Indian Internet Startups ~ Lots of Growth in Future.

Mahesh Murthy Ji is a fine Venture Capitalist. We read his blogs on funding. His Tweets on Entrepreneurship and his Fairly Open Views on various topics including Net-Neutrality.

Yesterday, he wrote an article about Indian Internet startups and how it compares with China . Now, one must give credit to the fact, that, it was a data driven article. In a world where 360 degrees is considered as a U-Turn, this is refreshing :) .So, I delved into it with Interest. Some of the figures were exciting. I enjoyed the conclusion that, India must make bigger products which are global in perspective. Who can disagree with that?

But, one summary, rankled. Ofcourse , I had the data in front of me . If one takes all the majors of world, Their Indian Valuation will be $150 Billion. The Indian unicorns translate to $30 Billion. So, the conclusion was, since, Indian Market Cap is already $180 billion. The Maximum one can go is , $500 Billion , which was the chinese investment benchmark for the article. So, how was $150 Billion calculated?

I checked the charts and I found, that, this was on basis of user numbers. i.e India has 9.4% of total facebook users. So, Indian market Capitalisation for facebook with all it’s properties is $30 Billion. This calculation implies, facebook should be earning at least $3 billion a year from india. How? My reference is an Alok Kejriwal Article. Now, there can be multiple disagreements on this.

Some properties of facebook have futuristic valuation. Instagram, Whatsapp to name a few. But, this should not change the flagship product facebook to be less than 1/3 of the total Valuations. Therefore, should we say, $1 Billion a year. Is that a reality? Not at all. facebook made 124 crores last year. Nowhere close to 6000 crores based on a $1 Billion calculation. Forget $ 1 Billion. What will be the Indian valuation of a company which makes 124 crores in revenue in 1 year?

Now, I do know, most of the numbers above are conjecture. But, let us look at the reality. Is it correct to make assumptions, that, Indian Market Cap for global products is $150 Billion with a user number calculation. I’m sincerely asking, since, I want to learn. It sounds incorrect to me, since, currencies are different. Facebook made Rs. 9 per user in India, while in United States it made Rs. 630 per user.Something, I would really like to learn.

The Larger point is, Yes, India has a created by and large Me-Too products. I would even call Redbus as just another E-Commerce product. It’s a brilliant product, perfectly fitting a need which originated by Lots of Hyderabadis going to and fro to Bangalore. I happen to be one of them. Used the office Internet to do the booking. :)

But, If I may say so, How many indian investors would have invested in, Twitter, Pinterest, and even Uber for that matter. Ola happened after Uber got popular.

I'm sorry, if this article hurts people, but, as an entrepreneur, I work hard to retain my energy and hope for the future. Please have faith. Indian companies can go global too. Mahesh Mentioned Inmobi. Freshdesk is beating Market leaders. AI is the next Holy grail. Who knows, if the next great AI startup comes from India?

On the Chinese comparision, it is true, that, closed Markets allowed them to create huge companies. But, let us not underestimate our bad Internet Infrastructure. Since, then, We've caught on. Average speeds are bad, but, in big cities, we even get 50 Mbps. So, The future could well be next door. We just need to believe.

Someone wise told this to me,” There can be a 1000 bottlenecks. and 2–3 positives”. Take the positives the negatives will wash through.

I’m really open to understanding the numbers better. These things excite me.