Herd mentality and Indian startups

I’ve noticed the herd mentality is becoming popular when it comes to Indian startups. Let me explain what I mean.

One startup enters a particular domain with all fan fare and great buzz. Within no time you’ll come across news about 2-3 more startups launching in the same domain. Plenty of examples to illustrate my point:

1) Seventymm was the first entrant into the online DVD rental market. Suddenly you have Madhouse, CatchFlix, ClixFlix and several others who follow suit (For crying out loud, you dont have these many players in the US too)

2) Video Sharing for India – I dont know which one launched first. But within no time, you have AapKaVideo, MeraVideo, ApnaTube, VideoDubba

3) Shaadi.com came first. Then there was BharatMatrimony, JeevanSaathi, Badhai, MeraSathi, timesmatri

4) There’s indimoto, Carwale, automartIndia, AutoIndia, IndiaAutoMall (again – unsure which came first)

5) MakeMyTrip came first. Then came a D-E-L-U-G-E : Yatra, TravelGuru, ClearTrip, FlightRaja, Arzoo and numerous others

6) Picsquare was first. MeraSnap, PhotoJagat, PhotoMasti, iTasveer, SnapGalaxy quickly followed suit

7) Fropper and Orkut struck first. The next morning you read about Yaari, iBibo, MingleBox, Jhoom, SaffronConnect

8) There’s HumDigg, IndianBytes, NewsCola, PutVote, IndianPad, IndiaMarks (unsure which was first)

Is this healthy for the Indian startup scene ? Is this a good phenomena ? Is the Indian startup scene lacking originality and innovation (Not to take away anything from the numerous innovative ones out there) ? One can argue that some of these markets have room for more than one player. Also, considering that majority of the sites listed above are in their infancy, the market will evolve and only the fittest will survive.
I’d like to hear what everyone has to say about this ‘herd mentality’. I’m planning to do a follow up post to this sometime later this week.

Note: If you find any of the links above are broken, please feel free to point it out. Also, I havent intentionally left out the other players in their respective segments.

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73 comments

  1. It appears to be a herd-mentality(not just limited to India btw) and why not. This is the internet gold
    rush. As you say, only the fittest(or a couple) will survive. And also if you could differentiate between them in terms of functionality/business model that would be gr8. Are any of these sites and surely more breaking new ground and/or creating new opportunities in the indian internet market.

  2. Blogging has made it so easy to publish thoughts. Wouldn’t it be nice if some more research was done before writing articles. Also article title “Herd mentality and Indian startups” sounds too harsh to me. Remember it is not easy to execute a concept and launch an internet startup. People involved in above mentioned startups are bright, energitic and get done attitude guys/gals. It is highly likely (and I think that is what has happened) that multiple people have comeup with an idea at about the same time and then it was just that who launched when (few of then could have focused more on quality and launced a bit late, others might be ok with buggy and not too professional first version to launch)

    Few corrections in your list.

    In cars you missed carsalesindia.com – They are the first one in that field.
    In online photo printing – PhotoJagat is first – It launched in 2004 so looks like it is ahead by about 2 years compared to other companies.

    Orkut is not founded by an Indian or does not have Indian roots. It just happens that somehow it has got very popular among Indians. (http://www.insideorkut.com/)

    Also it would be easy to checkout when the domain name was registered to know approximate inception date of the idea.

    PhotoJagat.com Created: Fri, Mar 15, 2002
    eYaadein.com Created: 12-oct-2004
    SnapGalaxy.com Creation ……. 2005-09-05 (YYYY-MM-DD)
    MeraSnap.com Created on….: 2005-09-09 (YYYY-MM-DD)
    PicSquare.com Created: 2005-10-04 (YYYY-MM-DD)
    PhotoMasti.com Created: 03-jan-2006

    So once again, research, research, research. Also quality comparision between these companies would be good. Anyway, overall an informative blog.

  3. I’d say that this is not unique to India at all. VCs have forever been accused of the herd mentality, and lots of them talk it about themselves.

