Indian E-commerce: Moving on from GMV

It has been a nervous month for the professionals working for internet and e-commerce companies in India. Shutdowns and layoffs have been the flavour of the month, and business models have come under scrutiny. The effects of recent events at Stayzilla and Snapdeal have not been limited to job losses only. Weighed down by these developments in the sector, Rakuten, the Japanese e-tailer, has puts its India plans on the back-burner.

Stayzilla, an alternate and homestay aggregator, has shut operations. Investors including Nexus Venture Partners and Matrix Partners have invested USD 33 million across multiple rounds in the company. The founders have promised to bounce back ‘with a different business model’.

Snapdeal, announced that it will lay-off about 600 employees from the company including from its Vulcan (logistics) and Freecharge (payments) business divisions. The company has so far raised USD 1.75 billion from investors which include global heavyweights such as Softbank, Kalaari Capital, Temasek, Alibaba Group and eBay. However, Snapdeal reportedly is left with less than enough cash to survive the next 12 months. The merger talks with Paytm, facilitated by the common investor Alibaba, are not murmurs anymore and seem to be the logical next step in many ways. A very honest and important insight on the business model emerged from this episode, in which the founders admitted to ‘doing too many things’ and ‘diversifying and starting new projects while we still hadn’t perfected the first or made it profitable’.

The above incidents highlight the fact that Indian e-commerce in 2016 has been significantly different from its ‘glory days’ in 2015. GMV growth in 2016 was flat, even though long term prospects remain intact for now. The year-end sales were also impacted due to the demonetisation exercise carried out by the government. The cash on delivery (CoD) transactions, which account for approximately 50% of total GMV, were severely impacted due to the lack of availability of the new currency notes.

Figure 1: India e-tailing GMV (USD mn)

Source: Company data, IAMAI, Euromonitor, Credit Suisse

AHHHGMV, as the supreme emperor of metrics, has lost its sheen and the challengers which have come to the fore include revenue per customer (function of number of orders per year, value per order and commission), net promoter score (a measure of customer satisfaction) and overall user monetisation (including alternative sources such as advertising as well as new service offerings such as hyperlocal services).

The sustainability of business model is back in focus as a tool to evaluate potential winners and losers. Throwing money at the customers as discounts has not worked out very well for a lot of players. There has been a definite move towards trying to find other means of retaining customers. Going forward, winners are most likely to be companies that provide a differentiated customer experience. An obvious example is Amazon Prime which now brings more personalized experience to the company’s customers. Flipkart (Flipkart Assured) and Snapdeal (Snapdeal Gold) have similar offerings to enhance the stickiness of their customers. While ‘Flipkart Assured’ has seen limited success so far, Amazon Prime, launched at a very attractive price point of INR 499 per year, seems to be more suited for success going forward. Amazon has also clubbed its Netflix challenge – Prime Video offering with Amazon Prime subscription. With these offerings, the companies are trying to take focus away from discounts and towards customisation, quick delivery, consistency and reliability of shopping experience.

The control over supply side is a key element of constructing an enhanced and consistent experience for customers. Logistics is one of most prominent cost items for ecommerce firms, and depending on the category and value of the goods being delivered, could be 10% to 20% of GMV.

In India, the number of Amazon fulfilment centres has grown to 27 by the end of 2016. Shipping from stores is less efficient than from dedicated fulfilment centres. Amazon is looking to replicate their success in North America where they have invested billions in network of fulfilment centres. It has more than 75 such centres in North America, covering 25 US states. This gives Amazon an easy two-day reach over the entire US. Snapdeal has opened 6 logistics hub during 2016, with an estimated investment of USD 300 million. Paytm, flush with a USD 200 million funding from Alibaba, is reportedly firming up plans for a significant strategic investment in a logistics firm to improve its deliveries process.

The key growth drivers for e-commerce in India remain in place. There is a large aspirational population, faster and wider internet access, a never before push on digital payments and an opportunity to further penetrate the offline organised retail market. Nevertheless, the year 2016 has been a reality check. The Indian players have had to review their business models and take some tough calls to focus on sustainability. While the market may continue to be volatile in the short term, with more potential shutdowns and/or consolidation in the offing, we can now be more confident that the firms that do survive will turn profitable soon.

arvind-yadav

This is a guest post by Arvind Yadav,

Principal at Aurum Equity Partners LLP.

 

Going Digital – A simple framework

Today, everyone talks about going Digital. Renowned strategy and customer experience consulting firms have renewed themselves as Digital Transformation agency. Softskill trainers have become Digital marketing consultants. Large industrial conglomerates have become Digital industrial company by a creating a platform for Digital aficionados to develop custom apps.

New roles such as Chief Digital Office, Data scientist, Experience designer, Digital evangelist and many more. What are these roles to do with? Where should I start my Digital journey?

Here is a very simple framework!

Going Digital

Remember!

To keep up the Brand promise,always deliver

Speed (Adopt Agile & DevOps)

Accuracy & Authenticity ( Create Cognitive / Sentient Systems)

Codify ‘Trust’

Courtesy

1. Book titled ‘Disrupting Digital Business’ – Ray ‘R’ Wang
2. Book titled ‘Leading Digital’ – Didier Bonnet
3. eBook titled ‘Digitally Remastered’ – CA Technologies

Guest Post by R Ragavendra Prasath, a volunteer for iSPIRT. An avid reader, wannabe entrepreneur and Digital enthusiast…! He tweets @ragavendra1

How limited access to paid tools as a startup made me realize the need for a community

When I started out as an entrepreneur the journey was fueled by big dreams that were perhaps a bit too daring. It wasn’t smooth sailing and early days were tough. Life in a startup is dotted with challenges that can be overcome only by sacrifice.

Bootstrapping required a lot of restraint – both professionally and personally. Leaving a good-paying job at Zoho and trying to build a company meant cutting a lot of corners. We had to forgo luxuries, back out from family & vacation time, self-inflict pay cuts and moved into an apartment-turned office.  

However, the biggest gripe was lack of access to the tools and services we loved. From basic necessities like Mail or CRM solution to universally used tools like Photoshop and Invision seem like a luxury when bootstrapping. As the saying goes ‘Nothing good comes for free’. We were pushed to try and find open-source alternatives. But they were nothing but painful compromises! It hurt us a lot – we couldn’t get things done in the same timescale as we could’ve.

A lot of products, tools and services do have offers but there were none tailor-made for the struggling startups. We had to make do with the free stuff and somehow managed to get our product out! Our product attracted funding and things slowly started to change and got to a better place. However, we still remember the struggles of our startup life!

