Funding Dilemma

"My plan is to start a startup that is going to revolutionize the way people avail that particular service"- a very common line among the young generation entrepreneurs. If we look at the startups of the last 5 years we would only find internet based startups. It may be that the service aggregators are the logical answer to the already fragmented Indian market but can they survive without pimping into the already established ground businesses. It may be that few have emerged very strongly in their respective industry but was it possible just by bringing a brick and mortar model into the ecommerce world or was there something more?

Lets talk about the unicorn startups which have started reporting profits. Oops! I think we aren't at that stage now. But how long can the companies continue reaping for more and more customer base. With such ease in funding rivals will keep on coming and create a price war. The players will keep on fighting for the market share until few of them ultimately give up. Lets take few examples. Uber began with an idea to acquire as many customers. They offered free rides generously. I would say they did succeed in acquiring a good customer base but then came the rival Lyft and now Uber is struggling to maintain the same price chart for its rides. It hasn't earned a single penny of profit and now it will only get worse unless they do something really different with their operations or have a price understanding with its rivals. Lets take the case of Paytm. Certainly the most popular e-wallet in the market but then the competitors with their more generous Cash back offers are only going to make it difficult. Lets not talk about the plain ecommerce portals. I clearly don't see any model for earning profit. Amazon has been in the business for more than 15 years now and still no profit from its core business. Flipkart too is expanding the revenue only with an idea of making it a profitable venture down the line. The question remains- For how Long? There can be a 2008 like situation when the funds will stop flowing. How would these companies survive if such a scenario occurs. Till then the whole startup industry is a zero sum game for the investor pool. The fear is if the current situation be not like another dotcom boom. However there is optimism as well.  What happens to the traditional businesses where the opportunity to differentiate with their service/product is more likely than the current e-commerce setting. For example there are so many players in the cellphone industry but every player is bringing something different on the table. Why can't we have a new clothing brand or a new tech device - something innovative as well as commercial.

We can only choose one side of the debate but we can never be sure. Only time will tell where this whole industry is leaning towards. Till then wait, watch and enjoy. :)