2013 tablet adoption to drive startups

This piece appeared at the Times of India Business section yesterday.

About 407 technology companies were started in 2012, which was a decrease of 19% from 2011. For 2013 we expect the number to increase
thanks to many startup accelerators, going to about 460+ startups.

The most number of new companies will be in mobile applications, cloud computing, software as a service, and education. Since many ecommerce infrastructure companies in payments, logistics and distribution were formed and funded, I expect a second coming of e-commerce only in 2015.

There are three major trends that are shaping the startup world. First, lower costs of tablet computers, causing rapid adoption. Second, dramatically lower 3G prices and rapid WiFi rollout, allowing most tablets to enable cloud computing. Finally, lower costs of simple biomechanical arms will see early signs of consumer robotics companies.

More than rapid adoption of smartphones, the tablet adoption will help bring disruptive changes to entertainment, education and communication in the next year. The upcoming general election in 2014 will ensure that the ruling political party will give free tablets to each low-income family that has at least one child. The primary use of this device initially will be for education and communication, but will quickly replace the television as the entertainment device of choice for the younger generation. We will see many startups provide education content and many crowd-sourced applications for test preparation.

While 4G and LTE networks might surface in India by 2013, 3G prices will lower sharply and many carriers will offer them bundled with DTH options. Thanks to smartphones, the urban youth will quickly start to create niche content in the form of short movies and music and upload them online, helping create startups that assist users to discover new entertainment choices. I also see an increase in gaming companies that offer in-app purchases and virtual goods.

Business application startups targeting small and medium businesses will continue to grow, but many will target global markets instead of India in 2013.

Finally I see the start of primitive consumer-robotics companies which are simple extensions of bio-mechanical arms aiding in specific tasks such as replacing the large water jug or cutting vegetables based on camera sensors.

Availability of seed capital will continue to increase, but later stage companies will increasingly look outside India to raise capital.

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