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Become A Startup Insider With Inc42 Plus
Join our exclusive community of business leaders &makers for in-depth tech stories and intelligence on India’s tech economy you won’t find elsewhere.
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“India will be a $7 Tn economy by 2030,” Chief Economic Advisor V. Anantha Nageswaran boldly declared when tabling the Economic Survey (2022-23) in Parliament in January this year. Of course, it is nothing more than a forecast, and reaching the goal will depend on a host of internal and external factors. However, it is evident that Indian startups will play a critical role in rejuvenating the country’s economy.
India, home to the third-largest startup ecosystem globally, has witnessed the launch of more than 57K startups to date, with a combined valuation of $450 Bn+, according to an Inc42 report. A 2022 StrideOne report also states that the country’s startup ecosystem has the potential to contribute 4-5% to its GDP in the next three to five years.
Fulfilment and Logistics are going to be two major areas contributing to a massive increase in internal trade especially B2B, and Logistics Automation platforms like LogiNext & B2B trading networks like Moglix are going to be at the center of the fulfilment story, managing ordering and fulfilment logistics via technology for the enterprise buyer.
It is very difficult to scale a startup that sells primarily to the enterprise buyer because of the longer sales life cycles, especially with enterprise inertia about legacy systems. Startups like LogiNext & Moglix have aced this game and their founders talk about pivotal points, key challenges faced and how all these challenges were overcome at scale. Dhruvil Sanghvi, CEO at LogiNext & Rahul Garg, founder of Moglix talk about their journeys and pack in a lot of practical advice for startups founders who are building tech for enterprises.
Dhruvil Sanghvi spoke about how order fulfilment is a cost center with very low cost-control because of the operational dynamics and how solving for this problem at scale was extremely critical for B2B enterprises and hence a massive opportunity area for LogiNext.
While discussing how serendipity plays a role in companies growth, Dhruvil shared this –
“If the timing is right, 90% of things go smoothly, and companies can scale up successfully,” said Dhruvil Sanghvi, founder and CEO of the logistics SaaS soonicorn LogiNext.
Rahul Garg, founder and CEO of Moglix, a B2B ecommerce marketplace for industrial equipment, agreed.
Had it not been for the GST tailwind, Moglix’s rise to the unicorn status or its current growth – about 1,800 employees and operations in multiple countries – would never have happened, the founder said. Earlier, the business was present in just two Indian cities.
Dhruvil spoke about the rationale behind his decision to expand to the global market and how watertight legal contracts have led to better quality of customers. He also spoke about his pet metric – Truly Recurring Revenue and how it is better than ARR.
Rahul mentioned how the tailwinds from GST led to a situation where they were able to 2x their growth in a matter of 6 months.
Selling to enterprises via just online conversations seems the logical thing to do, but Dhruvil debunked that theory with his own philosophy about being physically close to your customers to truly understand their challenges & solve their problems.
“It takes a fair bit of commitment and belief to build an organisation,” said Garg. “It’s an important task that cannot be delegated; hence, I spend 25-30% of my time doing just that.”
Dhruvil & Rahul spoke about how startup founders need to change their perspective about fundraises. They shared their thoughts about how funding and VCs are resources and not the ultimate milestone for any startup.
When building one’s business, good governance remains a top priority. Given the recent controversies in the Indian startup ecosystem involving companies such as BharatPe, Zilingo, Trell and more, the spotlight should be on the founders in mitigating the crises.
Garg said three critical factors – capability, blind spot and intent – must be considered when examining governance issues.
“[Wrong] intent is absolutely unacceptable; it is fraud,” he said. “But it also calls into question the board’s capability as good governance is a joint responsibility.”
Sanghvi did not agree, though.
“I think it is the founder’s or the CEO’s responsibility first to ensure all compliances are met. Yes, the board, too, is responsible. But I think it comes second because everybody is investing their capital, time and more in the founder’s vision,” he said.
Speaking about the road ahead, Sanghvi said LogiNext would try to become the backbone for everything that supply chain companies do, be it logistics, accounting or HR.
“There are tonnes of challenges. But I feel that becoming a one-stop operating system can be a large market opportunity for us,” he said.
Referring to India’s target to emerge as a $7 Tn economy, Garg said that Moglix would play a significant role in recreating distribution for modern India.
“By 2030, we need to have better distribution experiences, and we are building the ecosystem’s capabilities to ensure that,” he said. “I am fairly bullish on what India can achieve in the next 10 years.”
Watch Moglix’s founder-CEO Rahul Garg and LogiNext’s founder-CEO Dhruvil Sanghvi discuss with Inc42’s Vaibhav Vardhan about their respective startup journeys and personal learnings from the perspective of a founder in driving a startup from inception to profitability, to implementing good governance practices & processes across the organisation and more.
