Why do Indian startup companies not become as big as the foreign ones?

Market analysis example for food business

Why do Indian Startups not become as big as the Foreign ones.

,Before answering - it is to be noted that the chance of startups to becoming highly successful businesses are very very low.

Very few startups become big and successful businesses.

,Now - what you are asking is why Indian Startups dont become a Facebook or Google or Tik-Tok with a worldwide global market,Had this question been asked before 2005 - I would have added a lot of things like lesser opportunities for financing or angel investors, lack of an entrepreneurial base etc etc.

,Today all these things are moot.

If you have a good product - investors will flock to it from all around the globe.

,,In my opinion - here are a few reasons why Indian Startups dont become a Global Giant in any area of field:-,Hair Cutting Saloon without any Technological EdgeSimple example.

I order food regularly from Zomato and Swiggy.

I always order u201cCash on Deliveryu201d Option, I always order specific types of foods like Shawarma or Chinese or Biriyani and I always order from select restaurants.

,Yet everytime i log in - i see the same screen with the restaurants arranged based on my delivery location and every time i have to keep scrolling and searching.

,Meanwhile when i use an App called GrubHub - in USA - it modifies my screen every time.

Based on my orders, my payment preferences and the restaurants i always order from - it acknowledges my choice and personalizes my screen modifying it from order to order.

,Thats the difference between Stock Algorithms and Adaptive / Evolutionary Algorithms.

,Youtube, Google, Tik Tok, PUBG, Instagram, Whatsapp - they all have evolutionary algorithms which read the user and analyze the user and slowly and steadily and personalize his experience entirely and completely.

,Thats called a Technological Edge.

Thats Intellectual Property.

Tik Toks entire value is solely due to that Technological edge.

Almost every Technological Startup in USA or other countries - have a Technological Edge that renders it a leverage or advantage,Almost every Technological Startup in India - has NO Technological edge.

Sure they have excellent programs and algorithms but they can be done by any decent programmer with resources.

,Bottom line - Indian apps like Zomato is just a App to deliver food with a connection to several restaurants and users.

Tomorrow someone else can invest $ 50 Billion and take over all of Zomatos operations.

Zomato has zero leverage or edge.

,Same with every Indian Startup - Ola, Uber, Byjus etc etc.

,Utterly inflated Valuation based on Terrible Terrible AnalysisGrubhub was founded in the year 2004.

In 2014 it had an IPO.

Its valuation was steady and accurate.

,This despite Grubhub having the Leverage or Technological edge.

,Now let us see some of the Valuations for some of the Indian Start ups:-,Byjus - 88000 Crore, Oyo Group - 64000 Crore, Ola - 35000 CroreSeriously!!!!,And some naive gentlemen actually say I am old fashioned and that the modern method of evaluating start ups have changed.

,Let me tell you - Valuing something has been the same for 3000 years - right from the time a Hebrew valued a Knondle of Gold.

,Its like buying a Plot of land for Rs.

50 Lakhs, predicting the population will keep growing, predicting the values will climb - and value the land at Rs.

10 Crore and make your deals based on that valuation.

,Ultimately - the Startup collapses under its own weight.

Best example was Snapdeal.

,Now - before you ask me - then why do big venture capitalists invest so much money into these startups - the answer is,(a) They hedge their money.

They invest in 100 startups with the bet that 2u20133 will become public and repay their money 100 fold making up for the losses in the other 97u201398,(b) Eventually they know - the ultimate Bakraa is the Indian Public.

Eventually the Naive public - either directly or through conmen mutual funds or institutional investors will be buying IPO shares of the startup - giving the Investors their returns 10 - 20 fold.

,Not one Startup is worth even 10% of its valuation.

Not a single one of the so called Group of Tech Startups - Oyo, Ola, Byjus, Zomato, Swiggy etc.

,Cancer like Growth Model against the Banyan Root ModelThe Banyan Root Model is a steady model.

Establish a Business, consolidate an initial customer base, grow your roots, then expand further, consolidate the next set of customer base through word of mouth, then expand further, consolidate the next set of customer base through advertising and publicity, then expand further, consolidate the next set of customer base etc etc etc.

,It shows a Medium Term Growth plan of 10 - 15 years during which you consolidate your customers slowly and steadily and start expanding only after a specific period of time.

You ask for investments only once in 4u20135 years - Phase by Phase and at each phase you have some innovation to take your plans forward.

This way you deal with Competition and you can deal with any issues or problems.

,Amazon, Google, Flipkart, Sakae Sushi all follow the Banyan Root Model,The Aggregation Model or Cancer Model is a huge disaster that was invented by India.

Establish a Business, advertise, advertise and saturate advertise, pull political clout, make use of media extensively and grab a market share.

Before consolidation of that market - ask for more funds to go for a bigger share, and before that consolidation - ask for more funds to go for an even bigger share.

Soon - you are asking for funds to artificially sustain your growth because your market has become saturated and you simply cannot go any further.

