Greetings, fellow enthusiasts of innovation and entrepreneurial spirit! Today, we embark on an exciting journey into the vibrant realm of the India startup ecosystem. With India’s recent surge to the No.1 population in the world, this thriving landscape has witnessed an incredible surge of innovative ideas, passionate dreamers, and groundbreaking ventures, all contributing to India’s rapidly transforming economy.
India startup ecosystem is a bubbling cauldron of endless possibilities, fostering a conducive environment for fresh, imaginative minds to flourish. However, there are certain challenges and drawbacks like founding limitations, intense competition, and bureaucratic hurdles that exist within the ecosystem.
Now, let’s explore the depths of this ever-evolving ecosystem through an exclusive interview with Prem Nadar, the Co-founder and CEO of Jungle Lakes, a startup community that connects investors, corporates, and other stakeholders with startups globally to collaborate and grow.
Without further ado, let us dive into the heart of this enlightening discussion and discover the secrets behind the magic that fuels the India startup ecosystem and the hidden challenges that comes with it. From this interview, you will be able to learn
- Who is Prem and why is his insight valuable?
- Why is the Indian ecosystem great to start a startup or expand to?
- What’s the most important thing (hidden rule) that founders should know?
- What’s the biggest challenge that founders are facing in India?
- Who are the people & organizations founders should know in India?
- What Prem is looking for?
Below is the full transcript of the interview
Welcome to our Startup Ecosystem Expert interview. This is a series of interviews where we go pick the brilliant brain of Startup Ecosystem Builders on our platform around the globe. We hope this can provide the funders some insights on the opportunities, challenges, and people you should know and how international entrepreneurs can actually enter those markets. Today we have Prem Nadar here with us to get a better glance at the India startup ecosystem. Welcome Prem!
Hello, thanks Pili. Thanks for the warm introduction. Hello guys. I hope it will be wonderful talking to you all.
1- Who is Prem and why is his insight valuable?
Great, well thank you, thank you. So let’s dive into the questions. First of all, we would like to get to know you a bit more, so could you please introduce yourself to the audience so we know who you are, and what you do in the India startup ecosystem?
Perfect. So I’m the co-founder and CEO of Jungle Lakes. So Jungle Lakes is an open startup ecosystem. Our tagline is democratizing opportunities. You know, we go by the belief that talent is everywhere, but opportunities are not. So our mission is to create a startup ecosystem, an open community, an open global startup community, connecting all the stakeholders of the ecosystem with one another to explore greater collaboration and mutual growth. Like we connect global corporations and investors globally with startups from emerging markets and all those regions. So that, you know, it bridges a gap between the resources and the opportunities. So that’s what is all about us.
2- Why is the Indian ecosystem great to start a startup or expand to?
Of course, of course. Because we understand the gap between the startup founders and the opportunities. That’s actually the reason why we built Founders Lair. I’m so glad that we are on the same direction, that we all want to help founders to get help. So good to know that. Good, so amazing introduction. Thank you so much. Let’s zoom into the ecosystem. Could you please tell the audience why India is a great startup ecosystem, what’s good about it, and why should people go to India to start their business?
Okay, perfect. So the biggest advantage that the India startup ecosystem offers is its cost factor. You know, we are unbeatable when it comes to the cost factor, you can register your startup, hire a few teams and get a startup up and running within a few thousand dollars. The talent here is cheaper, you can hire a few interns or engineers for a few hundred dollars and you can easily set it up and running.
Secondly, there are huge opportunities here. We all know India is an emerging market. It’s a developing world. So there’s a plethora of opportunities like, you know, obviously 1 .4 billion people. Everyone is trying to become better and the aspirations of the young Indians are increasing. So there’s a plethora of opportunities here. Almost every sector needs improvement, needs correction and people want a better life’s improvement. Unlike 20 years ago when people were like, okay, we’ll work it out. We’ll just take it. We’ll just adjust to this thing.
So that’s no more the mentality, people want a better life, and people are yearning for it. So that’s why I said there are huge opportunities here to serve 1.4 billion people. If you want me to name specifically the sectors, then Financial inclusion is one big thing that you can focus upon. Because even today credit facilities are not available to the entire population. The unbanked population is still huge so financial inclusion could be a sector that you guys can focus upon.
The healthcare sector, like quality healthcare. So that is one thing like, you know, everyone needs good quality health care, correct?
