Why has India failed to produce awe-fucking-some Tech Consumer Product companies?
A population of around 1.4 Billion and we hardly have a great Technology Consumer Product company like a Google or a Facebook or an Apple. No doubting the fact that we have a few of the best Technology Services Companies in the world like TCS, Infosys, HCL, Wipro which would have market caps way above the likes of Pinterest, twitter, Linkedin, Stripe, AirBnB etc but when it comes to building tech consumer product companies we lack something.
It’s difficult pointing out one single factor that makes up for this. There are a number of things that act in tandem that’s hurting the startup culture in India.
Society and Culture: I don’t know if many would agree but I consider this as a crucial factor that’s limiting the vast majority of Intelligent and smart young minds in our country to take up the mantle of doing something maverick, creating something that has tremendous value to the society. With parent’s asking their young ones to focus only on getting good grades and taking care of their educational expenses we hardly get a chance to be Independent early on in our life. By the time we complete our education & hit the mid twenties, Parent’s are busy getting us married to someone whom they think would be our ideal partners. If you try and resist any of this, you are classified as a spoilt brat who is a problem to the entire family and that leaves a normal person in India with hardly any chance to don the hat of an Entrepreneur early in his life. By the time you get a grip on your life and think about doing something life changing, you are in your mid-thirties, time long lost! Compare this with the culture outside, in the US for eg where people feel the urge to do something life changing right when they are in college or maybe even before that, that’s a big headstart they have.
Setting Local goals: I’m not really sure why we do this, but then the more Entrepreneurs I meet the more vindicated I’m on this thought of mine. We hardly have ambitions to create a Global product. We are quite content to create a product in a niche that would do well in a couple of states or may be the whole of India. That’s the dream and with a dream like that it’s hard to build a google or a facebook. Compare this to the guys in Silicon Valley, they always dream big. The focus is always on building a product that’s world class and used all over the world even though they might start building their base locally.
The Indian Consumer: Imagine a product like Pinterest or Twitter having a huge audience here in India during its initial days? I don’t really know the reason for this but for any of the Consumer tech Products, we somehow have the tendency to accept it only after it has significantly scaled. We are not early adopters of anything. I guess a lot of it has to be because of the way we live as well. The few who are tech savvy are busy working from dawn till dusk, majority of the sites blocked in 90% of the offices, post which they have to commute for hours (which is a major pain), have to be on Facebook and Gmail, then where do we get the time to try out something new? The rest either don’t have connectivity or hardly know how to operate a computer/smart phone. General rule for any startup is to be in a place where your customers are. So the fact is, Indian Market is a very small market for consumer tech companies, be it tech gadgets or internet marketing. There is not enough money to be made there, although this will change in the coming years. The only market that could have supported companies like Facebook, Apple or Google is the US which has a large market and a big set of early adopters of anything related to technology.
Lack of Startup Ecosystem: Having a great ecosystem for startups to flourish is yet another key missing component in India. Startups thrive when there are Investors, entrepreneurs, lawyers, best companies all at a single place. We in India can hardly expect to walk into a Coffee shop or go for a morning walk and expect to find Paul Graham or Peter Thiel. It could never happen. Having a group of extremely brilliant Entrepreneurs has a effect on everyone around. It rubs off. Getting frequent opportunities to listen to Mark Zuckerberg or Larry Page or Bill Gates does inspire you in ways you would have never thought. Not just the entrepreneurs even the lawyers matter. Having an ecosystem that gives you ample opportunity and encourages talent is something we should genuinely start building here in India. Must say, things are signs of change but I guess we here in Bangalore or Mumbai or Chennai or Delhi are still 10-15 years behind the valley in this regard.
Mentors: Having great mentors who have carved out brilliant products and technology companies is yet another crucial piece in the jigsaw. We have the likes of Narayana Murthy, Nandan Nilekani etc but with no due disregard for their achievements, these are not the people who could guide you in creating Product companies like Google or Apple.
VC Market : The Indian VC market is at least 20 years behind the American VCs. It’s hard to get valuation at an early stage which is crucial for a Tech Consumer Product company to grow. Investors need to show confidence in their founders and expect to not rake in profits right away. A company like Pinterest with Ben Silberman could have hardly survived had Pinterest been started in India. For that matter even a Twitter or a Facebook. The VCs would have written it off right from the beginning. In India the only segment that gets funding are the E-commerce space and maybe the travel segment. The irony is that neither of these segments have been highly profitable at least till date.
Angels: Angels are crucial for startups during its initial days. In India one could hardly find any angels in reality. I find it odd that the few who invest in companies as Angels more often than not eat up a big pie of the founder’s share leaving them with hardly anything. The more the Angels exert themselves and the lesser the freedom they give to the founders, the higher the chance that the company would fail.
Brilliant Universities: The education system in India somehow does not encourage students to create products, become entrepreneurs. It’s highly text book oriented and all we are expected to do is produce on the answer sheet are the things we have mugged up the day before.
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