I just got back from a trip to India during which I picked up a book titled Jugaad Innovation.  For those who are not familiar with the term, Jugaad is a colloquial Hindi word that’s used in the context of something that’s a mix of creativity, innovation, and cleverness. The word is used in adjective and noun forms. So, you could have a “jugaad” approach to solving a problem, or you could be using something that’s a product of “jugaad” inventiveness, like the machine above.

Wow- What is That?

The picture above is literally a “Jugaad” – a vehicle that’s a crossover between a motorcycle and a bullock-cart, which has been the traditional mode of transport in Indian villages for a long time. The Jugaad is a common sight in North India, and can be seen on highways carrying humans, domestic animals, and all manner of goods and provisions. It is the most economic and efficient mode of transport for low income farmers who make the trip from village to city for their needs from time to time. The Jugaad was born out of necessity – a central tenet of the spirit of “Jugaad”, which this piece is about.

Jugaad and Frugal Innovation

In a broader sense, the term Jugaad Innovation is known these days as frugal innovation – doing more with less. Firms in emerging nations like India have been practicing frugal innovation for a long time, born out of necessity to address a very large consumer base, albeit with low purchasing power. Jugaad also has a certain localized meaning, and the spirit in which Jugaad innovation is carried out sometimes has a very local hand stamp. Different countries have different terms that are their equivalents of Jugaad, from Brazil to France to China.

Why would this be a topic of interest for startups and entrepreneurs in the U.S? The answer is that every large corporation in the west, from automotive to pharma to electronics to consumer goods, is practicing frugal innovation today. Entrepreneurs everywhere are  practicing it. In a very general sense, frugal innovation is about making the most of limited resources, but coming up with workable solutions. This is an important point. All entrepreneurs works with limited resources, but relatively  few come up with products or offerings that meet a practical need at a price point that fits the budget.

Jugaad is the New Normal

However, Jugaad is not just some emerging market model that has little relevance in western markets. Jugaad is the new normal all around the world.

The spirit of Jugaad is embodied in the ability to work with limited available resources, but also building something relevant and useful. It also embodies a spirit of clever cheekiness that celebrates workarounds, sometimes at the expense of established structures. When Napster came along, they overlaid peer-to-peer sharing on top of established digital infrastructure and thumbed their noses at big music labels. They let loose a monster that’s effectively accelerating the demise of big music labels and upending the way music is produced and distributed. Pandora and Spotify are doing the same thing to syndicated radio.

Jugaad Innovation also tends to come out of necessity. With the explosion of big data and compute-intensive applications, companies have been increasingly concerned about the costs of managing data centers – especially the costs related to power and cooling. At the same time, not everyone is jumping on the cloud bandwagon due to data privacy and security concerns among other things. Sensing a need for an alternate model, IO Data Centers, a company that’s been around just a few years, has come up with modular data centers with their own self-contained cooling, back-up power, and operating system dashboards. They have completely reinvented the concept of a data center to address the crack between big corporate data centers and the public cloud.

Western corporations are slashing multi-billion dollar R & D budgets, crowdsourcing research globally, and tasking teams to come up with innovations faster. They are learning to apply Jugaad thinking, which is a kind of bottom-up approach that involves practically rebuilding the product for the target market. An example of this is the $ 3,000 Nano car from Tata Motors in India that was developed from the ground-up to build an affordable car for an average middle-class Indian family (nevermind that there’s no place to park in the big Indian cities). Nissan has recently announced plans to launch its own $ 3,000 car.

The Road to Success for Disruptive Innovators

I love the picture of the Jugaad above. It embodies one very important aspect of Jugaad Innovation: the ability to include people living at the margin. The poor farmer in an Indian village is able to transport himself and all of his belongings with an ingenious innovation that cost very little to make, and cleverly combined elements from what was available.

Research and empirical evidence tell us 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.

One of biggest successes of the past decade has been, which started off originally at the fringes, offering a SaaS model to small companies that couldn’t afford the big on-premise solutions like Siebel. Zipcar, a car rental service with limited reach, may one day be the norm for personal transport. Companies like Salesforce , Zipcar, and IO Data Centers provide an important insight: The real key to success may be how you use your limited resources to build something that’s relevant at the margin and grow into the mainstream. Apply Jugaad principles to get there faster.

Finally, Jugaad doesn’t have to be about commercially viable products all the time. Social entrepreneurship across the world relies heavily on Jugaad to build things for people at the margin. The Khan Academy, an institution I greatly admire, used simple YouTube videos to start a movement that’s grown to a free learning medium for millions, and has transformed countless lives in the process.

This is the spirit of Jugaad.

Photography: Dave Prager