Here is a small tribute to startups and the struggles we face: 

Somewhere amidst the mad rush of shifting to our new office and redesigning our logo, I realized that it’s time I gave back to the startup community. The easiest option was to provide a free trial extension for startups but it rather made sense to initiate a change!

Every solution, product or service a startup requires is most likely what another startup is working on and if we are able to set up a mutual sharing, we can surge ahead as a single startup ecosystem!

This is the idea behind #RespectStartups, powered by Zarget, for the startup community. It is an opportunity for every startup, no matter how small, to make an impact and reach out in a big way. I personally urge every entrepreneur to look at this as an opportune moment to give back to the community.

Share your offers and claim the ones you need at www.respectstartups.com

Voice your opinions about the movement with #RespectStartups on social media.

Let’s say “No!” to startup sacrifices! Let’s march ahead as a startup ecosystem…

Guest Post by Arvind Parthiban, Co-founder & CEO of Zarget. He loves travelling, is a foodie and is crazy about football, a Chelsea fanatic. With 12 years of experience in the SaaS industry, now into startup life.

Are AI and Automation dirty words for some?

Man being replaced by machines has been a topic very well documented in our academic and social history. While, designing machines that can replicate human intelligence is ‘the dream’ for many, the idea has seen its fair share of resistance from anxious workers afraid to lose their livelihood. It would be a mistake to think that the phenomenon is only very recent. The Luddite movement, which began in Nottingham in 1811, was named after a disgruntled weaver who broke two stocking frames in a fit of rage. Destruction of machinery, as a form of protest, was carried out throughout England by groups of English textile workers and self-employed weavers. Since then, the term ‘Luddite’ has become a reference to someone opposed to industrialisation, automation, computerisation or new technologies in general.

Back to the 21st Century, Infosys’s human resources head Krishnamurthy Shankar has revealed that the company had “released” 8,000-9,000 employees in the last 12 months due to automation of lower-end jobs. The employees are not necessarily jobless and have been retrained and absorbed to carry out ‘more advanced projects’. The company also reduced its hiring in the Jan to December 2016 period to 5,700 compared to 17,000 in the first nine months of previous fiscal year. Infosys is not alone in their journey towards automation. Most Indian and global IT services companies are investing in automation of processes in their core businesses such as Application Management, Infrastructure Management and Business Process Management (BPM).

India’s IT giants are leaving no stones unturned to fill the gaps in their digital portfolio of products and services. The subjects of Internet of Things, Cloud, Artificial Intelligence and Automation figure high on each company’s organic strategy and also in their shopping list for inorganic growth (Table 1).

Table 1: Select Digital Acquisitions by Indian IT majors

Acquirer Target Value

(USD mn)

Brief
Infosys Panaya 200 Provider of automation technology for large scale enterprise software management
Wipro Healthplan Services 460 A technology and Business Process as a Service (BPaaS) provider in the U.S. Health Insurance market
Wipro Appiro 500 A services company that helps customers create next-generation Worker and Customer Experience using the latest cloud technologies
Infosys Skava 120 A provider of digital experience solutions, including mobile commerce and in-store shopping experiences to large retail clients
Tech Mahindra The BIO Agency 52 UK-based digital transformation firm
Tech Mahindra Target Group 164 A provider of business process outsourcing and software solutions

Automation is heralding the age of Industry 4.0 which is characterised by a diminishing boundary between the cyber and physical systems. In October 2016, World Bank research announced that Automation threatens 69 % of the jobs in India, while 77% in China. Google’s AI research lab, Google Brain is working on building AI software that can build more AI software. I wouldn’t blame anyone if they started thinking about the Skynet from Terminator or the writings of James Barrat – Our Final Invention: Artificial Intelligence and the End of the Human Era.

As per research by Gartner, IT process automation (ITPA) is very underpenetrated (only 15-20%) and will move towards maturity over the next 5-10 years. Most leading vendors in the IT services space have launched an automation platform to boost delivery efficiency.

Table 2: Automation/ AI Platforms of Indian IT Players

Company Platform Offerings
Wipro Holmes An artificial-intelligence platform built on opensource computing aimed at optimising resource utilisation and reducing costs
Infosys Aikido Enables creation of intelligent robots that can resolve incident related to customer orders
TCS Ignio An Artificial intelligence-based automation platform which automates and optimizes IT processes within an organisation.
Tech Mahindra Carexa Uno Customer care, with agent virtualisation, analytics, assisted

interactions and digital channels.

HCL Technologies DryIce A digital service exchange platform enabled by ServiceNOW

Source: NASSCOM, Edelweiss

Platforms based on novel technologies will minimise the human effort required. Are the coders coding away their jobs then? Thankfully, there are learned people who believe otherwise. As per NASSCOM, the future may not be as dire. There is a distinct possibility that repetitive and labour intensive jobs such as data entry and testing may get completely automated, but there will be augmentation of cognitive jobs. New roles will emerge which will focus on training, learning and maintenance requirements of AI systems. Indian companies will also need to invest in re-training its employees or importing talent in the short term. In the long term, a joint effort with technology schools such as IITs and IISc will be needed to build a supply chain of talent. 65% of Google DeepMind’s hires were directly from academia.

The Indian IT services sector is worth approximately USD 150 billion, and it is largely export dependent. The Indian players need to enhance their digital capabilities to compete globally. Automation is a key area of this digital growth and so is the evolution of skilled workforce and their job profiles. The fear of technology destroying all the jobs is as unreasonable now as it was in the 18th century. Also, it is evident from history that technology has always led to creation of more jobs than it has destroyed.

The workforce engaged in IT services by nature is flexible and open to evolving work profiles. Workers in some other sectors may not have that option, especially at the jobs requiring less complexity. HDFC bank just announced that it has witnessed a head count reduction of 4,500 due to efficiency improvements and attritions in the last quarter alone. The Bank is planning to install up to 20 humanoids named “Íra” at its branches in the two years to assist customers. Ira has been developed by Kochi-based Asimov Robotics and the company has already received queries from airports, hospitality industry and retail chains to deploy similar humanoids. It would be a good move for all professionals in all sectors to ask themselves – “Can a Robot do my job?”, and upgrade their professional skills accordingly.

arvind-yadav

 

This is a guest post by Arvind Yadav,

Principal at Aurum Equity Partners LLP.