Secondly, quality education. I’m not saying that parents (around the world) are not obsessed (with education). But in India, Indian parents are much more competitive and emphasize more on quality education. So there is one sector which you can tap into.
Quality of living, like the good infrastructure, good healthcare, good residential building, good transport. So these are the sectors that need immediate changes and improvement and which present a huge opportunity for you for the startup community.
3- What’s the most important thing (hidden rule) that founders should know?
Great, great, very insightful! I’m just glad that you also point out several industries that are good for people to enter, that’s very helpful. So besides that, my next question would be what are the most important things that the founders should know when they want to build a startup in India? More of like a hidden rule, you know, the things people should know, but they don’t know?
So there are three or four things that founders should understand when entering the Indian market.
Number one – It’s a slow market. It’s an excruciatingly slow market. And this goes for the VCS as well as the founders. For most of the foreign investors who invested in India, this is for them as well. The typical VC fund cycle is seven years to ten years and that will not work here that definitely will not work here. So you need to have at least a 15 to 20 years’ time horizon only then you’ll be able to succeed here.
And another important thing is that what works in the West or what works in the European market, the developed world, will definitely not work here. India is a very very different market compared to the West. So there are a few startups like you know who are working abroad in the Western world and they came back to India and then say like we will do this for the Indian middle class. So there’s one thing which you need to understand. There’s a huge difference between a European middle class, an American middle class and an Indian middle class. The disposable income here of the Indian middle class is almost negligible. So they have very little money to spend on the non-essentials. So this is the number one thing that you guys need to understand.
And another thing that you guys need to understand is that, as I said before, we have a 1.4 billion population. Obviously, it looks good on paper. It looks really really nice, right? 1.4 billion population. A huge market we can target and all that stuff. But the reality is very different. It’s extremely extremely different. You know it’s like the famous James Bond quote goes “Looks can be deceptive”. And that is completely true for the Indian markets. Because recent surveys say, out of the 1.4 billion population, only the top 30 million households of India have the paying capacity to pay a premium for the products. So essentially, the rest of the population, they struggle to even pay for the basic goods. Even for the basics like food, clothing, and shelter, that’s a struggle for them. And they left this almost negligible disposable income to spend on non-essential.
So technically, for the startups, the target audience is not the 1 billion population, but just the 30, 40 million, 30 to 100 million population, the “top 1%” what we called. That is what the target audience is. So this is one thing that you guys need to be very, very aware of. Because people blindly jump into thinking that we have a huge population and we can target the entire market and this is a huge crowd and all. So that is not true. So only the top 30 to 100 million people have the paying capacity.
And that is why the competition is intense. Because every startup is targeting this population. They want to target, obviously, those people who have the paying capacity. And only these people have the paying capacity. So the competition intensifies there. And the drawback is that these 30 to 100 million people, the top 30 million households, have a plethora of options to choose from. And India is a cutthroat market. I mean, in the literal sense. It’s a highly, highly competitive market.
As a startup, you’ll always find someone who can provide the same services that you do, at a few dollars cheaper price. So the margin is always going to be an issue, at least for the next 20 -25 years. I mean, no doubt growth is there. but obviously, it will take another 25 to 30 years for us to reach that level. But in the interim time, this is going to be a challenge. So that’s something that you guys need to be aware of.
And another thing is, it is not an open community, guys. Please understand, the India startup ecosystem is not an open community. It is what we call, there are a lot of gatekeepers, a lot of middlemen who will block your access. My friends in Hong Kong, Singapore, the US, and all these places, it is easier to meet any founder, investor, or decision maker of some good company. But here, it is extremely difficult to network with good people because there are gatekeepers. There are gatekeepers blocking your access.
Like I said, your network determines your net worth. But here, building a good network is a huge challenge here. If you’re a student of a college, if you don’t come from the Ivy League college, like the IITs, IIMs, or if you don’t come from a good family background, it will be very difficult for you to like, you know, make a name for yourself. Because people are not willing to give back. the mentality of helping out others, providing them with connection (is not there), even in the friend circle.
I will tell you this thing, supposing one of my friends knows Masayoshi Son for example, and I am working on a startup. If I go to him and say, “You know Messiah Shison, please introduce me to him”, then he will not introduce me, he will be like, “Okay, you give me a cut off your thing, that’s the only way I will help you out”.
So the culture of helping out and giving back to society is missing here. And that’s the reason you see so many accelerators in India fail, the TechStars, 500 startups, all had to shut down because the mentors are not available here.