    Most new opportunities have lots of companies getting in: that’s the very nature of business and free economics. Over time, some will fold up, others will get acquired, and the number that survive will be much less. This is true for *all* business, not just new economy: look at the following sectors in India: telecom, airlines, retail, movie exhibition, real estate…

    BTW, a minor point: people who become visible first are not necessarily the first. In movie rentals, the order was Clixflix (sometime in 2004), then perhaps Madhouse (May 2005), or perhaps Catchflix. SeventyMM launched only in March 2006.

  4. you missed another category of sites: mobile payments. mChek, IMIMobile, Paymate, JiGrahak etc etc.

    IMHO its good in the overall scenario. At least people are doing something, even if copying proven ideas. Hopefully more innovative services will spring up once most of these sites fail.

  5. @krish & @ blr bytes – I think you misinterpreted my intentions. The post isnt supposed to be any kind of personal attack or ridiculing any of the individuals and their respective startups. Entrepreneurship takes balls – period..There is no argument about that. the point I’m more trying to make is that to launch a startup just because ‘video sharing’ is hot — it doesnt make sense. YouTube is the pack leader and lots of people from India already know about YouTube and use it. So, if you are a launching a video sharing site for Indian audience, what incentive are you offering for people to switch from YouTube ?

    Orkut is the most popular social networking site for Indians. If you are launching a social networking site, you need to snatch users from orkut to your site. But, are you offering any incentives on why users should make the switch ? What is the USP ?

    there is nothing wrong with launching a similar product in a crowded market. However, if you want to be successful in this scenario, you need to offer additional value to the end user — to motivate him to use your service over any other established player.

    Google launched into a market dominated by Yahoo & MSN — why did Google become the search king ? Because they had the technology
    Flickr launched into a immensely crowded market — why were they so successful? They elevated the user experience to a new level.

    So, launching a startup just because video sharing is hot or social networking is hot is not going to work — this is what I meant by ‘herd mentality’. You have to step aside from the herd in some respects to provide additional value and incentive for the user to switch. Or you need to execute exceedingly well on your startup.

  6. An addendum to my comment above…

    You need to offer added value to the end user — unless the market size is huge enough for multiple players to co-exist and thrive

    -pranav.

  7. your email addy contact [at] startupduniya [dot] com is bouncing…

  8. @rohan — its contact AT startupdunia dot com (you spelt duniya incorrectly)

    -pranav.

  9. I just like to ask you isn’t herd mentality a universal phenomenon so why are you subjecting this to indian startups

  10. got it. thanks. my bad… sending you an email now:

    BTW: why use the term “herd mentality” ? when small timers asipre to make something big is that bad ?

    didnt MSFT clone youtube and google~video, calling it SOAPBOX? well, when MSFT does it we call it innovation.. and when others do it… it’s herd mentality ? – fair enough.

    Whats important is not who came first. lets not do the classic chicken/egg story, lets see who makes a good omlette.. just kidding.

    BTW: I have my own viral video site called KONKAN TV., well, i have to admit, i started the site with exactly the same codebase as all of the others that you mentioned in your post, and probably a few thousand more of such sites exist… But whats important is how many of those sites evolve, and how many remain the same.

    I have evolved the codebase from where I started and have gotten it to a point where, I believe you would say, is way different than the the others (all in under 60 days). I also am constantly releasing new tools and features which make the site a what-do-they-call-it… ah ! a web 2.oh!! site. do give it a glance and tell me what u think of it ? and more importantly some critique, because it’s the critique that would help me make it better.

    I also have thrown across a concept called SOCIAL-INCOME, It may take a while for the community to digest it and abuse it, but thats what I want. abuse it, and be very much part of it.

    KONKAN TV has been a 1-man-show so far, but i would like you to own it… not me… I have blogged about it here. So do give it a read and comment away…

    watch me closely. the features i plan to realease would surprise you… i mean please you… so keep an eye out for what KONKAN TV would be coming out with next. I do have a whole bunch of feature releases up my sleeve….

    BTW: I also co-brand. so gimme a shout, if you would like a co-branded site… :-)

  11. @Raj

    Yes, it is a universal phenomenon, but as part of my blog, i’m focused on technology, entrepreneurship and indian startups.

  12. @rohan,

    no when small timers aspire to make something big, there isnt anything bad about it. Every company first starts out small only.

