I have been writing quite a bit about the startup scene and tech entrepreneurship in the Silicon Valley lately. The last couple of years have been good times for startups to flourish and that has spurred a lot of activity in this area. Kleiner Perkins partner Mary Meeker’s revealing power-point slide-deck about “Internet Trends” explains the current state of U.S. economy rather succinctly - “(There’s) A lot to be excited about in tech. (There’s) A lot to be worried about in other areas.” Anytime you say technology or software, India has a strong role to play in it in today’s global village. So the situation in the U.S. made me curious about the environment for startups in India. My travels took me to India recently and I was fortunate enough to explore this topic in some detail. Couple of my close contacts are both running their own tech startups out of Bengaluru and it was interesting to listen to their experiences and challenges as entrepreneurs in India’s Silicon Valley. Is that term just some marketing hype or has Bengaluru really become an integral part of the culture of innovation and tech entrepreneurship that people are used to in the U.S. in general, and Silicon Valley in particular? Let’s find out.
Meet Joydeep Sen Sarma, who, along with Ashish Thusoo, has co-founded Qubole, a big data startup building an analytics platform on the cloud. Both Joydeep and Ashish have years of experience in big data and were early employees and an integral part of Facebook’s data service. They helped scale it to over 25 PB of data with tens of thousands of queries every day as Facebook grew and flourished over the past few years. They also founded and authored Apache Hive, an important query tool that’s part of the Apache Hadoop eco-system. Qubole is currently one of the hotter startups in the big data space and has a significant presence in India as Joydeep decided to move to India for personal and family reasons. He moved to India in the very early days of Qubole and relies on his co-founder to operate the Silicon Valley arm. Qubole was basically built as a global operation from its early days because of Joydeep’s decision to relocate. Joydeep is primarily focused on building a world-class Software Development Center for Qubole with a significant workforce in Bengaluru while his friend manages most of the business aspects out of Silicon Valley. Qubole has raised enough money for now and is in a great spot - not surprising, considering its co-founders’ IIT credentials and Facebook success.
But Joydeep feels Qubole is primarily a Silicon Valley company. “It’s still very difficult gaining exposure sitting in India if you are targeting a global market,” says Joydeep. “Investors in Silicon Valley have so much talent around them that they have no real reason to look to startups in India to build products for U.S.” What about investors in India? Terms like Venture Capitalists were rarely in circulation 15 years back, but the VC culture has definitely spread its wings in India. I was at a recent startup expo in Silicon Valley when a prominent VC made it a point to say that they have started looking for Indian startups building products for the global market. This is a positive shift from the current reality where most Indian startups that flourish are primarily targeted towards the Indian market. This is indeed a natural evolution for India – from purely being an outsourcing hub to becoming a flourishing market to eventually transforming into a global hub for innovation.
Krishna Thiruvengadam, another tech entrepreneur from Bengaluru feels this is exactly the trajectory India in general and Bengaluru is particular is on. Krishna is building an online weekend travel site for the Indian market. He moved back from Australia to work on this with his friends and his site, weekendzing.com, is just days away from its launch. “Indian cities are currently flooded with young couples or single professionals with a lot of disposable income. They are constantly looking for weekend activities and entertainment options and we hope to provide them with a much needed service,” says Krishna. “We are not just a travel site or a site to book cheap accommodation. We are an all-encompassing, weekend, activity site.” Weekendzing is an Indian startup for the Indian market and Krishna is very impressed with how easy it was for him to register the business and get started in Bengaluru in just 10 days. All forms were online and he did not pay any bribe – a notion unheard of in the old days. Krishna credits the Karnataka state government for this and adds that some of his entrepreneur friends in other Indian states are not that lucky yet.
Within hours of his business being registered, Krishna was also flooded with e-mails providing all kinds of services for his startup ranging from tax help from chartered accountants to trademark and copyright services. “The ecosystem for startups is definitely maturing in India. Access to angel funding is improving and a lot of VC money is flowing into India from Silicon Valley,” says Krishna, who is bootstrapping his startup himself with his co-founders and is not currently looking for funding. “Take for instance the online apparel retail space. Multiple sites like yebhi.com, myntra.com and jabong.com are enjoying a lot of attention and getting funded liberally.” There is a very visible network of angel investors in India named after their respective cities and it’s fascinating to see even TV ads by “Mumbai Angels” – a phenomenon quite uncommon even in Silicon Valley. “While the startup culture is definitely finding it’s footing in India, there is still one big problem in my opinion. There is a lot of entrepreneurship, but not enough innovation,” says Krishna. What he means by this is, there are many successful ventures like flipkart.com and snapdeal.com, but they all tend to be well-proven ideas borrowed and implemented for the burgeoning Indian market.
Startup is a generic term for most people, but Joydeep and Krishna are obviously running very different kinds of startups targeted towards completely different markets. Their opinions are rightfully influenced by their respective experiences, situations and backgrounds. Joydeep for instance has lived in the Silicon Valley for several years and feels the Indian ecosystem is not quite there yet. “Indian VCs are still pretty risk-averse compared to the VCs I have seen in the Silicon Valley. And even if they decide to fund you, their valuations for your startup tend to be obscenely low,” says Joydeep. “It takes equity out of the hands of the founders and puts it exclusively in the VC’s pockets. This also means the startup does not have enough equity to offer and attract top-talent.” Joydeep feels Qubole is very well placed when it comes to hiring and retaining talent in Bengaluru because of the U.S. dollars in the bank and the backing of Silicon Valley VCs. While Joydeep and Krishna are building their startups their own way, they do share some things in common beyond their stellar resumes – Krishna studied at IIM Bengaluru and has worked at American Express. They both agree that one thing that the Indian eco-system lacks is infrastructure for startups. This includes shared space, affordable conference rooms for networking events etc. Even here, Krishna is seeing many services popping up in Bengaluru lately. Both also agree that India can be the epicenter of Asia-Pacific operations for their respective businesses if and when they expand in the future. Last but not the least, they share the hope that India becomes a hub for true innovation in the near future.
I came away from all this both excited and hopeful. India is trending in the right direction when it comes to tech entrepreneurship and is moving fast. Is it ever going to close the gap with Silicon Valley? The answer, in my opinion, is it doesn’t have to! Both eco-systems need to organically evolve, improve and contribute to making this world a better place with innovative products and services. Silicon Valley and Bengaluru may be attached at the hip in some sense, but they don’t have to be mirror images of each other. One thing is for certain — the future currently looks bright for smart entrepreneurs on both sides of the globe.