The rise of Indian Unicorns and the role of Product

Let’s get down to some numbers coming from India 📈 before we start talking:

• India is on pace to reach >100 startup unicorns (>$1B value) in 2022 👌

• If India beats 2021 numbers, India could be generating unicorns at the rate of one unicorn per week in 2022 🤯, thats insane!

• Around $42 Bn was raised by Indian startups in 2021

• India (with 90 unicorns) is now placed third in the world behind US (487) and China (301)

  Now let’s get down to the secret sauce of what’s working, meet:
  

  
  👉The FlyWheel that drives Indian Unicorn Machine

  

  
  
  Before we get excited about how ‘New from Old’ flywheel has fired Indian startup ecosystem, let us take a minute to appreciate how VC investments played a role too:
  

• Initial Excitement: From 2012-2015 (when first-generation startups were doing well and ALSO were giving birth to new entrepreneurs), the VC funding was in Growth Stage (reaching upto $6B / year ) and it ignited 1000s of minds to be able to build their own companies BUT very quickly…

• ‘But Wait a Minute’ Stage: In 2016, VCs started getting nervous about exists and how they will be able to recoup their money. For two years, VCs only invested in high quality companies (stagnant at $4.5B/year)

• ‘Lets do this’ Stage : 2018 was when it begin to dawn upon VCs that exists are possible either through liquidity events or through IPOs (a lot of startups had started talking about them). This stage saw up-to $10B getting invested in 2019
  
  Okay, back to the flywheel:
  

  The secret sauce to Indian startup engine is not the first-generation startups (Flipkart, Ola, PayTM) but what their employees did next in around year 2015:
  

  

  Inmobi, Flipkart, Myntra, InMobi and Housing.com 👉 Just these 5 companies gave birth to 100 new startups in 2015 and then the flywheel kickstarted a “new from old” pattern that just continued to inspire more employees to start companies. The phenomena became so common that most of the engineers today (from IITs, BITS Pilani) would know someone who knows someone building or have built a billion dollar+ startup. 🤯
  
  People are important, but you cannot build a startup without a few building blocks, one of them is growth of tech talent in India and more specifically Product Management. Before we come to Product Management, let us talk about another phenomena:
  
  It is no more about Bangalore

  Although Bangalore pretty much provided the raw engine power for this startup engine to get started, the data shows that future unicorn startups will be coming from all over India, thanks to internet and infrastructure improvements that allow Founders to start from anywhere.
  

• 43% of future unicorns are still expected to be coming from Bangalore

• But, around 40% more are going to be taking birth in Mumbai and Delhi.

• Ahmedabad, Chennai, Hyderabad and Pune each will contribute to 15% more approximately.
  
  If you look at startups being founded (not unicorns), Delhi leads well over Bangalore (2017-2019). We may even see Delhi taking over Bangalore for number of unicorns too by 2025.
  

  

  
  And now, ** DRUMS** back to Product Management
  
  You could say that software engineers are driving this growth which is inarguable, but so much has been written about Indian tech talent that I want to focus this post on Product Managers (yes, the folks who don’t take claim for success, but take the blame ;) ). Having worked as a PM in Indian ecosystem, here is my writeup on why PMs are central to Indian startup Growth story.
  
  Trend 1: Tech hiring increase led to PM demand
  
  The product manager demand increased by 30% from 2020 to 2021. The demand is not only coming from tech-first companies but other sectors are also joining the queue for hiring product managers : BFSI, Automobile, Retail, Pharma, Logistics and many more!
  
  In-fact, many of the founders such as those of Freshworks, Flat White Capital, Coda.io and many more were ex-Product Managers.

  Trend 2: Product Managers are now coming from different fields

  
  A lot of experienced Product Managers (+10 years) today in India have come from either non-tech background or from IT/agile backgrounds.
  
  Another trend has been that Product Management has become the preferred function post MBA. This snapshot from Indian School of Business below shows that 16% of Class of 2020 got placed in Product Management, ranked second after Consulting. I can predict that PM jobs will surpass consulting by 2025.
  
  

  

  Trend 3: Money, Money, Money!
  
  Moving to tech sector and building products is not the only reason, as per Glassdoor data, Indian born startups are paying as much or more salaries to Product Managers than the multinational companies operating in India. (Data is in Indian Rupees)
  

But, what’s missing in Indian Product Management Ecosystem?

The problem in Indian ecosystem is that Product Management is not understood well by executives and hiring managers who started working before 2008 (before Indian Startup Scene started). Below is a list of wrong and blurry understanding of what product managers should do:

→ Deliver features (Scrum/Agile PMs)
→ Manage a project and deliver it (Project Management)
→ Analytics Guy who can make great presentations under pressure
and more.

In-fact, none of the above is what Product Manager does. Maybe 20-25% of PMs time may go into above activities but not the most.

Indian Product Management ecosystem has to pivot to the true product management craft:

→ Someone who constantly delivers value to users first, and not to business first
→ Someone who can find out if something we build is viable to business
→ Works with engineers and designers to find out usability and feasibility

essentially as Melissa Perri would put it as “vehicle of value creation”

But given how startup engine is growing, should they pivot to globally accepted idea of product manager or should they evolve their own art of building products, the desi Indian version? 🤔🤔🤔


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References to data sources used:
1. Indian School of Business placement report Co’2022
2. https://inc42.com/buzz/indian-startups-that-entered-the-unicorn-club-in-2021-in-india/
3. https://www.business-standard.com/article/companies/indian-start-ups-raised-a-record-14-5-bn-in-1185-funding-rounds-this-year-119122700061_1.html
4. https://www.businesstoday.in/latest/corporate/story/startups-are-propelling-the-high-flying-careers-of-product-managers-data-scientists-317330-2021-12-30