    And you drive home exactly the point I’m trying to make –

    just because omlette is popular doesnt mean you need to start making omlettes. if you do think of start making omlettes, strive to make a ‘better omlette’ – change the ingredients / toppings etc…

  13. @pranav – I loved your analogy on the omlette… I simply loved it…

    I’m gonna make an omlette substitute packaged in a ginseng vial :-) a shot of it would give you the energy boost thta would keep you going.. and going.. and going… (I just hope you take this in good humor – no pun intended… gotto make the blogspace fun to read too.. aye ?)

    BTW: Do provode me your critique on KONKAN TV, I do need more critique than applauses….

  14. INDIANPAD.COM – 21-jul-2005 (Alexa Rank 8,899)
    INDIAMARKS.COM -13-dec-2005 (Alexa Rank 137,462)
    NEWSCOLA.COM – 09-jan-2006 (Alexa Rank 630,832)
    HUMDIGG.COM – 23-apr-2006 (Alexa Rank 981,362)
    PUTVOTE.COM – 21-jul-2006 (Alexa Rank 377,612)
    INDIANBYTES.COM – 24-jul-2006 (Alexa Rank 434,313)

  15. @beachbong

    alexa ranking is not important.

    try this. Download the alexa toolbar, have 10 of your friends download it too. simply visit the site whose ranking you want to boost, and hit refresh 10 times a day for 10 consequtive days and you will see the results… they really dont really mean anything…

    and if you do see results, hey !! do me a favor, ask your friends to do it to my site too ;-)

    now imagine a 100 friends hitting refresh 100 times a day for 100 consequtive days…. LOL !!!

    BTW: do check You Putting Vote, Video Fighting Becoming Now, help me get the rest of them on the same bandwagon and co-brand…. help me buddy, help me ;-)

  16. I was only pointing out the existence of a differing view point. That the herd mentality *may* not be such a bad thing…

  17. Hey Pranav,

    a) Let’s hope this leads to healthy competition :)
    b) I think you should do a sequel to this post, where an analysis on the specifics would be in order. At the end of the day it is not so much about the idea, as much as it is about the execution.

  18. Hai yar , It is not right to use Herd mentality here ..India is a country with 100 + crore people and there is lot of scope for the internet market . So feel , if u can stand in the competition , all the sites can do well ..Even though we have many good and paid channels in India ,DD has the higher viewer ship . Even Star Sports and Espn are there , Neo and Sony Max are there out . Same in the case of all the Ideas too ..

  19. hi ,you have said that only the fittest will survive but you refrained from mentioning your forecast as which one you see have the greatest potential
    hmm ,may be you will do that in your follow up article
    looking forward to that :-)

  20. no no no – no forecasts. forecasts are like casting a spell….

  21. Pranav,

    As a blogger, you do not have to defend your posts to anyone, least of all to xenophobic individuals & one guy trying to promote his website so that his adsense makes some money.

    If Indian startups are so great, why is that there is not even a single product/website/concept/operating sytem/anything that came from India first? India is good at copying. Even the great Infosys/TCS/Wipro are at best mere body shoppers. There are umpteen emails forwarded by employees of these companies themselves. Why is that to earn the lakhs of rupees people have to work past midnight, is this life??

    Tomorrow if the world market (and this is already happening) decides that Phillipines & East Europe are cheaper to cover call centers guess what happens to the Indian economy?

    Why can’t the so called Indian barons who give interviews to Time/Fortune etc create something which will outlast their careers and obviously their respective pockets.

  22. @ pranav – well said, very well said. (btw: i am trying to promote my website, but not for adsense revenues)

    Anyway, skipping the promote my website topic, I would not agree with the fact that there aint a single product/website/concetp etc from india.

    check out zoho.com, hotmail – started by an india, vinod khosla, yet again an india, there are many.. just because an indian does not reside in india, does not mean that indians have not spearheaded startups…

    as far as the indian barons creating something that will outlast their careers and pockets go.. well, there are several who do so.

    yes, we do need something in india that would enable folks in india to earn a healthy paycheck that leads to decent living without them having to work past midnight… remember, “we” need to do something about it… lets not make it a “U” need to do something, lets say “we” will….

