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Unicorn Club

Why Competition Is Good For Unicorns To Keep Innovating

Why Competition Is Good For Unicorns To Keep Innovating
Image credit: Amazon / Flipkart
Michael D. Dingman Chair in Strategy and Entrepreneurship, University of Maryland
4 min read
Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

A lot of inspiration for Indian startups come from the Silicon Valley. But you also see that in the recent times, these big startups are hitting a roadblock of sorts because they don’t know the way out of the problems they are facing now. For instance, take Flipkart which can't repeat the way they have been working. It will have to do things differently.

So, how does an entrepreneur really build that inspiration when they're big, and of course, trying to do hundred things at once? How does a start-up come up with the ingenious solution? 

To start with, for any company you have to take care of the core first. For say, if your house is burning down, you can’t be thinking about renovation. Your worries will be if the house is still.

What that means is, unlike China, India welcomes all foreign competitors, e.g. Amazon, Google or Facebook, whereas some of them are banned in China. Amazon being present there is still a relatively weaker player. So, just to manage your own house, like Flipkart that faces competition with Amazon as an online retailer, this competition is a good thing.

Amazon's first mover advantage

India being an open market, Flipkart does not have the protection offered by government to keep these global challengers away. So Flipkart, in order to stay ahead of Amazon, has to innovate at a much faster pace than it otherwise would need to. That also means that are free to attract talent, executives from Amazon to come and work for them so they know how the Amazon game is played. And given the kind of funding and valuation Flipkart has, they can attract people from Silicon Valley to come to India and work for them.

In that sense, Ola, Snapdeal and Flipkart are forced to be more innovative, just in terms of their basic business. Though they are preoccupied at the moment, but that preoccupation is not doing the same thing because they are competing with Amazon and Amazon is not doing that same thing anymore. They are way ahead. 

Second part of it is that even Amazon is going from being a retailer to being a technology company. They started being a technology company from 2003 onwards. Now, in order to start venturing out, you need some degree of confidence about your basic business. It could be that Amazon did something which may or may not be that easy to repeat now. For instance, Amazon started thinking of cloud when pretty much nobody else was. But today, if Flipkart wants to go into cloud, it’s no longer the case that there is no one else in the business. There are some things that Amazon had a first mover advantage in globally. It could be that some opportunities that are open to Amazon are open to them.

And it works in the reverse also . If Amazon were to succeed in India it will have to be Amazon India. And Amazon India ,other than the first name, is an Indian company. India is technologically very strong and has such strong talent, and as Amazon gets rooted deeper in India, Amazon global may start relying on Amazon India to be the technology pioneer.

It is also good for India

Ultimately in terms of technology and entrepreneurship ecosystem in India, India will become more than a place where technology is commercialized and exploited. In fact, India may become even stronger. Not just a technology commercializer but also a technology creator. For example, look at Google and how strong India’s role is in technology for Google globally.

Therefore, I would say, let it flow. 

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