 

 

 

 

 

Union Budget 2017 : How’s it Set to Impact These #5 Key Domains in India

Union-Budget-2017---How’s-it-Set-to-Impact-These-#5-Key-Domains-in-India

Alright, before I take the plunge into revealing what I expect from the impending budget, let’s take a quick glance at numbers on how the Government has fared since its inception:

  • Modi’s flagship Make in India initiative launched to create employment & self-employment saw huge traction with India’s gross FDI flow jumping by 27% a.k.a $45 billion in 2015-16, an all-time high.
  • Jan Dhan Yojana witnessed 11.5 crore Indians opening bank accounts, that’s getting 99.74% households bankable.
  • Under the Swachch Bharat initiative, a total of 31.83 lakh toilets have been built between April 2014 and January 2015, 25.4% of the target. World bank has also invested $1 Bn in PM’s pet project.
    In Feb 2016 alone, under the Skill India initiative, 3,222 training centres were opened, more than 55 lakh people trained and 50% placed.
  • Nasscom had launched the “10,000 Startups programme” in 2013 in which 700 tech-driven startups were set up. After the launch of the Startup India, Stand up India initiative by 2015, the number had increased by 70% to around 1200. It is expected, there will be a 75% increase in the number to 2100 by 2020.

All said and done, looks like NDA government has fared decently in their term thus far and as the run up to the elections in 2019 rapidly advances, this year’s budget is going to be epic!

For starters this is going to be the first time that a Union Budget will be passed in February. The reason is concrete! When a budget is declared in March, it gets passed by both the houses only by mid-May thus delaying the entire process. By having a budget in Feb, the govt is making sure that it’s passed and ready to be implemented before the start of the new financial calendar.

Secondly, thanks to the demonetization move, digital commerce has been given a massive push. Furthermore, a year after PM Modi launched the visionary ‘Startup India Campaign’, there’s a lot of heat building up in the startup community which is expecting a series of initiatives that will be in their favor. 2017 is surely poised to be an exciting year.

1. For Startups

Widening of tax-free regime from the current 3 years to 5 years along with easier procedural clearances. Considering startups take a while to register profits, this move will promote entrepreneurship and innovation.
The government may also make regulations on FDI and ease institutional investment while also reducing governmental charges and taxes on it. In the long run, this will help in solving the capital need for startups since, majority of funding for startups come from venture capital funds that rely heavily on foreign investments.
With the Start-up initiative at the fore, we can see a new set of concessions on employee stock options, unlisted securities and convertible instruments.

2. Womenpreneurs: Easy access to funds

When it comes to women entrepreneurs, though, the government has been supportive in promoting women entrepreneurship, what most of us need is an easy access to funds. Additionally, since the implementation of GST will be on table for this budget, the government will come up with the new rationalized tax structure. We, women entrepreneurs, should definitely be a part of consideration in corporate taxes and loans.

3. Definitive SOPs, tax rebates, indirect taxes

The sole goal of demonetization was to put India on the path towards a cashless economy. Keeping this in mind, the Budget should include definitive SOPs and tax rebates to encourage and boost e-payments. Moreover, to achieve the goal of financial inclusion, the government should also rationalize indirect taxes and charges levied with respect to digital payment transactions and further incentivize companies operating within this space. To adapt to the need of time, government should also rationalize income tax provisions including provisions related to employee tax benefits such that payments/documents in the digital medium are treated at par with physical instruments.

4. Corporate taxes

I’m even looking at the reduction of corporate tax rate from 35 to 25% percent for startups and companies in the digital payments ecosystem. Transactions worth trillions are done in India yearly. Of these, hardly 10% are on digital platforms. The government must take more concrete steps to make digital payments ubiquitous. This budget should announce measures to upgrade digital infrastructure across the country. Steps should be taken to promote digital literacy and connect cities, towns and villages with high-speed internet networks.

5. Digital payment

While, the government has pushed for digitalization, post the demonetization move, I believe a lot still needs to be done on promoting digital payments. For instance, the government needs to reconcile and even reduce all indirect taxes on digital payments to nil. The government needs to work on a concerted effort to cut the payment gateway and bank charges on online transactions. Only then would people be truly incentivized to pay online.

The sector wants more tax concessions for customers and shopkeepers who go digital. The incentives can come in the form of income tax, service tax etc. What the budget can offer is extend the nuggets of sops on e-payments through UPI, add a dash of income tax rebates on e-payments and facilitate retailer-rebates on grocery bills, LPG payments, bus or metro card recharges and so on. The government has already introduced waiver of service tax on debit and credit card transactions of up to Rs 2,000.

In conclusion…

2016 had witnessed several markdowns in India’s ecosystem and I’m definitely looking forward to the budget and what it has in store.

Guest Post by Dr. Som Singh, Entrepreneur, Investor and founder of Unspun Consulting. This post was written for the Entrepreneur India magazine. 

What the U.S. can learn from India’s move toward a cashless society

Looking from Silicon Valley upon the progress that India has made in building a digital infrastructure, I am in awe.  The U.S. tech industry fancies itself as the global leader in innovation, yet India has leapt far ahead of it.  Silicon Valley’s tech investors hype complex technologies such as Bitcoin and blockchain.  But India, with simple and practical innovations and massive grunt work, has built a digital infrastructure that will soon process billions more transactions than these do.

India is about to skip two generations of financial technologies and build something as monumental as China’s Great Wall and America’s interstate highways.

Though few people in the West know of Aadhar, it has been the largest and most successful I.T. project in the world.  There was widespread skepticism that a billion people could be provided with a verifiable digital identity, yet it has occurred, in a short six years.  Hundreds of millions of people who were doomed to live in the shadows of the informal economy can now participate as equals in the global economy.  Thanks to Jan Dhan Yojana, they also have bank accounts; these already haveRs. 69000 crores in deposits.

The reason investors are pouring billions of dollars into technologies such as Bitcoin is that they provide a secure way of linking a person to and recording a transaction.  But Bitcoin requires massive, wasteful, computing resources to do what is called mining: transactions’ mathematical verification.  And this complex computing infrastructure needs constantly improvement as it hits transaction limits.

The simple design of India’s digital payments infrastructure, Unified Payments Interface (UPI), allows banks to transfer money directly to each other based on an Aadhar number or mobile-phone number plus pin.  Yes, this doesn’t have the anonymity of Bitcoin, but I would argue that anonymity is mainly for money laundering and tax evasion—which need to be eliminated.  There is almost no overhead in UPI, and transactions happen within seconds rather than the 10 minutes that Bitcoin takes.

