I am proud to say that taking this awesome style desi, I was discussing VC attitudes towards tech-enabled startups in India with Pravin Jadhav and Kulin Shah of Social Discovery Website, Wishberg yesterday. In an animated conversation about the kind of problems tech startups are facing while raising funds, Kulin said that one of the key problems in India, while raising VC is having an offline component to your business. If you have even a small offline fulfillment component to the business, VC / Seed funds are loath to touch you, citing "execution" issues and / or "IP problems".
This, I feel points to a much larger problem, and one that deals with both scale and profitability. In truth, a true "tech" startup is one that invites you on a communications network to test, use and buy it's service online (whether on a phone or a tab or the WWW) and fulfills it's deliverables online itself, entailing no physical touchpoints.
*Incidentally Wishberg is such a startup which creates, constructs and delivers a purely online user experience and leverages your user habits to create virality.
However, in INDIA, if you must think about true global scale, your aim must be to create a Billion Dollar Company (by Revenues). However, Most of the problems that can yield these billion dollar opportunities are dirty, disorganised, fragmented offline markets that have traditionally thrived since over 200 years using paper, trust, and recently telephones to generate, negotiate, close and fulfill business - both on a B2B and a B2C level.
To scale to that level in India, you need to take your eye off that pitiful variable number of Indian Internet Users that varies as per convenience, and focus on the larger picture: Almost 1.1 billion people that are not online yet.
Most of these people have not used technology in any meaningful way (Owning a smartphone is far different from using it effectively). To reach those people, you need to use technology as a bridge, not a delivery mechanism. This makes your startup "tech-enabled" not "proprietory tech". Using tech to enable your business gives you scale, speed, distribution, lowered costs of access and a scalable method to handle 100,000 customers.
Some of the most successful startups today are solving real Indian bottlenecks that have eased up people's lives considerably - Startups like RedBus, MeraDoctor, Practo, Mirakle, PayTM, Freecharge and Suvidhaa have done it at awesome to middling scale.
***Any other Indian Startups that you feel are creating completely new value chains in otherwise fragmented markets, please let me know, I will add them here***
There are still many markets / sectors / industries that are ripe for disruption of traditional practices, where technology can provide that killer edge / advantage over entrenched systems and allow for cheaper, more efficient, completely revolutionary methods of scaling and solving business problems.
**Plug Alert: At eVitaran, we are attempting to solve the Tier-2 and Tier-3 apparel / textiles distribution problem for low cost unbranded apparel. **