Godrej's 126-year journey from building locks and safes to rockets launchers and satellites!

A young lawyer Ardeshir Godrej built a lock making business in 1897. Today that business is a global conglomerate celebrating its 126 year long run! This is the story of Godrej!

18th January 2023
5 min read

There are many stages in a company's journey — the idea stage, the validation stage, getting your first user, breaking even, the growth and maturity stage and finally the renewal/reinvention stage.

Nothing tests your startup like TIME.

So, startups that survive for 100+ years are true winners in this game. But, among the BIG names of Tata, Reliance, Adani and Wadia, rarely do you hear about another Indian conglomerate that'll celebrate its 126th year in 2022.

The Invisible Indian giant, the Godrej Group, sits on an INR 37,900 crore revenue businesses[1], acres and acres of land, sells products like Cinthol, Good Knight, Aer and has a "Make in India" story predating the independent India!

Founder, Ardeshir Godrej, was an innovator like none other who built a lock business that now makes rocket launchers and satellite equipment. Learn modern startup lessons from this century-old company!

A failed venture, Pre-Independence "Make in India" and the dream

Ardeshir Godrej was born in 1868 to a wealthy Parsi family dappling in real estate. Ardeshir, like many wealthy youngsters in pre-independence India, went straight to pursue a law degree.[2]

Fresh out of law school in 1894, Ardeshir was hired to defend a case for a client in Zanzibar. Working on the case, he immediately realised that a career in law, which requires a fair amount of twisting facts for clients, was not his cup of tea.

He returned to Mumbai, India in hopes of finding an alternative career. His first job was that of an assistant under a chemist. Working at the shop, Ardeshir felt the first spark of entrepreneurship.

He approached his father's friend, Merwanji Cama, for a Rs 3000 loan to set up a surgical equipment manufacturing shop. But, this venture didn't go too far. Everything broke down at a basic argument, Ardeshir wanted all the equipment to be stamped with "Made in India" text, but the proprietary refused. They suggested the "Made in India" tag for a surgical equipment company would be bad for business.

The argument never settled and businesses died, but by then the fire of entrepreneurship was well-lit within Ardeshir.

bulb

As a startup founder "Shamelessness" is a big superpower.

The Lock Business Unlocks the KEY to Godrej's success!

A while after the first failed venture, Ardeshir heard the news about increased burglaries in Mumbai city. The common consensus was that the residents and businesses needed better locks.

So, he quickly started working to solve this problem. He approached Mr Cama again to help raise funds. The goal was to create the ultimate "unpickable" lock that wouldn't corrode in India's hot weather.

bulb

To find a startup idea, stop thinking of potential ideas and start observing problems around you.

They set up a small 20 sq m shed that housed their entire lock-making operation of 40 steam presses and a dozen workers. He quickly began deploying high-quality locks known for their "un-pickability".

But, Ardeshir didn't stop there. He was already diversifying his product range for different customer needs. He created a lower-grade lock that was not as fail-proof but appropriate for more common locking needs.

The idea was simple - sell a cheaper product with slightly lower quality and a superior and costly product with much better quality. If customers find the cheaper product to be sufficiently good for their needs, the higher-grade product will automatically get a better name.

bulb

Fast, good, or cheap - At any point, you can only get 2 out of these 3 right.

But, this was not it, Ardeshir had gotten in touch with his inventor side and there was no stopping him:

  1. He patented his first invention of the "Gordian Lock".
  2. Followed by a "Detector Lock", which made the owner aware that the lock was picked using an incorrect key.
  3. He also invented the first springless lock in 1909.

While his experiments were ongoing, Ardeshir was also content marketing his products. He often distributed a small booklet detailing his work on locks, a 1900's physical blog if you will.

Even in the 1900s, Ardeshir Godrej was laser focused on distribution and spreading the word about his products. Marketing, although not at the same scale as today, was still a huge priority!

The locks were obviously an instant hit. In fact, they had become so popular that England monarchy used Godrej locks during their visit to India in 1921!

Godrej and India's Many Firsts!

Now, that Godrej's wheels were churning, there was no stopping them! Ardeshir was on a roll, inventing and solving every little problem the Indian public faced.

  1. They built the first Indian safe in 1902.

    Fun fact about the safe - during a devastating blast at the Bombay docks, the only remains that were left at the end was the Godrej safe perfectly intact in all its glory![3]

  2. They created the first soap made of vegetable oil that was more friendly to India's largely vegetarian population.
  3. They made India's first cupboard, the steel Godrej almirah from our childhood, which was certainly used by most households in India.
  4. The Election Commission of India asked Godrej to make ballot boxes for the first free elections in India in 1951.
  5. Godrej launched Cinthol in 1952, making them the 2nd largest soap manufacturer in India.
  6. Godrej also made the first Indian refrigerator in 1958.
  7. It also launched India's first hair colour product, a liquid dye, in 1974.

