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Why do Investors and Start-ups Ignore Small Businesses in India?

Every enterprise, be it micro, small or medium these days have a common set of requirements at the digital level. In an earlier era, office automation or digitization involved the installation of computers and digitization of documents. Today, the story is vastly different and the requirements can be roughly summed up under the following categories:

Connectivity: This covers portables (mobile phones, tablets, laptops), desktops and miscellaneous devices (IP-enabled webcams). They all need to hook up to IP networks (public & private) over wired and unwired networks. As the SaaS slowly makes its way through this space, ubiquitous IP connectivity will become the norm and any solution that will provide a simple, single point interface to manage all of that infrastructure will do really well.

Document & Information Management: This covers content management systems, file management systems, documentation systems (not limited to accounting, shipping and taxation roles), internal and external websites. Current solutions are either at the extreme high end or at the lower end where the integration nightmares put off smaller enterprises. Another neglected fact is that every sector and sub-sector has different requirements that needs solutions tailored to its needs.

Storage & Disaster Recovery: Network-attached, role-restricted devices and services are again non-existent at a lower price level or unaffordable at the higher end. Most of the smaller companies I have interacted with badly need a plug-and-play solution that has an optional cloud component.

Communication: Email, collaboration and IM servers and services. Needs range from simple email to secure web conferencing at the higher end. Various pieces of this exist in the market right now, but there is again no single easy-to-use managed service.

Business Intelligence: I am really surprised that something like ActiveCell for India does not exist in the market. A significant chunk of the SME/SMB space has decisions driven by instinct than information. If it can be packaged and made to work right, the opportunity is considerable.

There are obvious challenges to addressing the small business space, especially in India, the usual bugbear of payments being only one of the significant problems. But the transition to a younger leadership in the space is also changing the game. From a generation of leaders who were unfamilair with technology or computers, we have transitioned to a world where a sizable chunk of the leaders now have Blackberries and are familiar with various digital products.

Another important fact is that to make selling to SMEs in India is not just a case of running another A/B test or a smart Adwords campaign. The one thing that works well for sales in the segment is boots on the ground and as amply demonstrated by the success of Naukri.com, it is not a challenge that cannot be overcome.

In 2013, I am hopeful that we’ll see more action in this space both from investors and entrepreneurs.


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