In the U.S., we pay an indirect tax of 2–3% on consumer transactions because of the use of credit cards.  Companies such as Visa, Mastercard, and American Express don’t even manage the money or provide banking services; all they do is to act as an intermediary between banks.  The merchant has the responsibility of verifying the identity of a customer.  With UPI, India doesn’t need credit cards or middlemen, it can build the next generation of finance.

The instant and non-repudiable proof of identity that Aadhaar’s know your customer technology, e-KYC, provides, gives India a big advantage. Most people in the U.S. have drivers licenses and social security numbers. But these are not verifiable with biometrics or mobile numbers, so complex verification technologies need to be built into every financial system.  Indian entrepreneurs building applications don’t need to worry about all this.

Going beyond money, India Stack provides a digital locker through which to store and share personal data such as addresses, medical records, and employment records.  With this, the government is providing a public service that is the digital equivalent of roads and electricity.  I don’t know of any other country that has anything comparable; India will soon have the digital equivalent of super-highways.

There are all sorts of benefits.  For example, the opening of a mobile-phone account is a lengthy process everywhere, because telecom carriers must verify the user’s identity and credit history.  With India Stack, all it requires is a thumbprint or retina scan and permission to share digital documents.  The typical villager presently has no chance of getting a small-business loan, because he or she does not have a credit history or verifiable credentials.  With India Stack, he or she can share digital copies of bank statements and utility-bill payments, and life-insurance policies and loans can receive instantaneous approval.

Nandan Nilekeni is right when he says that these advances “represent the biggest advance globally in public digital infrastructure since the Internet and GPS”.  In an email to me, he predicted that they will “lead to a leapfrogging on many fronts, including a digital financial platform for a billion people which does not require cards, POS machines or ATMs but will be entirely driven by what is in your hand—your finger and your phone”.

Prime Minister Modi has taken a lot of fire for demonetization.  This is understandable, given the hardships and the disruption to the economy that it created.  But it was a bold move and one that will produce tremendous long-term benefit—because it will accelerate the push to digital currency.  India has the opportunity to enter an age of transparency and be at the forefront of digital technologies.

Nobel Prize–winning economist Joseph Stiglitz said in Davos that the U.S. should follow Modi’s lead in phasing out currency and moving toward a digital economy, because it would have “benefits that outweigh the cost”.  Speaking of the inequity and corruption that is becoming an issue in the U.S. and all over the world, he said “I believe very strongly that countries like the United States could and should move to a digital currency so that you would have the ability to trace this kind of corruption”.

Yes, India is ahead and America can learn from it.

Guest post by Prof. Vivek Wadhwa, Distinguished Fellow, Carnegie Mellon University Engineering at Silicon Valley. Former entrepreneur. Syndicated columnist for Washington Post.


eKYC – Know Your Customer unassisted using Aadhaar, OTP and Face Biometrics

Context

Know Your Customer (KYC) is essential for obtaining Financial, Healthcare, Insurance, and Telecom services around the world. In the Indian context, until Aadhaar opened up its APIs, KYC was a laborious process costing billions to services providers and inconveniencing customers with a mountain of paper identity documents. The thoughts here are confined to the Banking sector but applies to other sectors equally.

eKYC “assisted”

With the advent of electronic KYC or eKYC using the Aadhaar biometrics platform, things haven’t changed a lot. It certainly has reduced paper documents. However, eKYC is still done in “assisted” mode – meaning either the customer has to be present at the Bank or a Bank Executive has to reach the customer to collect the biometric data. Besides, in most Banks, a paper trail is still maintained despite the biometrics data – reasons best known to themselves. What was costing the Banks earlier is what is costing today – perhaps more with the new biometric devices and the cost to maintain them.

eKYC “unassisted”

The Reserve Bank of India (RBI) took a significant step in December 2016 to allow opening of deposits and borrower accounts using OTP based eKYC, albeit with some restrictions (RBI notification on 08 December 2016, Chapter VI – Customer Due Diligence (CDD) Procedure – Clause 17 and 38 amendments). This has opened up the opportunity to provide this service to customers at the comfort of their homes at a vastly reduced cost to Banks. This would satisfy the two-factor authentication needed by RBI and would suffice to open an Account. However, with increasing volumes (500 million eKYCs projected for 2020 by UIDAI), and the possibility for this service to be abused through third party fraud, this would need additional authentication to ensure that the person completing the transaction is who he really says he is (as close to a physical check).

eKYC “unassisted” with three factor authentication – Aadhaar, OTP and Face Biometrics

To solve this particular problem, FRS Labs rolled out the “Atlas eKYC” solution – fully integrated with Aadhaar – with face biometrics as the third factor of authentication (watch the 60 second video here). While the face is captured by UIDAI as the third biometric element (fingerprints and IRIS being the other two), RBI has not mandated the use of face for biometric authentications – for reasons that face is considered not as unique as fingerprints and certainly not IRIS – and the false acceptance rates (e.g. twins) could be high and that people’s faces change over time – but as always research contradicts this notion and there are plenty of evidence to prove that face is a reliable biometric feature. And it can only get better.

Notwithstanding, RBI has not specified that face could not be used if a commercial organisation wishes to do so as additional factor of authentication to protect their businesses and consumers, so long as the mandatory 2 factor authentication is in force. In a similar tone, RBI has not ruled out authenticating customers using their voice (another biometric element not in Aadhaar). ICICI Bank and Citibank have rolled out voice biometrics to authenticate customers to call centres is a case in point – It is still two factor authentication (the registered mobile phone as the first factor and the consumer’s voice as the second factor of authentication). Therefore, there is a great opportunity here for Banks to provide face biometrics as the third factor of authentication for secure “unassisted” OTP based eKYC without the need for biometric devices. I can only begin to image the convenience for consumers and cost savings for Banks.

Author: P. Shankar – Founder & CEO of FRS Labs.

On-Premise or On-Demand Product Modeling: cloud is in your court

On-Premise or On-Demand Product Modeling- cloud is in your court

Do you sound familiar with the situation explained below?

You started out with a Custom Off-the-Shelf (COTS) CRM product suite, but your user adoption changed dramatically, owing to Scale and Technology Transformation, thus leaving you to think over to a new deployment model. Or perhaps, you purchased your Point of Sale (POS) system many years ago and now decided that it is time to switch to mobile network retail solution. The cost of maintenance could be high or you feel it is time to minimize CAPEX.  All of these situations put you in a position to find the need of solving heavy infrastructure concerns and thus make business operation lean, which at the same time must not disrupt the business continuity. Often, an overwhelming task.

