From jugaad innovation to sustainable long-term innovation: How Indian SaaS start-ups have moved upwards in the value creation gambit

Abstract

India is emerging as a favourable destination for the SaaS industry. The large-scale available talent at a lower acquisition costs can drive growth rapidly with the same amount of investment. The marginal cost of the SaaS industry is relatively low, so investors are open to new ideas, and as a result, seed funding has increased considerably. India has about 1000 start-ups in this space, and 15 of them are unicorns. The SaaS industry is expected to reach a market cap of $10 trillion by 2030. The Indian SaaS industry is expected to grow to 7% of the global market by then with a market cap of $700-800 billion. Businesses in emerging countries like India , China, and Brazil are redefining innovation by generating affordable products and solutions in environments with scarce resources. These items deliver a lot of value for a given price, which is known as a high price to performance ratio. Consequently, both enterprises in developed countries and those in these developing areas. These nations, particularly India, have given low-cost invention many other titles, including indovation (Lamont, Mitra), innovation (Freiberg, Freiverg, & Dunston), or grass-roots innovation (Utz & dahlman). The title "Indovation," which combines the terms "India" and "innovation," is a reflection of Nanovation, the first ultra-cheap car ever produced by Tata Motors, an Indian company. In other countries, low-cost innovation also goes by different names. For example, it is referred to as "bandit innovation" or "Shanzai innovation" in China (Kao & Lee). Jugaad is a Hindi word that refers to improvised solutions using scarce resources, a term used for the Frugal form of innovation. But one major fallback we face in the creation of Jugaad Innovation is that it lacks the flexibility to adapt to changing needs of the consumer. Hence in the long term, it lacks the capability to call itself a sustainable innovation. The major reason to focus on innovation is because innovation generates revenue for the company. Innovation can be process innovation or product innovation. Our research focuses primarily on how SaaS start-ups primarily focus on creating sustainable innovation. On an average, for a company to come up with a sustainable idea is about 2 years. Short-term competitive advantages are easy to replicate and replace for a firm to stay in the market. Companies need to understand how to not just create value but how to properly communicate to the user to generate revenue out of the innovation. Our research tries to understand how successful startups try to sustain their innovation in the rising SaaS Industry.