A Business Started by 7 Uneducated Women With $2 is Today Worth $213 Million

This amazing case study is about one of the most incredible Indian businesses of all time. There cannot be a better example of women’s self-empowerment in brand history.

A story of seven ordinary women who had no background in business, no significant educational qualification, and with just $2 in capital, could build a business empire worth $213 million spread across 69 branches and employing more than 42,000 people.

This is the story of women’s struggle that saw the light of the day.

The brand I’m talking about is none other than Shree Mahila Gruha Udhoy Lijjat Papad — a pappadam manufacturing company, a household name in India.

What’s fascinating about this company is not its growth but the fact that the business philosophies of this homegrown business have a resemblance to great companies like Starbucks and Apple.

So what’s unique about this pappadam company, and how has it lasted for more than 62 years? And how did these seven women manage to build a business empire out of just $2 in capital?

The answer lies in the incredible history of Lijjat Papad.

The story dates back to the late 1950s when India had just gotten its independence and was underdeveloped.

Back then, let alone education, even literacy was considered a luxury. In terms of education, women’s literacy was deemed unimportant, and only eight percent of Indian women could read and write. On top of that, women were not even allowed to go out and work.

80% of India’s population was below the poverty line, and earning capacity of families was not enough to afford a decent standard of living.

That’s when in Mumbai, a group of seven exceptional women from very ordinary backgrounds came together to discuss a business idea that wouldn’t need them to step out of the house, wouldn’t need education, and yet could produce a competitive product in the market.

And, that is how the idea of Lijjat Papped was born with just eighty rupees of capital given to them by a social worker.

These women first started selling their pappadams at a local store, and soon enough, due to the superb quality and taste of the pappadams, even other shops began buying their product.

The business was growing, and Lijjat decided to scale up. Initially, they had the opportunity to hire women at a dirt-cheap cost because they were one of the rarest avenues of income for women, which allowed them to work from home.

But, when these women had their first board meeting, they decided that the primary goal of their business wouldn’t be to make money but to empower women from the smallest houses of the country and provide them with the livelihood to nurture their families.

And, more importantly, they also established a value that the money would only be used as a fuel to scale their impact on the women of India and not be the sole purpose of their existence.

So instead of hiring women, they started to give out ownership to every woman who joined their business and called them Lijjat Ben (Lijjat sister) rather than employees.

This concept is called “collective ownership,” wherein every employee owns a small part of the company. And, every single person shares the profits and losses in the organization.

So regardless of your age, caste or religion, even if you were at the lowest hierarchy of the organization, you would still own a part of the business.

Now, most of us might think that this is just another business move, but this attribute of collective ownership is one of the foundational principles that make Starbucks a great company.

Like the sisters of Lijjat, every employee at Starbucks is considered a partner in business rather than an employee. This move develops a deep sense of ownership, which cultivates a culture of greatness. Every employee is motivated to go out of the way and contribute diligently towards the organization’s growth.

But the only difference between these companies is that, while Starbucks deployed this strategy with MBA masterminds and a million-dollar capital backing, the seven sisters of Lijjat did it way before Starbucks in 1959, without knowing what an MBA degree is. Such was the business acumen of these incredible women.

In the second phase of Lijjat, the organization focused on building a robust supply chain that would be cost-effective, ensure production quality, and fend the lifestyle of the women who work for the company.

So instead of having huge office spaces, they used the sisters’ houses as their small centers of pappadam making.

Lijjat’s supply chain was pretty simple. The flour would first arrive from the mills to the respective central locations and be made into dough. The sisters were brought to the center by a bus facility provided by the company. They would collect their dough and then go home, make pappadams, dry them on their veranda, and deliver the finished product the next day. Lastly, after the delivery of the pappadams, they would collect their money and the dough for the next cycle.

The company would ensure quality by doing surprise visits by supervisors to check the quality of oil they use, the hygiene check of the house, and most importantly, the process of making pappadams.

The company also gave sisters aluminum pappadam makers to ensure that the production is in a standardized manner.

Each branch of Lijjat would work as a separate unit. So, if one of these branches does very well, the profits are distributed among all sisters, and if not, the losses are borne by the branch members together.

