By Abhishek Latthe, Founder & CEO, SenseGiz
SenseGiz is a leading provider of innovative consumer electronics products in the Internet of Things & wearable tech space that add value to users every single day.
IoT being a very vast field, there are several things that a start-up could potentially do in this sector. From lifestyle focused products to agriculture and defence, the possibilities for disruption are endless. There are several opportunities within the Indian market as well. If one is looking at the B-to-C segment, looking at the global market makes sense to take advantage of a knowledgeable consumer base. Value addition, the wow factor from the target customer and differentiation from any competitors while having a very sound marketing strategy will be key driving factors which will determine the success or failure for Indian IoT companies.
Compared to mature hardware development markets like the U.S. or China, developing hardware products from scratch is still in its infancy in India. The support ecosystem for hardware start-ups is much better in Shanghai or the Bay Area. Validating a MVP is one of the first things that need to be done while building an IoT product, and for that it is difficult to find cost effective and high quality ancillary service providers in India. Another reality that we have to face is that Indian service providers for prototyping or design/testing services are usually more expensive apart from being considerably inexperienced at building successful commercial products, which again does not help start-ups. Going to China for everything is fraught with some risk as one cannot do background checks easily there. The best way to deal with a Chinese company in the manufacturing sector is to have some references who can vouch for the quality of work. I know quite a few Indian start-ups which had various problems while outsourcing prototyping/mass production to China.
One advantage that India does however provide is access to a well trained workforce of engineers - who are on par with anyone in the world. That is something that can work to our advantage. Availability is talent is also not an issue in India. Whenever we at SenseGiz had any hiring need, we usually have 100+ well-skilled applicants for any role. IoT being a multi-disciplinary subject, companies will need electronic hardware designers, firmware developers, mobile application developers, testers in various roles plus subject experts depending on the end application like healthcare/agriculture etc. Access to capital remains difficult though for Indian start-ups in the hardware domain, be it from conventional sources like banks or venture funds. Most early stage start-ups in this sector are usually funded by angels known to the founders. Founders have to be prepared to fight it out atleast until there is a decent amount of traction from customers or tie ups with larger companies. Being connected to the target customers right from day one of the company is crucial for early success and also to pivot the product as per customers' needs and feedback.
Building an IoT product is only half of the battle won. Marketing IOT products requires a huge amount of resources in times of time and money to get sufficient traction, especially in the global markets. Marketing a consumer focused product differs entirely from marketing a B2B product. Having a global impact is something that Indian hardware companies have not been able to crack yet. There have been many successful Indian software product start-ups but not hardware/IoT start-ups yet. Most global players in the electronic product development ecosystem have well established support offices in India which can be very helpful while developing a product.
A lot of companies like to play it safe by being in the service domain for hardware, rather than marketing their own products. Hopefully that should change rapidly in 2015! Indian start-ups also need to make use of various state and central government schemes which can help in the initial stages as well. I believe that over the next five years, 2-3 Indian IoT companies will make it big on the global stage with billion dollar valuations. A couple of companies making it to the major leagues can inspire a whole new generation of IoT product companies, much like the early stage software successes from India!