5 ms·

India has a drought – not of Investors, but Customers

50 points by playhard 14y ago

npguy 14y ago
Talking about technology startups in India, here is a point worth remembering: http://statspotting.com/2012/12/from-mary-meekers-year-end-trends-the-anomaly-called-india/ http://statspotting.com/2012/12/from-mary-meekers-year-end-t... That could not be the reason for the drought but is definitely an issue in gaining adaption
- vijayanands 14y ago
  India is a very strange market. The customers are quite hard nosed, but wont flich so easily to alternatives so easily. They like to touch, feel, weigh things before they buy and once bought they sell their hearts to the brand. All the big empires here, be it Amul, Tata, Dabur etc etc have built their brands as such. Adoption doesnt come quickly though, and pouring venture capital into a business in India to gain quick adoption is akin to asking nine women to give birth to a baby in a month here. Which is also the issue that startups face, when they are funded by US based VC Firms cause they are expected to act and deliver like US based startups - fast, quick, wham-bham customers who come and leave, but still "acquiring" them is what investors care for. Its a long story. There is no J Curve with Indian Startups, but the ones that manage to sustain and build, build a moat so large that they are IPO worthy by any measure. Its a different kind of enterprise building, that the investors from the west, arent quite "getting"
- deleted 14y ago
  [deleted]
jai_vasanthan 14y ago
I think we are carried away by what is happening in Silicon Valley too much and think of ideas which are attractive to us, the Geeks, and assume that will also be welcomed with open arms in India. While there are some who will appreciate the idea, it is pretty difficult to say that we can generate a certain volume (millions or billions of users) which is generated by a silicon valley company. Ideas are never invalid only the timing in which we play in an existing market is. Tablets were not a craze when Apple's Newton was launched but they are a craze now. I believe playing in a market where where an existing product or a set of products are not able to solve an obvious problem will certainly garner interest of investors as well as customers. I also believe if I am unable to get atleast five paying customers to see eye-to-eye in what I do, then I need to pivot to what they want.
monsterix 14y ago
This article is very shallow. I would say it wrong to assume that there is ever going to be a drought of customers. Investors with risk appetite? - may be, but there can never be a drought of customers. Here is the real picture: there are over a billion customers in India. They need something. All you have to do is open your eyes and ears and figure out what they want the most. Solve a pain that people currently have. Don't shovel your imported world-view of products because you stayed in Americas for a few years. Get your karma right.
- pretoriusB 14y ago
  >This article is very shallow. I would say it wrong to assume that there is ever going to be a drought of customers. Investors with risk appetite? - may be, but there can never be a drought of customers. Oh, there can easily be a drought of customers. The article covers specifically the Indian market for one, but even in the US, with the squeezed out middle class, there can very well be a drought of customers. >Here is the real picture: there are over a billion customers in India. No, there are a billion _people_ in India, which is a different thing. Even if you bypass the starving masses, the actual internet ready audience for what an internet startup might sell is smaller than the US, less adopted to the internet way of doing business and with less money. >They need something. All you have to do is open your eyes and ears and figure out what they want the most. Solve a pain that people currently have. Well, most of their problems have nothing to do with what an internet startup can offer. Hence a "drought of customers" for internet startups.
  - monsterix 14y ago
    You probably jump the gun again, but I do get your point about infrastructure issue. And I agree that the needs in India are probably towards lower-middle side of Maslow's hierarchy of needs. But the need is there for sure. > "The actual internet ready audience for what an internet start-up might sell is smaller than" ... "less adopted to the internet way of doing business and with less money." > "Well, most of their problems have nothing to do with what an internet start-up can offer. Hence a drought of customers for internet start-ups." For example, shouldn't you then be looking to provide internet/bandwidth in the first place? This is a lucrative problem that you (entrepreneurs) can solve. Customers are always going to be there, no matter how you see it.
pajju 14y ago
