I am Aarihant Aaryan! Welcome to the Iron sharpen Iron newsletter,
Every week I share my homework from my startup journey, learning’s about human behavior, and sometimes decode industries and business models for fun,
I can’t control my curiosity :) )
It’s been close to 2 years since I have been part of the tech/startup ecosystem.
There is a 100x the difference between the Tech ecosystem and India - the actual society.
Many undervalue the kind of impact it can make over generations, everytime they see a tech product they are like :
Did you ever think of grocery-getting delivered to your home in 10mins?
or
You tap on a button and a cab shows up at your location?
or
Sending money to your friends at a lightning speed?
Well, that’s what tech can do, turn every inefficiency into efficiency - and create more value.
Well, what many people assume is that creating a tech product is the end but that’s not true. That’s where it all begins.
Why Tech is the only way?
You will not be able to see tech as the only way if you keep perceiving tech = as coding. Perceive tech as a door to infinite opportunities.
Scale: Scaling is absolutely easy, the efforts are mostly constant or a little higher. You can serve a million customers in a minute with the same quality.
Time taken to create a certain value is much less using tech.
Relationship: Before / even now probably every company has a relationship manager or an offline POC assigned to you and you hardly spend time with them. You call them when you have an issue. they call you when they have to cross-sell something to you. The fun fact is they don’t know you, but still serve you :(
7. Yes, they had relationship managers, the last time my relationship manager called me was to sell me an insurance product or a SIP. Relationship managers focused more on cross-selling rather than building “Relationships”Tech changes this entirely, every time someone uses an app/website. They are “engaging with it” - the product is following the command and also chimes in and offers the best solution.
As users spend more time on the product, the product will be able to know more about the user - which humans easily fail at.
The infinite possibilities: All tech products solve for “ one case” first and later on diversify into other offerings. Amazon started off selling books, now they sell everything that is available on the planet.
Swiggy started with food, they sell groceries and concierge service as well.
Cred started with credit card payments, now they do a lot of financial services and commerce.
If that’s a big opportunity, why are they making losses?
For most tech companies to become profitable, it will take 7 to 10years, because we are in the nuance stages of digital adoption.
Tech companies seek growth because having a larger distribution/market share exposes them to more opportunities.
Them making losses is not something unexpected, they seek it - because they have an ambitious long-term picture.
In a normal business, if someone buys your product/service - You make money, mostly profits as well.
For Tech products - they have to solve for
Acquiring users
Engagement
Retention
Monetization
If only these are solved well, tech companies can make money.
Difference between SMBs and tech companies.
Most SMBs are sole proprietors in India, i.e 81% - These businesses are non-fundable because the company begins and ends with the owner.
These businesses run to solve for their own bread and butter not to create any larger impact - they hardly employ people. It’s hardly 1 or 2 folks running the show.
All tech companies are private limited in India, there are 1.2 million private limited companies in India that employ many individuals and it’s never a one-man show.
One of the reasons why tech companies are celebrated not SMBs is because of the innovation and impeccable value created in a shorter period of time.
Unpopular opinion: If you don’t understand something, you can trust it. Hence doing a tech IPO in India doesn’t make sense - people might participate because of greed but they will exit once the stock price decreases.
If you have any thoughts on why Indians don’t understand tech share them in the comments :)
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I think one very big reason why most people don't understand tech is because of the generational gap. Our parents generation is neither interested and nor is it easy for us to explain them the Hows and Whys of these new tech giants, because they spent their lives working on traditional businesses which as you explained very well are completely different.