Zen and the Art of Surviving India's Startup Crash | Hacker News Reader

Zen and the Art of Surviving India's Startup Crash

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72 pointsvatsal14 comments

Compared to any other market for Internet startups in the world, India is the least homogenous (type of consumer) and shallow of them all (when you measure it against the size of the population).

Good-quality Internet/smartphone penetration is not as deep as you think. If you think it's a market of 1B people, you're sorely off the mark.

Then there's the issue of language. 10% or less of the population speaks and understands English.

Past that, there's the issue of credit cards/digital wallets and willingness to pay for online services (not just goods).

Finally, while there's a massive middle class that does access the web on their phones, most of their usage is limited to facebook, whatsapp, and the like.

There are likely less than 50-75M english-speaking, smartphone-enabled, credit-card/wallet-enabled consumers.

With time this will get better, but for now I feel like irrational exuberance has gone a little too far in funding 4-5 similar startups in a single category.

> There are likely less than 50-75M english-speaking, smartphone-enabled, credit-card/wallet-enabled consumers.

So approximately the entire population of the UK? Not the full 1.2 billion, of course, but nothing to sneeze at.

> Good-quality Internet/smartphone penetration is not as deep as you think. If you think it's a market of 1B people, you're sorely off the mark.

It's not that bad; I've met folk who make ~$200 month use 3G on their phones (mostly for downloading movies).

It's not clear how to make money off such a poor (but large) demographic (other than say, manufacturing-export).

> Then there's the issue of language. 10% or less of the population speaks and understands English.

There also exists no tangible educational resources for these 90%. At this point, however, inexorable Anglicization, is really the only direction staring India in the face; anything else will basically destroy the current system of power/governance.

Even the so-called "Hindu nationalists" don't want that; neither do the organizations that ostensibly "fight" for the native languages (and there are just way too many of these). Not surprisingly, there is rather a big effort to console the rebelling mass by giving them reservations in private corporations, on the basis of linguistic origin in addition to the usual caste-pawning.

It'd have been less farcical were this acknowledged, and India went full-steam on its agenda. Even if this were to take place, the pace of this Anglicization would (as it has been) by necessity be extremely slow, often producing many more people with no grasp of any single language, and by extension also without much proficiency with logic/reason.

Ergo, India, as I have been persuading (irritating) folk on HN, is quite literally doomed (in the short term). The English-speaking mass might've been a force to reckon with were it separate country, but it is widely spread over and often governed by people who are the most stupid/unenlightened/corrupt political elite (see education) I've ever seen (or can imagine).

Indian cities are bubbles of reality of a particular self-selected class, which is often more familiar with the US than a village 50 km out. News from within the reality distortion field is not the best indicator of anything. It'd be like SFO folk claiming to make US into a $100 Trillion economy (even this would be a under-rated comparison, since India's nominal GDP is just $2 Trillion).

Note: When I say India, I actually mean India-Pakistan-Bangladesh-Nepal-Bhutan.

Myanmar/Sri Lanka may have better futures; so might Nepal-Bhutan (too early to tell).

Elst has a nice post on the duplicity of India's supposed "culture warriors",

http://koenraadelst.blogspot.in/2015/11/propagating-english-...

" And stay in the undemocratic schizophrenic neo-colonial second-class condition for another century, until that bothersome native culture has finally been layed to rest for good."

>Then there's the issue of language. 10% or less of the population speaks and understands English

Why restrict yourself to do business with only english-speaking people?

Not sure what the implication was meant to be by the parent. That English speaking demographic would also tend to be a more highly educated, wealthier / higher income segment of India, linking up with the rest of the parent's reference about having a smart phone + credit card etc. I'm not sure what Internet business could possibly generate significant profit from the bottom 750-900 million consumers in India today (median ~$500 annual income in that group). They simply do not have enough disposable income and won't for a few decades yet. Nor are they a homogeneous consumer group that you can network capture (get the first N and the rest come in easier and easier) all or a huge part of (spending wise). The top 200 million consumers in India however are increasingly very enticing for a traditional tech company. The ideal would be to start with the higher profit, higher margin customers in the top demographic, and as India rises accumulate the customers that move upwards in income. It's exactly what eg Amazon will ultimately do.

Um, because that's the lowest hanging fruit for companies that already do business in the Anglosphere.

The Indian customer is extremely price-centric. Price trumps everything. The biggest startups today are the online retailers. The Indian customer switches to whoever offers the best deal, not the best convenience. It was Flipkart, PayTM, Snapdeal, then Amazon. People no matter how financially well off or educated or technology-friendly, will still squeeze every penny's worth out of a business and will go any distance for a good deal.

Startups we've seen use funding to attract customers. They offer attractive deals, and when they're done, the same customers move on to the next startup. Startups will be popular as long as the price is right, and as long as there is funding.

There are going to be some successful startups in India that won't be in the limelight. They'll be small and won't take over the country, or the world.

How exactly is this different from the US ?

You think people will rush to Amazon, if overnight becomes just as expensive as B&N ?

In Germany, book prices are fixed. Buying a book on Amazon costs exactly as much as buying it from the small shop at the corner. People still prefer Amazon and book shops are dying.

I see. Are book-stores far and in-between (why is it inconvenient ?).

No density of bookstores is going to be able to match ordering from inside your house.

Well price trumps everything in every part of the world, for the average person. That said, there are millions of Indians who plunk down exorbitant prices for cars, TVs, Jewellery. However, what I've noticed is that very few Indians value time. They'll value convenience, only if the price for convenience falls in their perceived 'economical' bracket. For ex, maids. So any product or service that saves time in India is very hard to sell.

> She was convinced that local startups would have a fundamental edge over foreign competitors.

No they do not. They had a head start from setting up a city-wide logistics company, but other than that there isn't much else.

Localization ? None of them localize. All of them are meant to serve the English-speaking classes. Flipkart said earlier that "churan" and "hing" don't count for "real" sales [1].

Honestly, I basically see multiple foreign entities fight it out. Ironically, American cos generally tend to localize far more than Indian cos (not AMA though).

[1] http://m.thehindu.com/business/Industry/rivals-find-it-shame...

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