A lot of doubts have been cast on the real Indian venture capital opportunity. In the last few years, most companies funded by VCs have failed to scale. And, those that have scaled have used a very high amount of capital and not generated disproportionate returns. Both entrepreneurs and investors lay the blame squarely on the ‘size’ of Indian markets. Many a rationalizations have surmised that ‘addressable’ Indian market is just a fraction of the GDP figures.

Aaron Levie, the brilliant CEO of Box.net tweeted some thing that aptly describes an Indian founder’s dilemma – “We underestimate the role that friction plays in supply/demand. Consumption is often far more limited by experience than the price”. We believe the ‘high friction’ character of Indian market is changing. There’s ample proof that a lot of things are working and there are some lessons for us to imbibe.

India Has Always Shown Progress by Leapfrogs

As the average selling price of smart phones is plummeting, smartphone adoption in India is shooting high, thereby giving a fillip to the number of mobile internet users in the country. eMarketer in a report released in December 2015, forecasted that India will exceed 200 million smartphone users, topping the U.S. as the world’s second-largest smart phone market by 2016. And then, the organized retail is growing at about 10 per cent and e-Commerce is growing at 50–60 percent year-over-year.

This year, we saw some more leapfrogs developing even more smoothly, and interestingly, many of them were driven by the government. We all know the impact of Aadhar card and how smoothly it’s being integrated in processes by corporates and governments a like.

But the leapfrog to LED lights is even more interesting. Power is essential for the entire smartphone and tech boom. It was difficult to electrify remote villages in India, and even more difficult to get them to pay for it. We have skipped all of those problems, and solar power is now reaching the hinterland. We have solar powered villages that use LED bulbs. 170 million low cost LED bulbs have been distributed by the government so far.

Jio has launched the mother of all freemium offers for its broadband services. Indian consumers were being served poor quality data services, and that was the reason they were consuming only small bytes. A lot has been said about Indian consumers not wanting to pay for data.

But the reality is that they never got the exact bang for their buck.

There are about 40 million subscribers on Jio broadband, consuming 30GB of data every month, with the number increasing by 10 million a month. What are the chances that these subscribers will go back to consuming less than 1GB a month after Jio’s free period offer ends? Nil.

As the average selling price of smartphones is plummeting, smartphone adoption in India is shooting high, thereby giving a fillip to the number of mobile internet users in the country

We now have 4G handsets available for about $70. These smartphones have fancy cameras and enough memory to enable people to make good use of broadband. Quality hardware is nudging people to move beyond basic calling functions.

In the content space, YouTube long tail content has overtaken TV soaps. This is an important landmark for content creators and distributors because the market is now evolving into 100s of sub segments from the format of copycat family TV shows.

Given cheap and quality broadband and the fact that Indian languages are tough to type, we will see a shift to video chatting soon. Amazon has introduced its first data center infrastructure in India in acknowledgement of the booming internet traffic.

Microfinance has been a silent revolution now, staying away from noise for good reasons. The industry grew by 84 percent in 2015-16, now serving over 32 million Indians. In a slightly higher segment, chit funds – the community peer to peer lending groups are doing a great job of aiding businessmen. With easy access to bank accounts and direct debit of subsidies, gone are the days of Indians waiting in lines for collecting pensions or subsidies.

In a subtle way, this is also increasing the common man’s faith in technology, which in turn removes friction in a consumer purchase. Today, senior citizens happily shop online. People use a lot of their consumer durables budget on Flipkart. As Myntra gets bigger than all offline fashion chains put together, online brands like FabAlley are beating well-known global brands on the portal. These leapfrogs seem to prove that execution and adoption of new things, especially technology, is getting better and faster in India.

For startup enthusiasts, there is a lot to look forward to:

• Mobile payments, skipping the card + device system
• Postal system that’ll create the largest digital bank with their 0.2 mn location/pin code reach
• Electrification that’ll make it possible to procure FMCG goods and pharma in hinterlands with well-designed supply chain systems
• India-built social networks and content aggregators that’ll compete with the likes of Linkedin, Twitter, Pinterest and even Whatsapp and Facebook

In the next year or two, startups will prove conclusively that Indian market size is indeed very large. Some of these are likely to be in the space of Hyperlocal content, media, gaming, Payment systems, Insurance and savings products and Lending using technology.

Micro-finance has already shown us how the movement channelled resources of the banking sector to the economically challenged in towns and villages and has resulted into multiple IPOs like SKS, Ujjivan, Equitas and many others in pipeline . The same revolution is about to happen in lending and payment space with the Govt renewed push for digital economy.

Entrepreneurs will re-imagine the eco-system around delivering their goods, services, and experience, and create markets that encompass all of India. Overall, fintech is first off the block and will lead all other leapfrogs.