Well written, agreed strongly with your title and the closing notes. Speaking about B2B in India - I run a small consultation firm(ninjaas.com), we have worked with couple of big clients in India, who have deep pockets, but they don't burn much cash for software and web services. They must be taught + nurtured more in adopting web tools, so largely its only support with Phone calls. They ask for way too many customization's and Ready made things don't sell! Worth mentioning, they don't have much Internet presence, are more or less offline businesses, and as you said - they must be taught, nurtured to adopt newer, better Business processes tools. As there is no internet presence, adoption is largely word of mouth. But, the market is huge and the change will happen soon; will only get better overtime. So, Selling B2B web products in India = Fail, a small market with no much Demand. I see a favorable market where Demand >>> supply, 3x at least. And Many Businesses say - they don't need Internet presence, as most of them operate largely around Phone calls. And its not easy to close bigger deals in India doing an Internet startup. You can pocket out around $$ max. And if its a bigger deal, you have to wait longer to get your returns from followups, may be 18+months. Speaking about B2C in India - Low cost deals with huge discounts works great. Anything around phone, tablet is huge, its growing faster than PC web. And most of them own a budget smartphone and/or a tablet. This market is huge, people are spending to buy apps from the App market. But this segment is largely owned by Indie developers. Startups have nothing much to disrupt in this space. In short, in India, its only the phone that Sells.
rushabh 14y ago
1. Most of India's early adopters are in the US. 2. India also has no language barrier for top class international products like Facebook, Twitter, Basecamp and their ecosystems to take large market share. 3. India's Internet audience is 50-100 mn and mostly mobile. 4. India has a very large number of small IT companies based on MS platform that serve the SMB market well and offer custom solutions.
capex 14y ago
Getting a south asian customer to pay $1 for the most beloved of their services is actually hard. Things like 'security of my banking information', 'can't someone in my family do this for me', 'These guys are asking for money in dollars! Just too expensive.' etc come to mind. Physical products are different though. Its a cultural thing.
davidpayne11 14y ago
Vijayanand is moderately infamous for sheepishly promoting his in50hrs event (it is a PAID event organized by him) under the guise of such shallow articles and also on twitter (EDIT: I've been his follower for ages, he sometimes misleads people into buying tickets for the event, falsely advertising that it's going to be 'sold out' even when no one has actually signed up).
- playhard 14y ago
  Did he talk about in50hrs event in this article? He was talking about the Indian market because he understands it.Is it wrong to promote events on twitter? What is your problem? Sidenote: Vijay Anand has done so much to Indian entrepreneurs and Indian startup ecosystem.
  - davidpayne11 14y ago
    This explains you haven't read the article in its entirety. Please read it again, he references it as the first link while citing examples about the superiority within the Indian Start-up eco-system. That is a contradiction in a way that you cannot promote something as a valid citation while you stand to benefit from it. >Sidenote: Vijay Anand has done so much to Indian entrepreneurs and Indian startup ecosystem. There are many people who have done more than him (I personally know a handful) yet, don't advertise it explicitly as much as he does. He takes money for providing an office space in return. How does that contribute as doing 'much' to the Indian Startup Ecosystem? There are plenty of office spaces over here...
    - playhard 14y ago
      Well, I don't see any problem in plugging one's event in a blog post. If you don't like the idea of paid event, why bother following him in twitter and commenting on hacker news? Where does he advertise about his contribution to the Indian startup ecosystem? It is entrepreneurs like us who say he does. >He takes money for providing an office space in return You want office space for free? >How does that contribute as doing 'much' to the Indian Startup Ecosystem? There are plenty of office spaces over here... He also runs accelerator which invests in startup. They have invested in 2 startups so far. He hosts free events like Chennai OCC, Chennai geeks at the startup centre. Also the space is free if you want to host any free event. I graduated from college and worked from startup centre under Vijay for six months. I come from a small town and knew little about startups. It was Vijay who taught me lot about building a product and distributing it to users. The education i had at the startup centre was invaluable. You know how much he charged for the office space for the period of six months? ZERO(because he wanted me to succeed and i was a recent college grad) Please understand what someone does before trying to bash them in public
