For some time now, Indian startups and in fact Indian investors have been content to copy paste ideas from overseas and replicate them here in India. We heard about how ‘Amazon won’t be able to compete here’, ‘the Indian customer is very demanding’ and my personal favourite ‘there are tremendous on ground execution challenges here’.
There was even a time when they accepted hypothesis behind a copycat idea was that the original company will buy it out to acquire the skillset and market share.
We all know how that’s turning out.
Anyway, here’s a scary thought, what if these companies started copying Indian startups?
There are spaces which make strategic and financial sense for them to enter into. Remember, their core businesses are in relative steady state or cash generative. Our startups are still living off the subsidy that investor capital provides.
We’ve all heard about purchase financing startups — want a sofa? We’ll finance it for you. These companies had a very important insight; they realized that e-commerce companies offer a very lucrative point of customer acquisitions. Flipkart, Amazon etc. already know this.
What stops them from opening their own NBFCs and offer purchase financing? All the ‘fin tech’ startups are already running after them, they know it’s a market worth getting into. Certainly, it is not for lack of capital or execution capability. They have that in droves.
In payments, we’ve already seen Hike jump in. WhatsApp has made the right noises but Neeraj Arora (of WhatsApp fame) is on the board of PayTM so maybe there’s something brewing there. But does that apply to Google? Why won’t they want to get in on the wallet game? Unit economics aside, they certainly won’t have a problem with customer acquisition.
In the streaming space, a lot of HotStar’s dominance comes from cricket. And those rights as we know, are up for sale. What happens if Netflix decides to start streaming cricket tournaments and puts its financial might behind that decision. Facebook could be a tougher adversary. Video is a priority for them, we know that. Customer acquisition is not even a question.
In automotive, we all just assume that Tesla will stay premium. Who wrote that rule? What stops them from developing an electric car for the masses?
We’ve always just assumed that ‘X’ is not a priority or they just won’t do ‘Y’ but remember this. As growth gets harder and harder to come by and companies struggle to increase revenues quarter on quarter — these will all become possibilities.
If Facebook should ever feel the need to unlock the value held in WhatsApp, they could take it public. And there is nothing like shareholder pressure to expand your portfolio of services and avenues of monetization.
Indian startups have grown intellectually and operationally lazy hiding behind a maze of rules & laws and ‘accepted wisdom’. These rules and laws are subject to change (if they matter at all — remember when Uber was illegal?) as is the list of things technology companies will and will not do.
Thanks for your time,
Ashish
- Team KG
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You can reach me on ashish@kalagato.com
