<div><em>The new generation of startups will build businesses faster because it has access to money and mentorship, <strong>Vishal Krishna</strong> reports </em></div><div> </div><div>India is going to be the third largest internet market in the world because of the high smartphone penetration by 2020. Founders of mobile-first and mobile-future companies like InMobi, Flipkart and PayTM believe that India is going to build large internet businesses that deliver a valuation of $500 billion in a decade.</div><div> </div><div>"We have reversed the brain drain from India," Sachin Bansal, founder of Flipkart, said on the sidelines of the GMIC India conference in Bangalore.</div><div> </div><div>If spectrum costs fall, then the services available on mobile will become cheaper, he added.</div><div> </div><div>Flipkart is already piloting its App-only strategy and is focused on building immersive experiences across all its categories before launching it to the public.</div><div> </div><div>Flipkart's subsidiary Myntra has already become an App and has seen that India is clearly moving mobile for shopping. It is only a matter of time before services like education, health, financial planning and transportation move completely to the app. With this, advertising will also move to the app. Today this segment is only Rs 2,000 crore in the Rs 500,000 crore global smartphone advertising market.</div><div> </div><div>Data from Gartner shows that there will be 500 million smartphones sold per year by 2018.</div><div> </div><div>"The app is where the magic happens. This is what most internet companies are investing in," said Vijay Shekar Sharma, founder of PayTM. He added that browser was dead and that most of them were taking to the app for services.</div><div> </div><div>"There is a need to build local language services to complete the mobile revolution in India," Sharma said.</div><div> </div><div>While PayTM and Flipkart build India's largest mobile commerce companies, Naveen Tewari of InMobi is building a global location based advertising business. He believes that the App debate is two three levels away.</div><div> </div><div>"One, we must improve user experience, second, internet businesses need to monetise services and finally how is the consumer moving to the App," Tewari of InMobi said, adding that India is going to be big after the US and China.</div><div> </div><div>"India is the third front because revenue numbers have proved that the USA and China have become mobile economies. India is on its way to becoming the largest internet economy," Tewari said.</div><div> </div><div>Today internet commerce companies in India have many front loaded costs. Most of the valuation is based on transactions made rather than the cash generated by the business. All three founders agree that it is still early days and that front loaded costs are necessary to build internet businesses. "We have to generate cash soon; but today the opportunity to invest is very high because only 100 million are on the Internet today and there is more to be added," says Vijay Shekar of PayTM.</div><div> </div><div>The founders say that startups, of this generation, will build businesses faster because they have access to money and mentorship.</div><div> </div><div>"The signs for India are positive and we need to keep improving the ecosystem," said Bansal. He said that telecom regulations need to change quickly and telcos must be allowed to pay less for spectrum and that a tax should be brought in to charge telcos over a longer time line.</div><div> </div><div>"Indian internet businesses will grow faster with fall in spectrum costs," he said.</div><div> </div><div>The bet on India being mobile is not euphoric anymore, it is a reality, and perhaps it will continue to be the largest-funded market in a few years, provided an economic downturn does not bring the party crashing. But the bet is certainly made on creating sustainable businesses.</div>
