
India has a drought – not of Investors, but Customers - playhard
http://www.vijayanand.name/2012/12/india-has-a-drought-not-of-investors-but-customers/
======
RaSoJo
Do not look at the author's post from an internet product standpoint. India
has an overall internet penetration of 11% and a the % of people who do actual
commerce via the web would be about 2%. "Good" Internet products originating
from India are extremely few..countable using your fingers. So yes, not an
attractive market for the average HNer.

But if you are interested in hacking life...India is the place to be. The
author goes on to point out the example of Amul
(<http://en.wikipedia.org/wiki/Amul>) It is a co-operative firm (kinda like a
non-profit) that generated $2.5 Billion in yearly revenues and has become one
of India's most trusted brands. What is moot is the way that it has not only
helped local farmers and lifted the living standards for millions of Indians
but has also gone on to generate truck-loads of revenue. It is quite an
innovative but a very simple idea at the end of it.

THAT is Hacking Life...and that India needs a lot more of. Customers
guaranteed.

------
jai_vasanthan
I think we are carried away by what is happening in Silicon Valley too much
and think of ideas which are attractive to us, the Geeks, and assume that will
also be welcomed with open arms in India. While there are some who will
appreciate the idea, it is pretty difficult to say that we can generate a
certain volume (millions or billions of users) which is generated by a silicon
valley company.

Ideas are never invalid only the timing in which we play in an existing market
is. Tablets were not a craze when Apple's Newton was launched but they are a
craze now.

I believe playing in a market where where an existing product or a set of
products are not able to solve an obvious problem will certainly garner
interest of investors as well as customers. I also believe if I am unable to
get atleast five paying customers to see eye-to-eye in what I do, then I need
to pivot to what they want.

------
senthilnayagam
I agree with Vijay .

Read other comments, some don't understand the Indian context.

Indias biggest ecommerce site is operated by federal government owned , IRCTC,
they sell train tickets which is the most popular form of long distance
travel. you can hear lot of horror stories at
[https://twitter.com/search?q=irctc&src=typd](https://twitter.com/search?q=irctc&src=typd)

Then indian financial and banking regulator RBI, they limit online payment in
every possible way

a) every online credit card payment needs multi factor authentication.

b) no recurring payments.

c) getting merchant account for online services is a long tedious process.

d) TDR as high as 7%.

now add the problem with logistics due to bad infrastructure.

add the news of people getting arrested for posting liking on online sites
<http://www.bbc.co.uk/news/world-asia-india-20576416>

culturally Indians feel guilty for exuberance, so they would go for value for
money propositions and take safer options.

you have people who go to stores and buy mostly in cash

now you have the context,now you can read the article again, it would make lot
more sense