Any business transformation is not easy for organizations to adopt and there are pain points associated with it. Be it the On-Premise products/applications behaviour that has gone outclassed or the products/applications dispensability – that require changed approach to position the organization competitively. For specific business functions with high need of control over such products/applications and data even at the price of higher management efforts and slightly more time to market, organizations are accelerating towards the possibilities of cloud adoption. Thus cloud has become a serious business proposition slab from products perspectives.

When deciding to implement a new business management product, there are many factors that need to be considered. Up until the beginning of this decade, choice of deployment, how to deploy and where to deploy – was NOT one of these considerations. Nowadays, most evaluations of solution / product / application platforms include the question of – whether to model the platforms “On-Premise” or “On-Demand”.

cloud_premise_comparisonMost enterprises are tending to evaluate if putting the buck on hosting applications on the cloud is the way forward or not. The answer to this difficult question really depends on the technology landscape of the company and the complexity of operations. For example, a new age start up or an ISV may consider a “Cloud First” model, where all the infrastructure, applications and products may deem suitable to be migrated to the cloud. This greatly simplifies the IT model for that company and allows a provision of leveraging a pay-for-consumption based model. In turn, it results into the galvanization of resource costings, achieving a business flexibility in the initial stages of start-up formation, thus relieving a surplus of cost for low hanging fruits. However, enterprises with legacy applications and investments in existing datacentres should evaluate key considerations before moving to the cloud model.

I underline the below top five considerations associated with product suite selection and how both On-Demand and On-Premise deployments impact upon them. These considerations are broadly categorized as the following:

  • User empowerment
  • Investment timeline and Total Cost of Ownership (TCO)
  • Data sensitivity
  • Availability of internal IT resources
  • Integration

There are always two sides of the coin while arriving at a business decision of: if in-house infrastructure model will suit for business applications or a SaaS model.

Where expensive take, long implementation times, debilitated user augmentation, inflexible licensing plans might be taking the sheen off the On-Premise journeys, that may have left vast quantities of product suites sitting unused on shelves; In contrast, SaaS journeys provide a ‘pay per use’ subscription model, no IT infrastructure to maintain in-house, better user uptake and shorter deployment periods – could appear a bright oven to cook.

Where security and uptime concerns and criticisms about the lack of customisation on SaaS model derive some amount of restraints, On-Premise models can be configured to fit exact business requirements and might suit better large organizations that have complex integration needs.

Where the SaaS model eliminates the need for provisioning of systems upgrades (with upgrading the entire technology stack – the database, the servers, the operating system, the system integrations, etc.) for the company against the service provider – the On-Premise computing products allow the possibilities of having complete control over the data and information– thus, to be able to access information at any time without restriction.

While ROI is effectively recognized quickly with On-Demand model, many thoughts also seem to appear that the recurring monthly fees involved in the invoicing approach make them a bit more expensive option than On-Premise models in the long run.

Forrester Research has pointed out that although On-Demand product suites eliminate big initial investments, they can however include monthly substantial fees, such as for industry-specific functionalities, additional storage fees, integration with On-Premise applications, etc.

But it could also be equally argued that long-term TCO of On-Premise product suites is equally unknown. Can you guarantee how much you need to budget for additional servers and storage in five years? Or how costly the next upgrade project is going to be? And as you need an in-house IT resource to manage and maintain those systems – will that head count go up or down?

Some organizations hurry up towards adopting a ‘cloud only’ approach, assuming cost savings are a guarantee. But not all applications are meant for the public cloud, and moving them may cost more.

Choosing On-Demand or an On-Premise product modelling solutions can be tricky, especially since both have pros and cons and can ultimately dictate successes of the enterprise. Whatever direction that the organizations decide to go in, relates to what the end user customer experiences show up in the end revenues.

Strategies for MNCs Engaging with Start-ups in Emerging Markets

Strategies for MNCs Engaging with Start-ups in Emerging Markets

For large global companies, forging effective partnerships with high-potential start-ups is easier said than done. The very traits that make such start-ups potentially complementary as partners also make it difficult for large companies to engage with them in the first place. Multinational corporations often struggle event to identify promising potential start-up partners, while start-ups find it difficult to identify and reach the relevant decision makers within the often-confusing hierarchies of giant multinationals. The challenge is even greater for both sides in emerging markets.

To understand how multinational companies have partnered successfully with start-ups in emerging markets, CEIBS Associate Professor of International Business & Strategy Shameen Prashantham has co-authored a research study in three major emerging market economies: India, China and South Africa. The study focussed on non-equity partnering through start-up engagement programmes such as Microsoft’s BizSpark, IBM’s Global Entrepreneur Programme, and SAP’s Start-up Focus programme.

The research uncovered four key factors that multinational companies confront in such partnerships in emerging markets, and corresponding strategies that can help multinationals engage with start-ups in  emerging markets. The challenges and the strategies to address them are as follows:

Immature Entrepreneurial Ecosystem → Compensate for Deficiencies

Appetite for Entrepreneurship → Commit Resources to tapping the Entrepreneurial Energy

Outsider Status of Western Multinationals → Work with Local Groups

Access to Novel Innovations → Co-innovate with Start-ups

The findings also highlight the importance for Western multinationals to recognize differences among emerging markets. Different emerging markets have distinct national priorities, regulations, and differing scales of economic activity and entrepreneurship which will affect the strategies of multinationals. These things must also be taken into account if multinational companies are to succeed in creating mutual value for themselves and their start-up partners.

The results of the study are featured in the Winter 2017 edition of MIT Sloan Management Review which Prof. Prashantham co-authored with Prof. George S. Yip of Imperial College Business School in London. Read the article here.

Mr. Sikka, you are right.

Mr. Sikka, you are right

For any of you who may have missed Vishal Sikka communication to Infosys employees on the new year, read here.

The problem that Vishal Sikka is alluding to is largely connected to the identity of our IT Industry today. We’re the ‘outsourcing’ destination for the world – and companies like Infosys actually helped create the concept of ‘outsourcing’. This is precisely what is getting disrupted by automation and AI. The term “outsourcing” itself is facing obsolescence.

Clearly, the Indian IT story can no longer be about cost arbitrage. Let’s not forget that India is also a huge, untapped market with enormous potential for disruptive ideas. Amazon and Uber will probably paint a very different picture of India than Infosys or Wipro.

