Last summer, I wrote a Concept Arbitrage series focusing on the Indian market.
The market has moved, and Consumer Internet and Mobile Value Added Services, which were turning hot then, are much too hot now. Valuations are very high. Much too high. At this rate, I dread to think how long it would take to actually back-fill those valuations, and get any return for the investors or the entrepreneurs.
On top of that, there is a serious overflow of capital, with 120 venture / private equity firms walking up and down the Bangalore-Mumbai-Chennai corridoor.
All the low hanging fruits – online travel, movie rental, jobs, matrimonial – have several players, which is to be expected in hot segments. Niches, however, are more open. For example, as I pointed out before, Events & Reviews – the CitySearch concept – has not been arbitraged well at all.
As is customary in the venture business, now, we need to turn our heads to the next trends. Remember, foresight is what makes one successful in this business, not Me Too!
With Consumer Internet, the Indian market lagged the US market by almost a decade. Why? Because, no venture capital industry existed in India through much of the nineties. Even until 2005, there was a rather nascent one. This phenomenon has changed. With it, has changed the tremendous opportunity that lies ahead of the Indian market to actually play in the same timezone as the US market.
With that context, let me propose that Indian entrepreneurs start looking at the trends that would shape the US market in the next 5 years. Let’s look forward, not behind.
I propose, we look at Web 3.0 and Enterprise 3.0. Especially with Enterprise 3.0, India has a huge mass of skilled developers who have experience in developing enterprise infrastructure and applications for multinationals and outsourcers. It’s time to call upon that experience, and understand where the opportunities might lie.
This way, entrepreneurs in India and US would be working on the same generation of problems, and I suspect, India can leapfrog a generation of technology that has already become outdated.
This segment is a part in the series : Concept Arbitrage