RaSoJo 14y ago
Do not look at the author's post from an internet product standpoint. India has an overall internet penetration of 11% and a the % of people who do actual commerce via the web would be about 2%. "Good" Internet products originating from India are extremely few..countable using your fingers. So yes, not an attractive market for the average HNer. But if you are interested in hacking life...India is the place to be. The author goes on to point out the example of Amul (http://en.wikipedia.org/wiki/Amul http://en.wikipedia.org/wiki/Amul) It is a co-operative firm (kinda like a non-profit) that generated $2.5 Billion in yearly revenues and has become one of India's most trusted brands. What is moot is the way that it has not only helped local farmers and lifted the living standards for millions of Indians but has also gone on to generate truck-loads of revenue. It is quite an innovative but a very simple idea at the end of it. THAT is Hacking Life...and that India needs a lot more of. Customers guaranteed.
namank 14y ago
I know little about the Indian systems but reading this article and comments makes me think that entrepreneurs there don't really know the customer yet. Talking about "educating the customer" does not bode well for startups with no IP, especially when the education is regarding the customer's online behaviour and not the product itself. All in good time, I suppose. Good luck to you all. Meanwhile, I'll enjoy the show from the sidelines for another couple of years. Also, whats up with all you guys on HN using the word 'shallow'? Someone explain that please...I don't get it. It's used 3 separate times in this thread.
senthilnayagam 14y ago
I agree with Vijay . Read other comments, some don't understand the Indian context. Indias biggest ecommerce site is operated by federal government owned , IRCTC, they sell train tickets which is the most popular form of long distance travel. you can hear lot of horror stories at https://twitter.com/search?q=irctc&src=typd https://twitter.com/search?q=irctc&src=typd Then indian financial and banking regulator RBI, they limit online payment in every possible way a) every online credit card payment needs multi factor authentication. b) no recurring payments. c) getting merchant account for online services is a long tedious process. d) TDR as high as 7%. now add the problem with logistics due to bad infrastructure. add the news of people getting arrested for posting liking on online sites http://www.bbc.co.uk/news/world-asia-india-20576416 http://www.bbc.co.uk/news/world-asia-india-20576416 culturally Indians feel guilty for exuberance, so they would go for value for money propositions and take safer options. you have people who go to stores and buy mostly in cash now you have the context,now you can read the article again, it would make lot more sense disclosures: I am friend of Vijay, I have been mentor at couple of in50hrs events along with fellow Chennai tech entrepreneur
- fakeer 14y ago
  >>a) every online credit card payment needs multi factor authentication. I am not sure you stated this as a seller, customer or as a payment-gateway guy; but I, myself, as a customer find this feature to be one of the best things to have happened to Indian banking scene and I feel (and am) many times more secure having this feature around. >>culturally Indians feel guilty for exuberance, so they would go for value for money propositions and take safer options. Do you mean the lack of a population that braves the fire, ice, rain and storm to line-up for next iDevice release, not because it's the best (at the best price), but because it's costliest and does exactly the same things many other half-the-price mobile devices do too? And because everyone else with more than enough money is buying it because GrubIegler wrote volumes in reviews mostly comprising - "it's just the right size" and "just the right balance"? >>you have people who go to stores and buy mostly in cash I have lazily switched to ordering groceries from on-line grocery sites in Bangalore. There's a friend of mine who earns almost 1.5+ of my earnings and visits a nearby store to buy one 1L milk tetra pack (among many other things) which costs him around INR 35-40 there and INR 50-55 elsewhere (55 online). No, it's not a duplicate/fake product. And I appreciate this so much. This is called intelligence. Smart decision. Simple. >>now you have the context,now you can read the article again, it would make lot more sense I will sure read it again and share my feedback here, iff it made more sense or very much different from what it actually does.