Also the next wave of technological thinking is emerging. API-driven ecosystems, Low- code app development, design-led growth, and the impending data explosion with IoT are shaping the future for us. These mega trends are giving rise to a new breed of smaller and nimbler companies that are uniquely positioned to create products and services for a new breed of enterprises around the world that are ‘born digital’. At Pramati, we’re looking at these markets. And the future looks fantastic for us.

How To File Patents In India?

A patent is a form of intellectual property defined as “a government authority or licence conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention.” The purpose of a patent is to protect the intellectual property created by an inventor for a period of time so that the inventor has first rights over how he wishes to use his patent. A patent can be sold, leased, be used in exchange for royalties, equity, etc. A patent holder however, does not become the holder of the invention unless he has invented it first.

The then British Government of India, during the year 1856, tried to encourage and propagate new inventions termed as ‘exclusive privileges’ in the manufacturing sector. The first invention to be granted Intellectual Property Protection in India was by the Government of India under the petition special privileges to George Alfred DePenning for inventing the ‘Efficient Punkah (fan) Pulling Machine.’

The Indian Patents Act, 1970

Patentable Inventions

The list of inventions patentable are:

  • Process, manner, or method of manufacture or Art
  • Machine, apparatus or other articles
  • Product patent for medicines, food, drugs and chemicals
  • A substance should be produced by manufacturing
  • Computer software  used with hardware or with technical application to industry

Inventions Not Patentable (Sec 3)

The following is a list of inventions that cannot be patented:

  • Any invention obviously contradictory to established laws or that is superficial.
  • Any invention that could be used to exploit the population, contrary to morality, public order, or causes prejudice to life or health (of animals, plants, natural resources, humans,etc).
  • The discovery of a scientific principle, any substance occurring naturally (living or nonliving) or any abstract theory.
  • If no new product is formed nor a new reactant is formed using machines or apparatus. The discovery of a new property or new form of a substance.
  • Mere mixture of chemicals.
  • The duplication, rearrangement or arrangement of known devices.
  • A method of horticulture or agriculture.
  • Any surgical, medical, diagnostic, therapeutic, etc. process for the treatment of humans or animals (to render them free from disease).
  • Animals and plants in part or whole (other than microorganisms).
  • Algorithms, computer programmes, business or mathematical methods.
  • Musical, literary, artistic, dramatic, cinematographic (aesthetic productions or works), or television productions.
  • The mental strategy in playing a game, a mental act, rule, method or scheme.
  • Topography of integrated circuits
  • An invention that is traditional knowledge or which is a duplication or aggregate of known components properties.
  • Inventions related to atomic energy cannot be patentable under Sec 20 (1) of the Atomic Energy Act, 1962.

Application For Patents

The person applying for a patent should apply jointly with another person or alone and can be:

  • The first and true inventor of an invention.
  • An assignee can make an application on behalf of the first and true inventor of the invention.
  • The legal representative of a deceased applicant provided that before death, the applicant was entitled to make such an application.

Form Of Application

  • Every application made shall be for one patent only at the patent office in the prescribed form.
  • An international applicant applying for a patent in India under the Patent Cooperation Treaty must file a corresponding application before the Controller in India. No patent is valid for the entire world because patent law is territorial in nature. Filing an application in India enables a person to file for application at convention member countries which makes the application process easier when applying to multiple countries.

Amendments To The Patents Act And Rules

The Indian Patent Act was amended in 1999, 2002 and 2005. The need for patenting marks of patent agent examination, and chemicals and drugs under Trade Related Intellectual Property Rights (TRIPS) brought about the need for an amendment to the Patent Act.

The Indian Patent Rules were amended in 2003, 2005, 2006, 2012, 2013, 2014 and 2016. The rules were amended to include a fixed fee structure, patent agent exam qualification, appointment of the patent office as searching and examining authority, third category for applicants that are small entities.

The Indian Patents Office

The Office of the Controller General of Patents, Design and Trademarks (CGPDTM) administers the Indian Patent Office, which is an Office of the Government of India that is entitled with administering the laws of patents, trademarks and designs. It is important to note the distinction between patents, designs and trademarks.

Patent Duration

The duration of any patent filed in India is valid for a period of 20 years (irrespective of filing with complete or provisional specification) from the date of filing the application. If an applicant wishes to file an application under PCT, then the term of 20 years begins from the date of international patent filing. If an applicant wishes to file a patent in another country, then he must file the patent with the Patent Office of that respective country (through the conventional filing of an application or through the PCT route) since patents granted in India are valid only throughout the territory of India.

How To Get A Patent?

Get an Idea for a Patent

First get an idea of what has to be patented, and the same has to be presented on paper with a description, drawings and sketches (if necessary) explaining the work of the invention.

Patentability Search

Next, an individual must check the list of patentable inventions. The Patent Act (as mentioned above) entails what constitutes a patentable invention and what doesn’t. Only if an idea is patentable can an individual move forward to the next step. It also enables an individual to search for existing patents in case the idea or patent already exists.

Patent Application

If a patent is at the early stages of its development, then an inventor can file a provisional patent. This enables an inventor to secure a filing date (12 months of time to file complete specification) and it is also lower in cost to file a provisional patent as compared to the cost of filing a complete patent. If an inventor has complete specifications about the invention, then the individual can file for complete specification.

Publication of the Application

After an inventor has filed for complete specification, the application is published 18 months post first filing. If an inventor feels that they cannot wait for the period of 18 months from the date of filing the application, then s(he) can file for an early publication request along with the prescribed fees and the patent would take about a month to be published under an early publication request.

Request for Examination

The controller, upon receiving an RFE request from the applicant, hands over the patent to the patent examiner for examining criteria such as novelty, enabling, inventive step, patentable subject-matter and industrial application. All steps covered till now (from patent application till grant) is termed as patent prosecution. The patent examiner then submits a first examination report to the controller and the applicant which consists of documents of the claimed invention.

Response and Clearing of Objections

Based on the examination report, most patent applicants would receive objections. A patent agent can help create a response to the objections raised in the application. An inventor can communicate to the controller as to why his invention is patentable.

Grant of Patent

After all objects raised in the report are resolved and the patent is deemed to be in order of grant after meeting all criteria requirements, the patent is granted to the applicant as early as possible. The grant of a patent is published in the patent journal.

As we move towards becoming a Product Nation, it is important that companies and individuals own their IP. A Patent can become a competitive advantage in itself and is to be ignored at your own peril!

