation has run its course, “why do your new models take so long to come to India?”
This is the story that jumped to my mind when I heard about Barra’s exit from Xiaomi last week. Before Xiaomi, Brazil-born Barra worked at Google, rising to become vice president of Android and one of the tech world’s hottest stars. In 2013, he shocked everyone by moving to Xiaomi, then a little-known Chinese consumer electronics startup that made everything from phones to air purifiers. Soon, Xiaomi overcame sniggers around its unpronounceable name to rocket to the position of the world’s most valuable startup.
Barra, along with Xiaomi India head Manu Jain, led the company’s massively hyped debut in India in 2014: If you are a Mi lover, you may have been frustrated by its crazy flash sales on Flipkart where it claimed to have sold out thousands of units in seconds—without putting out a single paid advertisement anywhere. And then there was that investment by Tata, the most powerful name in Indian business.
More recently, Xiaomi has fallen into harder times and lost much of its early momentum. But that doesn’t take away from its stellar run during Barra’s tenure, when it reportedly became the fastest brand to reach a billion dollars in revenue in India, and briefly, even the third-largest smartphone seller in the world, after Samsung and Apple.
In the December 2014 issue of Fortune India, I had analysed how Xiaomi was changing the shady image of Chinese companies, naming Barra as a key factor. Consider his Facebook album where he was routinely seen posing with the likes of Tim Cook, Jack Ma, and Rupert Murdoch. If that didn’t impress you, you only had to attend any of Xiaomi’s jam-packed launch events, where Barra’s stage presence drew gushing comparisons with Steve Jobs. Barra’s charisma was key to Xiaomi amassing an army of fans and devoted tech bloggers, whose online evangelism more than made up for the company’s no-advertising policy.
But sitting in this Bengaluru restaurant, facing the charge from a nameless waiter that his company is neglecting its Indian customers, Barra’s credentials can’t help him. This isn’t just another waiter chumming up to an important client. By announcing himself as a Xiaomi customer—a customer who keeps track of the company’s fundraising activity, no less—the waiter has turned this into a conversation between equals.
The entire episode lasts maybe a couple of minutes. Barra promises the waiter that Xiaomi would try to bring its future models into India faster. (A few months later, it would announce its first Indian factory, in Andhra Pradesh, as part of Prime Minister Narendra Modi’s Make in India scheme.) But as I watch from the sidelines, a question pops up in my mind: would the same waiter walk up to a top executive from, say, Nokia, and confront them about slow supply, or congratulate them on raising new funds? Would he even care who the company’s investors were?
I come to the conclusion it would be highly unlikely. Over the years I have had a few dinner meetings with C-suite executives of large companies. No waiter ever went beyond the token greeting, getting little more than a perfunctory nod in return. Certainly, no waiter stopped by to quiz a CEO while they ate their salad.
What made Xiaomi different? Or was this just one unusually curious waiter?
It’s not just Xiaomi, and it’s not just this waiter. We live in a world—the world of Xiaomi, but also Flipkart, Ola, and Paytm—where the conversation between businesses and customers is undergoing a dramatic change compared with the one that a lot of us grew up in. This is the world of startups.
Now, there’s hardly anything about startups that hasn’t been analysed ad nauseam in the past couple of years. From their scantly believable valuations to their disdain for old-fashioned signifiers of business health, like revenue and profit, startups have been both glorified and, increasingly, demonised.
But all that bluster has distracted from the most profound and irreversible impact of startups: in a world that often had a testy, cold, and impersonal relationship with business, startups have reclaimed space for business in everyday conversations.
It’s a seismic change that has almost sneaked up on us, given that startups were marginalised less than a decade ago. But now, when hoardings of Flipkart’s Big Billion Day sale invade cities, or auto drivers notorious for saying ‘no’ show up at the doorstep at the press of a button in the Ola app, or grocery delivery boys with colourful BigBasket bags crisscross neighbourhoods—or indeed, when cricket is funded by Paytm and not a cola company—something amazing happens: it makes the guy on the street curious about business in a way that was just not possible before.
In the old world, being curious about business was a job, not a condition of everyday existence. It was the job of a fixed set of people—business journalists, financial analysts, stock-market punters, activists—to ask questions about how businesses functioned and what that meant for you.
Your relationship with business was second-hand, coloured by the agendas of the people to whom you outsourced the job of asking the questions. And the answers were often cryptic—jargon-laden financial analysis that shut you out if you didn’t understand balance sheets.
But in the world of startups, things are a lot more personal. Thanks to the smartphone and social media, curiosity is the default mode in the relationship. Everyone wants to know, and everyone has an opinion. Nobody needs to be a balance-sheet expert anymore.
