If you are a Hardware Startup, Veer to India!
Technological waves happen every few years, on the back of innovations that are either exponential or incremental. Patents protect such innovations. The patents demonstrate or underline the value of the technological innovation to a variety of stakeholders in the market.
Not so long ago, the US was experiencing a hardware boom, with many new VC funded and crowdsourced hardware startups, coming to the fore, tackling challenges in mobility, imaging, wearables, and digital health, to name a few. A lot of different factors, ranging from new infrastructure to easier prototyping enabled the hardware wave.
A few years down the line, the technological tide in the United States has changed again, as demonstrated by the death of a few marquee hardware startups. VCs are again looking at newer technologies to support.
On top of this, the market conditions in US are still improving slowly. The ecosystem is slowly beginning to show some positive signs. For an entrepreneur, now is the time to look east.
When one looks east, one sees how far India has come over the last three years, to emerge as an essential destination for new technological innovation.
Today India is an important pitstop for technology startups to build and scale new technology development. India is the world’s fastest growing market, one of the toughest to be in, and represents a gateway to the world. Whether it be technology co-development; whether it be patent sale, or company sale; or to seek new capital infusion, startups should consider putting India in the centre of their plans.
Let us explain why?
In 2014, new flagship programs were unveiled by the Government of India to spur innovation and to make in India. Building on the success story in software, there is a strong impetus for encouraging new innovations to build on the hardware capabilities. As part of its initiatives, the Government introduced Make in India. Make in India is a nation building initiative to build India into a design and manufacturing destination. Alongside, Startup India was introduced as an action plan to boost new start-ups and foster entrepreneurial culture. At the grassroots, the Government and Industry came up with new incubation centres and technology parks, having a specific focus on fostering innovations in hardware electronics. Unlike before, there is a new wave of hardware startup festivals that aim at encouraging new innovations to emerge from universities.
Given the sharp focus on promoting new innovation, and intellectual property, hardware startups will find favor in the India startup ecosystem.
India is synonymous with cost arbitrage. The costs for conducting R&D and manufacturing in India remain far lesser than in the West, and than those in other Asian economies. Coupled with favorable Government incentives, hardware startups can overcome the cost challenge, and scale-up their prototypes.
Over the past couple of years, India has focused on rapidly developing an ancillary support ecosystem to encourage new technological innovations. The ancillary support infrastructure supports in bringing new innovations to market quickly.
There is strong impetus for technology development in futuristic technology areas. The ecosystem is primed for new innovations in Payments; Cybersecurity, Machine learning; Drones; Augmented Reality; Virtual Reality; Telematics; Self Driving Cars; Medical Devices, among others. This was not the case a few years before. There is now an emerging culture for risk taking, and supporting risk, coupled with global ambitions, that is now supporting the new wave of technological innovations to emerge from India. Unlike before, patents and patent-protected innovations are also emerging as must-have attributes for new technology startups.
The Venture Capitalists and Angel Investors in India are also riding the technological wave. From supporting ecommerce till recently, there has been a shift to healthcare, and to futuristic technological innovations. Investors are betting big on new technologies, and are developing the expertise to support such investments. While software startups had strong support earlier, the investor community is now supporting new hardware startups. The investor community also exhibits a strong Indian cultural ethos that does not bind entrepreneurs or imposes tough boundaries, but rather encourages risk taking, and supports the entrepreneurial vision to solve grand challenges facing India, and the world.
Underpinning all of this, is a strong and young consumer base that includes > 440 million millennials and > 390 million Gen Z. Fuelled by growing aspirations, and increasing disposable incomes, the middle and upper middle consumer class consume, and adapt quickly to next-generation technologies. This consumer class is very demanding and discerning too. Startups focused on consumer electronics will find a very tough, but attractive market for rapid growth. Catering to the India market will prime such startups for success in other Asian geographies and the world too.
India is indeed an attractive proposition for any technology startup to look at. Guided by fair regulations and an opening economy, with an encouraging culture for patents, India is par for the course. However, it is always essential to sidestep all the risks and local challenges, by having a trusted partner alongside.
