Part 3 - Learning from the trenches
This section of the playbook answers three questions:
How do you define product-market fit for an emerging consumer base in a new category of ecommerce for a potentially large but fledgling market?
What are some assumptions drawn from more developed markets that can hinder rather than help a startup validate its product fast and scale-up?
How is the second generation of consumer internet startups different from the first wave?
Meesho 2.0, leveraging the widespread use of WhatsApp for commercial purposes in India, represents the second generation of Indian startups. Their mindset is different from that of the first wave which mostly focused on adapting business models tried and tested in more mature and developed markets. This brings its own challenges of foraying into uncharted territory to figure out solutions that work in India. It solves India-specific problems by taking into account local user behaviour and then adapting that to similar markets like Indonesia. So it’s a reversal of the mindset prevalent in the first generation of startups.
Show Notes:
[0:00] Many entrepreneurs make the costly mistake of defining their product-market fit wrongly. Getting that right was what made Meesho move on from its first product instead of carrying on with it too long.
[1:05] The imperative in the West is to hire engineers and automate processes as early as possible. But that isn’t always the best solution in India, where non-tech employees and manual processes can validate a product faster and economically.
[2:31] Meesho scaled 100X in 12 months by ramping up its team from 40 to 700 people. Only after market validation did it expand its engineering team and automation, turning the Western playbook on its head.
[3:20] India-specific models are emerging as the second generation of internet entrepreneurs no longer ape successful companies from the West or China. Expectations of investors have to also change so that models aren’t rejected if they haven’t been tried in the US or China.