Technology sector will see a new set of creators from the next billion, says Hans Tung
Building for the next billion customers is going to be a challenge for technology companies going ahead believes Hans Tung, Managing Partner at GGV Capital.
Citing the example of Roblox, which allows users to play its 3D games, hang out in a virtual room, and create their own games — Hans said that the next billion customers will also be creators in their own right.
“It is fascinating to see young users who are so comfortable with mobile technology; it will be fascinating to see what they build,” he said, speaking to Shradha Sharma, Founder and CEO of YourStory, at TechSparks 2021.
The next billion consumers of technology are younger, mobile native, want more choices, want things done faster, and to automate them, said Hans, adding that these users want to use the internet to change lives and make their voices heard.
The seasoned venture capitalist, Stanford alumnus, and first-generation Taiwanese American, believes that the pandemic has opened up an unprecedented opportunity to build technology-led businesses that have more impact.
Growth and growth of technology businesses
It is no surprise that the Limited Partners and investors in GGV Capital have seen an upside to their technology bets.
“We are extremely fortunate to be where we are as the tech ecosystem...the technology ecosystem in the world has grown as a percentage of overall GDP, as well as a percentage of the market cap,” said Hans.
He added that endowments and pension fund Limited Partners with GGV Capital who have taken larger bets on technology in their public and private portfolios have ended up gaining between 28 percent and 43 percent over the last 18 months. This makes a case for greater support to research and technology development, creating a ripple effect.
Hans predicted that sectors like edtech, fintech, healthtech, and enterprise tech will continue to grow due to mobile technology. Also, the progress in automation and research on Edge Cloud will impact more processes and distribution channels. Sectors such as property tech, industrial tech, and smart tech will benefit from this.
The pandemic has also levelled the playing field for micro, small, and medium enterprises (MSMEs), which quickly adopted mobile technology to grow their business as the offline world closed down.
In keeping with trends in emerging markets, Hans said that the contribution of MSMEs to India’s GDP will grow to 50 percent over the next decade, from the current 35 percent.
“Granted that the tech giants have a lot more power than before such as the FAANG in the US, but they will also empower a lot more MSMEs to build. The market will bifurcate into the tech giants on one side and billions of consumers on the other side who are also creators, producers and sellers,” he added.
The great divide
As the global technology trends play out in India in terms of growth and opportunities, the gap between the haves and have-nots will also deepen.
“It is not an issue now but over the next 10-20 years, there will be a bifurcation — like we have seen in the US and China, and over time, it will be a concern. We will see more venture capitalists and founders who have made it give back, starting more non-profits, donating more, and starting to give to people who need it,” said Hans, adding that the sooner we start, the better.
He himself has been a strong voice opposing hate crimes against Asians, especially after the COVID-19 outbreak, which started with China.
Word for founders
As he sees global trends play out across the world, the investor swears by the motto of thinking global but acting local.
Hans cautioned founders to keep their highs not too high and lows not too low to survive the cyclical nature of the business.
“The best kind of founders either know the market really well and the growth opportunities, or they know exactly the problem they want to solve. Leadership is another important quality in a founder as no one can do this alone. They need to be able to build and inspire a team to work with them,” said Hans as a parting shot.
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