NYT on slow pace of innovation in India

Vikas Bajaj has a story on NYT about India’s slow pace of innovation.  Nothing new and nothing most of you all didnt know already. Even the ubiquitous Sujai Karampuri gets a mention as is normally the case on stories based on this theme (no offense to Sujai – I love his blog and admire how outspoken he is).

This topic – call it ‘lack of innovation in India’ or ‘why no product companies in India’ or ‘where are Indian startups’ – has been touched upon umpteen times by media, bloggers (yes – I’m guilty too) and startup conferences and panels.

So, there’s absolutely no contest that there’s no or very little innovation happening in the Indian tech scene. I think we should move beyond the obvious and try to focus more on how to resolve the issue.

For starters, I’d like to point to a recent post by Fred Wilson who captured the essence of building a startup ecosystem quite well. By far, its one of the best and most lucid pieces I’ve seen on startup ecosystems. I’d say we’re still early in the first decade and have a long way to go yet.

Meanwhile, I also wanted to talk briefly about the oft quoted ‘not enough angels’ issue. The way I see it — the lack of angel funding is a classic chicken & egg problem in the Indian market. Lets say that hypothetically speaking, I have some extra money lying around that I’d want to invest somewhere. Lets say a startup pitches me for angel funding. Now, without any significant M&A activity or IPO’s, what is the probability of getting good returns on my investment ? Indian Internet, in its current form, is not a very viable market. So, what are the odds that I see more concrete returns in other sectors – be it stocks / real estate etc. and opt to invest in those sectors as opposed to tech startups ?

But some you may argue – arent angels supposed to be true risk takers ? Isnt angel investing more like – invest and forget (assuming you lost the investment). And I agree – thats the reason I say its a classic chicken and egg problem. Without some returns on investment, the sector might not attract a lot of angels and without the angels, there might not be a lot of startups.

Would love to hear your thoughts about it.

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33 comments

  1. What we need is not talks, symposiums, seminars etc.

    What we need is action.

  2. One thing need to understand that India is having huge middle class base but it is not consumer base. So no product innovation can be profitable till active consumer base increase.

    In India till now people are dead scared of using credit card online. Even offline use is also very limited to high-tech cities.

    Till actual consumption does not grow the product or innovation development cycle will not complete.

  3. I personally feel its mostly human nature to follow a trend (as it seems safer), if one VC invests in a company that turns out to be the next google from India, then plenty will follow soon.
    There are ways to get around this problem.
    There is a thriving indian community in western countries whether in USA,canada or UK.Why not we people create a pool and put in some money and start investing in startups in India or launch our own startups.Might seem like a stupid idea to some.Shall we create a website for this and take up this idea.

    Also startups in India can take help from their contacts in US or other countries and ask them to pitch for them in front of VC’s there.
    I think we should think in terms of global markets when we are launching products.
    I really donot understand when we launch service companies we think globally but when we launch products we think in terms of local market only (which might not be mature at this time for the internet)

    Also innovation comes from thinking long term.I think its in our culture to think short term, that shows in our vision for creating fly overs that only help to sooth traffic for a while, or joining bigger companies for money. Sticking to a service + product model might work i.e. to say doing ‘service’ work to survive and doing ‘product’ innovation to thrive.Once product initiatives pick up , then service work should be stopped.

    • Hello,
      India consist of middle class people, we in india are more concerned on our future rather concentrating on our present, this doesn’t allow us to take risk, there is no lack of innovation, I have an idea to connect people so that they can express themselves and share their problems and by the virtue of discussion can arrive a common solution, these requires a tool that i am trying to develop for the time being i developed a website http://www.evoljournal.com where people can express themselves, now I came across problems which involves funding, this is a situation in india therefore an idea takes a long road to achieve its aim in India

  4. hey ! i think we are quite innovative , but problem is in action
    and action isnt there because we dont get much support from our nearest friends ,teachers and relatives leave VC , having VC funds doesnt bring much innovations , innvoations happens from universities , participating in quality discussions. the more and more we discuss the more products u c from india !

    • Innovation is there i agree, but in bits and chunks. And i also agree that many people even though talented enough still donot get support for e.g see this http://www.youtube.com/watch?v=BPN3gLVDsOY

      This guy can easily be one of the best rock climbers in the world but very few people even know about him even in India, and nobody cares.If he would have been born in some western country by this time he would have been very popular.
      The chalta hai attitue is killing us and the nature to not help each other to succeed is also a problem.

  5. I absolutely agree with the idea about lack of innovation in India. I read a similar article but in a different direction in venturewoods.org, where the author has discussed about why we need product based technology startups in India. You can have a read here http://www.venturewoods.org/index.php/2009/12/17/why-india-needs-more-tech-software-companies/

  6. Innovation in India is way more than any other country(My Thinking) but there is lack of awareness. The young entrepreneurs are suppressed by conditions here in India. When I started blogging people around me laughed at the idea of income from ads by other people clicking at them and instead of exploring any other field many of us are forced to move along the crowd. For them a 9 to 5 job is good rather than earning more money and working from home.

  7. In an indian context a few things matter most – Family views, Securing ones future, avoiding authorities when possible and buy gold, govt bonds or FD, property if possible…This thinking comes from their parents who have slogged their backs off and saved money all through their lives…It is very difficult to shake this monkey off!

