The Transplanted Star Business

Sometimes you can start a star business by simply taking an idea that has worked in one country and moving it to another country.

One example that comes to mind Taco Bell India. Taco Bell in Bangalore, India has been a runaway success. While it's possible that people are flocking to Taco Bell because it's a new concept there may be another reason for it's success. Indians like spicy tastes and the Mexican taste may be an interesting variation for them. And the relatively low prices are another reason for their success.

On the other hand, if the transplanted star business has a very low barrier of entry you may land-up in a situation where you have too much competition to have a high probability of becoming a market leader (one of the requirements for a star business.)

One example is group buying. Groupon and woot.com seem to have succeeded with the idea of group buying in the US. So a host of new start-ups in India have simply copied the idea and brought it to India. Examples include Taggle, Lootmore, Snapon, MyDala etc. Check out this Plugged.in article for more examples.

While the category certainly looks very appealing, it will be hard for these start-ups to claim market leadership in terms of revenues. The only way for them to succeed is to differentiate themselves in some way by slicing the market in a whole new way. For example, they can focus on a particular niche (say hotel rooms, restaurants, airline tickets or spa experiences or by a single geography) or they can turn the model on it's head and become aggregators of these aggregators (i.e. think of a start-up that scours all these sites and lists all of the deals from all of these group buying sites) or even a search engine that simply indexes these websites.

The danger in the case of implementing generic group buying for the Indian market is that your business might become a question mark (a follower in a fast growing market.)