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.

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Over the last couple of days, I was getting some updates about friends-family in India, while talking to my mom. During conversation, my mom mentioned about two recent graduates, who’s campus placements (in IT companies) were deferred due to the uncertain economy. And so, they were considering pursuing – applying for an MBA in the meanwhile.

And for some reason, that topic lingered on in my mind – bothering me. Why would two recent graduates consider an MBA as a ‘way out’ ? How much did they even know about what MBA is about ? After all, by the time you graduate with a bachleors degree, you hardly have any insight into real world, leave aside an MBA. Who counseled them into an MBA program ?

It didnt take long for me to figure out that no one else is to blame for this distorted notion but our society. A B.E + MBA combo is seen as the holy grail for Indian technical professionals. BE + MBA candidates are not only paid highly – they are valued highly by the society, professionally and even from the matrimonial perspective. Not to mention the extent to which the media has glamorized the MBA degree – touting the crore plus salaries and the direct placements abroad. Now that I revisit some of the conversations i’ve had with my peers, several of whom have graduated from top-tier MBA schools in India & abroad, it seems that the common motivation to do an MBA seems to be for one of the following three reasons:

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Here’s a potential startup idea with a solid business model.

Provide a Groupon clone for major Indian cities.  The concept of Groupon is simple. Each day, you provide a new discount / deal to customers from local retailers. The catch is that the discount is only valid if a certain threshold of customers buy the deal. So, essentially, its group buying power, but becomes active only when the number of buyers reaches a certain tipping point. To illustrate with an example, say you negotiate a deal with a Bangalore restaurant – if you bring 25 customers, how much of a discount will the restaurant provide. Say, the restaurant agrees to provide a 20% discount if you guarantee 25 new customers. So, you announce the deal on your site and the deal becomes active only if at least 25 customers buy the deal. If less than 25 customers sign up for the deal, the deal isnt valid and all the restaurant gets is free publicity / marketing via your website.

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“Lack of angel funding” is an issue brought up so many times while addressing entrepreneurship in India that I’ve seriously started getting nauseated at the very mention of it.

Its just become common place to cite lack of angel funding as one of the main reasons for lack of startups in India. To a certain extent, I agree – angel funding needs to be more easily accessible and there are a lot of genuine startups that could benefit from angel funding being more readily available.

However, an equal amount of blame also lies in the fact that most of the ’so called’ startups are simply not fundable. We lack motivated, passionate entrepreneurs pursuing high quality ideas and startups. Hate me if you want, but someone had to say it and so I just did. Like it or not, but thats a fact. As someone who gets several pitches for reviews on a daily basis, I cant help but use one word to describe some of the startups – appalling. Day in – day out I witness how folks develop a new mashup or some inane idea, which at best could pass of as a hobby or a side project. Or even a college level project. But in no way, could they be called a startup.

Over time, the number of such ’startups’ has increased. I cant help but wonder why / how people tend to get the distorted notion that their side projects could qualify as a startup ? Are we doing something fundamentally wrong from a perspective of fostering entrepreneurship that folks get the notion that their side project is a startup ?  Seriously, not everything goes. Having a lousy website with 10 users does not qualify as being an entrepreneur.

If I find some of these pitches not worthy of even giving a 2nd glance at, why – how do you expect angels / VC’s to fund these ideas with real money ?

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This may seem somewhat off-topic to some of you, but I get lots of emails from users who are confused about their career, unhappy with their jobs and unsure of what’s next in their professional life.

This post on a so-called ‘quarter-life crisis’ sums it up so well. Although written in the context of the western society / lifestyle — lots of bits an pieces could apply to the indian context as well.

It was too good not to share with all of you.

Building (read- coding and designing) a website or a social network is the easy part.  How you build a loyal, active community of users is the hard bit.

Here’s an interesting post that provides an awesome example – definitely worth a read.

In an insightful post, Deap Ubhi, co-founder and CEO of Burrp, says that India is not yet ready for online or mobile entrepreneurship.

this is where india diverges a bit from many other countries that are currently cultivating some great startup ideas. why is india different? my theory is simply this: the delta (or difference) between what many consider to be india’s market size and its addressable market size is vast.

the mobile market in india is closing in on just below half a billion. that’s almost twice the entire population of the united states. how many of those mobile subscribers are on prepaid plans? how many of them are below the poverty line? how many of them are unemployed? qualitatively, how many of them are just struggling to get a 4th grade education, can’t afford medicine for their illnesses, and frankly, don’t give a shit about anything except making sure their mobile allows them to talk to their circle

The post definitely gives us some food for thought. Deap has had the experience of running Burrp for about 3+ years now and it’d be foolish to dismiss his opinion as lame.

I had touched upon a similar topic way back in 2007 — even though India’s potential seems huge (1 Billion), actual figures are pretty dismal.

With 43% of votes, Information Technology still remains the preferred career choice for Indian engineering graduates of the class of 2010, as per a survey by Nielsen.

IT is followed by automobile, telecom, energy – oil & gas, infrastructure/real-estate and power sectors.

Some additional interesting tidbits from the survey:

• Ratan Tata is the most popular role model for the 2010 graduating class
• Students perceive nanotechnology (12%), IT services (11%), Power (9%), oil & gas (8%), telecom (6%) as the top 5 ‘industries of the future’
• IIT students consider energy/oil & gas, nanotechnology and finance as the top ‘industries of the future’
• half of the 2010 graduating class intend to move out of their first job in the first 3 years
• 51% cite higher studies as reason for leaving their first job
• 69% of the 51% intending to leave their first job for higher studies intend to do an MBA
• Students are willing to continue with their employer if they employer pays well (39%), they have a good job satisfaction (34%), if they have a good work environment (32%)

You might wonder why this survey even deserves a post.

In my opinion, this survey is important because it gives a very good background on what factors graduates weigh in while looking for a job, while leaving a job etc. Not to mention that entrepreneurship doesnt even figure as a career option anywhere in the survey. The fresh graduating class is where we actually need to sow the seeds for entrepreneurship – that is the best time when they can afford to take risks as entrepreneurs. When such a high percentage of students sees an IT + MBA as the holy grail, there needs to be a means to show the benefits that they might get from being a hands on entrepreneur instead of attending a b-school. Last, but not the least, this data will also be helpful to startups to attract and retain talent.

via release