I wrote a bit of an incendiary post where I suggest NOT bootstrapping a software startup targeting Indian Businesses/consumers. The post got a lot of page views. A tiny vocal minority picked a few strawmen to attack and nitpicked on the style. A lot of entrepreneurs agreed, sending in notes. My writing left a bit to be desired. I wrote the article quickly and didn't do peer review. I blog mainly to reason and to think. Still that is no reason to not write full sentences and with clarity.
I didn't see a single well reasoned argument against what I wrote. A logical inference could be, most startups targeting Indian Businesses/consumers are raising VC, making my argument moot.
I am not positing that raising VC is the right way, or bootstrapping is the winning way. I am trying to identify factors which are beyond the bootstrapping entrepreneur's control while attacking a market.
There were subtle takeaways which other entrepreneurs agreed with (I didn't write them explicitly in that post):
- If bootstrapping, target a more oxygen rich environment. You can target the US markets which have a higher capacity and willingness to pay for technology today. $49 per month for software for an Indian small/medium business is expensive (go ask target customers).
- As a bootstrapper, you want to ride other people's waves. (Attributed to Sam Altman). He was more general: "As a startup, ride waves."
- Ramen profitability - As an Indian bootstrapper targeting North America, you have a better shot than your North American counterpart. Third world expenses means profits of $5K per month for two founders is going to be ok for you to not worry. In the US, equivalent would be $20K a month for two. (I am assuming here that you and/or your co-founder are technical, and you can create the product).
There are issues - How do you identify needs for which US business would pay?
I would say build technological solutions have no barrier to identifying and understanding needs. Case in point is MailGun. Handling email at scale is as general as it gets. Anything plumbing is really a fair game.
Also as a bootstrapper, try to do a Subscription businesses. There are many reasons: Customer acquisition costs are high, so once you get a customer you don't have to chase after them every year to buy an upgrade. A small monthly ticket is lower risk than a large upfront cost. You will remain laser focused on great customer service and retention. There are a few very good blogs on the SaaS and subscription topic. They focus on pricing and cost of customer acquisitions. I'll try to dig them up.
Again, its not all doom and gloom for Indian markets. I am not smart enough to tell you to not do what you think is best. Software will eat the world [Marc Andreessen's writing].
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[Mukund Mohan has a good blog post on the different nature of the Indian market. While I don't agree with him 100%, its a good post to read backed by data.]