After all of this success comes the most challenging part. As I mentioned earlier, the organization’s primary goal is not to make money but to empower women from underprivileged families.

Sticking to the vision and mission statement of the company becomes more challenging as you grow.

Mission and Vision statements are considered stupid formalities. They have no real significance for us because everybody knows that mission, vision, and values are just words written on the wall in the corporate world.

At the end of the day, if your boss wants to kick your ass, he’s going to do it anyway. And this is the reason why most of us do not understand the importance of mission and vision statements.

But, in a true sense, mission and vision statements form the very foundations of every organization. When designed and followed the right way, it can help the organizations sustain for centuries. At the same time, if not done right, they can even bring down a million-dollar business.

A classic example of this is “Apple.” When Steve Jobs got fired from Apple in 1984, Apple was a million-dollar company. Until he was there, the company stuck to its values and was a formidable player in the industry.

But after he left, they started to derail from their values, and within just ten years, they were almost bankrupt. That’s when Apple called back Steve Jobs to fix things and get the company back on track.

When Jobs joined back, the first question he asked every engineer, designer, and manager was, what does Apple stand for? And what are the values that we believe in as a company?

Because the biggest mistake that Apple made while Jobs was not around was that they started to lose their identity and deviated from their values to create products with no sense of purpose. Eventually, the brand lost its unique identity, and customer loyalty faded away.

So Steve baba comes back, asks this question, and shortly after, the entire team is clear on what they were supposed to do. And this is what got them to the “Think Different” campaign, which, within two years, went on to create history and made Apple a legendary company that made products that changed the world forever. I have an interesting story about that, if you want to read it, the link is at the end.

This is the importance of mission and vision statements.

And here’s the most mind-blowing fact of all, in its sixty-two years of existence, not a single time Lijjat has ever deviated from its core values.

After expanding business to sixty-seven branches, scaling up to forty-two thousand employees, and exporting their products to fifteen different countries, they still abide by the core philosophy, “Sarvodaya,” a Sanskrit language word that means “progress for all.”

You will agree that we live in a world where billion-dollar corporates wouldn’t think twice before firing thousands of employees, with the slightest change in policies, putting their employee’s family’s life under stress.

On the other hand, we have Lijjat, which makes sure that with every automation they make, not a single woman is asked to leave the organization.

This is because they’re 100% clear that their ultimate purpose of business is not to make money but women’s empowerment to give their families and children a better quality of life for the future.

On one side, where we’ve got these evil companies who would put the health of their frontline workers at stake to maximize their profits, on the other, we’ve Lijjat, where they make use of the extra profits to sponsor the education of the children of their frontline workers regardless of their age, caste, religion, or even their position in the organization.

And they do all of this to ensure that the next generation of these frontline workers can get the opportunities they truly deserve.

This was the story of “Lijjat Papad,” an organization that was true to its goal and kept ethics over profits.

If this isn’t proof of greatness, I don’t know what is?

Key Takeaways

#1) Where there is a will, there is always a success story

It’s great learning for today’s entrepreneurs, who, despite being at the pinnacle of the technological revolution, often keep doubting our capabilities and complaining about constraints.

And, here we see a standing example of seven incredible women who had no education qualification, no background in business, and no fancy investors. Yet, they were able to build a business empire that empowers generations of women all across the country, making a positive difference in their life.

#2) Don’t forget your vision and mission for doing a business

We often talk about passion for being successful, but most of the time the passion is so powerful that we do not bother to think if we are going the right way or not. Companies try to use shortcuts or wrong ways to earn profits and this is what eventually leads to their downfall.

There is no alternative for doing the right thing because that is what will gain you the trust of your customers and stakeholders and this trust will keep you in business during your difficult times.

#3) Empathy is a very strong attribute that is often discounted

We sometimes forget to be empathic to our customers, colleagues, and other stakeholders. This is because we always want to earn at any cost. But empathy is an attribute that impacts businesses more than most of the other factors.

Lijjat is a classic example of how empathy builds strong and trusted bonds within the organization as well as with the outside world. Not only do they make profits, but also ensure that they give back to the betterment of their employee’s families for a better future and call their employees as partners.

This sense of belonging is what keeps a business growing.

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