disclosures: I am friend of Vijay, I have been mentor at couple of in50hrs
events along with fellow Chennai tech entrepreneur

~~~
fakeer
>> _a) every online credit card payment needs multi factor authentication._

I am not sure you stated this as a seller, customer or as a payment-gateway
guy; but I, myself, as a customer find this feature to be one of the best
things to have happened to Indian banking scene and I feel (and am) many times
more secure having this feature around.

>> _culturally Indians feel guilty for exuberance, so they would go for value
for money propositions and take safer options._

Do you mean the lack of a population that braves the fire, ice, rain and storm
to line-up for next iDevice release, not because it's the best (at the best
price), but because it's costliest and does exactly the same things many other
half-the-price mobile devices do too? And because everyone else with more than
enough money is buying it because GrubIegler wrote volumes in reviews mostly
comprising - "it's just the right size" and "just the right balance"?

>> _you have people who go to stores and buy mostly in cash_

I have lazily switched to ordering groceries from on-line grocery sites in
Bangalore. There's a friend of mine who earns almost 1.5+ of my earnings and
visits a nearby store to buy one 1L milk tetra pack (among many other things)
which costs him around INR 35-40 there and INR 50-55 elsewhere (55 online).
No, it's not a duplicate/fake product. And I appreciate this so much. This is
called intelligence. Smart decision. Simple.

>> _now you have the context,now you can read the article again, it would make
lot more sense_

I will sure read it again and share my feedback here, iff it made more sense
or very much different from what it actually does.

------
pajju
Well written, agreed strongly with your title and the closing notes.

Speaking about B2B in India - I run a small consultation firm(ninjaas.com), we
have worked with couple of big clients in India, who have deep pockets, but
they don't burn much cash for software and web services. They must be taught +
nurtured more in adopting web tools, so largely its only support with Phone
calls. They ask for way too many customization's and Ready made things don't
sell!

Worth mentioning, they don't have much Internet presence, are more or less
offline businesses, and as you said - they must be taught, nurtured to adopt
newer, better Business processes tools. As there is no internet presence,
adoption is largely word of mouth.

But, the market is huge and the change will happen soon; will only get better
overtime.

So, Selling B2B web products in India = Fail, a small market with no much
Demand. I see a favorable market where Demand >>> supply, 3x at least. And
Many Businesses say - they don't need Internet presence, as most of them
operate largely around Phone calls.

And its not easy to close bigger deals in India doing an Internet startup. You
can pocket out around $$ max. And if its a bigger deal, you have to wait
longer to get your returns from followups, may be 18+months.

Speaking about B2C in India - Low cost deals with huge discounts works great.
Anything around phone, tablet is huge, its growing faster than PC web. And
most of them own a budget smartphone and/or a tablet. This market is huge,
people are spending to buy apps from the App market. But this segment is
largely owned by Indie developers. Startups have nothing much to disrupt in
this space.

In short, in India, its only the phone that Sells.

------
capex
Getting a south asian customer to pay $1 for the most beloved of their
services is actually hard. Things like 'security of my banking information',
'can't someone in my family do this for me', 'These guys are asking for money
in dollars! Just too expensive.' etc come to mind. Physical products are
different though.

Its a cultural thing.

------
namank
I know little about the Indian systems but reading this article and comments
makes me think that entrepreneurs there don't really know the customer yet.
Talking about "educating the customer" does not bode well for startups with no
IP, especially when the education is regarding the customer's online behaviour
and not the product itself.

All in good time, I suppose. Good luck to you all. Meanwhile, I'll enjoy the
show from the sidelines for another couple of years.

Also, whats up with all you guys on HN using the word 'shallow'? Someone
explain that please...I don't get it. It's used 3 separate times in this
thread.

------
npguy
Talking about technology startups in India, here is a point worth remembering:

[http://statspotting.com/2012/12/from-mary-meekers-year-
end-t...](http://statspotting.com/2012/12/from-mary-meekers-year-end-trends-
the-anomaly-called-india/)

That could not be the reason for the drought but is definitely an issue in
gaining adaption

------
rushabh
1\. Most of India's early adopters are in the US. 2\. India also has no
language barrier for top class international products like Facebook, Twitter,
Basecamp and their ecosystems to take large market share. 3\. India's Internet
audience is 50-100 mn and mostly mobile. 4\. India has a very large number of
small IT companies based on MS platform that serve the SMB market well and
offer custom solutions.

------
davidpayne11
Vijayanand is moderately infamous for sheepishly promoting his in50hrs event
(it is a PAID event organized by him) under the guise of such shallow articles
and also on twitter

(EDIT: I've been his follower for ages, he sometimes misleads people into
buying tickets for the event, falsely advertising that it's going to be 'sold
out' even when no one has actually signed up).

~~~
playhard
Did he talk about in50hrs event in this article? He was talking about the
Indian market because he understands it.Is it wrong to promote events on
twitter? What is your problem?

Sidenote: Vijay Anand has done so much to Indian entrepreneurs and Indian
startup ecosystem.

~~~
davidpayne11
This explains you haven't read the article in its entirety. Please read it
again, he references it as the first link while citing examples about the
superiority within the Indian Start-up eco-system.

That is a contradiction in a way that you cannot promote something as a valid
citation while you stand to benefit from it.

>Sidenote: Vijay Anand has done so much to Indian entrepreneurs and Indian
startup ecosystem.

There are many people who have done more than him (I personally know a
handful) yet, don't _advertise_ it explicitly as much as he does. He takes
money for providing an office space in return. How does that contribute as
doing 'much' to the Indian Startup Ecosystem? There are plenty of office
spaces over here...

~~~
playhard
Well, I don't see any problem in plugging one's event in a blog post. If you
don't like the idea of paid event, why bother following him in twitter and
commenting on hacker news?

Where does he advertise about his contribution to the Indian startup
ecosystem? It is entrepreneurs like us who say he does.

>He takes money for providing an office space in return

You want office space for free?

>How does that contribute as doing 'much' to the Indian Startup Ecosystem?
There are plenty of office spaces over here...

He also runs accelerator which invests in startup. They have invested in 2
startups so far. He hosts free events like Chennai OCC, Chennai geeks at the
startup centre. Also the space is free if you want to host any free event.

