Narratives are the most powerful tools of our age. Each week, I deconstruct the dominant ones behind the success or failure of businesses, leaders and governments
Good Morning Dear Reader,
There was an entire generation that fought battles and won a war before the events in the first episode of popular HBO series Game of Thrones even transpired. Before British author JRR Tolkien wrote The Lord of the Rings, he first introduced Middle-earth with Bilbo Baggins’ adventures in The Hobbit. And after American filmmaker George Lucas’ made the first Star Wars trilogy, he went back and made a prequel trilogy to put things in context.
All three stories here follow several aspects of the most common motif in storytelling—the hero’s journey. And although the hero’s journey often begins with an Inciting Incident, tools like prologues, backstories, and prequels are all there to put this critical piece of the narrative into perspective.
In storytelling, an inciting incident is the epicentre from which both the backstory and the future emanate. We find them all around us in the real world too. Sometimes they look like funding rounds, sometimes product launches and marketing campaigns.
If you are new to this newsletter, that’s what it’s all about. And every week, I pick such inciting incidents from the world of business and break down the story underneath for you.
This week, we take a look at the story that preceded the US$2-million Series A funding round of the Bombay Hemp Company (BOHECO). The size of the raise might look a bit paltry, but let’s face it. It’s not everyday that we hear about a company that makes hemp (cannabis!) products in India—let alone one that has raised money to keep growing.
BOHECO’s rise has as much to do with telling a story as it does with creating products and a market. It was the first Indian startup that decided to make products out of hemp and when it launched in 2013, it had the weight of Indian regulation stacked firmly against it. But over these last few years, it hasn’t just built products out of hemp, but also a narrative—making a world for itself where it can exist, and even hope to thrive in.
Now, as the regulation of hemp/cannabis becomes increasingly subject to debate (several Indian states favour new legalisation here), let’s look at how BOHECO built a story that policymakers and consumers are finally beginning to accept in India.
Bombay Hemp Company blazes a lonely trail
While it was founded about a decade ago in 2013, BOHECO took its first major step in 2016, when it secured a US$1-million seed round from a set of investors that included one of India’s most prominent industrialists—Ratan Tata. This Tuesday, it announced a US$2-million Series A round. It has spent the years in between building a health and wellness brand, a textile vertical, and a research wing, and had an annual revenue of about Rs 3 crore (~US$400,000) in the year ended March 2020.
None of these are major achievements for a startup in India, but its story shows that Indian startups will have a role to play in how the global cannabis market evolves—it is already valued at US$28 billion and is expected to grow to about US$197.74 billion by 2028. The Indian hemp market, meanwhile, is currently valued at about US$2-3 million and is estimated to reach US$500-700 million over the next few years.
Of course, these are quite optimistic projections, especially because they stand in sharp contrast to the law of the land. Cannabis is labelled a narcotic/addictive substance and its commercial production and consumption is legally prohibited in the majority of Indian states.
But BOHECO has navigated these choppy waters by sticking to its narrative, one its co-founder Yash Kotak laid out while launching its very first store in Bangalore.
Hemp’s uses are kaleidoscopic. "Pull its fibre out and it’ll give you yarn; chop it into softwood, it’ll give you material to build shelter; harvest its seeds and it will transform into all the health and nutrition a human body needs; study its genetics, and you’ll find medicine. Our design fuses this very potential with the existing industries of agriculture, technology, health and nutrition, to bring together community, impact, and value."
The company has launched products in the health category like hemp seed oil, personal care products like body oils, shampoos, and soap, and edible oils for stress and pain management. Some of these need a prescription, others are available over the counter. It has also tied up with alternate medicine and Ayurveda practitioners who can prescribe some of its products, and established a supply chain network with two farmer groups.
In a country where a new, innovative use of an addictive substance—like nicotine in e-cigarettes/vaping devices (which some nations have chosen to regulate)—was outright banned in 2019, how has BOHECO created a narrative that has gained acceptance?
One part of the answer is how it has built alliances with government bodies.
In 2017, by collaborating with the Council of Scientific and Industrial Research’s Indian Institute of Integrative Medicine (CSIR-IIIM), BOHECO became the first-ever company to get a licence to grow and study the medicinal properties of cannabis. Together, the institute and the company have been researching how to develop cost-effective cannabis-based drugs for the treatment of cancer, epilepsy, and sickle cell anaemia.
