Startups are creating a huge buzz in India, this is mainly due to the fact that many of the new ideas have worked wonders for the consumers, that is why India is one of the fastest growing startup ecosystems. The service-based startups are dominating the market as compared to product based ones. A few examples of service based startups are Quikr, Sulekha, Ola, Yatra and Ask Me. Below are some reasons why service-based startups are more successful in India.
1. Low capital requirement
The setup cost of a startup based on services is way low than the plan which is product based. Manufacturing and selling products require a huge investment which can be avoided in the service sector and also a service based startup can be started by a very small team as compared to product based.
2. Less Risk
Risk involvement is more in product based businesses as it is very difficult to say that the product a company is launching will get high sales but in case of service, people are more comfortable in trying new firms for it. Skill-based businesses always have less risk than selling a product.
3. Flexibility
It is easy to make some changes in service we provide than in the product. One can work from anywhere in terms of a service based startup but the location of product based plan is fixed. There is very less adaptability in product based startups. On the basis of feedbacks changes in services can be made easily as it is in our hands on how to do it next time.
4. Fast to launch
It takes very less time to launch a service based startup and one can start earning from the start. Whereas, the product-focused businesses take some time in starting to get good sell and earn a profit. There is nothing like big infrastructure that takes time to build in service-based startups and a small office can bring huge profits.
5. Legal Issues
There are a lot of legal issues in starting a manufacturing firm. There are many factory related laws and selling laws that can put someone who is new into business into big problems.
These are some of the main factors why service-based startups and being very suv=ccessful in India as compared to the product based. Please do give your thoughts about this in comments.
