We constantly ask when India will produce the next Google, Facebook or Yahoo.
Why aren’t good product companies coming up?
I believe we have always been cost focused hence never developed good quality products .Our
benchmarks of development has always been to produce more cheaper stuff , and thus compromising on quality. We never focus on design, usability. Plus ease of capital availability in our country was always a problem and thus we have focused on service business models where investment required has been mostly working capital. But new age entrepreneurs are changing this and we will have exceptional product companies from India competing on global front.
Product companies face a lot of risk. That is true of India, US or anywhere else. However, unlike in the US, Indian companies face extra hurdles:
Venture System: India doesn’t have the capability to fund companies of the scale of Google or Facebook. As proof of how different India’s venture ecosystem is, Sequoia India is investing in hospitals & billion dollar phone directories, instead of funding the next, game changing Product Company. The most well know incubator in the Silicon Valley is Y-Combinator famous for incubating dropbox and many other such startups.
Innovation adoption: Elon Musk, Peter Thiel or Sergey Brin are unlike the traditional billionaires of the past. They are really looking to challenge the status quo. You would be hard pressed to find such a culture elsewhere.Culture of accepting new ideas. Americans are far more open when it comes to accepting new products. Innovation and startups have positive connotations. However, Indians are more conservative when it comes to new ideas. This prevents the Indian startups from building an early market at home.
Market Size: India’s domestic market for IT products is way smaller than America’s. That’s why even big product startups such as Zoho target a lot of non-Indian enterprises. But, such distant relationships are hard to establish and sustain. In Silicon Valley, Boston or NYC, the customers could be right next door.
M&A. For a great startup ecosystem to flourish, companies should put themselves in the market. They should be willing to buy newer venture ( to grow them, acquire talent or to create monopolies) and they should be willing to sell themselves at a right price (if you are over-protective of your company you become Yahoo!). In India, there is hardly any Merger activity. Bigger companies either copy the smaller rivals or ignore the market, but seldom buy.
Research & Development: Product companies require a lot of skilled and research oriented workforce to constantly innovate and improve products.
You must, right at the start, think and believe that your product, your company, is global. Google didn’t say it wants to index all information in California, or the United States.It said it wants to index all the information in the world – global from Day One.
Why do we assume that India’s problems are India’s alone? Why deprive the rest of humanity of your phenomenal innovation ?
Global from Day One. This should be one of the core goals of the company — something you should actively work on, fiercely protect and always uphold, whether against existing or new investors, your team, competitive distractions or whatever else that comes.
The Rise and Rise of InMobi
InMobi enables consumers to discover products through mobile advertising. Through Miip, a discovery platform, developers, merchants & brands can engage mobile consumers globally. Recognized by MIT Technology Review as one of the 50 Most Disruptive Companies in the world, InMobi enables over 100 billion discovery sessions on mobile across a billion users every month, becoming the largest discovery platform in the world. InMobi has customers in 165 countries. About a billion unique users receive advertisements from the company on a monthly basis. InMobi is targeting a revenue of $1 billion by 2017 through Miip alone.
Experimentation the new product road maps:Organisations need to start getting into the mode of experimentation. Talking about InMobi’s functioning, Naveen said: “We have a team of just five to six people whose job is to work on an idea. They are not required to think of long-term success or failure. They just work on an innovative idea and launch it; if it gains traction, we pump the money in.” The time to market products has shrunk, and the costs and resources required have become negligible. This makes it easier for companies to experiment with new products.
InMobi is one such product company based in Bangalore giving Google sleepless nights!
Raghav Bhal of TV18 group in one of the interviews “While there is a bubble building on the other side it will burst. History has shown us in the last 100 years that bubbles from tulips, to dotcoms and now e-commerce have been created and these will burst because businesses run on cash flows and profitability and not on valuations,” Is it easy? Show them what you can do. Build Global. Do Great.”