Lets Not Lose the Reason and Season for Products

One of the long running debates in the Indian technology entrepreneurial world is whether India will ever engender global product companies or will it be destined to be a purveyor of services and a consumer of products and solutions that are imagined, created and marketed by others. As in most things, and especially true for India, there has to be a reason and there has to be a season for anything to occur. So what has occurred? What’s the reason? What’s the season?

What has occurred and is occurring with increasing velocity is:

  • Services companies are passé.  Almost all companies being created today are products or solutions (ie services around a core product offering)
  • These companies are largely to be found in the telecom/mobile domains utilising SaaS/cloud based delivery. This isn’t surprising since telecom/mobile are global scale, scope and market opportunities in India; SaaS/Cloud based companies can inexpensively cater to the world leveraging expensive and complex infrastructure built by others.
  • Talent from global tech companies or even from overseas is coming together to capitalise on these opportunities.

While these are heartening developments, what is more interesting is the opportunity ahead-  across each and every sector of the economy.

What’s the reason though for all this?

Increasing competition, awareness, technology adoption, and the like are beginning to convince more and more companies, across the board, of the importance of investing in technology to drive efficiency, productivity, quality and indeed competitiveness. Technology for all practical purposes today is all software: from vehicles to logistics to hotel, bus and airline reservations to rocket launches to banking to fraud detection to communication to education to anything-else-you-can-imagine! India is beginning to realise that it can be a market on a global scale for solutions as each of these sector s is plagued by colossal global sized problems.

Why is the season right?

Without the right season, no fruit would ever ripen. The season, in this case, is the environment:  enormous numbers of youngsters – aspirational, aware, impatient, confident, unafraid, educated, driven, the growing presence of avenues for these youngsters and their supporters, backers, service providers – investors, mentors, partners of all kinds– to experiment.

The collision of the reason with the season is accelerating this process at an increasing pace.

But before we all start hyperventilating, it is useful to remember that India, despite being the world’s largest producer of milk and in spite of being a milk surplus country, isn’t known around the world for its milk products! There’s a lesson in there somewhere right?  And as a country, we’re known to grab defeat from the jaws of victory with unfailing regularity and precision.  Some important points to keep in mind:

  • Most of the young product companies, especially those that have the connections, are either considering or already have set themselves up as overseas entities. Why? To escape from the mind-numbing red-tape, to enjoy operating freedom, for reasons of branding, protection of intellectual property, to get the benefit of taxation, investments and exits.  Is this desirable? If not, shouldn’t there be policy mechanisms to ensure that the reasons for seeking overseas domicile are minimised? When all countries are laying out red-carpets for companies to come to their shores, why are we intent on driving away those we have?
  • Local branding and awareness generation: Are there sufficient role models for Indian customers? Is it a matter of pride for the country if a world class “Made in India” product is used? What can and should be done to make this happen? Examples from what Taiwan and Korea did are relevant here. Remember, branding isn’t advertising. It is the delivery of a promise, consistently.
  • Industries that are global scale in India eg  defence or where India offers unique challenges eg retail and distribution? Co-option of stakeholders to build world class solutions in these areas is a possibility.
  • India, one would imagine, is ripe territory for the creation of unique voice based products and solutions, given the illiteracy, proliferation of languages and accents. Yet there’re no solutions here. Education – quality video over low bandwidth lines – can be a gamechanger. What about offering cloud based mobile apps for managing businesses for the large number of SMBs?

There are obviously opportunities and possibilities. But without the coming together of like-minded people driven by the desire to effect change across industry clusters via policy, awareness generation, branding, crafting solutions to solve Indian problems, the season to ripen fruits will pass.

This is a season where the coming together of young people, using technology, knowledge, research, engagement, drive and passion, are driving large changes in the way democracy and politics are practised for the better in the Indian nation. Surely, building a product nation is far simpler? Are we all up to it?

About the author

Sanjay Anandaram
  • Lakshman Pillai

    Sanjay, Positive and highly encouraging article. Your thought provoking article got lot more lovely questions that need to be answered before most of us escape to the other side of this planet. How to facilitate those changes and for how long this careless environment will continue?

  • Arvind Jha

    A global product company in my mind will be one that will meet 3 key metrics :

    1. offer a product for global consumers / enterprises
    2. demonstrate scale globally, across multiple geographies
    3. have a brand recognition across user segments

    While many India oriented businesses will be built during the current “product” nation wave – mostly based on internet and mobile technologies, the *products* these businesses will offer, will by necessity, be targeted at indian consumers / enterprises and may not therefore scale globally. These may be large businesses and even cross the Indian borders to find customers globally but I doubt they will meet metric #3 above.

    A necessary condition for realizing metric #3 is innovation. A horizontal, technology led innovation (new circuit, new software algorithm, new application, or a factor of improvement over a large in-use workflow etc). This class of innovation requires high degree of human talent, sufficient capital and high risk appetite.

    Are we doing enough on innovation? risk? horizontal technology development that will disrupt or significantly make better an existing solution? As a nation, we are lagging far behind on the ground-swell that needs to happen to achieve some solid results.

    And yet, I remain optimistic. The first wave of “product’ entrepreneurs will build stable, profitable businesses and (i hope) use those profits to invest in higher-risk goals. If all goes well, the 3rd or the 4th wave of startups will get to where I think we should be.

    • Lakshman Pillai

      Arvind, I very much agree on 1 & 2 and the first part of “3” (brand recognition). But I would like to know more about “across user segments”. I do not want to misunderstand you. Please explain with example on why “across user segments” should decide whether the product company is a global company or not.

      Zoho could not grow by focusing only on domestic market and they have started focusing outside India. Refer to the comment from Sridhar Vembu – “Making One Dollar is lot easier than making One Rupee”.

      Will you consider Zoho (with the Made in India tag) as a global product company? Any specific strategy to grow domestic business first before venturing out?

      • Arvind Jha

        Hi Lakshman, brand recognition “across user segments” in the consumer space simply means across geographies, demographics and cultural preferences. A truly global brand, imo, must cut across these and still have recall, affinity and clear identity. In the enterprise space it will mean across geographies and size of companies.

        Zoho is certainly a global product company – it meets #1, #2 on my metrics. On #3 it is having an identity but as yet a weak one imo. If they continue to execute, in 3-5 years it could go mainstream in the consumer consciousness.

        Hope this helps.

        • Lakshman Pillai

          Arvind, thanks for the clarification

  • Sanjay you’ve talked about Indian cos turning into foreign cos and that’s probably happening faster than than turning into global companies. Its sad but business will go where it can flourish. I do not think remaining Indian is a virtue as products start addressing global markets.

    To create impact in India, we must have companies that solve problems which are uniquely Indian and massive in size. Opportunities around Aadhar, education (as you rightly pointed out), microfinance, public infrastructure are the ones that product companies must look at if they want to remain focused in India only. It’s these areas that will give them sufficient scale. All other areas which offer a global (and therefore more receptive) customer base, will lead to natural flight of entrepreneurship capital.