At 50, he has the vigor and vitality of a man half his age. A voracious reader – he has read a book a week for the last 25 years of his life. Clearly, one of the most interesting minds in Indian business today, Blume invited Manish Sabharwal (Chairman & Co-founder of Teamlease Services; and Member, Board of Directors at RBI), to discuss the lockdown, human capital, FinTech & EdTech, and much more.


Born to parents who served as civil servants, Manish carries the gifts and wounds of a civil service upbringing. He realized early on in life – ‘We don’t live in an economy, but in a society’. 

Early on in his career, Manish and his friend Ashok Reddy co-founded India Life, an HR outsourcing company that was acquired by Hewitt Associates in 2002. He moved to Singapore as part of Hewitt, but sitting in conferences with 30+ people, every morning, got the better of him. According to Manish, with companies beyond a certain stage, one doesn’t get cognitive diversity and one stops listening. The writing was on the wall – and this time, Ashok and he decided their second journey had to be three things – fun, profitable, and good for India.

Second innings

The analogy was – one could start a steel company, but that could be very boring. One could start a cola franchise and it could be profitable, but that wasn’t going to be ‘good for India’. At this point, it became clear – India’s ‘people supply chain’ was completely broken. Matching, repairing, and pipeline – all seemed to have deep-rooted issues. They therefore decided to solve the ‘matching’ problem since it was the lowest hanging fruit. 

The duo managed to bootstrap  for seven years – or in his own words, ‘a cat who sat on a hot stove will not sit on a cold stove again’. They finally raised funds in 2009, followed by a second round in 2012. They took the company public in 2016. 


According to Manish, the three upsides of being public are:

  • You can have acquisition conversations with people five times your size because they have to take you seriously.
  • You can attract a whole new level of talent
  • The important part of being public (which most people miss) is the ability to create goals and hold your own internal team accountable. 

The difference between a baby and a dwarf is thisNot easy to know at birth if it will grow to be a full-sized adult!

At Teamlife, they were clocking 100% yoy growth, and then seven years after it was sold, 10% growth was acceptable. Large companies tend to buy smaller companies and shrink them. Manish believes there are two kinds of companies that one can create – a baby and a dwarf, both of which are both small at birth. The baby will however grow and the dwarf will not. Most assume that the biggest difference is the addressable market – but it is much beyond that. This is the balance between poetry and prose. One of Manish’s favorite quotes is from Mario Cuomo – ‘We politicians campaign in poetry but govern in prose.’  This applies to entrepreneurs as well. As Manish points out, entrepreneurs often write business plans or do IPO roadshows in poetry, but obviously are held accountable in prose on a quarterly basis.

Manish goes on to share that ‘the dynamic balance between poetry and prose is what is more important’ – because too much poetry and no prose you do nothing; but too much prose and no poetry, you do nothing great. This is exactly what is happening today – the life expectancy of a Fortune 500 company is down from 64 in 1955 to 14 in these times. They obviously are getting the balance between poetry and prose completely wrong. Then, at some point, it becomes all about profits and organizations stop reinventing themselves. 

So obviously, the most important difference between a baby and a dwarf is the balance between poetry and prose.

In the growth phase, one succeeds by listening

One of Manish’s key learnings along his journey – Listening is a very important part of the next phase of entrepreneurship. In the first 10 years of one’s life, an individual succeeds as an entrepreneur because of not listening. Everybody is telling him/her there is no market and convincing  him/ her that he/she shouldn’t do whatever it is they are doing. In the first 10 years you succeed by not listening.

However, in the next 10 years, you succeed by listening, because every single person needs that. It’s really important to recognize that in the second phase if you don’t set yourself up for listening, the venture will struggle. As per Manish, one of the biggest differences between a baby and a dwarf is, after a certain stage, you have cognitive diversity.

Most new generations of founders own 7-9% equity in their companies. From his RBI vantage point, Manish shares that in a majority of the companies that are put into bankruptcy, the entrepreneurs own large stakes – eg: 75% of the company. 

TeamLease, regulatory policies and more

When Manish came back to India in ‘94 post an MBA at Wharton, he often asked himself – ‘Americans aren’t smarter than us, then why are they richer than us’. That’s when he got obsessed with ‘Productivity’ – why GDP per capita is more important than GDP of the country – it took 72 yrs for 1.3b Indians to cross the GDP of 66m Britishers.

 In India today, we have 63 million enterprises of which 12 million don’t have an office, 12 million work from home, only 8 million pay GST, only 1 million pay social security, and only 19,500 companies have paid-up capital of more than INR 10 crores. The only thing that stood between Teamlease and a million daily employees was ‘public policy’. This is what got Manish interested in public policy – labour laws to skill development. It was time to liberalize labour laws,  fix the apprentice system and fix the university system. Talking about TeamLease – Manish shared that Teamlease employees have an avg salary of INR 25k, they are among the largest payers of provident fund in the country, and their goal is to get to a million employees. 

Manish continues that the reality of India is that we are a 10 horsepower or 20 horsepower engine running on two horsepower. That’s very different from Latin America, which is a five horsepower engine running on four horsepower. China was very lucky and very skilled in 1978. They caught a 30 year supercycle of global growth, global openness to trade and global deconstruction of manufacturing supply chains. 

That’s not the hand India has been dealt with. Ricardo Hausmann, one of Manish’s favourite professors at the Harvard Kennedy School says India is very economically complex. As per his model, India should be more prosperous than we currently are, because our complexity is much higher than many countries with lower economic index. But why have we not been able to convert this complexity into productivity is the key question for us.

Manish believes it is quite clearly because of inadequate formalisation of urbanisation, and also the regulatory cholesterol. We have 69000 compliances and 6000 filings. And this changed eight times every day last year. Handling these regulations are some of the biggest challenges facing companies in India today.

On Fintech & Edtech

Touching upon financial services, whether it is payments or lending, we have a unique opportunity in the coming years. Manish believes that India should definitely increase its credit to GDP ratio,  get more money to MSME and to the self-employed. In the next ten years, we need to create competition, fix governance and raise the RBI game so we can handle the new world. 

Talking about education, Manish touches upon the fact that India completely missed primary education. Only 45% of children in India attend government schools ( 96% in Jpn, 85% in US, 92% in UK). Fixing our schools, fixing our skilling system and fixing our apprenticeship system is absolutely essential. So in education, it is a complex problem but we have to fix the government system, and we have to create space for the private system in balance.

COVID & beyond

It’s unclear if we are at the start, middle or the end of the virus. Also it’s unclear if consumers will be frugal or hedonistic after COVID. 

According to Manish, with regards to fiscal and monetary policy, we have reached the limits. So the only thing left with the government is structural reform. The key questions are – how can this be done, and how quickly can this be done.

It’s not just COVID right now, people are underestimating the impact of the China confrontation on getting rid of any cobwebs in the policymakers mind. So COVID plus China is a wonderful combination for us to get reformed. 

So creating more private space for the private sector and fixing the public sector are two ways to get there. There is a difference between the recipe and the list of ingredients – list of ingredients, everybody knows; but then the secret lies in the recipe, right proportion, sequencing, etc.

In conclusion

With the right policy reforms, given the digitization boom, and the impact of the Chinese confrontation – as Ricardo Holzman’s model suggests, India could accelerate its journey to a much more prosperous tomorrow.

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