“The Golden Tap – Indian Start-ups…” – a quick review

So, completed one of my first non-fictional “un-put-downable” books last weekend, “The Golden Tap – The Inside story of Hyper-funded Indian Start-ups”. Written by Kashyap Deorah, a self-made serial entrepreneur (there’s a parallel entrepreneur explained also in the book :) ), an IIT Bombay grad, and quite obviously a man of unusual perspective.

While the title is a mouthful, the entrepreneur-author has hit a sixer with this book, almost serving as a compendium, a reference book of Indian Start-up scene (while simultaneously covering Silicon valley Unicorns and Chinese Unicorns too). Inter-mingling the above with his own “entrepreneurial autobiography” is a master-stroke, doubling his target audience at one go J.

Dividing the post-1994 era into three distinct waves – the Internet Wave (1994-2002), Globalization Wave (2003-09) and the Smartphone Wave (2010 onwards) makes it easy to understand the drivers behind the various companies founded and funded in these phases. That “Funding is sometimes more important than Founding” has been dealt with an element of disdain by the author, who easily is not impressed by the VC community too much.

The strategies of big Funds– Tiger Global, SoftBank, Yuri Milner’s DST, Rocket Internet, Naspers, along with prominent VCs – Accel, SAIF, Sequoia have been brought out in sufficient detail. “Out-funding competition” seems to be the common thought in this phase of the start-up scene.

The author describes two types of start-ups : one which take the game from 0 to 1, and the others which take it from 1 to n. The 0 to 1 are the game-changers, and the 1 to n could become the scale-changers. He bets on the 0 to 1 types as the multi-baggers.

That only three start-ups in India have gone for an IPO successfully – Naukri, Justdial and Make-my-trip bears testimony to the fact that the jury’s still out on the long-term sustainability of the thousands of start-ups that have mushroomed in India (4000-odd in the past few years, if I recall an article in ET or Mint). These three successful companies got funded in a slim window of 2006-07 at the peak of the Globalization wave, revealing the relative nascent condition of the start-up market in India.   

The stories of Amazon, JD.com, Facebook, Alibaba, Uber are great to read through. Comparing them with those of our current Indian unicorns leaves a bit of an uneasy feeling in our stomach on the lack of depth of Indian markets, and the over-valuation of current Indian companies. The author in fact, takes a bet on the international giants prevailing in India in the long run L.

Similarly, the regulatory arbitrage that killed the e-commerce forays of brick-n-mortar retail companies leaves an odd feeling – wonder why the indigenous “offline retailers” did not raise a sufficient hue and cry on the lack of a level playing field. Another regulatory arbitrage mentioned is how China protected its start-ups by not allowing American biggies to come in for the longest time, while Indian opened its arms to international enterprises and Funds. The “liberal and reformist” path that we chose couple of decades ago forced us not to think of any other way we could have done this.

The IIT / Stanford / Wharton common thread running across the start-up scene has been brilliantly brought out. Some of his observations were downright funny – Lee Fixel liked founders with single or worst double digit JEE ranks and preferably North Indian Marwaris / Baniyas – was priceless!

The author of course carries his (single) JEE rank through a couple of occasions in the book. But then what the heck, he’s earned that!

The golden embossing on the hardback cover (“THE GOLDEN TAP”) is fading away after a couple of weeks in my hands – quality of Indian printing may have some way to go. But the quality of the content is top-notch :) . Waiting for a Part II from the author in 2020!!

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