Financial Services & Education: Potential Areas for Startups

Bejul Somaia

Managing Director,
Lightspeed Venture Partners.

When a financial recession comes there is generally nowhere to hide, but what an entrepreneur must to do is stay focused as if there is a large unmet consumer need. If you are solving it well, then over time you will be able to build a business that can survive recession. Financial services were quite badly hit by the recession but it also recovered very strongly and fundamentally whether you look at credit cards or home loans or insurance products the penetration is tiny compared to any other markets including other emerging markets. This means that the head room is significant and an entrepreneur has to find the right way to serve those needs.

There are opportunities for real innovations across the board. The power related sectors are going through a lot of changes now. One of our recent innovations is in Power Exchange. This is a company that is now a couple of years old so it is essentially a start up and it is being a transparent competitive market for electricity. That is something that India needs, to create the right kind of incentives for investments and price signals. Now this is an innovation in a very large, very mature market but still it is a disruptive innovation that has a significant impact on the industry.

In India where ever you look there are opportunities to innovate and apply technologies in interesting ways. The limitations are only by the entrepreneur’s imagination and knowledge of a sector, so it is not fair to say that there are only limited ways to innovate.

Entrepreneurs need to make sure that they are solving a large painful problem. Sometimes we see solutions looking for problems and sometimes we see really interesting technologies or ideas that no one is willing to pay for. In India the willingness to pay is often a challenge. That is why it is important to solve a large and painful problem, because if it is painful then people will pay. Another thing is to have a great team. This helps to increase your chances of success. Building businesses are not easy, it is an unnatural act to build something from nothing and so the human capitol that you assemble is the most prudent weapon you have. And finally the focus should be on execution.

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