Confused!!! Did the Indian start-up bubble really go bust?

Of late, I am seeing a lot of buzz around how India’s start-ups are getting a reality check, how they’ve been burning money and how the opportunity isn’t as big as it once seemed.  

Maybe I am over optimistic, but I see no reason to believe that the opportunity isn’t much bigger than what it was a couple of years ago:

Isn’t the market much bigger, much better than it was 2-3 years ago?

• Many more people are now online, many more people have smartphones.
• Many more people are now trained to transact online
• More people are more spending time on various social media, including older folks, people in rural India, politicians etc. FB has crossed 150M users in India, and soon, India will cross US in terms of number of users. WhatsApp isn’t far behind.
• Many more smaller businesses selling online
• Indian economy has grown around 7% y/y all this time
• The business environment has improved (even if slightly) with govt. initiatives like Start-up India, Stand-up India, Digital India, 100% FDI in e-commerce marketplaces, e-governance etc.
• Couple of e-commerce companies have already made good exists, validating the opportunity. Eg. Infibeam

Some start-ups folded up. But is that even a surprise?

It’s a very well-known fact that majority of start-ups fail, over 90% of them fail. The more the start-ups come up, the more the absolute number of start-ups that will fail. But, some will succeed, and they have. There is never a reason to panic when some start-ups fail or to use it to generalize the entire market scenario.

eCommerce companies burned a lot of cash – But wasn’t that a part of the plan?

It isn’t like eCommerce companies burned cash just the day before declaring revenues/GMVs. There are annual, quarterly, monthly plans that are run by the investors, experienced advisers etc.

The goal was to get more and more people to transact on respective eCommerce platforms, increase GMV etc. Almost all eCommerce companies have been able to achieve their GMV targets. Then why this panic, calls for course correction and all?

Don’t we have more experience, more talent in India than a couple of years ago?

Every other day, you hear news of some high placed executive from abroad joining one or the other start-up. In addition, you have folks who either failed at a start-up or worked at such a start-up. So, lot many more people with global experience, start-up exposure. This should be a good news for Indian start-up eco-system?

Isn’t the global market open for Indian start-ups?

Just the other day, I skimmed through an article that compared US companies like FB, Google and Amazon to Indian start-ups. It pointed to how Indian start-ups can never have similar market caps as the global giants because India is a much smaller market, unlike China. I couldn’t understand why we need to assume that Indian start-ups would be restricted to the Indian market only. FB was initially built for the US market, but it isn’t its biggest market anymore. There is no reason why Indian start-ups can’t or shouldn’t aspire to go global. The likes of Zomato, Oyo Rooms, Edureka (we have a huge percentage of our learners from around the world) etc. have already shown the potential. There are quite a few products coming out of India that have no reason to be restricted to Indian market. If Amazon can enter India, there’s no reason why Flipkart can’t enter US and challenge Amazon at certain point!

I don’t know if it’s the investors, founders, who want to protect their investments by discouraging new investments in new, competing start-ups or just a few pessimistic influencers out there, but there seems to be some sort of deliberation behind this negativity !

Quite a few start-ups are ripe enough to make exists in the three years, investors are going to cash out, and more money is going to flow into the Indian start-ups. It's just a matter of time. Maybe I am missing the obvious, but in my view, the Indian start-up boom is still waiting to happen!