Jugaad innovation: Are start-ups game for it?

'Jugaad' is a colloquial Hindi word that is used in the context of something that is a mix of creativity, innovation, and cleverness. So, you could have a 'jugaad' approach to solve a problem, or you could be using something that is a product of 'jugaad' inventiveness.

Jugaad aka Frugal Innovation

Used in the context of innovation, Jugaad is also known by another name - frugal innovation, or doing more with less - about making the most of limited resources, but coming up with workable solutions. Frugal innovation in India has been around for a while, born out of necessity to address a very large consumer base with local needs, and driven by a spirit of localization. Different countries have different terms that are their equivalents of Jugaad, from Brazil to France to China.

Large corporations and entrepreneurs in the west are practicing frugal innovation today - from automotive to pharma to electronics to consumer goods. While frugal innovation is being explored by many, few come up with products or offerings that address a practical need at a compelling price point.

Setting the New Normal through Jugaad Innovation

With market boundaries blending and blurring, Jugaad has assumed a new importance in the innovation ecosystem across geographies. Building relevant products with limited resources, coupled with a spirit of clever cheekiness that challenges established structures embodies the spirit of Jugaad.

When Napster exploded into the public conscious, they challenged the hegemony of big music labels by introducing peer-to-peer file sharing which rode on established digital infrastructure. This radically changed the way music was produced and distributed, while making an industry rethink the way music could be addressed as a business over online resources. Pandora and Spotify are doing the same thing to syndicated radio.

Necessity also drives Jugaad Innovation. A classic example of this is Tata Motors' $3,000 Nano car was developed from the ground-up to build an affordable car for an average middle-class Indian family, while Nissan has recently announced plans to launch its own $3,000 car.

US-based company IO Data Centers is another example of localized innovation driven by need. The company has completely reinvented the concept of a data centre to address the gap between big corporate data centres and the public cloud by developing modular data centres with their own self-contained cooling, back-up power, and operating system dashboards.

Organizations are adapting and applying Jugaad thinking to rebuild products for local markets worldwide by using a bottom-up approach that is hinged on practicality. They are cutting down on multi-billion dollar R&D budgets and outsourcing research to draw more from local knowledge and thinking, and speed up innovation.

 

Applying Jugaad Principles for Disruptive Innovation

The essence of Jugaad is the ability to think for the lower spectrum of the buyer market. Research and empirical evidence indicate that disruptive innovators appear at the margin and move into the mainstream over time. For tech entrepreneurs, especially those with disruptive ideas, Jugaad means going with your gut to spot a need that is often at the margin, and going about building and validating it as you go along.

The world of healthcare is ripe for innovation. We are on the cusp of the democratization of healthcare data, a tectonic shift that is being accelerated by start-ups launched by young entrepreneurs who have no background in healthcare - think of companies like Healthtap that have come out of nowhere and are disrupting mainstream healthcare by making medical advice and information available to everyone.

Healthtap has effectively crowdsourced medical advice through a frugal innovation model that caters to a demographic that cannot afford expensive doctor office visits, and has become a source of medical advice for even the employed-insured in the U.S.

We will see more innovative start-ups that take free and open source software and tools and innovate in the world of analytics. R, an open source statistical analysis framework like Java, has already become a force in the world of advanced analytics by building a community of statisticians and algorithm-developers that could well threaten the business models of the established players like SAS and IBM. New companies are taking these open source tools and building businesses converting these to enterprise-class tools.

These kinds of companies are truly championing Jugaad by using limited available resources to build relevant and practical solutions to compelling problems, and have thus redefined innovation. Starting off at the margin and growing to the mainstream - applying Jugaad principles to get there faster.

(Paddy Padmanabhan is SVP, Healthcare Analytics, at Symphony Analytics, a division of Symphony Teleca Corp. The views expressed in this article are that of the author and do not necessarily reflect the views or policies of CIOL)