Let me begin by congratulating Girish and his team @Freshdesk, which won the ET Award for Top Startup of the Year, announced just today. Freshdesk is unarguably one of the best known high-growth, built-for-global-markets enterprise B2B stories to have emerged from India’s shores.
Freshdesk followed last year’s winner, Ola (where Blume is also an investor, amongst many other larger peers), which similarly has become one of India’s best known and fastest growing consumer-internet (or B2C) stories.
While B2C and B2B, in that order, have traditionally constituted a majority of most VC funds’ focus areas, a core problem area to be solved remains – “large-market issues, unique and specific to India”. These may overlap with B2C business models, but are in a sense, more white-space opportunities than ‘replication models’
Let me relate an anecdote from a recent valley visit – we organized an ecosystem event in silicon valley timed around a few summer conferences. By pure coincidence, we were fortunate to count amongst our invitees two stalwart-Indian entrepreneurs who shared many similarities – both have just in this decade exited to larger players, representing real show-me-the-money exits to their investors, creating real value in the process; both are admired mentors to young founders, active angels in their own right, and have thrived in and seen a full startup lifecycle from inception to substantial exit – few and far between, and fairly rare in India.
Our friends mentioned here are Kunal Shah @ Freecharge and Phani Sama @ Redbus.
However, the most striking, single commonality was that both were from inception obsessively focused on solving very India-specific, India-unique and nuanced pain points:
In Redbus’ case, who would have thought of “replicating” selling bus tickets online? Air travel and hotels sure, but buses?
Moving to Freecharge, prepaid and free re-charging of phone plans anyone?
This is not to say that replicating Amazon, Uber, and Groupon in India – building on a proven idea lifted from Western markets and then flawlessly and relentlessly executing these business models tailored to the Indian market – is not fundable and scalable. They very much are – look at Ola, Flipkart, Snapdeal. However, when you add the experience of say a Rocket Internet (whose India entry and exit has been a failure by any standards), one can see the secret sauce is almost entirely in execution; further, absent massive capital backing, it remains difficult to innovate and stay ahead.
Neither is this to say enterprise B2B for-global-markets biz models should not be pursued. They should, and amply. Like Freshdesk, there are deservedly a slew of similar plays following its footsteps. Blume has proudly backed many such startups, including our very own Grey Orange (emerging as one of the world’s leaders in automated warehousing solutions, incidentally also winning last year’s ET Award for Top Innovator), Exotel, Webengage, Hotelogix, and many more.
But lets go back to what it means to obsessively focus on solving “India-unique” pain points. Lets explore how a bunch of new startups are going native – here are just a few of our own startups –
- Locus – a tech platform for solving last-mile routing, that counts leading e-commerce B2C and b2b logistics players as customers. Solving for accurate and timely “last mile delivery is everything” in India, and is often the make-or-break factor for customers
- Zopper and Nowfloats – have been instrumental in enabling the on boarding of potentially millions of “offline to online” [O2O] merchants and users via an integrated mobile enabled tech platform/marketplace
- Mockbank – edu-tech and career test preparation, targeting the “middle of the diamond” that makes up India’s hinterland and Tier II/III cities, becoming the one stop site for aspirants to discover, prepare for and secure options from a wide spectrum of Government jobs
- Wedding Brigade – its not untrue that India is all about “Cricket, movies and weddings!”. This aims to be a one-stop site catering to all things weddings, aided by a compelling mix of rich content, a curated community, and commerce.
- Healthifyme – an integrated health app platform that aims to improve the everyday health of “traditionally sedentary” indians, helping them eat better (think calorific intake tracker) and exercise more efficiently (from a choice of offline instructor classes and guidance to on-site in person tutorials etc), with a tailored approach to India-nuanced diets, exercise and needs across body types, professions and regions
Mr Amitabh Kant, CEO of Niti Aayog, and a key part of PM Modi’s Start up India and related initiatives, eloquently elaborated on this in a recent Economic Times article “Innovate for India” :
“Entrepreneurship is the next big economic force in India… because it attempts to resolve the very real problems of India. What we expect from startups is the mind-set to turn India’s vexing issues into opportunities.”
As VCs, our insights are not meant to be prescriptive. So, while many eminently capable, enthusiastic and persistent founders go about bringing Western B2C models to India, or set up well-run Enterprise B2B platforms to target overseas markets, it would be wonderful to see an equal number of tomorrow’s entrepreneurs dive deep into large-market India-specific pain points – and develop tech products, platforms and services to solve these needs. The founders above have shown there is real value and monetization for all stakeholders at the table.
Here’s to seeing many more entrepreneurs innovating-for-India, and to see them – going native.