And then secondly, guys, beware of fake mentors, beware of fake investors. Because in the India startup ecosystem, especially in the startup events and all, this is very common. You know, the middleman and brokers posing as investors, the consultants posing as mentors, trying to pitch you their services. So beware of them. Don’t trust anyone blindly. So these are the two, or three things that the founders, if they are in the India startup ecosystem, have to be aware of.
4- What’s the biggest challenge that founders are facing in India?
Thank you, this is so insightful. Personally, from the outside (point of view), I definitely see Indian markets as what you said, you know, it’s a huge market with so many people, actually the biggest population right now in the world, but I didn’t know there are so many hidden rules after this. And I’m a little bit shocked by the things you mentioned, especially since there are a lot of gatekeepers, the culture of giving back is not really a thing. And also it’s not really a funders market. It became the investors’ market because the competition between startups is so competitive. So yeah, I think that’s a very interesting insight. Thank you so much for this.
Actually what you answered basically covers my next question, which is “What is the biggest challenge that you think founders are facing here in India? I think you already covered a lot, but if you can only name one, what would it be?
Lack of capital. Because the investors in India are very risk averse. So they will not be willing to bet on something new, so they want a reference. The first question they’ll ask is “Does a similar product exist in the world? Does it exist in the West?” If yes, then the conversation goes forward, otherwise, the conversation is dead. They are like “No no, we are not gonna be investing in this thing.” The other thing is that the number of investors is pretty low in India and they are very sparse to be honest. Those investors who are there, they are very risk averse, especially for the early stage startup, it becomes difficult to gain the initial capital.
Another big challenge is that there are no early adopters and there are no paying customers there like I already mentioned. Just the 30 million population have the paying capacity and the others don’t. And even those people who have the paying capacity, they’re not early adopters. India is not an innovative market, it’s an imitative market. So here the general trend is like if something works in the West, if something works in Europe, that’s when the people will have more interest. I mean even now you can see this thing, right? I’m wearing an American brand, it’s not an Indian brand, right? Exactly that’s how the consumer is here in India. They trust American brands or European brands rather than Indian brands. So we’re not early adopters, we are slow movers.
Another biggest challenge is monetization. Monetizing your crowd, and monetizing customers is a huge huge huge challenge here.
I’ll give you one simple example, one real-life example. You must have heard of Share Chat, that’s an Indian social media app. So they came up with the idea of targeting the tier 2 and tier 3 city people of India. So they had a very good backer. I mean, on paper, it looks good. Like India has a lot of rural population. So we will target them. India doesn’t have a large English-speaking population. So we will target the rural population and we will have a huge audience. They got invested from Google and all those people who are the blue-chip investors. And they have a good target audience. I mean, the user base is amazing. They have over two to three hundred million users as of now.
But recently in the month of January and February, their advertisers complained. Despite such a huge target user base, they’re not able to monetize it. So what’s the point of having such a big user base? People cannot even monetize it. So this is gonna be a real challenge here.
5- Who are the people & organizations founders should know in India?
Right, right. I think it also relates to the fact that you mentioned only 30 million people actually have the leisure or have the money, extra money to spend, but the rest are mainly focusing on their daily life and how they can survive. Yeah, that also contributes to the fact that you said, it’s hard for startup companies to monetize their business. I totally agree with that.
Thank you so much. It’s a very valuable insight. So moving forward, Founders Lair basically cares about like community a lot. That’s why we utilize three products to help connect founders with global opportunities. That’s why we see the struggle that founders have when they are at the early stage. They don’t have access to different programs or they have to follow tons of LinkedIn pages just in order to keep up with what’s going on, and what programs that are available. So this is what we do.
And definitely, we care about the community a lot. We always think, okay, how can we help community builders like you and how we can help the ecosystem in general. So we wanted to also know who are the people that you would recommend. Yeah, who are the people you would recommend founders to know in Indian markets? As you said, like there are so many fake mentors, fake investors, and fake gatekeepers, but I bet there are people like you who are willing to offer a hand to others. So what are those people? Can you name a few?
Okay, so number one thing, obviously there are a few good people as well. It is not that everyone is fake. So some good people are Kuljit Rai (firstname.lastname@example.org). So he’s an active angel investor who takes bold bets. He’s always looking for the next innovative startup and all. Obviously, he’s not that he does not place in the millions and billions, but he’s a good like, you know, angel level investor, seed level investor, like, you know, who can place bold bets and again make a few recommendations as well.
