Startup Sectors to watch out in 2016

With an eventful year drawing to a close, it is time to look to the future in anticipation of what 2016 can bring. Let’s look at some of the sectors that will do well in 2016.

Internet of Things (IoT) – Around the world Internet of Things is hot and the same is the case in India. IoT enables objects to collect data and transmit it over the internet, which means things or objects look and behave a IoT like it did in Sci-Fi movies. We will see some interesting applications emerging in sectors such as automotive, construction, fitness and healthcare where objects in our lives are getting connected.

Software as a Service (SaaS) – When Twitter acquired ZipDial early this year; it marked the coming of age for India SaaS startups and further reaffirmation of the quality of new companies in the space. Boutique and niche cloud consulting and services companies such as TurningCloud will drive the next generation of applications. SaaS has gone on to encompass a wide range of functions and global SaaS companies operate across like cloud infrastructure, security, marketing, sales, HR, ecommerce, retail and others.

Marketplace Lending – Born from the ashes of the financial crisis in 2009 and the widespread mistrust of the established banking channels, alternative finance platforms have become much bigger than anyone could have imagined. Using technology as their main weapon, these platforms has gone on to create quite a bit of ripple.

Education – India’s educational gaps are well known and the opportunities it provides for participation is well chronicled. Startups have managed to create a niche around Education Technology or commonly known as EdTech. While EdTech is relatively small in the space, startups like FutureVidya, EduPro App, EduKart, and Toppr are doing a stellar job in addressing problems in the education space.

Healthcare – India’s healthcare sector is expected to be $280 Billion in size by 2020, growing at a compound annual growth rate of 16 percent. Practo, Portea and Lybrate are great examples in Healthcare sector. The year 2016 is likely to see the sector grow even stronger as it starts tackling even larger and serious healthcare problems in the country. 

Inequality

Inequality was in the news once again and the news is not particularly good. In a speech, RBI Governor of India commented that increasing inequality could be curtailing world demand. Since the rich typically spend a smaller portion of their income compared with the poor who spend almost all of their income. Most billionaires gained wealth because of their access to natural resources such as land or government contracts.

If Inequality is large or growing in India, there seems to be two key reasons. First, there was death of credible data on income inequality in India. Second, within the economics profession, there was a broad consensus that inequality may often be par for course for a fast growing economy such as India; once it grew richer the tide would turn. Both these aspects are changing. We now have newer sources of evidence on inequality in India. Also, economic thinking on inequality has changed considerably across the globe over the past few years.

Economists were always aware that comparing consumption based inequality in India with income based inequality in other countries was like comparing apples with pears, if not to oranges. Even if the rich earn a lot more than the poor, they are unlikely to spend all of their additional income. Thus consumption based inequality measures are expected to understate income inequality. In terms of income inequality, India seems scarcely better than some of the most unequal countries of Latin America.

Top 1% in India owns more than half of the country total wealth. The richest 5% own 68.6% of the country wealth, while the top 10% have 76.3%. At the other end of the pyramid, the poorer half jostles for 4.1% of the nation wealth. Recent research from the IMF suggests that inequality may in fact harm the growth prospects of an economy. An IMF note published last year put together cross-country evidence suggests that lower initial inequality may facilitate high growth rates for a long duration while high levels of inequality may cause redistributive pressures and lead to an unstable growth path.

Lessons from Indian Weddings

Preparing for a wedding in the family exposes one to the informal sector. There is an army of people working on various aspects of the wedding and it is an alive and thriving economy with various kinds of players. There is management excellence, skill and specialization, process orientation and quality checks. There is also an appalling lack of financial strategy and cash is king.

First, if one allows entrepreneurs into an activity, one creates a thriving ecosystem of ideas, innovation and specialization. From the caterer to the florist, decorator to the mehandi artist, each one has extended the range of products and services that they offer, so they are able to thrive in the competitive marketplace and offer value that they can charge for. The list of things they do is too long and a far cry from the simple weddings of the past.

Rituals that were long forgotten have made a comeback, dug out by an enthusiastic wedding planner who will arrange it in minutest detail. Weddings have become an industry run by this set of entrepreneurs. Second, an informal market hurts both buyer and seller. A florist, who has managed to get enlisted with a large hotel, can charge a bomb for the décor, while an informal artist who is unknown scrambles to find mandates, even at a fraction of cost.

Third, it is tough to find the basis for pricing when products and services are so customized. The sellers ensure that standardization is shunned wherever possible. From invitations that will be custom designed, to garlands that will be strung to match, every service provider will persuade the buyer to customize. Fourth, it is amusing to see how this market uses technology. Whatsapp dominates the scene, with image and videos flowing up and down all through the planning process.

Fifth, most of the service providers suffer from poor money management practices. Working capital is a big headache. Sixth, every one of them hates taxes. The demand side of the wedding market is driven by the cash rich tax evaders. In an age when taking a break from work to meet friends and relatives is so sought after, weddings offer the perfect opportunity for image crafting at one end and thanksgiving on the other and all things in between. 

Most Powerful People in Tech World

It isn’t just wealth and it isn’t just control over people or resources. It’s more. True Power is a potent combination of money and influence that enables people to help shape the world. And only a selected group of people really possess the economic and political clout to effect global change. For better or worse, their decisions affect millions, shake industries, and change nations. Here are some men and women who are most influential in technology landscape.

Foremost is IBM CEO Ginni Rometty. Her mandate is to keep one of tech’s most iconic companies which employ 380,000 people on par, relevant and profitable for the long haul even if it means changing some of the most fundamental things about the company. There is a trio of Internet Kings in China, collectively known as “BAT” – Baidu, Alibaba and Tencent. Robin Li commands the market in Internet search as the Chairman and CEO of Baidu, China Google’s equivalent.

Since becoming Microsoft third CEO last year, Satya Nadella has been busy helping the technology company relevant again. While Microsoft is still a software giant it pulls in about $95 Billion in sales. Oracle Billionaire co-founder Larry Ellison stepped down as the company CEO last year but hasn’t pumped the brakes. He still serves as Chairman and CTO of the $38 Billion database and software titan.

The second richest person in China, Alibaba founder and CEO Jack Ma broke records with the e-commerce company $25 Billion initial public offering in 2014, the world largest ever. Along with fellow co-founder Larry Page, Sergey Brin helped orchestrate Google massive restructuring announced in August. The move made Google a subsidiary of a new holding company called Alphabet, run by Brin as President and Page as CEO. Mark Zuckerberg, CEO of world largest social network.

Larry Page, CEO of Alphabet. Google would become a subsidiary of new holding company Alphabet, which would oversee all of Google ventures, such as Nest, Calico, and Google X as standalone entities. Tim Cook runs the most valuable company on the planet in Apple, which is worth $645 Billion. Under Cook’s continued direction as CEO, 2015 has been one of the company best years yet. Amazon.com is an undeniable superpower in e-commerce. Jeff Bezos privately owned Space Company Blue Origin successfully launched its first spacecraft this year and has plans to test rocket engines & launch manned rockets within the next decade.

Bill Gates co-founded Microsoft in 1975, builded an Iconic software company and becoming the richest man on earth in the process, with a net worth of $87.3 Billion. Though he still on the company board, he is no longer actively involved in Microsoft. Gates and Warren Buffet started the Giving Pledge to encourage billionaires to follow their lead and give away half or more of their wealth.