Vijay Anand | The Startup Guy.

Indian Entrepreneurs. Western Ideologies.

Posted on: May 1, 2007

I had quite a long conversation with Josh of Footprint ventures yesterday. It is a conversation I much enjoyed, partly cause we, for some reason, started asking all the big questions as to what was lacking in the Indian startup ecosystem. Right from, “force fitted ideas”, to “lack of seasoned entrepreneurs” to “lack of funds for really early stage companies”, it was all laid out and discussed upon.

In some way it was quite surprising and comforting, cause is actually trying to address all these issues. Most of these issues can be solved when the involved parties come together and atleast speak their heart out. certainly makes way for that.

Here’s one train of discussion that went on:

What is the biggest problem with Indian startups today?

You have gotten it right, if your answer is “The ability to scale”. It is certainly just one of the problems, but it is also a big one.

In most cases the basic issue comes down to this: Someone takes a radical idea from the west or somewhere far off, makes the tweak and makes it work here in India. When it comes to the matter of scaling, we do come to realize that everything that this model is based upon, is on a lot of concrete numbers that are from the west and shaking them might collapse the entire business itself. It has happened and unfortunately will go on for sometime – unless we realize the error in our ways.

There are two factors which are contributing to this issue: Most of the VC firms that are based here in India are from the west. They are much more familiar with business models that work there and arent quite familiar with the mass numbers that india presents, or working with low margin profits. What seems attractive to most firms, is the same – or familiar model of the west, twisted to fit the indian ecosystem. The other issue is the return of the entrepreneurs from the west. Most of them also are so drenched in the lifestyle of the west, that they sometimes forget that inorder to build a durable business model, it takes a fresh ground up approach.

But all in all, I dont think this is a bad thing. We all live to learn and learn to live. There is much that we can learn from the proven business models of the west. We don’t have to rewrite investment principles, and the basics that go with running any business – but we also need to realize and acknowledge that we need to define our own elements, principles and business models.

Much of this is going to require an indepth analysis of our own market segment. It is very hard – almost impossible – to get any statistics about the market segment that we are targetting – if you are building a product for India. To cite an example, I can hardly get any statistics about bloggers in India, and we still keep quoting the global figures that everybody is running with. We need initiatives like that to be kicked off.

We do have our setbacks, but I am positive that when we get back on our feet, we are definitely a force to be reckoned with. Numbers definitely don’t lie.


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