Second, it has brought scientists and policymakers on the same page publicly. In 2018, at a conference jointly hosted by BOHECO and CSIR on 'Cannabis R&D in India: A Scientific, Medical & Legal Perspective', all the speakers agreed that India needed to tweak its legal regulatory system to create a market for cannabis-based products—like Canada and the Netherlands. At this conference, Union Minister of State Dr Jitendra Singh said:
"There is a very thin line between use, misuse and abuse of a substance, and it is our responsibility to draw that line… Now, as the incidence of non-communicable diseases increase in India, we need to conduct pioneering research on drugs originating from plants and herbs… In the middle of the last century, such research gave us mint, which has now become an internationally used product. We need to replicate this kind of success by exploring the full medicinal potential of cannabis for the treatment and management of pain and health conditions for which there is currently no effective cure."
Other panelists at the conference recounted several “myths” surrounding cannabis-based medicinal products. They also separated medical use from recreational use, and talked about the quantities at which cannabis can become addictive. Essentially, in 2018, BOHECO began building a narrative that the cannabis market they wanted to build offered more benefits than harm.
It was the same year that Uttarakhand became India’s first state to permit large-scale commercial cultivation of industrial hemp. Since then, other states like Uttar Pradesh, Odisha, Rajasthan have done so too. And earlier this year, Himachal Pradesh announced that it intended to legalise production, while Madhya Pradesh and Manipur are considering the same.
All this, despite the fact that in 1985, the Narcotic Drugs and Psychotropic Substances (NDPS) Act banned the cultivation of the cannabis plant. But the Act also allows state governments to permit controlled and regulated cultivation for industrial or horticultural purposes. Which states are now starting to do.
Meanwhile, BOHECO has spent half of its time in advocacy and explaining its products to consumers. This is how its co-founders have explained the importance of its brand narrative:
“Prior to 2013, Hemp (Cannabis) was rarely mentioned or raised as an interesting opportunity for new industrial and medicinal development horizons, primarily due to the pre-conceived stigma surrounding the recreational use of Cannabis combined with the fear of industrial and medicinal cannabis being misused and re-directed to the illicit Cannabis market...Of course, there were the usual naysayers too who said ‘log kya kahenge’ [what will people say] backed up with statements that hinted on inability to give approvals due to it being cannabis. Fortunately, we chose to take that advice with a pinch of salt, and subsequently focus on aligning the brand narrative and commercial appeal of Hemp to cater to the sentiments of the larger market as well as the agrarian community.”
And they focused on both ends of the spectrum, on policy makers and consumers:
“At least once a week, someone will ask, ‘Will I get high with this?’ Even with paper, soap, with whatever we make. Is ‘soap’ a code word for something? they ask. I then send them a picture of the soap.”
But the jury is still out on the short- and long-term effects of producing and consuming cannabis globally. Production of cannabis in India has been associated with ecological harm and drug use; there are also several acute and chronic documented risks in legalising cannabis. But BOHECO has given itself a start among policymakers and consumers, and its story is beginning to gain wider validation.
There is another company that has managed to mushroom despite unfavourable regulations—Dream Sports, the parent firm of popular Indian fantasy gaming platform Dream11. This week, the company announced a new US$840 million funding round at a US$8 billion valuation.
In 2018, The Kenlaid out the company’s predicament thus: Gambling, games where the outcome predominantly depends on chance, is one of the most restricted and harshly regulated industries in India. Only three places—Goa, Daman & Diu and Sikkim—allow casinos to operate within their jurisdiction.
But Dream Sports has managed to swim against the tide. In another piece earlier this year, we wrote about how the company has fought in the courts, arguing that fantasy sports are games of skill and not chance; and how it hired one of the biggest faces in Indian cricket as its brand ambassador to build up its story.
What we are reading
Keeping with the spirit of shifting power structures, Robert Greene’s The 48 Laws of Power guides the reader through a maze of socio-psychological tools that work. Let me warn you, though, the book does not discuss the moral implications of applying these laws. Check it out, but to quote Spider Man’s uncle: “With great power comes great responsibility”.
Share this edition
That’s it for this week. Please let me know what you think about this edition. What did you like? What did I miss? What would you like to read about? Write to me at [email protected], and I’ll be back in your inbox at 7 am India time next Friday.
If you’d like to share this issue, here’s a link. You can also just hit the easy-share buttons below.
PS: The Ken is conducting a limited number of leadership workshops on building and differentiating with narratives every quarter. If you would like to reserve one of those for your organisation or team, please fill in and submit this form.
Narratives are the most powerful tools of our age. Each week, I deconstruct the dominant ones behind the success or failure of businesses, leaders and governments
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