The recent blockbuster listing of startups on the Indian Stock Exchange has shown the power of disruptive business models. Here's how to spot one of them.
Change is inevitable and the disruption it causes often brings both inconvenience and opportunity. Now it depends on you what disruption transpires to be for you.
Whether you are a retail investor, aspiring entrepreneur or just a student who follows India's blossoming startup ecosystem, this article is for you
WHY GO FOR DISRUPTION?
In simple words, it's an opportunity worth trillions of dollars, literally.
Source: McKinsey
There are a lot of factors that have made disruption a more realistic opportunity today than even a decade ago:
The availability of Computational Power to churn terabytes of data per second makes complex data analytics feasible.
The explosion of blockchain & metaverse based use cases & business models.
Record low adoption cycles show consumers are now more amenable to rapid changes.
Source: BlackRock
Tangible advancement in AI & ML which have upended their level in accordance with high-performance use cases
The end of the cycle of Moore's Law implies that microprocessors have reached the zenith of their capabilities.
This goes on to imply how inevitable & huge disruption will be.
HOW TO SPOT A DISRUPTIVE BUSINESS
Now that we have ascertained how big the stakes are here, let's look at the basics, shall we?
The disruptor completely revamps the industry & asks fundamental questions about the sector or the industry. Here are some examples for you:
Tesla asked why Internal Combustion Engines.
Slack asked why Gmail.
Zerodha asked why brokerages were so high & driven by advice in market where retail investors were self taught.
Audible developed both tech & liking for ebooks, a niche concept.
D2C companies questioned the relevance of intermediaries in a digital age.
The disruptor completely organizes a cluttered industry through a digital medium.
Zetwerk brought millions of small scale Indian manufacturers online
Zomato emerged as a hub for restaurants.
Uber brought mobility to a tap on the smartphone.
Nykaa & Myntra created companies out of generic e-commerce categories.
Amul (way ahead of its time) unified scattered dairy owners to form a powerful collective.
The disruptor removes friction from the activities we do every day.
UPI (tech on which PhonePe, GPay etc runs) made making payments easy & secure.
BigBasket & hyperlocal startups made grocery shopping less time-consuming.
Canva democratized image editing even for a layman.
Wix & WordPress transformed website building into a no-code affair.
Amazon pioneered the now omnipresent trend of online shopping.
Disruptors engage in sunrise sectors which are bound to grow by leaps & bounds in the near future. Some examples present on the Indian Stock Market are:
KPIT Tech (EV Design)
Borosil Renewables (solar power)
Paras Defense & Space Technologies (space)
Tata Power (EV Charging)
Nykaa (e-commerce)
PayTM (Fintech)
ps: THIS IS NOT INVESTMENT ADVICE.
THE FUTURE IS NOW
A look at the graphs below will show you more proof of the power of new models.
Source: StartUp Magazine
Source: WolfStreet
Hope this article expanded your horizons.
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Very well curated, as always!!