By solving local problems while keeping in mind reverse
innovation possibilities, start-ups can help take India global
There
are three key factors that have created the right conditions for a start-up
boom in India:
> There
is huge, latent demand; an intensive need for disruptive, low cost solutions
that can reach the masses, in order to meet challenges on many fronts -
education, health care, water, and agriculture to name just a few. Start-ups
are designed to create disruptive solutions.
> With
the success of start-ups like Flipkart, there is a large supply of eager
entrepreneurs that want to make an impact and make it big. The millennials are
not driven by getting a 'steady job'. They are more independent and
willing to take risks.
> The
barriers to entry have never been lower with respect to infrastructure (easy to
get in, elastic, cloud-based infrastructure such as Amazon Web Services), and
global reach (ability to leverage Google, Apple and the marketplace that has
democratised access). Large scale cell phone penetration can be tapped to
provide innovative solutions to the masses.
Most of
the focus in the past has been on providing products and services needed in the
West at a lower cost. For instance, the IT-services boom was triggered by cost
arbitrage between the East and the West. What is needed now is to shift focus
to solving the problems faced by Indians. For instance, most Indians lack
adequate health care. If start-ups can use digital technologies to provide
affordable good quality medical diagnosis, those solutions will have
applicability not just in India but all over the world, including in rich
countries like the US. This is the reverse innovation opportunity that Indian
startups should target. By shifting the focus and solving local problems while
at the same time keeping in mind reverse innovation possibilities, start-ups
can serve as the catalyst to channel the energy in areas that will help take
India global.
For
example, Amazon introduced Easy Ship in India because sellers in India lacked
the logistics capabilities. Amazon takes care of picking up from the seller's
location. At the same time, customers get trackable shipments. Now, this is a
service that is available in other countries.
In
particular, there are low hanging fruits in the areas of healthcare and
education. If start-ups can create disruptive solutions here, there is a latent
market of 3 billion people that can be served with these same solutions. In
addition, many so-called advanced countries, are struggling to cope with out of
control healthcare costs and an expensive education system that is out of reach
for many, and are looking for solutions that will bend the cost performance
curve in a disruptive way. On the other hand, start-ups by their very nature
are very risky. Amidst all this euphoria, this message of risk may get lost. It
is therefore, important to build a strong and robust ecosystem.
The
'village' includes:
> Venture capital: TLabs is a start-up accelerator as well as an early-stage seed-fund focused on Indian internet and mobile technology start-ups.
>
Early adopters: Consumers and enterprises that are willing to give these
start-ups a chance; those that see the early benefit of the disruptive
cost-performance curve (knowing that there may still be deficiencies that need
to be ironed out along the way)
>
Academic and research institutions: CIIE, for example, is an IIM Ahmedabad
initiative to promote entrepreneurship and bridge gaps in the ecosystem.
> Government:
Kerala Startup Village is a good example of a public-private partnership that
aims to launch 1,000 technology startups over the next 10 years and start the
search for the next billion-dollar Indian company.We have mentioned one example in each category just for illustrative purposes. We know there are others that are active in each of those areas. However, many more are needed in each of those categories and serving in more parts of the country, in order to scale the potential startup boom.
More than anything else, we need a mindset change. Rather than, 'Make in India', why not 'Innovate in India' as the slogan?
Srikanth Srinivas
CEO, Rapidi2i
Vijay Govindarajan
Coxe Distinguished Professor, Dartmouth's Tuck School of Business & a Marvin Bower Fellow, Harvard Business School
CEO, Rapidi2i
Vijay Govindarajan
Coxe Distinguished Professor, Dartmouth's Tuck School of Business & a Marvin Bower Fellow, Harvard Business School
source: BS
Comments