THINK OUT OF THE BOX
Just
when you were tiring of the cliché ‘think outside the box’, here are four
start-ups that are actually doing that
Big
companies start small. Most of those who begin the journey perish along the
way. Yet that big risk of failure does not deter entrepreneurs from starting
new businesses. In 2013 there were 228 venture-funded start-ups, compared with
a mere 37 in 2010, a 516% jump, according to VCCEdge, the financial research
platform of VCCircle.com.
Many of the new ideas are me-too, trying to sell everything from clothes and books to tickets and diapers online, copying the likes of Amazon, Flipkart, Jabong, Myntra, Yatra. Few venture to look at disrupting existing businesses, and creating new ones like WhatsApp or You-Tube. Business consultancy firm Grant Thornton reckons 80% of the ideas are me-toos. The remaining 20% are made up by a few brave guys who are trying to change the way business is done.
Says Vinamra Shastri, partner and practice leader, business advisory services, Grant Thornton: “You need a differentiator to win and that’s where new ideas score. By nature successful start-up ideas are fated to be unusual.”
The four start-ups featured here are part of that rare new ideas group — one has made a business out of carpooling, another crowdsources opinion on who’s the best doctor, the third puts couples through psychometric tests to see their compatibility and the last one is targeting the great Indian wedding, selling software to plan ceremonies.
Fad or a Trendsetter
What might look off the beaten track today enters the main stream if it’s able to scale, in the process changing behaviours; else it fades. Says Sanjeev Aggarwal, managing director, Helion Venture Partners, a venture fund: “Any idea is either ‘good to have’ or ‘must have’. The former will fade away, the latter will stay. Someone who can make the transition to a ‘must have’ business will succeed.” Adds Alok Mittal, managing director, Canaan Partners India, another venture fund: “By nature start-ups are unique, else they fall in the bucket of me-toos. Justdial.com, Zomato. com, matrimonial sites were unique when they started. They were ideas that created a new behaviour.”
Behind that unique idea is an entrepreneurial DNA that seeks to create scalable, financially sound businesses. As Rachna Nath, leader, retail, Pricewaterhouse-Coopers (PwC) India, puts it: “India is not about big companies but small entrepreneurs. They are the ones who will solve the daily problems for people. Out of say 10, just two might work, but that’s fine, as these two will disrupt existing models.”
For instance CrediHealth.com, started in January 2014 by Ravi Virmani, a former MD of Hewitt Associates India and COO of Max, is solving an existing pain point — how to look for a good healthcare provider — by seeking the opinion of crowds. Says Virmani: “We looked at the shortfalls in the existing referral system and created CrediHealth. com. We give information based on patient feedback.” When ploughing lonely furrows, Sameer Khanna, founder FolksVagn, a car-pooling business, says: “The idea should fundamentally appeal consumers. You need the ability to change mindsets.”
Show Me The Scale
While there is no dearth of new ideas, it takes a lot to achieve scale. And some of the new ideas challenge the not-so-old ideas. Example: professional n e t wo rk i n g s i t e LinkedIn makes job sites look obsolete.
Aggarwal of Helion says new ideas should pass through a few checks to ensure their viability. To begin with any new idea should ideally tap into a $1-billion market; that will help create at least a $100-million business. Besides, a business-to-consumer idea can scale better than a business-to-business one. Khanna of Folks-Vagn has taken the B2C equation one step further by creating a C2C model. His car pooling venture has consumers on both sides — the passengers and the car owner.
The ability to extend the business to international consumers is one way to achieve scale. Says Aggarwal: “Mobile ads are not big in India, yet InMobi, a mobile ad network, is a successful start-up from India as it appeals to global customers and not just those in India.” WhatsApp, started in California, took hardly any time to scale — 450 million users globally in 18 months with just 55 people. Says Mittal: “The big upside with a unique idea is that you end up owning the space, rather than being a me-too or an also-ran.”
Many of the new ideas are me-too, trying to sell everything from clothes and books to tickets and diapers online, copying the likes of Amazon, Flipkart, Jabong, Myntra, Yatra. Few venture to look at disrupting existing businesses, and creating new ones like WhatsApp or You-Tube. Business consultancy firm Grant Thornton reckons 80% of the ideas are me-toos. The remaining 20% are made up by a few brave guys who are trying to change the way business is done.
Says Vinamra Shastri, partner and practice leader, business advisory services, Grant Thornton: “You need a differentiator to win and that’s where new ideas score. By nature successful start-up ideas are fated to be unusual.”
The four start-ups featured here are part of that rare new ideas group — one has made a business out of carpooling, another crowdsources opinion on who’s the best doctor, the third puts couples through psychometric tests to see their compatibility and the last one is targeting the great Indian wedding, selling software to plan ceremonies.
Fad or a Trendsetter
What might look off the beaten track today enters the main stream if it’s able to scale, in the process changing behaviours; else it fades. Says Sanjeev Aggarwal, managing director, Helion Venture Partners, a venture fund: “Any idea is either ‘good to have’ or ‘must have’. The former will fade away, the latter will stay. Someone who can make the transition to a ‘must have’ business will succeed.” Adds Alok Mittal, managing director, Canaan Partners India, another venture fund: “By nature start-ups are unique, else they fall in the bucket of me-toos. Justdial.com, Zomato. com, matrimonial sites were unique when they started. They were ideas that created a new behaviour.”
Behind that unique idea is an entrepreneurial DNA that seeks to create scalable, financially sound businesses. As Rachna Nath, leader, retail, Pricewaterhouse-Coopers (PwC) India, puts it: “India is not about big companies but small entrepreneurs. They are the ones who will solve the daily problems for people. Out of say 10, just two might work, but that’s fine, as these two will disrupt existing models.”
For instance CrediHealth.com, started in January 2014 by Ravi Virmani, a former MD of Hewitt Associates India and COO of Max, is solving an existing pain point — how to look for a good healthcare provider — by seeking the opinion of crowds. Says Virmani: “We looked at the shortfalls in the existing referral system and created CrediHealth. com. We give information based on patient feedback.” When ploughing lonely furrows, Sameer Khanna, founder FolksVagn, a car-pooling business, says: “The idea should fundamentally appeal consumers. You need the ability to change mindsets.”
Show Me The Scale
While there is no dearth of new ideas, it takes a lot to achieve scale. And some of the new ideas challenge the not-so-old ideas. Example: professional n e t wo rk i n g s i t e LinkedIn makes job sites look obsolete.
Aggarwal of Helion says new ideas should pass through a few checks to ensure their viability. To begin with any new idea should ideally tap into a $1-billion market; that will help create at least a $100-million business. Besides, a business-to-consumer idea can scale better than a business-to-business one. Khanna of Folks-Vagn has taken the B2C equation one step further by creating a C2C model. His car pooling venture has consumers on both sides — the passengers and the car owner.
The ability to extend the business to international consumers is one way to achieve scale. Says Aggarwal: “Mobile ads are not big in India, yet InMobi, a mobile ad network, is a successful start-up from India as it appeals to global customers and not just those in India.” WhatsApp, started in California, took hardly any time to scale — 450 million users globally in 18 months with just 55 people. Says Mittal: “The big upside with a unique idea is that you end up owning the space, rather than being a me-too or an also-ran.”
Shelley
Singh ETM140316
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