Why founders should be looking at India to solve problems: Sanjay Anandaram
In this episode of Prime Ventures' Prime Knowledge video series, Sanjay Anandaram, serial entrepreneur and investor shares insights from 20 years of his experience in the business world.
India, with all its diversity, is currently home to more than 1.3 billion people, and estimates show that the figure is likely to surpass China by the end of 2024, with the population predicted to be at 1.44 billion.
This should give an idea about the market size that India already has and is expected to become. However, when the median working-age of Indians is compared to that of countries like China and Japan, the prospects brighten up further.
India’s workforce is aged nearly at a median of 27 years as compared to China’s 35 years. This means that the next batch of Indian customers will be young, open-minded, and willing to invest in new brands.
"No matter what the statistics say, India’s market is still a very open one to do business in," says Sanjay Anandaram.
Sanjay Anandaram is a passionate advocate of entrepreneurship in India, bringing close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor, and mentor. He is involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship while advising at Ideaspring Capital, Endiya Partners, iSPIRT Foundation, and Ojas Venture Partners.
Watch the Prime Knowledge series with Sanjay Anandaram, brought to you by Prime Ventures, an early-stage VC fund investing in technology and product-focused businesses:
Why solve Indian problems?
The common mantra that all veteran entrepreneurs chant is to look to solve the customers’ problems. However, it is much easier to copy a working foreign model and implement it in the Indian market. Most founders expect this trend will catch on soon.
Pinpointing the customers’ problems and setting up shop in those specific areas is time-consuming and more often than not, entrepreneurs and investors are unwilling to give that time to the businesses. Yet, the fact remains true that when a particular business solves its customers’ problems, it thrives. And the brand does not have to look back or worry about competitors.
In every Indian industry, be it agriculture, logistics, infrastructure, automation, food, or entertainment, consumers will continue to have problems at every point of time, and the canvas is open for entrepreneurs to find a preferred area and start a business. For the same reason, this problem-solving strategy is secular in nature.
With adaptability, the brand can continue to grow as the model revolves around identifying consumer problems and solving them. The growing Indian market will provide the required fuel, and all entrepreneurs will need are the right mindset and patience.
Creating a product or a service for India is never an easy task for entrepreneurs. Indian consumers are frugal enough to be unwilling to pay premium prices, unlike the West. This puts a considerable strain on the revenue flow of businesses. Sustenance soon becomes an issue if brands cannot cope up with the consumer’s price preference, especially when the business’ manufacturing and operating costs are considerably high.
Hence, the trick to learn before entering the Indian market is how to reduce the cost and then the price. For some time, the online payment applications and food delivery chains have been testing the cashback and discount models to bring down prices in India, but they are no longer working.
Prices must be low for Indian consumers, but that should only be because of the low manufacturing and operating cost. The pressure is definitely on entrepreneurs to create this business-cost-price blend.
The silver lining
The consumer preference for low-cost products and services allows entrepreneurs to be frugal as well. Naturally, if the plan is to build a business that will sustain itself with less money, entrepreneurs can also start with low capital and bring homeless debt. This is where the opening lies to speed up processes. Instead of searching for investors who will pay the large cheques, entrepreneurs can divert those resources to find out the problem areas of their future customers and enter the market in no time at all.
The way forward for willing entrepreneurs is to build a business in India, for the Indian consumer, and create a model that will work for India. Fortunately, or unfortunately, this specific market is still untapped in the country. If the brand is all about solving the Indian consumers’ existing problems, that too at a low cost, this parameter becomes a solid defence for the business.
The mere reason why foreign brands, even with their untamed willingness, are still struggling to grip the Indian market, is that their models are not customised for the Indian market. New-age Indian entrepreneurs can tap into this deficit and start playing with any amount of capital in hand.
(Edited by Suman Singh)