Why is the startup scene hugely populated by technology-enabled startups? Why do angel and venture funds prefer them over others? Why are no stories heard about non-tech startups?
These questions and many more pop up at regular intervals in any discussion pertaining to the Indian startup ecosystem. I have tried to put things in perspective through this post.
India as a country has a lot of broken systems and inherent inefficiencies. There are plenty of low hanging fruits available for anyone and everyone who can build a solution around it.
Technology has played a major role in disrupting the traditional way of doing things and focussed on adding value to all the stakeholders involved. It has also opened up avenues for small businesses to reach out to a broader customer base.
Look at our local grocery store or a lady baking cakes as a hobby or someone who is an excellent chef; all of them now have access to multiple technology-enabled platforms. This has provided them an opportunity to have better connect with their existing customers and has also opened up newer customer acquisition channels.
There are other aspects as well which tilt the scale in favour of technology enabled startups. Let’s look at a few of them:
We need to remember that angel and venture funds are attracted towards businesses which are highly scalable and generate insane returns in the shortest time possible. Technology enabled startups fit the bill to a T.
Another thing to note is that right now in India, there is a mad rush to replicate what has been successful in the West. Many of the investors have lost an opportunity to participate in the growth stories of the famed startups of the West. They want to make good of the lost opportunity by investing in their Indian counterparts and ride the wave this time.
To sum up, using technology you can create a WhatsApp, Facebook and Uber, which have generated insane returns for its investors. Whereas, a McDonald's, Tata and General Motors took decades to become what they are today.
Would love to hear your thoughts on this.
About the Author:
Sajid is a management consultant who advises SMEs and startups in their journey to be leaders of tomorrow. He is the Founder & Managing Partner at Le Monturé Consulting. You can follow him on Twitter @sajidkhetani.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)