In spite of being one of the top manufacturers in India, Ardeshir Godrej was in fact against the Swadeshi movement, because he believed that Indian innovators could very well produce superior products. And, if India were to have a free market system, consumers would freely choose the Indian version for their superior quality.

bulb

DON'T build startups based on popular trends. Build one that solves real customer problems.

The speed at which Godrej was innovating and genuinely filling gaps for post-independence India was astonishing. The consumer needs were blatantly clear and Godrej didn't hesitate to quickly find solutions and ship them!

Godrej: Mumbai's BIGGEST landowner

After his iconic stroke of inventions, Ardeshir peacefully retired to a village in Pune, India and tried his hand at farming. That's in fact where he first came up with the soap idea. He left all his inheritance and ultimately lived a peaceful, quiet life.

bulb

All startups don't have to become unicorns. Buildd something that can give you the lifestyle you desire and the happiness you seek.

Now, the reigns of Godrej were handed to his younger brother, Pirojshah, who joined the company in the early 1900s. Godrej had now passed its growth stage.

While Ardeshir was simple and mostly focused his efforts on innovation and experimentation. Pirojshah was more business-minded and perfectly pragmatic to scale Godrej's venture to new heights and that's exactly what the company needed at that time.

In a brilliant masterstroke, he bought 4300 acres of land worth Rs 30 lakhs in Mumbai to buildd Pirojshahnagar. This parcel of land was mostly covered by marshlands with only 1000 acres usable. But, today it houses Godrej's manufacturing hub Godrej ONE and serves as a residential plot for many of its employees.[1]

But, that's not the best part. Thanks to Mumbai's crazy real estate prices, the British Raj land has now grown to a revenue potential of INR 4,35,000 crores! That's 4 times the market capitalization of all its listed companies!

How is Godrej doing today?

Carrying Pirojshah's and Ardeshir's legacy, the 2nd and 3rd generations of Godrej kids built the company into a truly global conglomerate!

But, things were obviously not easy. Think about it - most 100-year-old companies had to navigate through incredibly volatile and changing economic and social environments during their run.

Godrej for instance started at the beginning of the Indian independence struggle, went through the thick of it, and emerged as a company of Independent India.

It went through a period of incredibly strict government control and regulation during the License Raj of the 1950s to 1980s. Followed by the sudden 1991 liberalisation that switched the market from low competition to Heavy competition with a capital H!

The supply-demand also changed drastically during this period. While post-independence, the supply was considerably low and manufacturers didn't have to scramble for customers. Today, the equation has flipped, with demand rising and supply rising faster.

Godrej survived all these changes by focusing on both organic and inorganic growth while looking out for opportunities for expansion in lucrative markets. Its strategy was simple:

  1. Organic Growth through Frugal Products ➝ Buildd products that are super simple to use and solve a real pain point and make sure it's of good quality. Basically, products that are low-cost, sustainable, simple and have passably good quality. The idea is to sell low-cost products in huge volumes!
  2. Inorganic Growth through Acquisitions ➝ With all the extra cash the company makes, Godrej occasionally goes on shopping sprees looking for acquisitions. The idea is to quickly expand market share by acquiring a decently performing company in a high-growth landscape.

Godrej products are household names in Indonesia, Africa and many Latin American countries. In fact, 50% of its sales to the consumer wing come from outside India!

Today, Godrej has 5 major wings:

  1. Godrej and Boyce Manufacturing — Revenue: INR 12,344 Cr
  2. Godrej Consumer Product — Revenue: INR 12,366 Cr
  3. Godrej Industries — Revenue: INR 15,064 Cr
  4. Godrej Properties — Revenue: INR 2331 Cr
  5. Godrej Agrovet — Revenue: INR 6289 Cr

These companies all together dabble in financial products, manufacturing, FMCG products, real estate, agriculture, and more! They even built aerospace equipment for both Chandrayaan and Mangalyaan ISRO missions.

That's the sum of Godrej's journey from buildd-ing Grade A locks to rocket launch equipment in 126 years!

2
Comments

You'll love these articles too!

How SpaceX, Amazon, Zerodha and DoorDash use First Principles Thinking to problem solve?!
How SpaceX, Amazon, Zerodha and DoorDash use First Principles Thinking to problem solve?!
How DMart cracked the grocery market to become the most profitable grocer in India?!
How DMart cracked the grocery market to become the most profitable grocer in India?!
Tata's new Super App will compete with Amazon, Jio & Flipkart!
Tata's new Super App will compete with Amazon, Jio & Flipkart!

Tata's new Super App will compete with Amazon, Jio & Flipkart!

Tata is a 153-year-old conglomerate company. It has managed to stay relevant for so long by expanding into new industries & making shrewd acquisitions.

However, it still relies heavily on TCS, which brings in 75% of profits for Tata!

While late to the startup party, Tata is making amends by acquiring already scaled startups like BigBasket, CureFit & 1mg.

The grand plan is to build a Super App — OG = WeChat, the Chinese Super App. Of course Tata is not alone, and faces stiff competition in this regard from the likes of Amazon, Reliance & PayTM.