Don’t play as per the rules. At least not here in India!
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The debate over who is the Facebook of India, the Amazon of India and the Uber of India is an ever going one. Minus those days when the government in it’s well known fashion decided to dig the old demons back and to bring back the licenses for the drivers. Everyone puts his hand in his faces at that time and say — Not again!
Even Rocket Internet with its well know model of funding and creating local copycats of global success needed to take a step back clearly seeing that India is not China. The Chinese censorship ensured that at least the market is homogenous enough for decent forecasting. However nothing can be said for certain in India. The global competition is free to ravage and no one knows that better than Flipkart which feels the full blow of behemoths like Amazon. Investors have started doubting whether first mover advantage counts in the largest open economy in the world and the continuous financial injections inside Flipkart that go beyond series G make a point.
Are we as investors to entirely rethink our way of thinking about India in order to cash on our present and current investments? My reflections follow below.
It still remains incredibly difficult to plan in India
Your irrational exuberance shatters under the wheels of thousands of rickshaw pullers you are likely to encounter within 2 square kilometers here in the capital. Your overstated realism bounces of shiny walls reflecting the dream of an ambitious middle class setting itself free to consume. Yet the middle class didn’t grow as anticipated and neither the Internet potential in India left to be used 15–25X as our pundits ever enthusiastically claimed. This is not a land to be too certain over everything. Old lows from 1950s still govern new expectations and you never guess which one would crumble first. The founder of Taxi for Sure was enthusiastically flying to San Francisco for the next round of funding to have his flight and his dreams shattered by a single tragic case of rape. No one can really tell when a dormant government force will abruptly awake and where. And on top of that here at EVC Ventures we have poised India to be the land where the next 1 million mobile first startups are to be born.
How much respect does local deserve?
The current success stories of the Indian startup ecosystem are all borrowing business models from Western markets. But how long before we have to acknowledge that there are India specific problems waiting to be solved with India specific business models and still possessing huge market potentials that would make every investor salivate? Recently I made a case against the recent shutdown of Peppertapwith a very fundamental promise — Did Peppertap shutdown because it didn’t remember to offer complementary dhania mirchinside the bag? Are we giving the due justice to emerging startups waiting to flourish taught by the mistake of their fresh predecessors? Did we all fail the Indian customer by failing to realize that his decisions, his propensity to squeeze the last drop of the Rupee may not be necessarily a practical thing but rather an emotional one?
Is it all poised towards happy ending?
Amazon has never encountered a more formidable opponent than Alibaba in China. Is Alibaba really that good and fit against a company that has successfully survived the dot com bubble and made series of quality decision in most adverse business environment? We cannot say. Could another one have done it better than Alibaba? We don’t know. China simply didn’t allow its darlings the option of failure.
Not the case in India. What was full of hoarding last year stares blankly at us today as we drive beneath? It marks a space where once a titan might have stood. Yet India has allowed the market to play around titans too. Today most of them are no longer with us. Do we have something to complain as investors? Not much. We were perfectly aware that it was a Babe Ruth kind of a game since the very beginning. But at least we received the benefits of learning. And now more than ever we know that playing by the rules we brought from out there will not be a wise thing to do. Millions of dollars down the drain taught us that. Perhaps now we are going to take it slower, and more the Indian way. Perhaps we may even allow ourselves to have fun in between as a brand new market unfolds following laws that we were never taught of. It has never been a better time to drop the rules we are accustomed to. India has been doing it without us, let us allow her to do it again. I don’t know happy ending but I surely see an exciting one.
