We have had a lot of discussion on this site on technology ventures and rightly so, given the talent pool in India. However, I think that with our changing social structure there will be interesting opportunities in the recreational services space. For instance, in areas like Health & Fitness, Tourism and so on. Think of the following:
– Will there be an entrepreneur who will set up India’s version of Lifetime Fitness or Ballys?
– Will there emerge new businesses managing sports stadiums, music and sports events and so on?
– What about innovative domestic tourism options such as specialized tours, coast-to-coast cruises?
– Will there be private equity investments in chains that take over and standardize the existing stand-alone hotels in Indian cities?
– Will there be a spate of restaurant chains post investments in the Mainland China business?
In each of these categories, there are reasonably large listed companies on the NYSE and the London Stock Exchange. I expect that over the next 5-10 years there will be several Indian companies that will emerge in these categories.
Their business models will probably be not as disruptively innovative as the next generation Web 2.0 product. But I am sure they will be fun and provide the much needed respite to technology entrepreneurs and workers.
I have written about a few such ideas on www.myopen-window.blogspot.com and would like to learn more from folks who are thinking about these opportunities.
- Building the Green Entrepreneurial Ecosystem city by Indian city - February 3, 2010
- The Largest gathering of Cleantech companies in India - January 8, 2010
- TiE ISB Connect 2009 is on October 22-23 in Hyderabad - September 25, 2009
Deepak,
Herds form since it’s perceived to be less risky, proven at least once before and calls for no fresh application of intelligence. Hell, it’s easy.
Never expect `Herdism’ to fade. Here’s why. World has only so few leaders and many are content at being followers. It’s too challenging for a follower to revisit the established conviction and it’s this ineptitude which tempts them to make a very strong investment in the theory. Their method is to spread the theory real fast to find that greater fool early (to sell it to). Any new evidence to the contrary will likely be experienced as upsetting to them. Such interruptions will throw a monkey wrench in their efforts to monetize it, causing them to go through new cognitive effort and threatening to destroy something that they’ve worked hard to construct.. They simply can’t afford it since they have too much at stake. [ MakeMyTrip, Cleartrip, Travelguru etc.etc.]
For them the clock hasn’t changed; it still reads twelve o’clock. It’s just that it happens to be noon again.
krish,
Thanks for that – I’ll add my two bits to fan the discussion:
“If money ever flows to anything just because it’s fashionable, you’ll soon be looking at a parched land.” : It would be horrible for me to call VCs sheep, but let me say that herd mentality isn’t often distinguishable from what investors here have done. i’m not saying that won’t change. Tech still has a great story, don’t get me wrong; I’m just saying that it looks like blinkers are on which doesnt allow smart money to look much beyond tech. Perhaps I’m wrong (or I’m the one with the blinkers!)
You make an excellent point that PE funds are in place that are investing in non-tech stories – and perhaps we are in a phase of too many good companies to invest in (non-tech), which means money will be available to only the best.
“It a typical biz plan contest, they try to educate not sell themselves.”: Hidden in your comment, sir, is this line that is just genius. Nod, nod, nod.
“*Money never leaves the market” : not in the absolute sense. If you do dy/dx it will – meaning that the rate of growth will reduce, more money will not come INTO the stock markets if there is a bearish influence. But given that the money is still being generated, it might find such avenues as mentioned in the original post.
I love the point about the BSE snake!
Deepak,
You make some interesting points.
“as long as technology is in fashion, the money will flow to technology” – If money ever flows to anything just because it’s fashionable, you’ll soon be looking at a parched land. Valley VCs who survived the Bubble era are seriously re-focusing on technology due to (a) low startup cost (b) presence of organized global VC network besides money (c) low marginal scaling cost (d) global delivery potential (e) scope for easier exit possibilities etc. Recent success of YouTube also helped fan the flames.
That’s not the case with other ideas outlined here.
The problem with most of our tech startups is that neither are they robust nor are they disruptive enough. At a typical biz plan contest, they try to educate not sell themselves. The VC network on its part, also is realizing its mistakes and is beginning to adapt to the cultural composition of our founding teams and their unique needs. Those who couldn’t adapt do more PE investments in listed entities ( Stock broking / Real Estate / Retail plays ). A multi dimensional ecosystem is getting built here, if you notice.
“Money needs to find its way out of the stock market” – seasoned investors who have weathered many a market cycles often say *Money never leaves the market*. It either gets made and comes back for more (during bull phase ) or is trapped in there ( during a downturn). Those who exited at 9,000 levels of Sensex ( fear ) came back at 14,000 ( greed ) and got stuck. It’s a greed-fear-greed continuum at work !
Have you noticed the BSE entrance shaped in the form of a snake with its mouth wide open ? Quite symbolic, isn’t it ?
Mohit: Not just foreigners, there aren’t enough such sites for Indian travellers! About three years back I’d got darn interested in such an idea and wanted to set up a travel company catering exclusively to the “non touristy + adventure” destinations. The idea was: We’d set up accomodation either in tents or with accomodating residents (and provide a guide if they really wanted someone). And we’d do trek maps, set up distress posts, manage and rent out equipment (ropes, tents, etc). But the revenues just weren’t doing it for me…some of my good friends have started an adventure company though! I think about five years later would be a great time to integrate the adv. tourism business – it simply needs too much money and time in education right now.
For the original topic: Fitness is interesting but again, I think we’re just starting and the gestation period is perhaps 5 to 10 years.
Music and sports events: There are companies that are already in this space – DNA for music, a gazillion ones for sport (with the PHL being the jazzy-t-shirt version). there’s very few pan-India games other than cricket, and cricket is controlled by politicians and bureaucrats;not my idea of a fun place to be.
The restaurant chains are just starting to make some headway, but not through the franchise model (which needs enormous amounts of money to create, standardise and maintain). Now if there were someone with such a model, would there be money to fund her?
I think that will only happen in a tech bust. I mean as long as technology is in fashion, the money will flow to technology…and when we tire of those, will we find the funding easier for motel chains, restaurant franchises, tourism giants and the like. And also, the money needs to find its way out of the stock market, which will probably happen in the next year or so.
Very interesting times no?
Hi,
I have thought about online travel space a bit. I think there is still a lack of a dedicated portal which provides a comprehensive information about places in India worth visiting to a foreigner. I might be wrong. But, if I am right I think this space has lots of opportunities. There are a whole lot of places where these guys want to go but havnt gone yet. Also as a foriegner everybody would like to have information related to travel requirements and everything. If a dedicated portal can provide all this @ one place and couple it with online reservations/bookings , I think it can make some serious money.
Any thoughts?