In 1975, India won the Men’s Hockey World Cup. It should have been an indication of more successes to follow, but things didn’t turn out that way. The reason for this was 1975 also marked the year when astroturf replaced grass on the hockey pitch. The result: For the next 20 years, Team India struggled to adapt to this change and lost its top position in the game.
This is a prime example of how your ability to handle change can sway your fortunes. This is one of the most important criteria for an entrepreneur looking to create a unicorn. At least that’s what Sharad Sharma, founder of iSpirt, a think tank dedicated to the software industry, believes.
Sharma used the astroturf example to set the ground for a panel discussion on ‘How To Ride A Unicorn’ at Inc42’s The Ecosystem Summit held on November 16 in New Delhi. The panel comprised Sanjeev Bikhchandani, founder of Info Edge, online classifieds company ; Rajesh Yabaji, founder of Blackbuck, a online logistics marketplace startup; Manav Garg, CEO of Eka Software, a commodity trading software company; and Murugavel Janakiraman, CEO of Matrimony.com, a online matchmaking and marriage services company. Sharma, who was moderating the panel, participated actively in the discussion and made many valid points.
The core agenda of the panel was to discuss the characteristics entrepreneurs need to possess to be able to build the next unicorns in India. The panel discussed the topic at some length and in depth, elucidating the points they were making through their own examples and those of other companies, to agree on three such must-have criteria
- Anticipating change rather than reacting to it
- Understanding in-depth customer needs
- Thinking big by trying to build platforms rather than creating just products
Staying Ahead of Change
The thread of sports ran through the discussion. Just as a sportsperson may have to adapt their style of play to the natural wear and tear of the physical form, an entrepreneur, too, needs to adapt to changing technology — in fact, stay one step ahead of the tech curve to build a successful company.
“An entrepreneur must remember that what worked for him yesterday, will not work for him tomorrow. If you will not appreciate the changing mindset of consumer and scale accordingly, someone else will do,” said Janakiraman.
A modern-day example of this can be seen in the case of Flipkart, which went strong on its mobile strategy in 2015, placing a big bet on its app. The strategy, however, fell through because at that time phones were not so smart, and the mobile-first approach was ahead of its time. After this, Flipkart’s Sameer Nigam (former senior vice president, engineering) and Rahul Chari (former vice president, engineering) left the company to setup PhonePe. Initially a platform to build progressive apps that didn’t rely too much on phone memory — PhonePe soon pivoted to payments, successfully. In 2016, it was bought by Flipkart for between $10 Mn (INR 70.4 Cr)-$20 Mn (INR 140.7 Cr) ).
Knowing Your Customers Inside Out
Sometimes, when entrepreneurs create a product, they are so engrossed with the nuances and the technology that they lose sight of the end customer. “One of the first things we talk about to entrepreneurs is to ask where they got the idea from,” said Bikhchandani.
He gave the example of food delivery unicorn Zomato, in which his firm, Info Edge, owns a 46% stake. Zomato founder Deepinder Goyal was working with Bain Consulting in Gurugram where he met many young, single people who would not get lunch from home. There was a cafeteria that did not serve food but displayed the menu cards of about 70-80 restaurants that delivered to the office. Lunchtime would see a long queue every day. One day, Goyal went to the cafe on a Saturday, scanned the menu cards, and put them up on his page on the office intranet.
Two days later, the IT infra guys came to him and asked him what was happening, as all the internal traffic going was going to his page. That’s when the penny dropped for him and he realised aggregation of menu cards could hold great value.
The moral of the story: It’s easy to build a product and deploy sophisticated technology but if the end user is not able to use the product or doesn’t find value in using it, then there is no point. Hence, insights on what works for the consumer are critical.Order The Report Now
Platform Over Products
Janakiraman picked Netflix as an example of how entrepreneurs need to think outside the box and adapt. Netflix, he believes was a destructive idea (in a good way) as it evolved from a distributor of content to a creator of content. From a service that delivered DVDs via mail to producing multi-million dollar shows, Netflix is also an example of how a service/product become a platform.
“They (Netflix) saw the tech shift happening with faster data speed and internet penetration and, after acing their tech play, they adapted to the content play,” said Janakiraman.
Garg reiterated Janakiraman’s thoughts by saying “a relentless focus on the consumer is paramount” and that as early as the conception stage, one must think about creating a platform rather than just a product. When one creates a platform, one also ends up creating an ecosystem along with it, which goes a long way in determining the success of one’s company.
Early on in the journey of Blackbuck, a online logistics marketplace startup, Yabaji found that 90% of the payments to truckers happens in cash. At that time, internet penetration was very low and smartphones were not easily accessible. From then on, Yabaji built the business in such a way that it became payments company in part and a financial services company in part.
Blackbuck has taken on functions relating to the entire trucking infrastructure in India — from toll payments to insurance framework and financial inclusion, building an ecosystem around its core business of trucking.
Unicorn Cheat Sheet
The panel discussed some key learnings and questions that entrepreneurs must take into account if they’re dreaming of building a unicorn. Here’s a cheat sheet:
What will happen to me if funding dries up?
We live in a day and age where the US is hiking up interest rates, there is a trade war between China and the US. One must prepare for the risks associated with shifting political-economic scenarios one should always asses one’s ability to handle such adversities.
Build your IP, because you will have to compete with global goliaths early on in your journey
For foreign companies, India has transformed from a backend operations destination to a market for products and services. Indian players will need to contend with the fact the competition will be global as more international players invest in the India growth story.
Unlearning is one of the biggest challenges for an entrepreneur
When technology is changing around you, one must make the difficult choice of letting go or putting on hold what has worked for you in the past and delving into the relatively unknown. Unlearning is as important as anticipating change.
Creating value in terms of service and cost for the customer
Are you able to address the need of the consumer that the incumbents have not been able to service? Can you do it at a price point that makes it accessible for your target audience? Answering both these questions is crucial to scaling your platform/product.
Learn to delegate and learn from others
Running a startup can be a lonely journey and success depends upon the team you have built. Many investors list the founding team and partners as a crucial deciding factor while making investment decisions. Surround yourself with people you can learn from and listen to their advice or else you risk losing valuable talent.
Building The Next Unicorn
The internet is a great enabler and a great disrupter. This is the opportunity and the challenge that young Indian entrepreneurs will have to increasingly deal with.
More than half of Indian internet users are currently logging in from rural areas, data costs are the lowest ever. They are streaming music on Youtube and demanding more vernacular content, ordering from Flipkart, and availing of traditional services like electricians and plumber through apps.
As more and more Indians go online, expendable incomes increase, and the middle class matures, new types of products and services will be created and new use cases will have to be explored to milk this unique opportunity that is just beginning to be realised.
Entrepreneurs also have to be nimble enough to adapt to changing technology and ambitious enough to see the larger picture and potential customers.
And it is on this backdrop that entrepreneurs and investors alike will hope to build and ride a unicorn.Order The Report Now