  23. Hi,
    Thats a nice site. But have found a better desi video sharing site it has a large desi video songs collection, lyrics most important is it has no popup ads. Check this out http://www.bollywoodtube.com

    Rajiv

  24. watch this site which has very good collection of videos and i think it has highest number of videos in india. http://www.canaravideo.com is very fast, good and has lot of indian cultural videos. it looks like indian youtube try this out

  25. I think it is more about cultural mindset which india is struggling to overcome. Indian tends to move towards security. Until, we become real risk takers, it wont be easy to come out with great startups in India. Even copying the existing idea is good, but as Pranav mentioned, there has to be some additional offerings.

    So, folks wake up before it gets late.

  26. Hi,
    Google search engine came last and yet it is first in the search engine market. The herd mentality is everywhere not just in India. Only the fittest and constant innovator will survive.

    enewss.com has always strived to be an aggregator for blogs, forums, groups.
    However, there was lot of noise in forums and groups with little content. As we evolved we retained few groups, forums and stopped accepting them into our system. We are now only aggregating blogs and have more features under development.
    Best regards

  27. There are so many new start ups ? what happend to meravideo Apnatube ? Few remaining including http://www.canaravideo.com. Making a point and vision.

  28. A bit late on the scene here – but given the small entry cost and huge upside potential, one should certainly expect so much competition. I think it will take some time for the boys to be separated from the men but if I am to be a consumer, I certainly don’t mind this!

    By the way, I am a chai-walla outside IIMA and here is my own India centric social bookmarking portals (www.rambhai.com). Heard elsewhere that this is now considered to be in the A-List :)

  29. It was bharatmatrimony.com came first and it was followed by Shaadi and other websites..

  30. Hi!

    I think there will be another herd-mentality to follow http://www.bargain17.com first to launch local buyer alliance. They gets best deal for their users for item of common interest.

    I think this will be boom in Indian retail market.
    Let’s join what they call “A Revolution”

  31. I disagree. I think herd mentality is a good thing. Here’s my reasoning
    http://v-slog.blogspot.com/2007/04/is-herd-mentality-really-bad.html

  32. A new startup, not really but a new face to an old site. Originally it was RouteServices.com, now rewritten http://www.indiatransit.com/

    Looks very promising, and i like their customer support, very very quick.

  33. I guess you have missed the buzzword Real Estate here. There are a few top players fighting for the No 1 position. I feel the launch of RealEstate4India.com adds up to the fight. Many features seem to be automated. First time in India, business ads are taking up an open shape. I mean click on the “This spot is Free” links and follow to see the rates to advertise in home page. I have never seen this before.

  34. I don’t see any thing wroing in this approch. It all depends on the size of the market. Its almost like FMCG products, you get may different brands of soaps. Indian internet market is growing I think there is always space of news players. Even Google has lots of rivals present in the same market. Google currently have 48% of market share and Yahoo have 22% (or 28%), that means other players are also present and are earning. The key will the personalization and localization. India having a diverse culture and lifestyle has lots of potential for personlized and localized products. If you can personalize and localize a search engine…you can give google some competition.

  35. Very interesting post, and interesting views.

    http://www.meriyatra.in

  36. I’ll say rather than comparing startups on the timeline when they started, it would be better to evaluate them on proposition and value they provide. Competition is good for business, it makes company to provide better value.

    It always good to see a number of startups coming out from India.

    - Vicky
    http://www.startupnews.in

  37. A kind of unique start up company on obituaries and memorials in India.

    http://www.obitsindia.com/

    Never have seen before a company offering such services as this people.

  38. I was looking for an Indian site that can combine news, movies, cricket and also social networking aspects such as forums, blogs, private messages etc. I stumbled upon http://www.hangoutwith.com and found to be great! Hangoutwith.com is a good social networking site especially for Indians and it is much cleaner than other sites such as orkut, tagged etc. It has news,videos,cricket news/videos,bollywood news/videos and much more!

