If you just go through the players and see who has done extremely well versus those who have not, you’ll see the difference. The ones who stuck to what they did best and didn’t try to do too many at that time, have worked. Then, management teams that had a great visionary on the top or had a core team of 5-6 people who hung together have gone the distance. Flexibility has been another big factor. The last few years of the Internet have been a hell of a journey. It has gone from being hyped to non-existent. Companies like Naukri and Baazee decided to advertise on television during the slowdown, a time when it was unheard of Internet companies to advertise on TV. That gave these companies credibility. Add to that flexibility in business models. Companies moved offline, some did acquisitions and all that helped. And finally, there was financial discipline. A lot of people had raised a lot of money and could survive the downturn. But people fundamentally managed their balance sheets well. So, for instance, we (at Baazee.com) were able to acquire Bidorbuy at the absolute bottom of the cycle.
...I think the Internet is finally beginning to take off in India. It starts with access and we’ve seen massive broadband rollouts in the last few years. Once access is in place, applications follow. Today it is smaller than what one would have liked it to be, therefore, even now the business model has to be pure viral C2C (AskLaila, Kijiji) or it has to be subscription-based (Seventymm). We are actively looking for good gaming type of companies. I actually believe there is some opportunity still in financial products. Overall, if we believe that a product or service has even a 50% chance of succeeding, we’ll look at it.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.