It’s a wonderful time to be in India’s startup ecosystem. From the start of this calendar year, India has birthed 12 unicorns . Zomato released its draft red herring prospectus and made it’s the IPO decision official . Since 2016, Jio has dropped data prices for 100s of millions of people and made Indians amongst the world’s highest data consumers. Thanks to homemade success stories like Flipkart, Paytm, Swiggy, Nykaa and more; young people around the country are using consumer products made by someone just like them . Super-inspiring. Even being a founder carries less stigma than it did 10 years ago.

These are all healthy signs of potentially good times. Yet it’s easy to be sceptical. India’s startup ecosystem is over-capitalised compared to it’s peers . The Indian ecosystem thanks to cultural ties with the US and the alleged TAM of “1 billion+ consumers” is able to draw in capital. Reality remains far more sobering . Zomato is but the rarest of exceptions in going IPO (OK there was EaseMyTrip too, congrats but eww). There are others lined up too, but we’ll have to see how many materialise, and more importantly materialise in India . While from an ease of capital raising perspective, it is better to IPO overseas, from a psychological perspective it is better if they IPO locally though I’m not sure if company promoter’s care . IPOs are a lagging indicator of system maturity. More troubling, well, is India itself. Douglas Hofstadter describes how software eventually bottoms out at hardware . Our hopes of creating a dynamic new India with a billion consumers are pointless if the economy is flatlining and there are no consumers with disposable income . India is a classic case of premature deindustrialisation despite having a human capital windfall like China. The median age in India is 28 years, young and ready to work but India sadly has completely botched the opportunity to reap its demographic dividend . As the population gets older and the hype of billions of young Indians eager to do new things wears off, this sobering reality will seep into external expectations too . We have lots of young people but they’re mostly unskilled, poor, and getting nothing but older. This says nothing about India’s failure to invest in and make any meaningful technological progress . We’re barely starting to contribute to open-source software, while we need to go full guns blazing into building trains, planes, roads, factories and what not . It was sad that during the US-China trade war when American companies were looking for new locations, the victors were Thailand and Vietnam! Ouch! Neither was India ready, nor did it react fast enough . Oh I don’t even want to mention that even China still far short of it’s goals of technological independence . Huawei went from the world’s largest smartphone manufacturer to (almost) nothing due to the semiconductor ban on them by the US. Insane! And multiple efforts by China to kickstart semiconductor manufacturing by China have mostly failed despite state blessings . India is not even playing the game!

Despite having dedicated far more words to the bear case, I remain hopeful. Just less hopeful than before, and hopeful for a smaller subset of Indians. Life can be full of surprises . I’ve been impressed by the some consumer product innovation that don’t resemble anything found elsewhere, which means someone sat and put their brains together . India’s current bubble is EdTech, which is good news. We first focused on E-commerce, but the truth is that we barely had malls and formal commerce. We’re a country who buys from Kirana shops (Dukaantech is rage, and hopefully drives efficiencies there . TBD). Education however is our dream and lifeblood and it’s good that the market figured out an Indian problem.