50 points by playhard 14y ago

npguy 14y ago

Talking about technology startups in India, here is a point worth remembering: http://statspotting.com/2012/12/from-mary-meekers-year-end-trends-the-anomaly-called-india/ http://statspotting.com/2012/12/from-mary-meekers-year-end-t... That could not be the reason for the drought but is definitely an issue in gaining adaption

vijayanands 14y ago
India is a very strange market. The customers are quite hard nosed, but wont flich so easily to alternatives so easily. They like to touch, feel, weigh things before they buy and once bought they sell their hearts to the brand. All the big empires here, be it Amul, Tata, Dabur etc etc have built their brands as such. Adoption doesnt come quickly though, and pouring venture capital into a business in India to gain quick adoption is akin to asking nine women to give birth to a baby in a month here. Which is also the issue that startups face, when they are funded by US based VC Firms cause they are expected to act and deliver like US based startups - fast, quick, wham-bham customers who come and leave, but still "acquiring" them is what investors care for. Its a long story. There is no J Curve with Indian Startups, but the ones that manage to sustain and build, build a moat so large that they are IPO worthy by any measure. Its a different kind of enterprise building, that the investors from the west, arent quite "getting"
deleted 14y ago
[deleted]

jai_vasanthan 14y ago

I think we are carried away by what is happening in Silicon Valley too much and think of ideas which are attractive to us, the Geeks, and assume that will also be welcomed with open arms in India. While there are some who will appreciate the idea, it is pretty difficult to say that we can generate a certain volume (millions or billions of users) which is generated by a silicon valley company. Ideas are never invalid only the timing in which we play in an existing market is. Tablets were not a craze when Apple's Newton was launched but they are a craze now. I believe playing in a market where where an existing product or a set of products are not able to solve an obvious problem will certainly garner interest of investors as well as customers. I also believe if I am unable to get atleast five paying customers to see eye-to-eye in what I do, then I need to pivot to what they want.

monsterix 14y ago

This article is very shallow. I would say it wrong to assume that there is ever going to be a drought of customers. Investors with risk appetite? - may be, but there can never be a drought of customers. Here is the real picture: there are over a billion customers in India. They need something. All you have to do is open your eyes and ears and figure out what they want the most. Solve a pain that people currently have. Don't shovel your imported world-view of products because you stayed in Americas for a few years. Get your karma right.

pretoriusB 14y ago
>This article is very shallow. I would say it wrong to assume that there is ever going to be a drought of customers. Investors with risk appetite? - may be, but there can never be a drought of customers. Oh, there can easily be a drought of customers. The article covers specifically the Indian market for one, but even in the US, with the squeezed out middle class, there can very well be a drought of customers. >Here is the real picture: there are over a billion customers in India. No, there are a billion _people_ in India, which is a different thing. Even if you bypass the starving masses, the actual internet ready audience for what an internet startup might sell is smaller than the US, less adopted to the internet way of doing business and with less money. >They need something. All you have to do is open your eyes and ears and figure out what they want the most. Solve a pain that people currently have. Well, most of their problems have nothing to do with what an internet startup can offer. Hence a "drought of customers" for internet startups.
- monsterix 14y ago
  You probably jump the gun again, but I do get your point about infrastructure issue. And I agree that the needs in India are probably towards lower-middle side of Maslow's hierarchy of needs. But the need is there for sure. > "The actual internet ready audience for what an internet start-up might sell is smaller than" ... "less adopted to the internet way of doing business and with less money." > "Well, most of their problems have nothing to do with what an internet start-up can offer. Hence a drought of customers for internet start-ups." For example, shouldn't you then be looking to provide internet/bandwidth in the first place? This is a lucrative problem that you (entrepreneurs) can solve. Customers are always going to be there, no matter how you see it.

