Defining success

Amazon@30 has lessons for startup ecosystem

Thirty years after starting from Jeff Bezos’ garage in Bellevue, Washington, Amazon is now a shopping powerhouse, set to sell an estimated $550 billion worth of goods online in the US during 2024. Just ahead of its 30th anniversary recently, the biggest e-commerce company hit a market value of $2 trillion for the first time. In 1994, Mr Bezos had quit his job in an investment bank to “capitalise’’ on the potential of the internet, putting in $10,000 from his personal savings to incorporate a company called Cadabra, which was soon changed to Amazon, inspired by the South American river, as the earlier name didn’t click. As the Seattle-headquartered e-commerce-to-AWS-to-Prime Video major prepares for the next trillion in market value while integrating its businesses, there are takeaways for the Indian startup world.

The Indian posterboy of e-commerce, Flipkart, was founded by Sachin Bansal and Binny Bansal (not related) and both worked in Amazon before starting their entrepreneurial journey. If Amazon had started as an online bookstore three decades ago, so had Flipkart, founded in 2007. If Amazon turned into a virtual department store soon after, so did Flipkart. While Flipkart’s success triggered a startup rush in India, the entrepreneurial ideas in this country have been heavily influenced by the successful models in the West, to a large extent. Flipkart, now owned by the world’s largest retailer Walmart, competes with Amazon in India. Even as a large number of Indian startups have been able to raise multiple rounds of funds from marquee foreign investors and join the unicorn and decacorn clubs, the absence of new and original ideas has been a concern. The education system and the regulatory environment in India may have come in the way of creating “garage-based” startups turning into world beaters such as Amazon, Apple, and Google. Startups have been high on the priority list of the government through its “Startup India Initiative”, but for them to make a difference there should be regulatory clarity on various fronts including taxation, in addition to a much greater focus on research and innovation. The startup culture in India should get a boost through real ease of doing business, helping entrepreneurs build transformational businesses while creating hundreds of thousands of jobs.

According to the recent data, India has the third-largest startup ecosystem globally with over 127,000 startups. India has produced more than 100 unicorns — privately-owned companies valued at over $1 billion — but the growth is not being fuelled by Indian investors. While some Indian industrialists have backed startups, the numbers are low. Along with domestic funding and industry backing, institutes of higher learning will play a key role in creating startups that can become a role model for generations. Along with bouquets, Amazon has got brickbats too through its 30-year journey. Its workplace culture has been under scrutiny for being “cut-throat’’, “inhuman’’, and “stressful’’. Its Indian warehouses too are under scrutiny owing to complaints that workers have been denied washroom breaks. In a latest report, a Switzerland-based trade union body, UNI Global Union, has alleged only one of five Amazon warehouse workers in India finds the work environment safe. Some of these concerns must be addressed. Indian startups must learn and build sustainable businesses.