Ask any investor or successful entrepreneur, and they will reiterate that the most important factor in a start-up is the quality of its founding team. A team is more important than the idea or the size of the market or the technology or the business case, or indeed any other factor that investors will review to check the investment-worthiness of a venture.
Even if – the product is great; the technology is cutting-edge; the market is large and the company has a strong chance to be a dominant player in that large market – investors will hesitate to invest in the venture if they do not get the confidence that the founding team can deliver in the market.
What investors seek is a team that is passionate about the subject, is enthusiastic about the opportunity, has a good grasp on the dynamics of ‘business’ and not just the product/service, and who can demonstrate commitment to fight it out in the market.
While it is good to have experience in the domain, that is not a must, as that will exclude a number of bright people who either do not have work experience or are from a different domain than the concept they are pursuing. However, what is important is that even without experience in the sector, the team should have studied the sector enough to understand it very well. In fact, that is also why passion and interest in the sector is critical, because that makes it easier for a person to study the sector well.
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Note: This question was answered on 1st May, 2012
E-commerce in India address some needs that are specific to the Indian context:
- Choice: There are quite a few places in India where consumers do not have a wide choice. Companies like http://www.allschoolstuff.com have orders from folks in smaller towns, only because stuff like Ben10 pencil boxes are not available in their town.
- Savings: Indian consumers seek value, and online models allow e-tailers some cost advantages over physical store distributed goods.
- Convenience: In major cities in India, driving or traveling to a market, finding parking space, etc. is quite a stressful experience.
My view is that many more categories will open up to online retailing. People on Quora have already started talking about motor spare parts online, car accessories online, etc. However, the niche categories will start seeing action after the wider appeal categories start becoming saturated. There are 100s of categories that can consider being online.
There will perhaps also be business models wherein the physical store is not to stock and dispense goods, but only to display and try, with the purchase being logged online at the store and delivered from a central warehouse [as this can reduce cost of goods sold due to lower inventory holding costs, lower dead-stock and lower unsold stock situations].
As financial inclusion becomes a reality across India, and as ‘safer’ payment options like virtual credit cards, etc. become more prevalent, electronic commerce can only increase. We are, in my view, seeing only the beginning of the journey.