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Admiration for the Customer at Elevar

The conversations we have with farmers, rural women’s groups, taxi drivers and more is not just a business prerogative

We live in the world of venture capital, valuations, investments, exits, board meetings, negotiations, shareholder agreements and investment memos – after all that is what investors do. But that’s not the reason why we love working at Elevar. In an earlier entry, the Elevar partnership shared their thoughts on the counter-intuitive approach the Elevar team takes to understanding low income customers and their aspirations and how we invest as a consequence. See: “Following the Customer” for our perspective on the customer. We talked about how we rather walk the city streets and rural villages and interact with the community than sit behind our desks reading reports (generally considered unusual behaviour for a bunch of investors). We recently received a number of fascinating questions about our team culture from a couple of Elevar well-wishers and we thought “hmm… let’s share our thoughts on how we make field visits.”

As we often say, Elevar’s customers live in economically vibrant, entrepreneurial communities and yet lack access to mainstream markets. Our desire to have conversations with farmers, rural women’s groups, taxi drivers, school children and more is not just a business prerogative (as an impact investor) but what defines everyone who works at Elevar. After all, there aren’t many funds who refer to the customers of their portfolio companies as their own customers.

From the outside, a field visit may seem like a fairly structured exercise with a set of planned questions – but the reality is that the only planning we do is around logistics (and we certainly resist guided tours). A typical visit involves a longish train journey or a few hours in a car and open-ended insightful conversations with customers and employees of our portfolio companies. Our visits are unlike the work that market researchers do and is mostly about feeling the pulse of the market and the vibrancy of the entrepreneurial communities we invest in. We would be kidding ourselves if we believed that a few conversations with customers would inform our investment strategy – and yet, it is this pulse check (seen over a few field visits) that informs the very decision we make to back business models and entrepreneurs.

Our most interesting conversations and insights take place during rides in a ‘Jugaad vehicle’ (a motorcycle converted to a four-wheeler that can transport 12 to 15 adults), over plates of local or street food and during train/road journeys when the team huddles together and has open conversations that inform our strategic choices. Here are some of the things we love talking about when we make our field visits: what products or services do our customers buy or aspire to buy, what and who drives household decisions when it comes to consumption and spending, what does a “good” education mean to parents in a local context, what are the careers young boys and girls aspire to (for example, in some parts of rural India, young girls are increasingly saying they want to seek employment in the beauty business or as part of the police or security forces), why a salaried job is deemed more respectable than earnings through an entrepreneurial venture even if the salaried job earns a lot less money. What we see directly is one reality, what our customers say is another reality, the narrative of the field staff interacting with customers or doing business with them is different reality. For us, it is always fascinating how much the narrative changes as one goes through organizational hierarchies and as it follows the flow of capital (field staff interacting with customers to their managers to senior management to founders to investors and board members, and then to LPs in investment funds). And so, these trips are extremely critical for us to stay in touch with ground realities and with the beat of the markets our businesses serve.

The team at Elevar feels a sense of purpose after these visits which never ceases to surprises us, even though we travel long and far. There is immense potential, ambition and resilience within low-income communities that you can’t help but take notice and feel inspired by it. Our field visits leave us with a strong feeling of admiration – admiration for the vibrancy and entrepreneurial energy of low-income customers and the communities they live in. It is this vibrancy and energy that is contagious at a personal level and has fueled the growth of our portfolio companies for over a decade (including all the way to a couple of IPOs). These customers have limited affordability but want in so they can get quality products and services. It is up to us and the entrepreneurs we back to deliver on their aspirations, bring more people into these vibrant communities and fuel massive phases of growth. It is what excites us at Elevar.