Why this is the right time for Consumer Internet Startups to Boom
Consumer startups are typically companies that change the culture of the world or at least the region they operate in. Example: Facebook and Instagram. These two companies changed the way people connected with each other and showed off their lives one-image-at-a-time. Or Uber, that changed the way the world hailed taxis. Or Airbnb and Couchsurfing, that made people open up their homes and rooms to strangers from across the globe.
As you can see in the above examples, these consumer internet companies have dictated culture. However, thanks to the quantum shift in social and economic dynamics, courtesy the Coronavirus, it might be time for culture to dictate consumer companies. The world has been forced to move to a new normal. A normal, where the previous rules of social engagement that evolved over centuries have all gone out of the window. Most people who are reading this article can work-from-home. And a lot of them will not step out of their homes until it is absolutely necessary. There is talk of a future where people walk around with masks, carry sanitizers and don’t talk on public transport.
A major problem with consumer startups in India has been the lack of willingness for consumers to pay for online products. Indians, as a people, have been spoiled by the discount wars that have waged in the country for the last decade. However, that is set to change. Already, restaurants on food-aggregator apps have done away with their discounts. Moreover, as the world lives in a post-pandemic world, people will place a premium on their health rather than their wallets.
Think about it: Would you rather hail a cab because its 50 bucks cheaper or pay 50 bucks more and ensure the vehicle is sanitized, and has a partition between the driver and the back seat passenger, and your payment can be made cash free?
There has been no dearth of consumer startups that have tried and failed in the world. Most of them burned through a ton of investor wealth before realising that the consumer is fickle and moves away when you try to monetize them. Even before the pandemic, investors had started looking at startups through the metric of profitability. They wanted companies that could show them a strong bottomline. Now, however, all startups and founders have a golden opportunity to do that. If the user experience is good and safe (online as well as offline), there is no reason why consumers won’t gravitate towards their service. Build it and they will come.