Startup goldrush of India

The Indian digital business eco-system is in full bloom. Its exponential impact across business and social services will be felt much sooner than we expect  The Building blocks of the transformation are in place – there is money pouring in (India is now the 3rd biggest startup country, with over $9Bn being pumped into the startups in 2015), there are success stories already making global headlines (India already has nine startups with a valuation of over a Billion dollars), and the adoption rate of internet is mind boggling – every second, three more Indians experience the internet for the first time.

Screen Shot 2016-03-07 at 9.07.27 amBeyond the numbers, there is a buzz that is palpable. A sense of this startup spirit gripping India is captured in the TV series, The Pitchers, which is in the top 21 TV shows of all times in IMDB. While fanboys, and a shoutout by producers  to the fans to up-vote it on IMDB may have a lot to do with it getting a score of 9+ (ahead of Fargo and House of cards? well, that is a bit far fetched), but it gripping and one of the best content to come out of India in a long time. It is the story of college friends setting out to put a startup together and what they go through as entrepreneurs. The series itself is designed for the Internet, was released on Youtube, and then was only available on TVF’s own website, challenging the traditional media and TV platforms with its OTT play.

I was part of a panel discussion at the recent 10th Digital India Summit (#10IDS) organised by IAMAI, and realised that the tonality of discussions at these conferences has changed. Until a few years ago such forums were dominated by Geeks talking about the technical aspects of running campaigns and managing apps etc, or by the larger companies like Google/ FB spouting wisdom on how they see the world changing. But now agenda is shaped by entrepreneurs who are battle hardened, many of whom are serial entrepreneurs, and their businesses may have already done a few ‘Pivots’ – where they have adapted the original business idea to something more viable.


India is witnessing its own ‘Cambrian Explosion’ in startups, much like the evolution of life on earth that happened 500mn years ago when diverse life-form exploded on earth. Startups are happening in every possible shape and form. Each start-up has a clear pitch and a proof-of-concept about how they will change the world. The clarity in their thinking probably comes from the tough questions they have had to answer to the VCs and investors they have to court – What problem are they trying to solve? what are the use-cases of their product? how is their service differentiated from the others in the market? It is inspiring to see the conviction of each of the founders in the face of a mere 20% survival rate over the next three years. The panelists and presenters at tech conferences now are the savvy entrepreneurs, the celebrated rockstar of the new startup economy. They are full of instructive stories about their journey, professional and personal, and learnings that they have picked up along the way.

Startup India

While e-commerce is the big shiny story that everyone talks about, there is a lot more depth in the variety of the startup eco-system. The entrepreneurs have split the world into smaller territories: health-tech/ edu-tech/ travel-tech/ OTT media/ Smart-city etc. Each tech-land has its set of technologies, competitors, rules, regulations (or lack of them), and full fledged wars are being waged on each turf. Tying all of this together are enablers who are helping with monetisation, optimising, selling, etc while letting the entrepreneurs focus on what they do best. iSPRIT, an influential technology think-tank sums up the mood in their annual newsletter – Indian Entrepreneurs have a ‘Panga’ mindset whereas our traditional small businessman was all about ‘Dhanda’. This craziness in their DNA makes them wonderful change agents.”


The social impact of the digitisation of India will be massive, and the that future is already here. Imagine the street vendor getting access to a micro-credit loan in an instant with no paperwork, imagine the elimination of all corruption in transfer of subsidy and a 100% efficiency, Imagine life/ health insurance being available to every Indian, and imagine everyone being able to transfer money instantly using their phone. The technology and policy framework is already here.

All of this happen through JAM, a combination of Jan Dhan, Adaar, and Mobile enabled services that will open up huge opportunities for Indians. These services will be open source, so any entrepreneur will be able to build services on top of these open source platforms to deliver solutions to consumers. These services will be built on the a set of technologies, which is being called the ‘India Stack’ (It combines Aadhaar, e-kYC, E-Sign, Digital Locker, and Unified Payment Interface-UPI).


India Stack

Lot of work has already happened, and it is already the largest implementation of its kind in the world – with over a Billion Aadhaar cards issued (the only Indian product with a user base of more than a billion), 200Mn bank accounts opened as part of PMJDY program – a financial inclusion plan being rolled out in India. India stack could help propel India onto a faster rate of growth, and the possibilities are endless. Soon the world will be looking to this Indian experiment and adopting it.

There is also a battle being fought in the background to lay the rules of the game. The battle with Facebook over ‘Free Basics’ was just one such instance. There are many entrenched interests that want to monopolise access, rules, and even identities, but India seems to be walking down an enlightened digital policy. The TRAI chairman gave a glimpse of it in his talk, in which he spoke about only adopting a policy framework that supports open systems accessible to all, based on open API platforms, and not let any one company create a platform that locks others out of it. This firmly puts the concerns of net-nutrality at rest, and is the reason why Facebook lost out on their ghastly free-basics campaign.


For the first time there is so much money available to back a good idea in India. A lot of this is ‘Smart Money’, coming from experienced investors across the world who have already tasted success elsewhere. These investors operate with a different set of rules than what traditional business investors have been used to. They have patience, they expect many of the bets to fail or change their shape, and hope a few of their bets to become the Unicorns with a Billion Dollar valuations.

Companies like Amazon are pumping in money and the only question they seem to be asking is – are we investing enough. Many companies are jumping across borders overnight into India – it took just one announcement at CES conference talk for Netflix to become available in India from the next day onwards, and the debate over lunch across offices that day was probably about the price point of the service. Overnight OTT has exploded into our living rooms as a paid platform. There are business disruptions that are happening across each sector and this tide will only get bigger.

The early movers are the ones who know what is at stake. Chinese companies see the similarities in India’s digital growth story with their own, and are targeting India with their investments and products. With most of the smart-phones already coming in from China, they are the biggest players in the Indian digital market. Someone told me, probably 30% of all mobile data traffic  of India flows out of China servers through their utility/ chatting apps.

Against this backdrop of furious change and opportunity, the traditional business seem to be moving sluggishly. Their stable business models have become a liability that does not allow them to place risky bets on untested technologies and products. Their shareholders expect consistency and a continuous bottomline, which the current business models on digital dont always have. This gives the more nimbler startups an opportunity to chip away at their business.

The future of India is being shaped inside these startups, and that future is Digital. Buckle up, and enjoy the ride.


  • India Stack to bridge the digital divide in our country >>
  • Understanding INDIA STACK >>
  • The great race – online retailing in India (Cover story of The Economist) >>

  • TVF – Pitchers >>

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