Sramana Mitra: Especially for companies coming out of India who sell using inside sales either into the large enterprises or SMB, the SMB market has a lot of headroom in terms of the next 5 to 15 years. That is a market where there is a lot of technology going in. It completely aligns with India’s strength in building global cloud plays.
Ashish Gupta: Especially in those products that are fast follower products. We are still not world class in product management or user interface, but if there is a fast follower opportunity where one can learn from the leader as to what product to put in, that becomes a very interesting example of what you’re calling out.
Sramana Mitra: Zoho is a CRM product. I’m very good friends with Sridhar. He’s one of the most original thinkers I’ve met. The truth is Zoho would not have been possible had Salesforce not built that market.
Ashish Gupta: One would argue Freshdesk is simliar. Zendesk charted the course. Freshdesk charted the same course faster.
Sramana Mitra: Faster and cheaper.
Ashish Gupta: Very true.
Sramana Mitra: Everybody who’s listening, one of the products that I think is ripe for this kind of disruption is Marketo. Marketo is an expensive product that needs to be brought down to the SMBs at an affordable price point. Same with HubSpot. If you can drop the price down by 10x, that would be a fantastic offering. What else looks interesting right now?
Ashish Gupta: I will got into controversial territory right off the bat given the e-commerce point that you were making. Vertical e-commerce is another area that we are quite keenly interested in. We’ve recently made an investment in a furniture company which takes care of the fixed furnishings in the house like cabinets and kitchens. One of our companies is Yepme, which does branded clothing. It’s not so much a retail play as much as it is a branded apparel play. Think of building GAP online.
Sramana Mitra: Private label. I’m very bullish on niche e-commerce globally. I love e-commerce. I think it’s a great business model. Niche e-commerce monetizes extremely well. It’s very possible to build vertical brands in niche e-commerce. I have a book on this.
Ashish Gupta: This is one area we’re excited about. We’ve started looking more from a forward-looking perspective at some global consumer mobile-first apps. Consider Snapchat. Snapchat has come about because enough people are experimenting with enough ideas as opposed to because there is a fundamental technical breakthrough. India is not ready for technical breakthrough products.
While we have a few good technologists, we don’t have the density needed to build many infrastructure products. However, there is enough of a density of both entrepreneurs and consumers to throw many pieces of spaghetti on the wall vis-a-vis consumer experiments.
Facebook is Facebook of India. YouTube is YouTube of India. The consumers are already in tune with how consumers think of digital assets. That is one area where we’ve started experimenting but not made any investments yet which is mobile first that look digital.
Sramana Mitra: We have a company in that space. It’s a complex play. The company is called Avaz. The origin is an autism app. Other than in mobile commerce, messaging, and gaming on the mobile phone, there’s not a whole lot else that’s monetizing very well.
The question is are we going to be able to come up with other use cases that are going to monetize and create new user experiences? Yelp on mobile is very successful but monetization is not that great.
Ashish Gupta: True.
Sramana Mitra: Any other concluding thoughts?
Ashish Gupta: I’ll give you an interesting anecdote. This company that I mentioned in the furniture space is called Livspace. They have relocated a team from Italy. There are now 10 Italian designers that are living in one of the enclaves in Bangalore. This is just a very interesting example of something that I’ve started seeing more and more.
More non-Indian entrepreneurs have begun to gravitate to India. Frothiness seems to have extended not just from the investor community but also in the entrepreneur community. Bangalore is fast becoming, in my view, the disproportionately larger hub of technology-centric entrepreneurship.
Sramana Mitra: That touched on one of my absolute hot buttons. I don’t know if you read my Vision India 2020 book. It has a lot of these ideas of moving Italian and French design. If you want to build world-class brands in fashion and luxury, I happen to understand these categories quite well.
Ashish Gupta: Well, you have a call coming. The Italians, French, and the Belgians do a very nice job of that.
Sramana Mitra: Indians generally don’t do that well in those categories. It will be a fantastic marriage of skill set to be able to combine those two categories of talent and really come up with global brands. That brand opportunity is really strong. I’m delighted to hear that you’re seeing some of that happening.
Thank you for your time.