As most of us harbor biases and are shaped by preconceived notions, when you find yourself holding a perspective that deviates from the status quo, it can be a challenge, even when backed by unfiltered data and insights. In such moments of doubt, discovering the wisdom of a true industry pioneer can instill a deep sense of conviction.
Recently, I came across a brilliant essay by Marc Andreessen on a16z titled "Techno-Optimistic Manifesto," and it profoundly resonated with me. These are the moments when you begin to feel that you are on the right path. Since day one, our mission has been to make healthcare affordable for the 1.2 billion people in India. While this mission may not sound like a conventional business idea, a closer look at the world's most successful and largest tech startups reveals a common thread: they leveraged technology to make products or services affordable, whether in mature markets like the USA or emerging markets like India.
Google democratized access to information, Amazon made purchasing products affordable, Facebook connected people affordably, Ford made automobiles accessible, Zerodha lowered the cost of stock brokering, and NPCI made digital payments affordable. The list goes on. There is a common thread among these companies: they improved the income of a large section of society by making products and services affordable. How, you might ask?
When we examine the tech startup ecosystem, it becomes evident that we need products and services that are accessible to a broader section of Indians, rather than focusing solely on catering to the top 1% to 5% of the population. Some prominent voices in the ecosystem argue about India's lower purchasing power, but this argument often rests on the fallacious notion that purchasing power is absolute. In reality, purchasing power is relative.
Let's delve into this concept: Purchasing power is an individual's ability to buy a product based on their net income. This ability is directly related to the price of the product. Can we treat price as an absolute? No, because price is inherently relative, and consequently, purchasing power is also relative. Constraining ourselves by treating this relativity as an absolute and creating narratives around India's lower purchasing power is a significant misstep within our startup ecosystem.
This is one of the key reasons I have been at odds with the experts in the ecosystem. I firmly believe in the transformative power of technology on Indian society and other civilizations. Technology brings a much-needed boost in productivity, and any efficient system should be more affordable than an inefficient one.
It seems all the experts are waiting for India’s GDP per capita to go up. Narratives about India's current GDP per capita being "A" and needing to reach "B" to effect change don't align with history. Technically, an increase in GDP per capita stems from productivity gains—making fundamental products and services affordable to a larger section of society, not just a small percentage. History is replete with examples; consider Ford, which built an automobile that was within reach of nearly everyone in society, leading to collective productivity and a substantial rise in income.
I have read the "Techno-Optimistic Manifesto" three times already, and I intend to revisit it many more times in the future. Each paragraph, even each sentence, has the potential to inspire a 2000-word essay, contextualized for our nation and billions of people.
But let me explain the same through a few quotes:
“We believe the measure of abundance is falling prices. Every time a price falls, the universe of people who buy it gets a raise in buying power, which is the same as a raise in income. If a lot of goods and services drop in price, the result is an upward explosion of buying power, real income, and quality of life.”
“We believe we should push to drop prices across the economy through the application of technology until as many prices are effectively zero as possible, driving income levels and quality of life into the stratosphere.”
This means that an increase in purchasing power occurs not only when income rises but also when we make products accessible to every human being, which is synonymous with an income increase. It's universally agreed that the most valuable use of technology is in making production more affordable. However, this perspective seems to be lacking in the Indian startup ecosystem.
I was also captivated by another quote:
“We believe Andy Warhol was right when he said, “What’s great about this country is America started the tradition where the richest consumers buy essentially the same things as the poorest...”
In light of this, my one overarching aspiration for our nation and billions of our people is that everyone, regardless of their economic status, should have access to essentials. We aspire to make quality healthcare Access and Affordability for billions. I hope that, as a startup ecosystem, we can move beyond complaints about low purchasing power and use technology to create products that are affordable to billions of people in India and around the world.
It was a long weekend, hence this new essay on Monday. If you find my essay useful please share this with your network.
I shall see you all next week :)