    I did it and only bcos i am doing ok it doesnt matter otherwise i would have been termed a loser!!

    Indians need to know they can…like in Matrix…choose between the Red or Blue Pill…we need a Morpheus brigade !!

  8. Hello Pranav, your blog post highlights a key issue, namely the lack of seed funding crucial to nurture a start up. I would also contend that along with the initial seed investment, having other serial entrepreneurs as advisors is also critical to getting things off the ground correctly. It would be worthwhile to mention that the US recently introduced a bill called the StartUpVisa Act in the Senate http://bit.ly/chjgor. If passed, it might have the consequence of attracting more Indian entrepreneurial talent to the US.

  9. Hi,

    A very thought provoking post indeed. When we see many ‘uprisings’ in entrepreneurship – websites, magazines, funds, conferences etc. one might think India is brimming with a dozen of ‘next big things’.

    Working as a development manager in a business incubator which is a part of one of the best universities in India. I often come across many ideas from students and faculties. from my interactions with student community (in general), i felt the type of education imparted in our colleges contributes a lot to the ‘less innovative thinking’ among us.

    You see, I spotted this post through a software developed two Stanford graduates. Most of us uses an operating system developed by a crazy group of college dropouts. We network online through the software developed by a Harvard undergraduate.

    We learned many things in undergraduate studies. but we were so neck deep in academics that we missed the big market of opportunities.

    There cannot be true innovation in India unless untill we encourage our engineers/graduates to correlate what they study with what they see.
    You will then identify the what is missing or what can be added. Such an ecosystem must evolve around our Universities/Colleges.

  10. You cannot expect everything thing to turn up over night. There is no lack of innovation in India, we innovate at scale which is feasible for us. If somebody expects that we should come up with new Microsoft, Google or Apple, well then they would have to wait some time.

    Enterpreneur ship is its very early stages in India.

    Current generation (kids of late 70s and early 80s) is very enthusiatic, I have many friends including my self who try to break the old mould and do something new, but please keep in my that we have be fed for 10 years, to study hard, get a job and get married.

  11. Who says there is no innovation in India. Did you not hear of one A raja, Lalit Modi, Gali brothers, Y S R Reddy !!!. They have taken innovation to such a high level no one in the rest of the world could emulate them.

  12. a bookmark to this blog was provided by Christian Dillstrom, the mobile and social media marketing veteran – so you must be doing an excellent job.

  13. You guys are the typical bunch who want to “appear very intellectual” but have very little or no substance. Stop yakking and start doing something – if you don’t have any ideas, at least keep quiet and stop bullshitting all over the place.

  14. I am not here to argue on what is missing in India and what is there. I am not sure of all the people who made a comment here, how many are really interested in doing something big.

    I dream of creating something innovative yet useful and during my search to find like minded people on the internet I ended up reading this blog.

    If anyone here shares the same feeling and is willing to devote some time of their day in realizing that dream then please feel free to connect with me through my email- v_singh@live.com.

  15. little innovation happening in the Indian tech scene this is real scene……

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  19. A country where meritocracy is dead on birth – the inglorious caste system – where even who gets to start a good startup is reserved for the great Brahmins……how can you expect India to be a new silicon valley?.

    I again tell you apart from the lack of infrastructure which can be overcome there is no dearth of other resources in India…….
    a. There is ample talent and manpower availability.
    b. There is less cost compared to US to start the startup.

    But still India has failed to be an innovative destination.

    The reasons are :
    1. The Sick culture of India – belief in being a slave rather than a founder. I have worked in service companies so called tech hubs like Infosys , wipro. Managers have personally told me to stop thinking a lot otherwise US clients will stop outsourcing work here.

    2.Politics – politics , Politics. A brahmin gets to be the CTO, CEO, Director and manager. Noone else. ……..why?. cause he wasnt born a Brahmin. !.

    The end result is there for all to see.

    Look where China has progressed in all these years.

  20. indian thought process is the criminal.we are all obsessed with earning a monthly income and being modern slaves.

  21. I don’t think it’s an issue of there being a lack of Angel investors it’s more a question of the government creating the right conditions. I’m talking R&D tax breaks and business incubation programs here.

  22. India is on its way..Things don’t happen over night..but one thing is sure..India has lots of potential

  23. Hi its not that, since there is NO necessity there is NO invention. if indians needed it they will invent it, see bollywood, see food,
    there is no big money for startup world in India, so not many ppl work on it and so no invention,

    USA needs startup and invention bcz of their eco system,
    if i can get a website up in 3 months for 2lakh rupees, why i need to think about a startup, where i can start business directly

  24. very nice article , i like this page, slow pace of innovation in India, very nice content, i like this post

  25. great article, absolutely no contest that there’s no or very little innovation happening in the Indian tech scene, very nice article and content, i like this page.

  26. yes i agree that there absolutely no contest that there’s no or very little innovation happening in the Indian tech scene it is a very nice article

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  29. Yes Indeed, it’s very slow pace. We actually don’t have support from government to create infrastructure for innovations. First of all, Government should help and finance for the infrastructure. Government should create the atmosphere.

    It’s my experience for a start up. To get fund at initial stage is very difficult.

    I believe in first you make $ 10 and then ask for $ 100 funding. There are chances you get money.

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