Another thing is, there’s an accelerator based in Bangalore called Startup360 and 100 Open Startups. The chairman is Varada Rajan Krishna. So he also is into the similar field. He connects startups and global corporations to startups in India. So that’s the thing.
And then the Venture Catalysts, they are an accelerator investor based in Mumbai, and they have a good network as well. And plus, Indian Angel Network, they are, I think they’re the oldest, they’re the first angel network in India, if I’m not wrong. They’ve been in existence since 2005 or 2006, I believe if I’m correct. So these are the people I know, whom I have met, interacted with personally, talked to them, and I’ve seen them over the years, and I’ve seen them grow. So I know that these people are definitely genuine.
6- What Prem is looking for?
Sounds good. Sounds good. I mean, the community definitely needs people like you and people like them to be willing to help others. That’s, that’s very good. Thank you for sharing. And then that goes to my last question, which is, thank you so much for sharing all those valuable insights. And we also want to return the favor to you. So we want to know how can the audience off of this video or how can the global community, be able to help you, and what they can do.
So, the number one thing which the global community can do for the India startup ecosystem is to give access to capital deals. Global investors who can take bold bets on innovative startups and most importantly they are patient, like I mentioned at the start of the interview, the seven-year fund cycle will not work here. So we need those kinds of investors who have this between year 20 or 25-year time horizon. So that is the number one thing.
Secondly, giving access to the global community, giving access to a rich market, the premium paying customers, their monetization is easy like the UAE, Singapore, South East Asia, Europe, and the US. So we need to create more and more global gateways helping Indian startups to sell their products in these developed markets, the high-paying markets, so that monetization is easy.
Like our discussion, monetization is a difficult part in India and many Indian startups have actually realized this thing. So what they are doing is once they reach a certain scale, once they reach a certain financial capability, they are moving out of India to US, Europe, Singapore, South East Asia, Hong Kong, and UAE, which is a new area where Indian startups are hoping to. So these are the things where you can help us out by creating more getaways, and also the corporates could take over more and more Indian startups here so that they can integrate them into their portfolio and into their services. That’s all.
Thank you, thank you. Thank you so much for actually thinking for the whole India startup ecosystem. But what are the things that we can actually do for you, like you personally? I know that you have Jungle Lakes and this company so we want to know what kind of things or resources are you looking for right now.
So currently we are in expansionary mode, we are looking at Southeast Asia as well as UAE markets. So if you guys can help us out with the investor ways in those countries or the corporates, that would be more helpful.
And also, we can help corporations globally to connect with Indian startups, where they can acquire the startups at their earlier stages and integrate them into their service. So, any corporate connections and investor connections, that would be really helpful.
Thank you. Thank you. Yeah. So, for the audience, if you’re looking for early-stage Indian startups, please reach out to Prem. And I’m sure he will be able to help. Thank you so much, Prem. I think this was a very good session and really good insights into the India startup ecosystem. And we’re looking forward to connecting you to other global startup ecosystems as well in the next couple of our other interviews. So, hopefully, more dive into other regions like the Philippines, Thailand, and Vietnam. So please stay tuned to the latest video. Thank you so much, Prem! It was a great interview. Thank you!
Thank you so much, Pili. You guys are doing wonderful work. Thank you so much.
About Prem Nadar
Prem Thangaraj Nadar, Co-founder & CEO, Jungle Lakes.
A parallel entrepreneur who suffers from Shiny Object Syndrome democratizing startup investments by building the world’s biggest open startup community to connect investors, corporates, and other stakeholders with startups globally to collaborate and grow.
Many corporates go bankrupt due to their inability to innovate constantly or inability to unearth the latest trends in their industry until it’s too late. Alternatively, many startups go bankrupt because they lack the resources to scale up faster. Jungle Lakes bridges this gap and connect them for mutual benefits and accelerated growth.
About Start Ecosystem Expert Interview
Founders Lair is conducting a series of interviews where we go pick the brilliant brain of startup ecosystem builders on our platform to share their valuable insights about the startup ecosystem they are in.
We hope this personal observation from startup veterans can prepare global startup enthusiasts with the mindset that they need when entering that market.
You will be able to learn
- Why is that region great to start a startup or expand to?
- What’s the most important thing (hidden rule) that founders should know?
- What’s the biggest challenge that founders are facing in that region?
- Who are the people and organizations that founders should know in that region?