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)
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.
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.
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
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.
IRCTC is still the biggest ecom site despite their UX and UI and all that; it simply solves a problem people want solved more than all the other stuff. India's ecom isn't about the fluff and the sub-millisecond response time; it's just about doing something right, and the success stories like Naukri or IRCTC or whatever have gone that route.
RBI isn't limiting stuff for no reason - multi factor makes Indian CC sites a much better alternative than abroad, honestly, where you can get overbilled and then have to go to court/claim etc.
Merchant account and TDRs are negotiable, anything above Rs. 100,000 a month ($2,000) can get you below 3%.
Logistics aren't such a bad deal - have worked with vendors who now have great options and assurances for ecommerce players.
Indians feel guilty for exuberance? I disagree. Having lived in Delhi and Mumbai and Bangalore, I see no end of ostentatiousness (if there is such a word).
The arrest on posting online is being addressed, and the law is ill-thought-out and if we put heads together, we can change things.
People pay in cash: so what. They will buy online if you give them stuff cheaper. If ECom sites stupidly decide to charge near-market rates, and they will die. It's cheap (in price) that works, and if you are that, they will pay you in whatever way you want -- cheque, cash, card etc. (See IRCTC: they don't take cash online, they don't do CoD, yet...)
Vijay's article has the correct tone that we should focus more on customers than investors. However, you need money to make money, sometimes the customer who wants you is a customer you just can't reach, because you don't have the money to show him your wares. And thinking "big" is now possible because there is money available for the investment, instead of waiting for organic growth.
>>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.
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.
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.
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.
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.
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).
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.
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...
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
Your answer is vague, but I will try to be objective as much as possible.
>Well, I don't see any problem in plugging one's event in a blog post.
The problem here isn't plugging his own event in his post. The problem here is that he cites the successes of start-ups and links to it. That is un-ethical. He stands to benefit from it by falsely citing it as a valid example. Many people here on HN DO NOT know that he runs it. His intention was malicious, if not unethical.
>You want office space for free?
You are missing the bigger point - Offering office space for {insert rate here} is something that anyone can do and that doesn't make one a contributor to the start-up ecosystem, atleast not as much as to the proportions to which you blow it up.
> 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've heard of these events. One of my friends tells me about it. I've also heard horror stories about Vijayanand mocking young college guys interested in starting-up. I also heard from him that he isn't just the one behind it, there are a lot of active young minds involved.
>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)
Your personal positive experience with him is best kept personal. Because we're talking about the rest of the Entrepreneurs from whom he collects money.
I understand your experience is so far positive with him. But, please don't try to dilute a valid argument using your individual opinion. I also understand that you have co-founded a company which you and Vijayanand have mutual interests in (like someone here commented). Please don't try to support him in public just for that reason - When someone is at wrong, it's best we let the others know about it, otherwise the purpose of such a vibrant community will be poisoned by such profit-motivated posts.
EDIT: Vijayanand has edited the link that went to his in50hrs programme. Maybe that's why you didn't notice it.
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.
> All you have to do is open your eyes and ears and figure out what they want the most.
The Indian masses want food, shelter, and an education for their children. Oh, and they can't afford to pay for it. Doesn't sound like a very good business opportunity, especially for your average HNer.
> "Indian masses want food, shelter, and an education for their children. Oh, and they can't afford to pay for it"
I don't know which economic lens you're looking through but I do know that Indian middle class is swell, and has pockets deep enough to buy iPhones and Black Berries.
How can you even convince yourself that there is a drought of customers in India? That's not true. From your position it seems that there is a drought of entrepreneurs who are able to see the needs instead.
Here is the big picture: there were millions of customers in America prior to the great depression and the same number immediately after the onset. Aggregate demand dropped, consumers sought safety, etc. "People just need to find the right product" wouldn't have been sound advice when looking at the overall scenario.
>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.
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.
>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.
Yes, of course. I agree with both statements in the sense that internet infrastructure and more basic needs are a big market in India, and that customers in general will always be there.
What I disagreed with is that Customers for some specific market or level of service will always be there.
>>actual internet ready audience for what an internet startup
It's really hard for me to grasp why people want to pin startup/business/entrepreneurship to Internet/website and iOS apps. It doesn't work everywhere and till it starts working you have the option of sitting out or start giving them Internet connectivity (not to mention device and training) or make something that they need now and will buy at a price they can safely afford, of course via a medium they use or have access too.
>>Well, most of their problems have nothing to do with what an internet startup can offer. Hence a "drought of customers" for internet startups.
Internet startups, many a times, start with a problem that doesn't exist here but they start it anyway because people in the USA had it and when last time someone in Germany had copied sth (or sth similar) from the USA it did actually work (as in got sold). Now, in the end you have narrowed down your opinion to a smaller subset.
There is a large population in India that accesses Internet through means that other part of world hardly shall ever recognise as Internet connectivity. That's an untapped one and many startups are taking small but significant startups towards it.
It is important to note that the author is from Canada and spent a significant portion of his life there, before trying to do something in India. So, his views are fairly biased about India - like trying to compare a Developed vs a Developing country.
I can give more info about him as I am his friend, he grew up in middle east, moved back to India, went to canada for graduation, did a startup, sold it, back in India, worked with RTBI in chennai for couple of years before starting StartupCentre.
so he spent about 3 years in Canada, yeah he is exposed to developed countries
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) 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.