Web2.0 start-ups are coming up in hurry in India. It is really interesting to watch the fresh ideas being executed this time around as compared to dot com era of 2001/02. I have wanted to write more on the Web2.0 start-ups in India; however, somehow I have not got around doing it. When I open my feed reader every day in the morning, the first thing I look for, is the news of any new start-ups, and I can say that in last 3 to 4 months there is hardly been a day when I have not seen something new!
The 3 aspects that I watch intently whenever a Web2.0 start-up comes up are:
I remain bullish on the future of Indian Web2.0 start-ups, mostly due to the reasons known to most of us:
The young Indian population that is internet savvy. Amount of time spent on home computers in increasing everyday. Sales of laptops in growing at 100% year on year. Currently broadband penetration in India is low but is expected to rocket in coming months and years. The virility of new Web2.0 start-ups itself. A unique offering can become a huge hit within matter of days. The overall growth in the huge middle class population in India.
Domain Names Market
Thanks to the new Web2.0 phenomenon, the domain names market has surged over last year and currently around 100,000 domains are registered daily. It has become a $2 billion Industry and expected to double in just 3 years.
“This industry is like the wild, Wild West right now and people have no idea how fast it’s growing,” said Jerry Nolte, managing partner of Domainer’s Magazine, a new trade publication devoted to this little-known world.
Web2.0 Finance
Another important aspect the start-ups need to watch out is how strong are they financially and whether they can take on the fiercely competitive ride. Can they impress the VCs and get the money out of their pockets?
I came across an advice on CNN money edition, that talks about how you could impress the Venture capitalists and precautions you need to take while approaching them.
Most venture capitalists will tell you that they invest in people, not business plans. They like experienced entrepreneurs they’ve worked with before. With luck, you’ve got one of those people on your team, preferably as CEO. But if you’re not a veteran and can’t find one, don’t fret. A common misstep is to pitch the wrong partner at a VC firm—that will get your business plan shot down immediately. Find the partner whose expertise aligns with your business and send that person your well-honed executive summary. (Save the full-blown plan for later.) If you get a meeting, highlight your experience and what differentiates your startup from others, but keep your ego in check. In such a close-knit business relationship, VCs much prefer to work with people they get along with easily. In an early-stage round, VCs will want 40 percent of the company in return for their investment. VC term sheets are notoriously demanding, but the place where entrepreneurs can suffer most is in the liquidation preferences. In essence, liquidation preferences determine how money gets divvied up if your company is sold. Your VCs are entitled to protect their downside, of course, but not to the exclusion of common stockholders—management and employees—who also want their equity to be worth something.
You got to proceed with caution!
Comments
Burrp! is a Fantastic name and their tag line couldn’t have been better “Let it out”. It also interesting to see how FMCG products are using the web2.0 platform for promotion, Bingo and Pepsi recently have been in the fore front of the same.
Yes…not only is it fantastic, it helps them create a brand. Take just this instance, For me even after 10 years I will remember it. Thats why I said, a domain name is a very important brand identity, it can make or break a start-up !