Take my office cab driver who took me around Mumbai just before I came to Bengaluru to meet Barra. As soon as he found out that I am a journalist who writes about new kinds of companies, he started plying me with questions about his part-time employer: Ola. “Sir, exactly how does Ola make money?” he demanded. “They give drivers so much incentive and then they give discounts to passengers too. It just doesn’t make sense. It can’t be their own money they are spending, right...?”
He then proceeded to answer his own question with the reassurance of an expert. “It must be black money or foreign money,” he said, before adding, “But it may not be enough to tackle Uber. Uber must have even more money.”
The conversation would have startled me if he were the first cabbie to broach these subjects. Even two years ago it was not customary for cab drivers in this country to discuss business models and competition with passengers. Conversations, if any, tended to be on the state of roads and corrupt traffic cops. But I have met countless Ola and Uber drivers who are acutely interested in how these companies function. My conversations with them have ranged from the sinister—like the foreign hand behind Ola—to the intricately technical—how surge pricing really works and why it doesn’t benefit too many drivers.
If you think the curiosity is limited only to those who have a direct interest in these businesses, like these drivers, think again. In fact, when drivers strike up conversations with random customers, they don’t do so in the capacity of business partners to Ola and Uber at all. They talk as one customer to another.
For cab aggregators that depend on adding more and more vehicles to their fleet for survival, drivers, and not passengers, are the primary customers. So when a driver chats up a passenger, it is really their mutual curiosity as customers of a strange new business that brings them together. This is an important nuance, and it permeates the behaviour of other “customers” in other businesses too.
That conversation is a powerful force in business isn’t a new idea. India is the land of bazaars. Constant, intense conversation between customers and businesses is in the DNA of our market economy. But as businesses grow and evolve from their small, intimate beginnings, there is often no conversation at all—only a one-way bombardment of ads, cold calls, and spam to shove a message down the customer’s throat.
Yes, there are those phone numbers and email ids dressed up as “customer care”, whose purported goal is to help the customer talk back. Except customer care often serves to kill the conversation rather than help it. Think of the inordinate waiting time when you dial your mobile operator’s helpline. Or worse, those confounding automated menus that deliberately hide the option to reach a real human being. How many times have you hung up in frustration? In some cases, you see the same bad habits infecting innovations like 24/7 chat windows that startups so love—ask a question and a get a ridiculous, irrelevant answer if you get an answer at all.
Here’s the thing: when businesses start killing the conversation, customers reciprocate. That’s why you mindlessly switch channels every time there’s an ad break. Or why you simply give up seeking redress for poor service after your first few calls and emails go unanswered. You are just not interested in the relationship anymore. Once you lose interest, you are always looking for a way out. You may stay awhile because it is inconvenient to leave immediately, but it is very tough to get you really interested once again.
An angry customer is not the worst thing for a business. A customer who has lost interest is. When they have a bad experience, an interested customer makes an effort to start a conversation and understand what went wrong. A customer who has lost interest feels that getting into any conversation is a waste of time. They find it easier to assume that they are dealing with evil people who have no interest in them, and they take their business elsewhere at the first opportunity.
A customer who gives you the chance to engage in a conversation—that’s the Holy Grail for any business. That’s what the entire advertising blitz is really after. And yet, a vast majority of businesses is shockingly bad at conversation.
The default setting at the beginning of the relationship is curiosity. Someone tells you about a cool new product or a great new deal, and you are curious to give it a go. In business as in life, curiosity is a wonderful thing.
Curious customers are empowered customers (think of our waiter who grilled the mighty Hugo Barra), and companies that encourage curiosity are the most human.
Already, several star Indian startups have suffered because they failed to deal with the power of curiosity. At the height of the media bashing of startups’ dubious valuations and business practices, I met a top investor and asked him why more entrepreneurs weren’t coming forward to directly talk to their customers and demystify their businesses. Why weren’t more of them blogging, or publishing YouTube explainers, or taking part in AMAs? He almost got offended. “Why should founders talk to customers about business,” he asked. “Why should customers care how a business functions? Those who care—us investors and the founders themselves—already know.”
His response represented the tendency among businesses to not think of customers as their intellectual equals. But in the social media age, customers are watching all aspects of businesses, and companies cannot dictate what questions they may or may not ask.
When customers don’t get talk-back from businesses themselves, they fill the vacuum either with idle speculation—as my Ola driver did.
Or they turn to the media, which brings its own biases to the story. Remember Jabong’s disastrous fire sale? There’s a school of thought that bad media management (read: inability to take ownership over the conversation) was at least one of the reasons for the company’s spectacular fall.
In the old world that we grew up in, lack of conversation between business and customer was systematically cultivated. For the first time in history, businesses have both an opportunity and an obligation to directly participate in the myriad conversations around them, capitalise on public curiosity, and humanise themselves.
When the dust settles on the fantastical valuations and struggling founders, the rebirth of curiosity could well be the real legacy of the startup era.
(Disclosure: In 2015, the author was briefly in talks with Xiaomi for a role in their India communications team.)