Happy new year!
I know, this post should have gone live a few months ago – but since we are talking about a decade, I am taking this liberty to start from ground zero.
First, let me share a few perspectives on the decade gone by.
What really happened in India startups/tech ecosystem in the last decade?
Apart from Jio – Flipkart, Swiggy, Zomato, Freshdesk et al. These companies launched and scaled. The M&A ecosystem, though is nascent – yet is kicking a$$ and now is the time to plan for the next decade.
In ’09, FDI was 5X of VC/PE investments into India.
In ’20, VC/PE is 4X of FDI (via).
10 years back, nobody would have thought of building an app for the Bharat market or an app for ordering food sans the follow-up calls to restaurants.
A lot has changed and it is quite clear that Indian startup ecosystem is now a true force to reckon with!
Zoom to today: What’s really happening?
A lot of low-hanging fruits are taken (and eaten).
New big categories are being created by either Chinese (e.g. TikTok) or American companies (Tiktok-everything else).
The era of ‘I-can-copy-paste’ is almost over, as more and more global companies are launching in India (with literally no time lag).
In 2020, it is literally impossible to launch an ecommerce company or a food delivery company (without a clearly defined differentiation) unless you’re interested in doing a very marginal thing.
Even a hot sector like Fintech is going through its own ‘product-market-fit’ discovery phase – since we have more lending strategies (thanks to plenty of VC funding) than collection strategies in place.
Evolution happens and here is what I believe the next decade will look like.
But before I share my perspective, let me share some context.
NextBigWhat (earlier known as Pluggdin) has been one of the largest/earliest players in the startup ecosystem – but ~2017 or so, we decided to take a backseat from the media world.
The decision to take a step back was largely driven by the fact that most Indian startups are operations company (there is nothing wrong with that, as long as they are solving the problem) – but the truth is that most of these are packaged as core tech/product business which is totally misleading (we started to help product companies scale and all we saw was..well, lot of ops org faking as product biz).
The result of this over enthusiastic funding drama is showing up now – most of the companies are struggling to get to profitability (or forced to use scammy means to sell), and are struggling with retention.
But like human beings, the startups too are evolving.
There has to be a next step from the last decade’s avatar.
If the last decade was all about aggregation, the next one will look very different.
We have seen many startups launch, rise and fade – and while I fundamentally believe in the fact that entrepreneurs are willing to solve bigger problems, the truth is that the market will force the new ones to think differently.
The next decade will not belong to ops-heavy companies.
The next decade will not belong to the masquerading-as-a-product companies (and command 10X valuation).
The next decade will belong to product-led companies.
An Important Question: In spite of billions of dollars of funding every year – there isn’t a single global consumer-tech product company from India. Why is that so?
Because till date, we weren’t forced to compete on products – we were happy to build on WhatsApp APIs but didn’t stop to think what the next messaging revolution could be.
The times they are a changin. Low hanging fruits are gone. The ops-heavy businesses aren’t fun anymore – unless they figure out a way to make money.
And importantly, the consumers (even the desi ones) are now willing to pay for products (for instance, subscription) which essentially means that the consumers will latch on to a better product – and that product need not be Indian (nobody cares, we all know).
In short – if we aren’t able to create world-class products, we don’t stand a chance anymore. As an entrepreneur, your chances of building the next FK is very slim, unless it is product-driven.
The next decade will belong to startups/companies which are product-first and have a strong product thinking culture.
After all, why can’t we have a global consumer-tech company from India!
Time to change the equation. And it will happen, just that if you are a founder who is inspired by several others who are more of aggregators (and less of creators), you are in for a shock as the world now mandates a place for creators (aggregators have had their due share).
Which is where core focus (was) and now is: To enable product-driven businesses to build, grow and repeat (more on that later).
If you are building a product-led business, do let us know what are your current challenges? What help do you need? Do share (you can use this form).
What do you see is going to be the next decade for Indian startups?