‘Entrepreneurship’ isn’t your fancy drink for Sunday morning breakfast. you're consuming it with every meal, They’re just called TikToks’
Preface:
It was inevitable for TikTok to get hold of Indian users with great numbers. With the long-standing aspirations of our young population, it was waiting to happen. A desire to perform, be successful to be out there. It’s A Global Stage provided with unlimited possibilities. And be seen is a global aspiration in the last decade and CHINA and INDIA with all the young and world-dominating aspirations sky is no limit.
Though vastly different but very Similar scenario in other areas like Electric vehicles and EV start-ups has gripped the world of automotive design. In general, it seems like a ladder to success where there are a lot of opportunities even for new performer and the end result is already stamped by Tesla and Iron Man-Elon Musk. It’s no surprise he is an idol to all these start-ups who like to follow his footsteps to be seen. There’s a desire to build a tesla killer or become another Elon musk in either china or India. And promising similar success story to get everybody open their wallets from investors to End User is reality. And Everybody hopes to make this story happen.
-Pravin Gaikwad
In Absence of core competencies required within these start-ups have forced them to perform their stories TIk TOk way with borrowed words. Rather many are convinced Tik Tok's way of building EV startup is the way forward. Where it is easy to get in and exit Strategy.
Getting off the shelf technology and products from china and building EV Brands overnight have been achieved by many. Numbers of manufacturers suppliers are ready to follow the suit, On the other hand, building sustainable EV products the un-sustainable way is not going to help EV progress in India in the long run.
There are few EV Start-ups that are founded by dynamic individuals or a group to solve unique problems. Their idea of a start-up is enchanting and expressive. they intend to solve market-specific problems and deliver value to the system. These Successful start-ups have demonstrated growth potential, viability, and scalability.
Many baby start-ups are under constant pressure to deliver viable products and project sustainable revenue streams.
Every start-up that ventures in a particular industry are presented with obstacles like High-barrier of entry, Insufficient domain knowledge in open source platforms, Industry regulation, Threat of existing players in the market, and Market acceptability to new solutions.
Some EV start-ups have a strong mission statement about clean and sustainable mobility. The scalability and growth potential of these start-ups are enormous. However even they are plagued with all the above start-up barriers. Many young entrants in this domain adopt different product development and growth strategies.
The first kind, “Indigenous developers” These start-ups comprises of individuals who have core expertise for developing EV tech. they develop all the relevant technologies like battery management systems, Battery chemistry development or EV motor technology, chassis, panels and etc indigenously. These developers take the path of high barriers of entry to the market. However, they rely on the IP value of technological competency. Investors invest in these start-ups for innovative tech and unique market offerings. Indigenous developers are lean in nature and have the ability to develop disruptive technology. In comparison to OEM, they are more inclined to invent new things rather than evolve existing. In my view, these start-ups have a high chance to resist the threat of existing players and bring game-changing products to the market.
Second Kind, “Follower developers” These start-ups comprises of individuals who have relevant knowledge for developing EV tech. However, they have limited capability. They rely on existing market solutions and reverse engineering. The aim of this start-up is to make a cost-effective product for the market. Imitators want to launch products quickly in the market to kick start revenue. A few of the problems with this kind of start-up are inadequate R&D investment and heavy reliance on off the shelf parts. Investors can gain in the short term but the ability to update with new technology is the key to sustain. In my view imitator strategy is good for developing revenue streams. However, they must invest in R&D to become indigenous developers to stay market competitive.
Third Kind, “Borrowers of technology aka 'TikTok Startups'., the core team of these start-ups is probably EV enthusiasts with sufficient knowledge. Many of these start-ups outsource parts or whole products from Chinese manufacturers. Special attention is given on Re-branding, marketing, distribution network, and quick sales. This kind of developer creates no value in the EV industry and not necessarily have any mission towards sustainability. eventually, diminish due to a lack of competitive advantage. Indian market is very lucrative for EV space giving rise to many such start-ups.
It is fuelled by many short-sighted investors venturing into these low-risk start-ups. This has encouraged Few young EV entrepreneurs to get into this area for quick funding and scalability on the back of show prototypes to attract investor money. Some are even far from any technology acquisition riding on the back few Design Renders from young designers without any actual insight into Design Development Luring Investors into falls promises. Thus investors must cautiously assess the kind of start-up they are venturing with. As investors, they must research, investigate, and determine the ability of high promise-making individuals. Mushrooming of this kind of start-up has an adverse effect on the EV start-up eco-system in India particularly.
Investors “Self-sufficiency is the key”
Recent ongoing pandemic has been an eye-opener for every industry about self-sufficiency. Tech Companies who were heavily relied on parts and core technologies are at a disadvantage. To have a competitive advantage in the market it is vital to develop everything in the house. Thus investors must ideally invest in indigenous developers. Investors should also take an active interest in EV technological developments happening around the globe. Encourage start-ups to develop home-grown feasible solutions for the Indian market. Also need to mentor about technologies that are more disruptive and trend-setting rather purely focuses on profitability.
There has to be a concrete measure taken to make sure the mushrooming of Tik Tok startups does not happen on a large scale in India. The government needs a roadmap to make sure the policy and public expenditure happen in a measurable way.
Government “Index and Invest”
The Indian government has taken concrete and definite steps towards EV India. The aggressive introduction of FAME I and FAME II EV policies have given a road map to the industry. The policies have outlined detailed plans and schemes to achieve EV India's dreams. However, there is a lack of understanding about real problems associated with infrastructure development, EV product development, market psychology, and EV economies.
Index:
The government must classify all-new EV start-ups as Indigenous, Semi indigenous, and Imitators aka TikTok developers. This classification helps to evaluate growth potential, IP valuation, product innovation, and etc. Investors can use this classification to assess start-up market value and seeding requirements. Regulating the EV start-up will allow genuine new players to take advantage of start-up funding and mentorship. More impetus and funds to indigenous start-ups will help the “Make in India” initiative. Thus more and more start-ups will be encouraged to be indigenous.
Invest:
More focus on developing technologies will breed specialist EV engineers and designers. The education industry also needs to support this with active engagement programs with start-ups.
EV start-ups have to come up with real innovation and have to focus on creating a knowledge base in the process, which is required for the EV ecosystem for technology to grow and improve. It becomes essential for the government and Investors to invest in world-class institute and innovation labs. Without it, we might just end up lip-synching to the global innovators EV tunes.
- Ajay Choudhary
Automotive Designer & Tech Enthusiast