Distribution Logistics can be avoided altogether if you are dealing with Internet plays, but presumably, not every entrepreneur would be working with Internet businesses, so we need to be quite creative. India’s heartland, for example, is still not easy to penetrate. Nonetheless, it can be penetrated.
One of my personal interest areas is Education. All levels of education, from primary, to elementary, to secondary, to higher education. If you are trying to do an education venture for one of these segments, my strong recommendation would be to think about it in the NIIT kind of way. In other words, you would need physical “centers” that are equipped with broadband connectivity.
However, I would also take advantage of distance learning methodologies, and implement hub-and-spoke models, whereby, teachers can teach from a hub center, and reach a large group of students at the spokes. This way, lot of different disciplines can be taught by a relatively smaller group of experts.
One of my favorite examples is the large repository of content that is being generated and made publicly available for free by
the MIT Open Courseware (OCW) program. It includes lecture notes, actual lectures by MIT professors, problem sets, etc.
How about an engineering education venture that has in its hub centers a bunch of teachers who can teach using the OCW material? At the spokes, then, there can simply be administrative supervisors. Consequently, the spoke centers can even be franchises, and creative solutions like micro-franchise could be implemented in that context.
If you extrapolate further from this model, there are many other segments of the education value chain where the same model can be applied, just as NIIT did it in teaching computer skills.
Of course, if you are selling hardware, channels do exist. Systems Integrators, the corner electronics shops, etc. are channels. They are, however, unorganized channels, and as I have mentioned in one of my concept arbitrage pieces earlier, business information itself is an opportunity for India.
Other variations exist. For now, it would suffice to say that distribution would need to be dealt with at the portfolio venture level, not at the incubator level.
This segment is a part in the series : Incubator Funds in India