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Getting out of ‘Build-for-India’ mode for SaaS

    Rohit Jain, Co-founder & Partner at Pravega Ventures

    I get a lot of pitches from founders for ‘I am building XYZ SaaS product for India’. The problem is that for a majority of these products there is nothing unique or special about the Indian context. I understand that for a startup located in India it is but natural to look at the immediate environment and identify opportunities. And there are some uniquely Indian opportunities: a lot of industries that were hitherto unorganized and fragmented in nature are now being transformed by marketplaces or new age companies that rely on technology for their growth and thus are looking for solutions. In some of these industries, the Indian context is sufficiently different that solutions from developed markets are not applicable and hence the opportunity for a new set of solutions to be built. Examples include areas like logistics (assets are tracked differently), GST (taxation systems are unique), agriculture (small holdings, different supply chains). These are solutions built for small businesses, are typically mobile-first, and in case of taxation /accounting have to implement local rules/regulation workflows.

    If you are building SaaS for the Low Similarity half, it is naturally ‘SaaS for X in India’ and is perhaps extensible to geographies like MiddleEast, Southeast Asia that share a lot of traits with India. (In some cases, it might turn out that a mobile-first solution could very well be the next generation and hence find adoption in the next wave in the US and like markets.) There are questions about how large Indian market is, but that is for a different post. What I want to focus here is on startups building for the top High Similarity half. For a vast majority of software that is used for horizontal business functions like online marketing, CRM, and team communication to name a few, there is very little difference between India and developed markets, from functionality and usability angle. I doubt that a Flipkart or a MakeMyTrip uses its marketing automation system or an employee performance management system any differently than a Walmart or Expedia. Ditto where the software is for a vertical function like e-commerce search, but the degree of similarity between India and developed markets is high. So as a founder if you are building a software that falls into these buckets, I’d urge you to step back and think hard about building not just for India but for the world.

    Why ? Because markets like these are flat and competition is global. There is no protection/preference afforded by geography or regulation. The buying consideration is only governed by the quality, functionality, and pricing. If your product is not globally competitive, it is highly likely that it will not do well in India also. Vice versa, if you do have a great product but are not looking beyond India, you are leaving a lot of money on the table as India is a very small market compared to the US. A technology business has high and fixed upfront cost with very small marginal cost. So staying in a small market would mean that you would eventually lose out even in that market as bigger players can serve it better. More critically, as a startup, this small market size potential would mean that you will find it hard to attract venture capital that is chasing large outcomes.

    Of course building globally competitive is hard. But you can only build what you can imagine. I find a lot of Indian founders are not even thinking about building for global markets. And in doing so are giving up on the huge advantage of deep connections with the US ecosystem - a large number of Indians in top tech companies, founders of influential companies like Nutanix and AppDynamics, long history of Indian IT services companies selling to large enterprises. Harnessing this ecosystem can give rich insights and connections with potential customers/early adopters. So the first step for founders is to widen their horizon and dream big. A lot of other things will follow.

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