pajju 14y ago

Well written, agreed strongly with your title and the closing notes. Speaking about B2B in India - I run a small consultation firm(ninjaas.com), we have worked with couple of big clients in India, who have deep pockets, but they don't burn much cash for software and web services. They must be taught + nurtured more in adopting web tools, so largely its only support with Phone calls. They ask for way too many customization's and Ready made things don't sell! Worth mentioning, they don't have much Internet presence, are more or less offline businesses, and as you said - they must be taught, nurtured to adopt newer, better Business processes tools. As there is no internet presence, adoption is largely word of mouth. But, the market is huge and the change will happen soon; will only get better overtime. So, Selling B2B web products in India = Fail, a small market with no much Demand. I see a favorable market where Demand >>> supply, 3x at least. And Many Businesses say - they don't need Internet presence, as most of them operate largely around Phone calls. And its not easy to close bigger deals in India doing an Internet startup. You can pocket out around $$ max. And if its a bigger deal, you have to wait longer to get your returns from followups, may be 18+months. Speaking about B2C in India - Low cost deals with huge discounts works great. Anything around phone, tablet is huge, its growing faster than PC web. And most of them own a budget smartphone and/or a tablet. This market is huge, people are spending to buy apps from the App market. But this segment is largely owned by Indie developers. Startups have nothing much to disrupt in this space. In short, in India, its only the phone that Sells.

rushabh 14y ago

1. Most of India's early adopters are in the US. 2. India also has no language barrier for top class international products like Facebook, Twitter, Basecamp and their ecosystems to take large market share. 3. India's Internet audience is 50-100 mn and mostly mobile. 4. India has a very large number of small IT companies based on MS platform that serve the SMB market well and offer custom solutions.

capex 14y ago

Getting a south asian customer to pay $1 for the most beloved of their services is actually hard. Things like 'security of my banking information', 'can't someone in my family do this for me', 'These guys are asking for money in dollars! Just too expensive.' etc come to mind. Physical products are different though. Its a cultural thing.

davidpayne11 14y ago

Vijayanand is moderately infamous for sheepishly promoting his in50hrs event (it is a PAID event organized by him) under the guise of such shallow articles and also on twitter (EDIT: I've been his follower for ages, he sometimes misleads people into buying tickets for the event, falsely advertising that it's going to be 'sold out' even when no one has actually signed up).

playhard 14y ago
Did he talk about in50hrs event in this article? He was talking about the Indian market because he understands it.Is it wrong to promote events on twitter? What is your problem? Sidenote: Vijay Anand has done so much to Indian entrepreneurs and Indian startup ecosystem.
- davidpayne11 14y ago
  This explains you haven't read the article in its entirety. Please read it again, he references it as the first link while citing examples about the superiority within the Indian Start-up eco-system. That is a contradiction in a way that you cannot promote something as a valid citation while you stand to benefit from it. >Sidenote: Vijay Anand has done so much to Indian entrepreneurs and Indian startup ecosystem. There are many people who have done more than him (I personally know a handful) yet, don't advertise it explicitly as much as he does. He takes money for providing an office space in return. How does that contribute as doing 'much' to the Indian Startup Ecosystem? There are plenty of office spaces over here...
  - playhard 14y ago
    Well, I don't see any problem in plugging one's event in a blog post. If you don't like the idea of paid event, why bother following him in twitter and commenting on hacker news? Where does he advertise about his contribution to the Indian startup ecosystem? It is entrepreneurs like us who say he does. >He takes money for providing an office space in return You want office space for free? >How does that contribute as doing 'much' to the Indian Startup Ecosystem? There are plenty of office spaces over here... He also runs accelerator which invests in startup. They have invested in 2 startups so far. He hosts free events like Chennai OCC, Chennai geeks at the startup centre. Also the space is free if you want to host any free event. I graduated from college and worked from startup centre under Vijay for six months. I come from a small town and knew little about startups. It was Vijay who taught me lot about building a product and distributing it to users. The education i had at the startup centre was invaluable. You know how much he charged for the office space for the period of six months? ZERO(because he wanted me to succeed and i was a recent college grad) Please understand what someone does before trying to bash them in public

