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.
What we need is not talks, symposiums, seminars etc.
What we need is action.
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.
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.
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.
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/
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.
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 !!
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.