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The Flywheel Effect in Indian Tech Start-ups
The Flywheel Effect in Indian Tech Start-ups

January 10, 2023

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The Flywheel Effect in India tech Start-ups

Entrepreneurs building entrepreneurs is a new trend that has emerged in recent years. Many large Indian tech start-ups inspired many of their employees to pursue entrepreneurship. This can be either an individual who takes on an entrepreneurial role or a team of colleagues who decide to set up a new business.

Another surprising part of this is that this journey is not limited to a few entrepreneurs but has a flywheel effect that keeps inspiring new entrepreneurs through the organisations they build. This flywheel effect is so powerful and has such an impact that it has resulted in many new age entrepreneurs.

MuSigma, a deep-tech unicorn, has become a launchpad for a large number of tech and deep-tech start-ups in the ecosystem, giving rise to second-generation entrepreneurs.

There are numerous other DeepTech unicorns that have resulted in the birth of second-generation entrepreneurs, such as: 

  • Blackbuck >>>> Zetwerk
  • Innovacer >>>>> Thekrishi
  • Highradius >>>>> Glosity

This flywheel not only promotes entrepreneurship but also employment generation. Eg: there are 2700+ employees in Mu Sigma and over 4100+ total employees in 12+ start-ups that came out of 2nd generation entrepreneurs from Mu Sigma.

 

 

This flywheel effect is at work not only in DeepTech but also in the SaaS ecosystem. There are 20+ start-ups founded by the former Zoho team and 10+ start-ups founded by the former FreshWorks team.

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 In the ecommerce sector, we have five Flipkart alums who built two major business-to-business e-commerce start-ups: Udaan and Arzooo.

What motivates this second generation of entrepreneurs?

  1. Inspiration: Working in a large start-up that has grown from the ground up always gives you a kick and inspires you to do something on your own.
  2. Tech understanding: Strong tech knowledge also helps in building a horizontal or vertical solution around the current business portfolio.
  3. Market Knowledge: When you understand the full value chain of a current business, you can identify the grey areas that still need work and offer a market opportunity for the person to enter.

Therefore, there was one flywheel effect that was based on the tenet from Jim Collins' book "Good to Great," which claims that your best salesmen are your customers. They'll tell their friends if you satisfy them. And those friends will buy your goods if you make it simple for them to learn about and buy. When your new, content customers tell their friends about you, the cycle continues. The other is this flywheel that you employed to create a different environment, one with sufficient strength to fuel the ecosystem's expansion.


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