,In this model - you collapse under your own weight.

,Oyo, Byjus, Ola, Swiggy, Zomato, Unacademy all follow this model.

They are already unviable - all of them.

,Instead of using your funds for cutting edge research or innovative streaks - you end up spending your funds on advertising and hype.

,OLA promised drivers the sun and moon to get them to sign in and kept changing the terms every 6 months - just to keep aggregating.

Now its market is totally saturated and Ola is getting stagnated.

Same for all of them.

,Unrealistic Market ProjectionAll Startups always believe the Population of India means a Huge MarketFor instance back in 1996 - McDonalds estimated that by 2010 - India would have 180 Million market for American Fast Foods while China would have 220 Million.

,Today in 2020 - while China has 280 Million market for US Fast Foods, India has only 50 Million and it has saturated.

,Likewise - the Startups predict the markets to be 100 - 150 Million in their business plans but in reality their markets saturate at 10 - 15 million and all their calculations are thrown into the wind.

,Best example is Zomato.

They made their business plan based on a market by 2020 but the market is barely 35% of what the planned.

The reason is simple enough - only a few foods are palatable and tasty on being delivered.

Rotis, Nans, Chappatis, Idlies, Dosas, Pongal - are meant to be eaten crisp and hot.

Delivering them makes them cold, soggy and tasteless.

This was one simple thing they failed to include in their future market analysis.

So their market projection (Yesterday I had 10000 Cusomers, today i have 100000 Customers so tomorrow i will have 1 Million customers) is wrong.

It is very likely in the INdian market - your customer base will saturate quickly enough.

,,As a result - Indian Startup companies are geared and designed to collapse harder and faster than most other countries.

,,Common Theories which i have discarded(a) Startup Culture is not encouraged in India because of focus on careers and salaries instead.

Data says that since 2010 - India has had the worlds most startups after China, South Korea and Japan (In terms of No of Startups per Capita Population),(b) India has little angel investors or fundingToday this is a moot point.

Any startup can get a potential investor from any country in the planet as seed funding (<$ 10 Million) if the project has potential.

,(c) Lack of TalentWhile i agree brain drain has caused potential Researchers to leave for better shores - I am sure we have enough talented guys to develop startups.

,,Some Startups which have defied the odds: - Khatabook, Flipkart, My Dukaan,Even though Flipkart is still hugely overvalued and Walmart is trying to get a better Value to Potential.

Market analysis in business plan PDF

Thereu2019s a big difference between a business plan and a pitch deck.

If you want to show the information to investors, and you donu2019t know how the information should look, then we need to figure out what business plan and pitch deck do.

,Pitch deck is a presentation in PDF that is shown to investors and help entrepreneurs get funding for their project.

Pitch deck is usually not very long (about 15-20 slides).

Pitch deck contains the information about your business, market size, problems you want to solve, and how.

The main goal of a pitch deck is to increase chances for project funding.

,A business plan is a more serious document that may contain 100 pages and more.

It is a document that may show plans for a few years ahead and the whole plan for companyu2019s success.

Moreover, the business plan includes market analysis and SWOT analysis (strengths, weaknesses, opportunities, threats).

So the business plan helps your investor see how you are going to invest their money and use them successfully.

nAs you can see, the difference is major.

Feel free to read more about pitch deck and business plan on Cadabra Studiou2019s blog (cadabra.

studio/blog).

Benefits of market analysis

Supply market analysis is vital to any business because it allows you to understand the landscape of the market, who your competition is, what your customers want and how to meet their needs.

,In short, supply market analysis is a way to reduce risk and increase profitability.

,There are many benefits of conducting a supply market analysis.

Here are just a few:,1.

Helps you understand your competition.

When you know who your competitors are and what theyre offering, you can make sure youre offering a better product or service.

This knowledge gives you a competitive edge.

,2.

Gives you insights into customer needs and wants.

Understanding what your customers want helps you create products and services that theyll love.

This information is invaluable when it comes to increasing sales and retaining customers.

,3.

Helps you find new supplier options.

When you know whats available in the market, you can find suppliers that offer better terms or products that meet your specific needs.

This can help save money and improve quality at the same time.

,4.

Reduces risk by identifying potential problems early on.

By understanding the landscape of the market, you can avoid potential pitfalls that could jeopardize your business dealings down the road.

This allows time for solutions to any identified risks, so they dont become actual problems.

Better yet, some risks may be avoided altogether with proper planning.

,Reduced risk leads to better decision making for business owners large and small.

,5.

Improves profitability.

When all other factors are equal, businesses with lower operating costs will have a better chance at achieving profit goals than those with higher costs.

By analyzing the supply market, businesses can find ways to reduce their own expenses which will have a direct impact on their overall profitability.

,Conducting an accurate and comprehensive supply market analysis can be extremely beneficial for businesses of all sizes u2013 from small mom-and-pop shops to large multinational corporations.