  39. 13 questions to test your orignal entrepreneurial quotient :
    http://ceoooh.blogspot.com/search/label/Entrepreneurship

  40. herd mentality?? I think this is not just for Internet market, talk about any industry it is there. Sometimes what happens, if you are in the market but don’t know the target audience and the ways to reach them then herd mentality will help you to plan the strategy to reach your target audience. For example – In early 90’s there was no such term in the market called serviced apartmens, but now this is really a good profitable market in hotel industry.

  41. V.Raghavendra

    Interesting comments overall.

    As an investor in startups, I can vouch that the best value to the end user (who is the target of most of these companies listed) is when you have multiple options online. Actually, this is true with any business (cars, computers, electronics…..).

    Also when we look for investment avenues, being the “first in the business” does not necessarily result in an investment (contrary to popular belief). The value prop, sustainability and duration of validity (of the biz model) are the key focus points.

  42. You can also find India’s first subscriptions based DVD movie rental service at http://www.moviemart.in .

  43. Sometimes, the newer entrants tweak the moel a bit and make it work better.

    Have you seen how http://www.ixigo.com flipped the classical makemytrip, yatra model and chose to become a pure-play search engine ?

  44. nice debate.

  45. Sorry but I think there is a factual error in the article. ClixFlix actually started before Seventymm. I have know Clixflix guys for a long time, since i registered on their site in 2004. I dont think seventymm was in picture then.

    -DD

  46. Besides, yes i agree of the Herd Mentality phenomenon, but it is definitely not restricted to India alone. Being in Valley, you for sure know that there was/is a literal bloodbath amongst 100s of similar Web 2.0 apps. Same is true for Japan and Korea as well.
    I think thats just a general phenomenon going on for centuries and not necessarily anything wrong with that either. Some of the successful Apps/companies that we see today are all who basically did something just better than what was existing, eg Google, Myspace, Facebook, yahoo, Amazon.
    So there are enough inspiring cases to be a part of herd and try and make it big at some point (though i agree the hit ratio is worse than Hollywood)

    -DD

  47. Interesting read. Herd mentality isn’t limited to India or Indian businesses, though. Having worked in Japan for quite some time, I know for a fact that it’s even more wild over there–fads go in and out within weeks!

    You can find alot of information on Indian startups at India Web 2.0 News, including business, internet and job news… it’s a pretty good site for Indian business news.

  48. I don’t accept with this post. You cannot call the followers a “HERD” because there are different ways each team approaches a perticular problem in the same domain. If people start accepting to what you say, there would be exaclty 1 website for everything…only google for search. Only Yahoo for email and Microsoft for browsers..etc. So domains and ideas may be just few, but the way each one approaches or implements the same idea is different. Thats where things get interesting.

  49. Another video sharing website you may want to add to your list, which joined the herd is layfile.com

  50. Surprising that you haven’t mentioned the web 2.0 jobsites – jobsidi.com, bixee.com, gladoo.com, recruit.net

  51. I disagree with you on the herd mentality. Before google there were companies into search engine(like AOL). Stil google made it to the top. Same with Infosys they were not the pioneer in outsourcing. Its the same in India, entrepreneurs have started out. We need to give them some time to evolve and prove.
    “Race is won not by the fastest but by the most consistent.”

  52. orkutup.com give you all orkut.com codes and Orkut Scrap scrapbook, picture scraps, quotes and tips and tricks.Orkut Scraps – Orkut Scrap Graphics, MySpace Comments, MySpace Stuff, MySpace Backgrounds & MySpace Codes!
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  53. Original innovation is good. Unfortunately it is the innovator who suffers as

    a). his blood is drained out by the time he can convince a Angel Investor or a VC (we are recipient of a Gold Medal from Lockheed Martin for the best Innovation from India). Investors discount this – “we want gold” – you keep your “medal” and come back to us after you gain initial momentum. Boils down to chicken & egg most of the times.

    b). Introducing a new innovation to the market without funding or a “God Father” takes a lot of time

    c). The ‘Clone’ with the VC money reaps the benefit.

  54. Challenging role in a startup:
    ———————————-
    We are running http://www.samfra.com – a local search engine.

    We are going to launch a travel portal with great innovations.
    We already have some highly experienced people in the team.
    But, we need experienced people from travel, web marketing and technical
    domains.

    If interested or you know someone who can be suitable, send me a mail at
    jeet232(at)gmail(dot)com
    Even if you are not in above categories, still we can discuss things.