I graduated from college and worked from startup centre under Vijay for six
months. I come from a small town and knew little about startups. It was Vijay
who taught me lot about building a product and distributing it to users. The
education i had at the startup centre was invaluable. You know how much he
charged for the office space for the period of six months? ZERO(because he
wanted me to succeed and i was a recent college grad)

Please understand what someone does before trying to bash them in public

~~~
davidpayne11
Your answer is vague, but I will try to be objective as much as possible.

>Well, I don't see any problem in plugging one's event in a blog post.

The problem here isn't plugging his own event in his post. The problem here is
that he cites the successes of start-ups and links to it. That is un-ethical.
He stands to benefit from it by falsely citing it as a valid example. Many
people here on HN DO NOT know that he runs it. His intention _was_ malicious,
if not unethical.

>You want office space for free?

You are missing the bigger point - Offering office space for {insert rate
here} is something that anyone can do and that doesn't make one a contributor
to the start-up ecosystem, atleast not as much as to the proportions to which
you blow it up.

> He hosts free events like Chennai OCC, Chennai geeks at the startup centre.
> Also the space is free if you want to host any free event.

I've heard of these events. One of my friends tells me about it. I've also
heard horror stories about Vijayanand mocking young college guys interested in
starting-up. I also heard from him that he isn't just the one behind it, there
are a lot of active young minds involved.

>You know how much he charged for the office space for the period of six
months? ZERO(because he wanted me to succeed and i was a recent college grad)

Your personal positive experience with him is best kept personal. Because
we're talking about the rest of the Entrepreneurs from whom he collects money.

I understand your experience is so far positive with him. But, please don't
try to dilute a valid argument using your individual opinion. I also
understand that you have co-founded a company which you and Vijayanand have
mutual interests in (like someone here commented). Please don't try to support
him in public just for that reason - When someone is at wrong, it's best we
let the others know about it, otherwise the purpose of such a vibrant
community will be poisoned by such profit-motivated posts.

EDIT: Vijayanand has edited the link that went to his in50hrs programme. Maybe
that's why you didn't notice it.

------
monsterix
This article is very shallow. I would say it wrong to assume that there is
ever going to be a drought of customers. Investors with risk appetite? - may
be, but there can never be a drought of customers.

Here is the real picture: there are over a billion customers in India. They
need something. All you have to do is open your eyes and ears and figure out
what they want the most.

Solve a pain that people currently have. Don't shovel your imported world-view
of products because you stayed in Americas for a few years.

Get your karma right.

~~~
pretoriusB
> _This article is very shallow. I would say it wrong to assume that there is
> ever going to be a drought of customers. Investors with risk appetite? - may
> be, but there can never be a drought of customers._

Oh, there can easily be a drought of customers. The article covers
specifically the Indian market for one, but even in the US, with the squeezed
out middle class, there can very well be a drought of customers.

> _Here is the real picture: there are over a billion customers in India._

No, there are a billion _people_ in India, which is a different thing. Even if
you bypass the starving masses, the actual internet ready audience for what an
internet startup might sell is smaller than the US, less adopted to the
internet way of doing business and with less money.

> _They need something. All you have to do is open your eyes and ears and
> figure out what they want the most. Solve a pain that people currently
> have._

Well, most of their problems have nothing to do with what an internet startup
can offer. Hence a "drought of customers" for internet startups.

~~~
monsterix
You probably jump the gun again, but I do get your point about infrastructure
issue. And I agree that the needs in India are probably towards lower-middle
side of Maslow's hierarchy of needs. But the need is there for sure.

> "The actual internet ready audience for what an internet start-up might sell
> is smaller than" ... "less adopted to the internet way of doing business and
> with less money."

> "Well, most of their problems have nothing to do with what an internet
> start-up can offer. Hence a drought of customers for internet start-ups."

For example, shouldn't you then be looking to provide internet/bandwidth in
the first place? This is a lucrative problem that you (entrepreneurs) can
solve. Customers are always going to be there, no matter how you see it.

~~~
pretoriusB
> _For example, shouldn't you then be looking to provide internet/bandwidth in
> the first place? This is a lucrative problem that you (entrepreneurs) can
> solve. Customers are always going to be there, no matter how you see it._

Yes, of course. I agree with both statements in the sense that internet
infrastructure and more basic needs are a big market in India, and that
customers in general will always be there.

What I disagreed with is that Customers for some specific market or level of
service will always be there.

