Finding Country-Startup Fit; India got one?

Every country develops its own startup identity ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [Finding Country-Startup Fit; India got one?]( Every country develops its own startup identity [Ashish Sinha](cnha) Nov 5   [READ IN APP](   I have been involved in the tech startup ecosystem for a long enough time to share this observation - eventually, each and every country/region finds its own country-startup fit, i.e. the kind of startups country will produce. [desk globe on table]( And no matter what you do, just as you cannot force 9 women to deliver a child in 1 month (or 10-minutes, in case you are ordering a lot onquick-commerce apps) - you cannot change the startup-market fit for a country (unless there is a very coordinated push). [Upgrade to paid]( What exactly is Country-Startup Fit Country-startup fit, at scale defines the kind of startups that a country will produce - largely defined by a set of industries (mostly related) that grow due to a combination of 3 things - local demand, local talent or government push. --------------------------------------------------------------- Let’s start with a question: - What is Israeli startup ecosystem known for? - What is Indonesia’s startup ecosystem known for? - What is Silicon Valley’s startup ecosystem known for? - What about China? - What about India? - Dubai? --------------------------------------------------------------- Answers - Security products + Deeptech (actually deeptech) - Fintech and consumer delivery companies - These days AI, AI and AI (a lot of innovations in healthcare, manufacturing and other industries are happening outside SV) - Globally: Hardware (very few global software apps like TikTok). Most digital products are geared towards the local market - ? - Web3 (and now trying to get into AI) - the govt is focused on catching the next wave, so we need to wait for a few iterations. [Share]( --------------------------------------------------------------- The Indian startup ecosystem has its own shares of iterations - some of the founders even attempted building global hardware products (remember Notion Ink?) to telecom solutions . The good ol' innocent days.. But what are we largely settling up with? I am using the word largely, because there will always be outliers - there will always be a Postman (and..where are the next 5 global dev tools from India?) or an Ultrahuman - but what about the rest 95%? Before we get to what we are settling up with, it’s important to understand that an ecosystem is a function of local context. Why is Israel the hub of security products Israel sees a lot of security and deep tech products - not just because of its strong focus on STEM education, but also because of the fact that Israeli Defense Forces (IDF), particularly Unit 8200 (military intelligence), serves as a tech talent pipeline for the local ecosystem (in Israel, military service is mandatory, giving many young people early exposure to advanced technology and cybersecurity). [Share Ashish Sinha’s Newsletter]() What about Dubai? There was no local ecosystem for Web3 (or for that matter, tech products), but the government focused on making Dubai the most attractive destination for Web3 companies (relaxed regulations) and is now trying to get its act together for the AI economy. Note that there is not a very significant local market for tech products in Dubai - but it is doing what Middle east is already doing with soccer football - attracting the best talent, giving away a lot of freebies, running championships - i.e. playing the long game to make it an attractive destination. --------------------------------------------------------------- Tl;dr: After a certain scale, what matters is the stuff that gets consumed by the local population. That stuff attracts a lot of ambitious entrepreneurs, gets funded by investors and grows by the virtue of a flywheel. After all, you cannot imagine Nvidia or even OpenAI or even Perplexity coming out of India - the local ecosystem is too small for that level of ambition (and that’s just fine). --------------------------------------------------------------- What about India? In countries with substantial population and tech density like India, the local ecosystem plays a massive role in defining the country-startup fit and that’s where I believe India has found its PMF in a few sectors. D2C Let’s be honest: 80% of India’s successful startups IPOs are consumer / retail businesses - and importantly, the majority of fund raising is happening in D2C space. The D2C space is expected to reach a market size of USD 60 billion by 2027. India has been a trading economy, and the local ecosystem thrives on that. Of course, we are consuming like there is no tomorrow. With new distribution platforms like Zepto, Blinkit et al - new age D2C startups have an edge over the traditional brands who are coming to terms with disruption (they have no idea what awaits them). In short, there is going to be massive disruption in the next few years (in India’s retail space) and there is no reason why ambitious entrepreneurs will let go of this opportunity. Fintech To consume things, you need money - which means both buyers and manufacturers need to rely on lending to grow together. India’s fintech rise is attributed to its iPhone 4S moment*, i.e. UPI launch. While I still believe that most of India’s [fintech is a UPI wrapper]( (and that’s just fine), it has opened up a world of opportunities across delivery, ecommerce - i.e. across all transactional layers. FYI: India’s biggest tech event is..run by the government (which is no-prize-for-guessing, Global FinTech Fest - attracted ~80K attendees in 2024) --------------------------------------------------------------- *iPhone 4S launch (apparently the last iPhone launched by Steve Jobs) was the watershed moment for global tech ecosystem. For the first time, we had GPS chip embedded in a phone which means location enabled services became a reality (which ultimately resulted in an entirely new world) SAAS Export India is among the leading exporters of SAAS startups. While the local market isn’t yet fully ready for SAAS ideas (there is a readiness in smaller pockets of HR tech to martech solutions, but largely Indian SAAS businesses end up focusing on US/North American market), Indian founders are building great SAAS businesses for the world and this trend will only grow. --------------------------------------------------------------- This also explains why we aren’t seeing a lot of great AI startups coming out of India - India’s entrepreneurs are more focused on solving for shampoo and oil (i.e. meet local demand), as opposed to wondering about GPUs. Will things change? My qn: why do you want anything to change? --------------------------------------------------------------- Next: Why Indian VCs aren’t investing in AI startups You're currently a free subscriber to [Ashish Sinha’s Newsletter](. 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