Sramana: I have noticed a couple of trends that are very strong. Zoho is one of the first who did product development in India while selling globally as a SaaS product. I have seen a lot of companies following that model. They don’t even need to have a presence in the U.S. because they sell and acquire customers online. This model has produced a lot of interesting mid-scale companies who are doing anywhere between $3 million and $20 million in revenue. A lot of these companies are bootstrapped as well.
Amit Gupta: I have seen that as well. It seems that some of those companies are catering to the enterprise or B2B segment.
Sramana: I think they are focusing on the small business market over the enterprise market. The enterprise market is a lot more difficult to do in that mode, but the small business market is rather straightforward to do.
Amit Gupta: What I like about mobile is that there are a lot of additional markets. Mobile is everywhere in the world. Imagine the power of mobile presented to all of those companies. You can start a consumer facing business in India without any problem. India has a strong workforce.
Sramana: We have a company in our product portfolio that builds a great autism app. They are selling that app using this model.
Amit Gupta: The point is that we have investment capital in India that understands the benefits of coding. We have a strong understanding of the U.S. market as well as other markets. We are in a unique position of creating value across multiple products. There is no reason that you cannot build great global businesses in India.
Sramana: If you look at the global market, the mobile app business has become very crowded. You have to find a niche where you can make a differentiated story. There are other companies that are more mature but it is very difficult to get discovered today.
Amit Gupta: I think that the enterprise mobile space is still available. Most of the work done has been to consumer facing applications.
Sramana: I am commenting on the cost of customer acquisition. When the cost of customer acquisition increases then the need for capital also increases. We are living in a highly connected world. When I was in graduate school, the Internet was just starting. It took us a long time for that Internet to get penetrated widely and there was no real access in India.
Amit Gupta: Things have definitely changed, including in India. India has 200 million unique users. My point is that there are available spaces for businesses to get started.
Sramana: India may have 200 million unique users but they are a shallow user base. I point to the recent launch of Kindle as an example. I fully agree that the user base will continue to grow and mature.
Amit Gupta: I am with you as well. The paid user base is small but you can launch your platform in other markets as well. The business opportunity is always there. Things are improving in the context of India.
Sramana: It may take a few years. China has a very deep, involved user base. I could see that India will get to the same point by the end of the decade.
Amit Gupta: I agree. It has to happen.
Sramana: Thank you for taking the time to share your story. Best of luck as you continue to build your company.
[Also check out my Entrepreneur Journeys book, Seed India – How To Navigate The Seed Capital Gap in India]