Winning Middle India: The Story of India’s New-age Entrepreneurs
Bala Srinivasa & TN Hari
For those who are familiar with the concept of fortune at the bottom of the pyramid made famous by CK Prahalad, Winning Middle India will bring a sense of déjà vu. In fact, the ideas are the same, but the context is more contemporary, which makes the said book quite relevant. We are not talking now of those at the bottom of the pyramid, but somewhere in between. This segment would typically have an income between Rs 3 lakh and Rs 20 lakh and fits the bill of middle India. The authors, Srinivasa and Hari, focus on this class, suggesting routes to be taken to bring about prosperity for these people. It is not a case of giving any largesse but establishing commercial business models that work for the enterprise as well as the targeted people. It would mean changing the approach to doing business by looking at a larger mass of the market who may individually have a small wallet but big dreams.
The Indian middle class has been written about very often, and it has been the main attraction for foreign investors in particular. It is probably fair to say that focusing on the middle class is the right way as there is increasing spending power too in this class, with the size of the cake becoming progressively bigger with increasing prosperity. Therefore, while the concept of small sachets was quite innovative to reach the base of the pyramid, technology will guide the way when you look at the middle where value-added products are delivered. The focus is clearly on how technology can be harnessed by businesses to obtain solutions while reaching out to a wide canvas.
The models of Amazon and Flipkart are legendary, but there are several startups in India that have effectively leveraged technology platforms delivering services that are close to the hinterland. This can be in the form of pure information on movement of trains or goods or prices of goods. These products touch the people more and are tailormade to ensure that value is derived from them. The new wave of entrepreneurs are qualified management and engineering graduates who are out to do something different from the conventional jobs. This has fostered high paced innovation which integrates with the aspirations of the people.
The book is also a kind of tribute to the new breed of entrepreneurs who have taken the effort and risk to try out something new. The underlying assumption is that for the country to grow in future, we need to take the 500 million people or so together through innovative routes. The focus is not just on creating new products, but providing technology-driven marketplaces for existing goods and services. Urban Company, for example, brings households in touch with plumbers, carpenters, electricians, etc, who necessarily go in for upskilling to provide higher value-add services and increase their incomes.
The authors have given a playbook that can be followed for best results. These are interesting. They argue for customer segmentation not in the traditional mode of rural or urban markets, but across age groups, which makes sense. Products have to be designed keeping in mind which segment one is looking at, as the responses tend to be different. Then they talk of customer trust, which is more from the point of view of being able to use technology. Doing things online is common but when targeting customers, it should be ensured that things should not go wrong. Further, the authors rightly point out that people in the middle are still risk-averse and will not trade loss for higher gains. Farmers don’t migrate to different crops merely because they can earn better returns. This cannot be contested and has to be kept in mind.
We all know that most startups end up shutting down in a period of four-five years. This has not been flagged by the authors, but invariably one realises that such failures can be linked to these seven principles being violated. The other points made relate to cost of acquisition, which has to be kept low, especially for new products being offered.
Also, no one can start from a single product and the strategy has to cover multiple products for success. Giving plain student loans on an app will not be adequate and other products like investment, or insurance should be part of the bouquet. And, of course, there has to be ease in operations or what they call low friction for on-boarding. Or else they can become deterrents.
The future surely will be exciting for entrepreneurs venturing into business, and technology will be the vehicle. And, these enterprises would be looking at this growing segment of population to target their business. With several platforms or marketplaces being created for reaching out to the middle class, we can see competition increase. People will need to think differently and be willing to think big and use innovative routes to provide solutions for complex problems. This is the way to go for startups, which the authors believe will be fulfilling their dreams. We have seen digital solutions reshaping industries like finance and agriculture, besides healthcare, logistics, etc. Quite clearly, the canvas is expansive.
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