    Thanks

    Jeet Singh
    9342141022

  55. I would say the so called “Herd mentality” in indian market is good for end customer. With competition in market/domain come better offerings and fair prices to the customer. Customer feels like king with so many offerings infront of him to choose from For example:
    Assume there is only one cloth retailer in your locality. Everytime you visit the shop, the owner will ask you to not negotiate on prices, also ask you to put the tried clothes back on the shelf properly folded and wont allow unlimited trails. But if there are around 20 shops, the same retailer will give u a different treatment- discounts, salesperson, coffee, tea offering…..hehehehe and unlimited cloth trials.

    So I would say as end customer, this availability of multiplayers is great for us asevery player will try to offer better service. Then only it becomes the game of all woeing the customer

  56. It is funny how most of the people posting comments here are trying to market their own websites. Ironic!! Here you are talking about herd mentality, and a few more want to join the herd:)

  57. Herd mentality is a global term but it’s more of a phenomena in India, specially in Indian web market. It would not be wrong to say that both Indian web startups as well as users are amateur at this point of time and they are undergoing a transition phase. So it’s not just the startups which dont care a damn about the original idea, but even the net users don’t give the right attention to originality. Moreover from users perspective it gives them a better option to pick from (whichever they think is better!) if they have lot of options. So I would say competitors try and compete in an already blooded red ocean (source: Blue ocean Strategy) and try to snatch the share from others rather than creating a blue ocean of their own. I have seen this mentality even among the investors, they feel it safe to put their money behind an already working idea rather than trying for a new one.
    What say!!

  58. Pls Visit Bangalore Catering Services and Post Your ReviewsBangalore Caterers

    Thank YOu

  59. Hi Friends,

    As for my i saw that site this is a very nice idea. Definitely a great step towards introducing the Desi tinch on Net.

    Regards
    Rashmi

    http://www.indiatourismhub.com

  60. In some rare cases the new players are better than the pioneers, one of them is definitely Admanya.com – there was only Mouthshut which ruled for 6 to 7 years and now there is Admanya!

  61. Attended the startup saturday event at IIM-B yesterday. There was a talk by Rakesh Godhwani (co-founder of Travelguru) and now a VC. He briefly touched upon herd mentality not only amongst entrepreneurs but also amongst VC’s. Though it might be good for the entire space in general, it could also mean, startup’s are not doing enough homework on the competition analysis front – a key point raised by Rakesh. On the other hand, as one of the posts above mention, it could be a case of delayed launch. Here I find another gentleman, Vishy Poosala’s (founder geopepper.com) insight relevant wherein he urges start-ups to quickly launch prototypes of their products…might just help you get that first mover advantage in the herd…..then the onus of differentiating is on the follower!

  62. Correction to my comment above – The co-founder of travel guru mentioned above is Ganesh Rengaswamy

  63. Interesting thoughts and ideas. But i think this is true in most industries where barriers to entry are low and replicability is easy (case in point – the web 2.0 space) so this is nothing unexpected. It does indicate that Indian startups take the easy way out but i think this happens everywhere else. You are mostly right though. Indian entrepreneurs need to break the mould. Industries consolidate. Everyone will not win.

    Look at the BPO boom as well.

    Indian companies tend quite easily towards services as well. Its the easy way out.

    So very few companies in the startup space as a result are making great products. Its a combination of education + the eco system + the consumer that is to blame.

    One Indian company i particularly like (and have mentioned this over and over again) is DeskAway (http://www.deskaway.com)

    They have a unique product that is building at quite a great pace. You’ll have also featured it. MVP has come on their board. They’ve presented at Proto, won international accolades via webworkerdaily, thinkvitamin and others – (http://www.cheapest-service.com/blog/2008/09/08/100-must-have-web-tools-for-telecommuters-best-of-the-best/). I think what works for them is an international outlook. I think Indian product startups need to look at capturing global markets. That will really lead to a stress on quality, individuality, and an enhanced reputation and benchmark for the Indian Start – up space..

    what do you think?

  64. @venkat,

    thanks for sharing your experience @ iim-b.

    put it pretty well..