If you are a millennial living in the Indian metros, you might be very well accustomed to the following trends:

Using Ola for your last ride and paying through OlaMoney;

Using Flipkart for buying that mobile on which you installed the Paytm and Snapdeal.

What do the companies cited above have in common? They are all  born digital, driven by ambitious Indian entrepreneurs and often  quoted as the beacons of “Make in India” start-up scenario.

While they might very well be “made in India”, the key question is can they be “sustained in India?” The reason I ask is, these founders have been relying more and more on foreign investment to run/sustain their business models. Chinese investors led by the likes of Alibaba and Tencent are making huge strategic investments to the tune of US$2 billion and more.

So what does the Chinese ecosystem look like ?

When i asked Dr Jiang Hongquan, Investment Partner from Robert Bosch Venture Capital, he had this to say giving a perspective of Chinese market:

“In the Chinese VC market, there is a very mature eco-system consisting  of rich capital offer, large domestic market, experienced VCs, very good industry environment and supply chain, Large industrial players which could become partners or acquirer, plus the stock exchanges for tech companies. These factors combined make the Chinese VC market very attractive, though sometimes overheated.”

Probably, the Indian ecosystem could take some of these aspects that it could learn from the Chinese ecosystem.

Vasu Ramanujam, a Business Consultant in the UK, is of the opinion that VCs in India should fund to create new unicorns (start-ups that rapidly reach billion dollar valuations). We could learn from Israel’s focus on nurturing startups or even the Estonian government efforts (the folks that gave us Skype), or even China.

There are some lofty goals that are available on the Make in India website. In order to make this a reality, it might be worthwhile to start with a grounds-up approach, nurturing and cultivating the startup ecosystem by providing the right infrastructure, enabling transparency, and removing the barriers for “ease of doing business.

On the brighter side, there are a lot of well-established IT/ITES companies in India creating the incubators (intraprenuership opportunities) that are well aligned to make in India, but at a global scale.

Indian tech startups are better connected to western world — the potential for a huge market to capture is one of the main reasons Chinese investors are looking towards India when we analyse various reports.

The biggest challenge would be how these startups adapt to become the companies of the future — how they use the technology to capture the unorganised or fragmented sectors.

Competition from bigger companies would definitely put pressure on the startups to raise more money, and that would be one of the reason why startups would go for foreign investments.

The Indian startup ecosystem is slowly moving towards profitability — and more focus on technology development and product building would be the key.

On one hand, there is a huge population which is under-served, and on the other hand, the services industry is highly fragmented and localised .This results in a poor quality of service.

Is the marketplace model a solution to this?

Ragavendra Prabhakar, a Strategist in Bezirk – A Bosch Startup, has this interesting perspective:

“Given the existing problem with not so great quality of services, marketplace model is a lucrative business model for startups to explore. This will enable quality services in different sectors ranging from retail, medical, transportation, to improve significantly and reach the vast population.”

We will look into the interesting dynamics of the marketplace model and the importance of viewing it with multi-model market ecosystem in the next column of Venture Upbeat.

Pavan Govindan is part of Bezirk, a Bosch Startup which is an Intrapreneural venture of Bosch Global.

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Source: e27.co