Industry 4.0: The New Normal

In case you are a manufacturing company beginning to explore how investment into Artificial Intelligence and Internet of Things could help your top and bottom lines, you may already have fallen behind. The fourth industrial revolution or the ‘Industry 4.0’ is already upon us and the opportunities to completely transform the way we carry out production are limitless. Industry 4.0 may be broadly defined as a collective term for a number of contemporary automation, data exchange and manufacturing technologies. It is characterised by a diminishing boundary between the cyber and physical systems to enhance productivity and reduce costs. ‘Smart’ and ‘Connected’ are two of the most important keywords in the new industry universe. Smart takes us into the domain of Artificial Intelligence (AI) while ‘Connected’ is more a purview of ‘Internet of Things’ (IoT).

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‘Smart’ – A detour into Artificial Intelligence

AI finds its roots way back in 1956 when the name ‘Artificial Intelligence’ was adopted or even further back with Alan Turing in 1950 or in 1943 when McCulloch & Pitts introduced the Boolean circuit model of brain. It’s still however, a little difficult to settle on one universal definition of AI. For our purpose we may define AI as the development of computer systems able to perform tasks normally requiring human intelligence. These may include (but are not limited to) visual perception, speech recognition, decision-making, and translation between languages. More passionate people define AI as the ability to ‘solve new problems’.

The lack of one single definition has not detracted investors from recognizing the potential of AI and they have been pouring in money like never before. As per Zinnov Consulting, in the last 5 years alone, investments in AI have grown ten-fold from USD 94 million in 2011 to USD 1billion in 2016. As per CB Insights, the equity investments in AI were North of USD 2 billion in both 2014 and 2015. We may attribute different ways of defining AI to different investment figures, however we can agree that investments have sky rocketed. While, Venture capital firms have obviously been at the forefront in backing early stage companies, the high corporate interest in acquiring AI start-ups has also led to a buzz in the M&A markets. Some of the biggest acquirers in AI include Google, Apple, Salesforce, Amazon, Microsoft, Intel and IBM.

India is holding its own in terms of AI related action. As per Zinnov, India has emerged as the 3rd largest AI ecosystem in the world with 170 start-ups. Niki.ai, SnapShopr, YANA, HealthNextGen, Aindra Systems, Hire Alchemy are some of the notable firms trying to disrupt the value chain across sectors. Global technology companies have acquired more than half-a-dozen India based AI start-ups in the last 18 months. It’s not all one way traffic. Indian IT services firms like Infosys (UNSILO, Cloudyn, TidalScale) and Wipro (Vicarious, Vectra Ventures) have been looking for targets abroad to augment their AI capabilities.

Table 1: AI use cases across sectors

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‘Connected’ – the Industrial IoT

The Industrial Internet of Things refers to the network of equipment which includes a very large volume of sensors, devices and “things” that produce information and add value to the manufacturing processes. This information or data acts a feed to the AI systems. As per Cisco, 50 billion devices will be connected by 2020 and 500 billion by 2030. McKinsey projects that IoT will generate 11% of global GDP by 2025. This is driven by optimising industry performance and cost efficiencies.

 

IIoT on the Factory Floor

The global IIoT spending is estimated at USD 250 billion and is expected to reach USD 575 billion by 2020. The key components of the IIoT ecosystem include sensors/modules, connectivity, customisation, and platform/IoT cloud/applications.

As per NASSCOM, The Indian IoT market is expected to reach USD 15 billion with 2.7 billion units by 2020 from the current USD 5.6 billion and 200 million connected units. This is expected to be largely driven by applications in manufacturing, automotive and transportation and logistics.

In India, the IIoT segment has caught the attention of the largest manufacturers. In November 2016, Reliance and GE announced a partnership to work together to build applications for GE’s Predix platform. The partnership will provide industrial IoT solutions to customers in industries such as oil and gas, fertilizers, power, healthcare and telecom. Mahindra & Mahindra’s uses bots to build car body frames at its Nashik plant. Plants operated by Godrej and Welspun use the Intelligent Plant Framework provided by Covacis Technologies to run their factory floors.

Industry 4.0 is an exciting phase and the possibilities seem limitless. The Indian government is trying to play its part through the Digital India mission. It is positively driving various government projects such as smart cities, smart transportation, smart grids, etc. which are also expected to further propel the use of IoT technology. It is imperative for the promoters and companies in the manufacturing segment to find their place in the new digital world order through organic or inorganic investment.

arvind-yadav

 

 

 

This is a guest post by Arvind Yadav,

Principal at Aurum Equity Partners LLP.

 

Thoughts on Open Source Communities

Supporting open source users seems like a thankless job. There have been many blogs written on this topic. Developers have stopped maintain popular projects because of the burn this causes. People who use open source projects, indirectly assume that they are entitled to free support, even if they have taken no effort to understand the issue, or tried searching for a solution.

Image by Andrew Branch

At some point, it becomes unsustainable for the original developers to keep helping without a return. At this point it is important for the community to come up with a good volunteer based model of helping new users. When the project hits a very large scale, like Ubuntu for example, you find enough people with expertise to answer such questions, so this problem can be overcome by scale. This assumes that basic housekeeping like building documentation continuously is being done.

When the project is moderately successful, (it has lot more users than volunteers), the developers have to keep supporting without any benefit, if they want to project to be successful. Specially if their livelihood depends on it. Of course after a point, the developers can push for paid support, but entitled users who expect free support will still bite if they don’t get the support they expect and bad-mouth about the project. This is a tricky phase.

Users waiting for help: Image by Paul Dufour

While it feels wrong to help anonymous users, it feels good to help people who belong to the community. As humans we feel happy when we are of use to somebody, but we feel sad when we think they are being exploited. While working on open source projects, its easy to move from one extreme to another. So how do we solve this problem?

One way would be to build a community and know the people in the community. So how do you define such a community? I think, a community is formed when people help each other to achieve a common goal. This means they invest time, effort, energy, money to help everyone else achieve this goal. When everyone does this, everyone benefits from each others’ investments and the community grows powerful.

Image by Clem Onojeghuo

So why would someone invest in being a part of the community? First the person has to be convinced that being in the community, that is giving back, is more beneficial than just being a taker. The process of contribution must be easy for someone who is new. It also helps that you feel that you are not being cheated by helping other users. This can be done if the benefits reaped by the community are fairly distributed instead of being cornered by a few. Another important thing is that there must be fairness in the way the affairs of the community are conducted.

A feeling of fairness comes when there is openness and transparentcommunication in the community. This also means moderating the communication so that the conversations are open, fair, focused and based on activities rather than opinions. Users who abuse the trust of others, or only keep taking (and not giving) should be discouraged or disbarred from the community. In online communities, people sharing their real identity, profile pictures rather than being anonymous, also makes it more human and friendly.