RaSoJo 14y ago

Do not look at the author's post from an internet product standpoint. India has an overall internet penetration of 11% and a the % of people who do actual commerce via the web would be about 2%. "Good" Internet products originating from India are extremely few..countable using your fingers. So yes, not an attractive market for the average HNer. But if you are interested in hacking life...India is the place to be. The author goes on to point out the example of Amul (http://en.wikipedia.org/wiki/Amul http://en.wikipedia.org/wiki/Amul) It is a co-operative firm (kinda like a non-profit) that generated $2.5 Billion in yearly revenues and has become one of India's most trusted brands. What is moot is the way that it has not only helped local farmers and lifted the living standards for millions of Indians but has also gone on to generate truck-loads of revenue. It is quite an innovative but a very simple idea at the end of it. THAT is Hacking Life...and that India needs a lot more of. Customers guaranteed.

namank 14y ago

I know little about the Indian systems but reading this article and comments makes me think that entrepreneurs there don't really know the customer yet. Talking about "educating the customer" does not bode well for startups with no IP, especially when the education is regarding the customer's online behaviour and not the product itself. All in good time, I suppose. Good luck to you all. Meanwhile, I'll enjoy the show from the sidelines for another couple of years. Also, whats up with all you guys on HN using the word 'shallow'? Someone explain that please...I don't get it. It's used 3 separate times in this thread.

senthilnayagam 14y ago

I agree with Vijay . Read other comments, some don't understand the Indian context. Indias biggest ecommerce site is operated by federal government owned , IRCTC, they sell train tickets which is the most popular form of long distance travel. you can hear lot of horror stories at https://twitter.com/search?q=irctc&src=typd https://twitter.com/search?q=irctc&src=typd Then indian financial and banking regulator RBI, they limit online payment in every possible way a) every online credit card payment needs multi factor authentication. b) no recurring payments. c) getting merchant account for online services is a long tedious process. d) TDR as high as 7%. now add the problem with logistics due to bad infrastructure. add the news of people getting arrested for posting liking on online sites http://www.bbc.co.uk/news/world-asia-india-20576416 http://www.bbc.co.uk/news/world-asia-india-20576416 culturally Indians feel guilty for exuberance, so they would go for value for money propositions and take safer options. you have people who go to stores and buy mostly in cash now you have the context,now you can read the article again, it would make lot more sense disclosures: I am friend of Vijay, I have been mentor at couple of in50hrs events along with fellow Chennai tech entrepreneur

fakeer 14y ago
>>a) every online credit card payment needs multi factor authentication. I am not sure you stated this as a seller, customer or as a payment-gateway guy; but I, myself, as a customer find this feature to be one of the best things to have happened to Indian banking scene and I feel (and am) many times more secure having this feature around. >>culturally Indians feel guilty for exuberance, so they would go for value for money propositions and take safer options. Do you mean the lack of a population that braves the fire, ice, rain and storm to line-up for next iDevice release, not because it's the best (at the best price), but because it's costliest and does exactly the same things many other half-the-price mobile devices do too? And because everyone else with more than enough money is buying it because GrubIegler wrote volumes in reviews mostly comprising - "it's just the right size" and "just the right balance"? >>you have people who go to stores and buy mostly in cash I have lazily switched to ordering groceries from on-line grocery sites in Bangalore. There's a friend of mine who earns almost 1.5+ of my earnings and visits a nearby store to buy one 1L milk tetra pack (among many other things) which costs him around INR 35-40 there and INR 50-55 elsewhere (55 online). No, it's not a duplicate/fake product. And I appreciate this so much. This is called intelligence. Smart decision. Simple. >>now you have the context,now you can read the article again, it would make lot more sense I will sure read it again and share my feedback here, iff it made more sense or very much different from what it actually does.