Building “XYZ for India”- cut, copy and paste solutions
Stories and science of Indian copy cats.
The rise and rise of the Indian startup ape-
The Indian startup ecosystem has been making news for quite some time now. Every other week or fortnight a new, almost uncommon startup enters the unicorn club. This has become such a normal phenomenon that people like you and I have come to believe that maybe the unicorn club is not as elite and hard to get in after all.
2021 alone witnessed a sharp rally in money flowing in startups in form of either standalone investments or via the mergers and acquisitions route. This momentum was building up in 2020 and it continues to date.
Given this unstoppable growth, India has bagged the title of third largest startup ecosystem globally but despite this prestigious title, it lacks successful innovation. A recent study by IBM and Oxford Economics has reported that 90% of Indian startups fail within the first five years of their inception. Additionally, 77% of 90% of the said startups die due to lack of innovation- business model, planning, technology or simply anything new.
It is no news that Indian startups are known to fine-tune an existing model to serve domestic needs. There is OYO for AirBnB, Gaana for Spotify, Mauj for TikTok, Flipkart for Amazon, Ola for Uber and innumerable XYZs for India. These brands have somehow managed to get a grip in the local market but they are not alone. According to data supplied by Tracxn, for every heavily funded American startup around 50 lookalikes spring up. And on the regulatory front, unlike China, which holds protectionist policies against foreign tech firms and other barriers to entry, India remains relatively open and free.
The real unasked questions that keep oscillating in the ecosystem are — are Indian startups worth the hype? Is the Indian startup valuation bubble inflated? How is it so common that the top Indian startups are just a simple copy of American giants? Is the Indian economy equipped to handle the quick scaling up of startups? but most importantly — Are Indian startups solving Indian problems?
Imitation is the innovation?
If a start-up clones or imitates a solution from westernised economies and moulds them according to the local market to get their hands on some quick cash, it is highly unlikely that they can scale sustainably. This is not me but years of data and research suggesting that multiple startups have and will die a slow death by being mere copycats.
But the bigger question that needs to answer is, what happens next? The product idea, the business model is copied but without localisation and a strong go-to-market strategy, even the global giant We-Chat also failed in India.
In another school of thought, the constant VC pressure can also be held accountable for entrepreneurs to take the tried and tested routes. Many investors are publically hesitant to “venture” into a new space. Amit Kumar Agarwal, CEO of No Broker ( Another freshly minted unicorn in India) has been candid about how investors in their early-stage funding would greet them with the same set of questions about examples in the West or success stories from the Valley.
The reluctance of investors is justifiable until a tip pointing and the need to change is echoing itself again and again.
Long story short, no copying will be successful without hyper localisation. The infamous Indian consumer is different and unique and as solution providers, startups should focus on finding a solution for “their consumer”. Their solution could be a simple Ctrl C+ Ctrl V or can be building something brand new from scratch.
To answer whether imitation is the new innovation — maybe.
Can Indian clones ever beat their global counterparts?
Call them copycats if you want, but India’s prudent entrepreneurs are filling emerging market gaps with tried and tested business models. The game is of execution and not the idea of a product.
Indian startups are putting up a strong fight against their multinational peers. Whether a customer prefers a homegrown copy to a global giant should be a choice. A choice based on better product options, more features, competitive prices, cultural fit and whatnot over the geographical originality. There is no winner or a loser here if you engage the correct target audience for your startup.
Also, there is always a strong possibility that the big sharks will acquire the small lost nemos and everyone walk home with bags full of exit cash and no local competition but that is the nature of business and empire building. Until then as an economy, we should welcome startups and not worry about them shutting down or copying from the wild west. We should celebrate them.
We are no longer building the “X” of something or somewhere, we are the “X”.