French (+EU) startups need a strategy for the world’s largest single market

So, What’s stopping you?

A walk through the viva technology summit in Paris recently would introduce you to the unicorns and force-fed horses of the French startup ecosystem which can give Silicon Valley a run for their money and someday they will. The question is when will that someday be? In terms of the quality of the research and technology there are some which are already even better but something’s clearly missing.

An American startup as an individual enterprise and as a part of the ecosystem finds ways for the world to work for them, and we can pin that on the grand American sense of international entitlement, but that is a lazy assessment and a topic for later. In comparison, the European ecosystem, and if you think about it, every other ecosystem is dragging its feet in its international ambition even though groundbreaking and bold work is being done in every sector. It's not nonexistent, it's just slow.

If there was a perfect time for the startups in France to rise to the occasion it would be now, given the political situation with Emmanuel Macron at the helm, and his conscious effort to bring the hunger for conquest to the French industry. France has successfully been brought close to the center of the narrative in the western hemisphere, the precedent has been set, and even if the leadership were to change, the support offered by the Elysee will be very difficult to roll back, unless there is a huge economic event. In a way, if played well, its also a time where few upstarts can write themselves into the annals of French industrial history by creating jobs for its people and returning the favor to their president.

Coming to the purpose of this message, the one market that is being ignored by the startup ecosystem, with very few exceptions, is India. Let's focus strictly on the innovative enterprises and startups’ ecosystem in Europe, as traditional corporations have already got wind of the possibilities in the Indian market thanks to their advisers at La defense. Scratch the surface and you’ll find the inroads already being built into India, at a quicker pace in the past couple of years.

The people are here, where are you?

In 2024, at the latest, which is right around the corner, India will overtake China as the most populated country and this will remain unchanged for the centuries to come. At its projected plateau the lead will stand by a margin of at least 400 million people. This will mean that if you are to play in this market, you are working with 20% of the world’s population in a single pop, and the luxury of having a single market at your disposal is not something which needs to be explained, at least not in Europe.

The beauty of markets like China and India is that when you get the growth or policy engine right, the results translate to unimaginable numbers to an outsider. Therefore, you will hear news like, out of the 510 million bank accounts opened worldwide from 2014 to 2017, 55% were in India with most of the account holders being first timers, which was a result of a policy implementation.

 While the population alone might not seem to be a gauge for good business, the parameter which will interest you is that India is one of the fastest growing middle-class population with an ever-growing disposable income. Its no surprise that India will be the second largest in GDP (PPP) in 2030, and that’s when the markets just warmed and there's a whole lot of new generations to come, but the margin by which it trails is a gap of one policy decision.

Their free will is your problem & your opportunity. Make it your strength.

India’s ranking in the ease of doing business has gone from 142 in 2014 to 72 in 2018, and this is again a result of policy. This will only get better as processes get smoother with the rise in number of participants.

The environment is right to get into a brawl for the market with the clear mandate that the people of India have given Narendra Modi for the next five years, however, its not the central government alone that’s opening its doors to innovative enterprises. Leaders like K.T Rama Rao, the IT minister for the state of Telangana has expressed by action his intent on making Hyderabad the startup capital of the country. With the establishment and success of institutions such as the T-hub and Telangana state innovation cell, Mr. Rao has made Telangana the destination for startups to be. Also, Mr. Rao's government, which has similar views on startups-development-growth as the Modi government in the center, also has a clear mandate for the next five years, and is expected to get another. You should read into the needs of the Indian public through this.

The Indian government needs to create about 11 million jobs per year and they are falling short by 20%. In a scenario as such, any business is good business and you will be welcomed with open arms. Its just been few days since Narendra modi has reclaimed his spot as the Prime minister of India, and jobs are already at the top of the agenda of every economist in the country. The problem is not a new one, which is why programs like startup India was one of Mr. Modi's flagship programs, but with time the pressure grows as unlike china, India’s population is still bloating, and it feels like a rich man's problem as most of the population for the centuries to come will be in their youth. The prime minister has established an unprecedented foreign policy opening multiple fronts for trade and job creation.

