I am currently reading “Different” by Youngme Moon ( HBS marketing faculty) which talks of “idea brands” among other things. This book coupled with Innovators Solution by Clayton Christensen are books that may inspire some of the people who will create billion dollar market cap companies in India from scratch.
For most entrepreneurs hitting a base hit ( say a 100 crore exit) makes much more sense then aiming for a home run ( 4500 crore) where most who try will fail.
When I relocated to India in 2004 I had thought that by now 5-10 large startups would be visible but I was wrong about that. I wonder whether the environment is now better and that by 2020 we will see $100 billion in market cap from companies that do not exist today.
I hope we will. To continue on a 8% + GDP growth path India needs innovation and entrepreneurship.
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There is no doubt that great roads everywhere will make a huge difference but let me make a few points. Over the last ten years innovation has been important and companies such as Financial Technologies,Educomp, Yes Bank, Suzlon, Airtel to name a few have added a lot in market cap. For the telecom industry making money from the masses was “different” and it may help some players over the next ten years become global giants.
China and India will grow at almost the same rate this year but China will add $600 billion to its GDP while India will add $120 billion. As the base grows it becomes harder to grow at 8-10% because the absolute growth required is higher.
To build those roads we need capital inflows which will keep coming as long as India reaps its demographic dividend and produces goods and services that people globally want to but.
The $100 billion I talked about need not come from internet companies or technology plays. These companies need not be venture funded. Large business houses may set up entrepreneurial ventures just as Infosys created Progeon.
$100b in marked cap from today’s Indian startups in 2020 is a pipe dream. For a reality check, count the top 50 startups in India in 2000. Most early stage VCs then are still around and they will help you make a list. The listed companies included Sify-Indiaworld, Rediff, and so on. I’d reckon that the total market cap of such top 50 companies does not exceed $ 5 B, even after counting big listed BPOs who got started in-between. So who are we kidding. The tech time lag with US vanished in 2000 itself. But the next gorilla tech companies like Facebook, LinkedIn, Skype or VMware all came from US/west, not from India.
India is probably the only nation that does NOT need innovation for 8% GDP growth. We have such a huge shortfall in infrastructure and such a high savings rate, that just infra buildout and more consumer spend on everyday items will make sure of 10%+ growth.
Let’s focus on just one thing: great roads (everywhere) and see the difference it will make.
Hi Rohit,
I made three angel investments, one I exited at a small loss, another at a small gain and one has been a major headache so I will do no more angel investing. This only means that angel investing does not work for me. That could be because of me of because of systemic issues in India. I suspect it is a combination of both. The one place I maybe successful is in being one of the promoters of Eko but that is not truly angel investing. In Eko I spent a year helping set the DNA and then sold part of my stake back to the main promoter as per the promoters agreement we had set out in the beginning. The main promoter has done a fantastic job in getting Eko to the point it has now reached and maybe it will become a big company. If it does then I would consider Eko a success for me as well.
At present I am trying to help the government think big pro bono and if a founding team and I vibe really well I may becoming an advisor for a small promoter stake but my bar for that is very high so I very much doubt that I will get involved with more than a couple over the next few years if at all.
Having too much fun trying to make the government think “different”.
As for your question on could I have done things differently. Most certainly yes !!!
So its been 6 years Sanjay!
As an angel investor, do you feel you could have done things differently? As startup guys many of us have tried and failed and some are still trying. Would be interesting to hear an angel investor’s account.