Image by Corrine Kutz

It is important that those who contribute to open source projects also be kind on themselves and do not burn themselves out. In the long run, open source is a great asset and win for everyone, but in the short run it is hard to sustain and keep the faith. The internet not only gives us tools to collaborate, but also to share the benefits and trade, and working in an open source community also feels specially rewarding.

But it need not be a hard slog just because its open. A little bit of balance can go a long way in making things fun.

India Inc Version 2: Disruptive, Agile, Confident and… ready to Go Global

The growing internet penetration has fuelled India’s start-up ecosystem, which is now the third biggest in the world. US-based Compass (Startup Genome), in its 2015 report, puts Bangalore as the world’s second fastest growing start-up ecosystem. There is a massive opportunity within the $2 trillion Indian economy owing to the consumption fuelled by 1.3 billion Indians and a good number of Indian start-ups are focusing on that. In fact, 7 of the 9 Indian unicorns are focusing on the domestic consumption story.

However the $150bn Indian IT services industry tells us that it is very important to look outside of your home market to create a world leading organization. Most large Indian IT companies derive 75% of their revenue from the US and Europe; and that allows them to create industry leading best practices besides scale, maturity and an innovative edge to enter the top global league. The new generation Indian tech product companies need to take a leaf out of these successful Indian enterprises.

Here are some of examples of how Indian product technology companies are challenging their global peers –

“Made in India, Made for the World” Zoho has over 20 million users across the globe, and is gunning to reach the 100 million users mark currently..

RateGain works with 12,000 hotels worldwide to help them enhance their revenue and optimize their inventory.

Chennai-based Indix has the world’s largest product database now – 50,000 brands and over 700 million products.

Mumbai-based fintech and cybersecurity company, Seclore, has created one of the most secure enterprise rights management systems in the world.

300x250-mpuIndia Emerging Twenty (IE20) aims to discover the next 20 most promising Indian companies to go global and provide them the visibility and platform to help them make a mark in the global arena. This unique programme is led by London & Partners, the Mayor of London’s inward investment company which has a proven track record working with over 2000 international businesses.

IE20 – Catapulting businesses to the global stage

Last year, 222 Indian companies nominated themselves for the inaugural edition of the IE20. Winners included companies of all shapes and sizes – from organisations turning over a few hundred thousand in top-line ($$ of course), to others touching $100 million. From IT services companies employing thousands of staff, to lean and mean start-ups growing  into adouble digit head count. Many of the winners (including Seclore, RateGain and Indix) are already pioneers in their space; while others are positioning themselves to challenge their global peers. From “Battle-tested Cybersecurity solutions” to companies collaborating with global universities to discover the next big thing in genomics, these companies reflect the new wave of a global technology ecosystem – disruptive technologies that will transform our lives and the way we do our business.

The programme is supported by BDO, Newland Chase, Santander UK plc, Lalit Hotels and the UK’s Department for International Trade.

Program qualifiers

Companies registered in India OR those registered outside of India having a majority Indian management.

Companies should have worked with global clients, and/ or have products suited for global markets. Having an international presence isn’t necessary.

Established after year 2000 and should have global ambitions.

Selection process and benefits

The selection process, spanning over a period of 20 weeks, will assess companies on the basis of three broad parameters – global scalability, innovation and differentiation and performance. Companies need to nominate themselves for the programme using the application form (link). ValueNotes, the knowledge partner, will use their 3-stage assessment framework and a robust rating model to ensure a high quality selection of the top 50 companies. These companies will be invited to make a brief presentation before a panel of business experts, who will then select the final top-20. . The panel round will be held in Mumbai, Bangalore and Delhi in late January/early February 2017..

The selected 20 companies will be felicitated and awarded, which will help them gain international recognition – critical to global expansion. The awards programme will also offer opportunities to network with investors, business heads, thought leaders and mentors of global repute. Courtesy of Air India, all 20 companies will be flown to London to participate in a high impact business programme during London Technology Week, in June 2017.

The nomination process has already begun and the last date to send in your nomination is 16th December 2016. For more details, visit www.indiaemerging20.com

Guest post by Gautam Sehgal, Chief Representative, India, London & Partners International

Why Indian startup founders should think about M&A and not be shy about it ?

Think about endgame, chess grandmasters do so to win.

Studies point out that chess grandmasters visualize the chess board state few steps away to a ‘winning game’ and make moves based on memory pattern that can lead to that board state and thus help them win the game.

Many startups however operate in a game where the rules are dynamic and change unexpectedly. An unanticipated flood of competition could sweep in, or the ground gets shaken underneath because of a regulation or policy change.  Due to such unpredictability most of the founder’s move is extremely tactical, the focus is in on surviving and not getting killed as opposed to planning to grow like rabbits.

Data from 20 years of startups in US suggest mean time to exit is 4th and 6th year.

Mean exit time
Mean exit time for startups

This is simply because If investors don’t do that then they can’t return the capital to their own investors (i.e limited partners) within the 10 year fund cycle.  

Same data also reveals that after 1997 there has been more exit through M&A than IPO both in terms of count and value which means that it is more likely for a startup to have an exit via M&A rather than an IPO as the most likely route

VC vs M&A vs IPO
VC vs M&A vs IPO

In India with no IPO route, M&A is the most likely endgame

On  decade long VC scale, Indian ecosystem is quite young and thus historical data is not available to compare however similar forces broady apply.  

Also while scale can become large but technology market growth rates in India are not as fast the US. Add to this the fact there is no IPO market in India for the technology companies. Some efforts are underway to open it such as the new ITP platform by SEBI but nothing has kicked in practice. That makes M&A option all the more important to consider for an Indian startup founder.

From limited data that is available about the Indian ecosystem we can that $14.5 billion of VC money has been invested in last 4 years and $2.5b of exits have happened in the same period spread over 300 deals. This ratio are still very skewed when compared to other ecosystem.  

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India M&A / VC Ratio – Low

All of this build the strong case for why an Indian startup founder should think about exits via M&A

A reason they don’t think about it is because they don’t know much about exits or the playbook involved in doing that. Second likely reason could be that advisors actively discourage founders from thinking about exits by labeling them opportunistic and not being a visionary founder.

Paradoxically the right time to think about exits is exactly when an exit is not needed.

Founders should think about exit before they are forced to think about it

PS: Exit has a broader significance, applies to open source and even countries. Here is a talk by Balaji Srinivasan that illustrates the importance of exit as key lever of an healthy ecosystem