While Indians are nationalists who take pride in their story, they are conducive to problem solving businesses, which as an innovative enterprise is your USP. The Indian consumer has no qualms with a free and open market and will give you an equal chance to acquire them. However, If you are not very aware of the Indian market, the one thing that you should be sure of with your eyes shut is that nothing in your career has prepared you for it. Its Chaos, with an order only seen by a trained eye, and you will need allies, but choose carefully.

However, there is one common mistake which even the traditional corporations make in India and apparently its a similar case in china according to jack ma. When western companies enter India they make assumptions from the start, such as that the prices need to be dropped for the Indian consumer compromising their finesse, or that they have to localize in their marketing and distribution forgetting their origins. Your difference is your strength in the chaotic Indian market, and you will not beat your local competitors on their own turf. The common reason for this misjudgment is that these companies hire traditional business leaders with the traditional profile on the advice from another traditional executive whose leading them into the country. Meanwhile your local competitor is making smart human resource and real estate choices to bring themselves faster in the black with their limited cash strength.

Welcome to the jungle, Pun intended.

Your India strategy can be a lot more than just business development, as the market can start delivering for you from the very start if you dig into the vast human resources it has to offer. Becoming the largest single market on the planet in this case also translates to becoming the single largest human resource provider. In 2020 India's average age will be 29, compared to 37 in China and 48 in Japan. While It is the most overused statistic in the past few years it does matter.

Population can be a problem as a social issue, however when educated and trained, it can become a great asset in a growth story, and for Indians irrespective of their social standing, education is paramount. If you have the patience to put in the training you can nurture a group of loyal foot soldiers.

Labor cost is a concern of the hour in the west and that’s a discussion in itself, but like it or not the low-cost labor that Asia has to offer at the moment has played a huge role in facilitating the worldwide roll out of much needed technical solutions. On this front too as the social structure in china is changing partly due to its rushed consumerism, Indian labor costs are way lower than that in China. This is one of the reasons that apple has also moved a part of it production to India and is testing the waters to get the machinery going.

In terms of human resources there is one sector where India has always had a huge lead over China, the service sector. India’s early investment into communication, business process solutions' infrastructure and most importantly, language, has made India the go to supplier for cost effective service to the US, UK and Canada. At a very basic level too, for a long time, English and American consumers have been exposed to client services based in India, but even as a C-level executives if you ever wonder where the catchy presentations from the big 4’s in accounting or consulting with the template based visualizations come from, your answer lies in a cubicle at Hyderabad, Bangalore or Mumbai. So if you are a European enterprise looking for trained resources to connect with your English speaking clients, you know where to go.

One interesting case study to look at if you want to see a direct link between a western company’s success and the Indian human resource supply, is that of Microsoft. It began investing in India in 1990, right about when India opened its markets to the world and soon began hiring the most, choosing from the cream of the primary institutions. They created a steady stream of techies to their base in silicon valley ensuring a high quality stable work force. If you knew the nature of Microsoft's employees, their seamless transformation to a business solutions provider and success would not have been a huge surprise, and they are continuing to build development centers in India as explained by Mr Jean-Philippe Courtois in a recent interview in India.

Talking about Microsoft, Bill gates once pointed out that India's inter state competition is key to its development. This has created a very distributed landscape to hedge your bets unlike in China.

You have the people, cash and demand, now…. create a market!

There will be skeptical speculation about India being or becoming the world’s largest single market. For some population doesn’t matter, for few the purchasing power is diluted and some may also point out the chaotic markets. To this, people are the greatest resource and the greatest asset of a market is the belief we are going ahead with. Also, don’t assume, and then understand that you have a market of 1,300,000,000+ ambitious technical adopters, with a government which wants you and does not lead a conscious effort against your technology or business. In this scenario, you get to control the narrative and numbers as an ecosystem.

Take on the market with a nontraditional executive team, with the skill and patience to educate your partners and clients. Hold on to your differentiating values and the people will come.

I’m a strategy consultant for innovative enterprises in growth and expansion, currently consulting for Indian startups to enter and expand in France, and for members of the French and European tech ecosystem.

If you are a startup or member of the ecosystem, looking to grow in India or develop a program to work on this problem do drop me a message.

A share and your opinions will be appreciated