Zero to Infinity 178: Matrix Moments: Investing in India's B2B Potential
Sep 5, 2023
This podcast delves into the attractiveness of the B2B segment, the fundamentals of a good B2B business, sustainable moats, pitfalls for B2B founders, and the importance of corporate governance. It explores the shift towards IP-led manufacturing in B2B investments and highlights well-established companies like OfBusiness, FarMart, and Captain Fresh. The speakers express their continued bullishness on B2B, discuss the concept of moats and return on capital employed (ROSIE), emphasize the significance of corporate governance and managing teams at scale, and share their future investment plans in B2B.
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B2B Macro Tailwinds Remain Strong
- Despite macroeconomic headwinds, key digitization and formalization tailwinds in India’s B2B sector remain strong and accelerating.
- This supports continued significant value creation in India's core GDP sectors through B2B businesses.
Choose Supply Chain Focus Wisely
- Build vertical B2B marketplaces where supply is fragmented to create trust and value.
- In consolidated, IP-driven supply chains, focus on manufacturing or production rather than distribution.
Understanding B2B Business Moats
- True moats in B2B arise from capabilities like matchmaking, supply chain optimization, underwriting, branding, or proprietary IP.
- Building distinctive capabilities prevents displacement by competitors despite commoditized industry perceptions.