The Indian startup eco system

It is no secret that the Indian startup eco system has started to take shape. Look around in India and you feel the vibrant atmosphere akin to the 1970’s Bay Area or the 90’s Silicon valley, Seattle excitement! Those were the days when Google.com was still non existent, The Airbnb’s and Uber’s were not even on the horizon! Those were truly the days of the Apple vs. Microsoft war, amazon.com was BIG, SUN was truly shining, DELL was BIG, the Personal Computer and server business was a never hotter, Cisco was huge, Intel was THE Chipmaker for the world, Yahoo was ‘THE Internet’ when Steve Jobs had just returned to Apple when his company NeXT got acquired by Apple and by a magical turn of events, he was CEO again!

The Indian startup system is akin to the Silicon valley dot com bubble that took the world by storm back in the late 90’s. Many parallels can be drawn here but that is where the comparison ends.

Differences I see

1. The culture of the US/Israel vs. India/China is grossly different

– Its an advantage if you failed building your own startup in the Bay Area; its not in India – a failed startup is viewed as a failure of the individual’s core capabilities here (of course, slowly but surely, its starting to creep into the eco system at large – by eco system here, I mean friends, family, companies we go to interviews to who take the time to find out if we had fun and learnt something new in the process!) – a great step ahead, IMHO!

– Its not viewed as a negative if you move jobs often in the product industry in the Bay Area – often times, I see Lin profiles of my past colleagues/peers making switches of all types – big role, low profile company, smaller role, high profile company with an employment velocity of 0.5 (1 job every 2 years on average in various roles and various verticals!)

As Rich Mironov (my mentor) calls out this phenomenon as ’employment velocity’ – in my case it is, 5/15 = 0.33 i.e. its an Agile form of trying to gauge how often one switches jobs in the valley. Its an anathema if you switch jobs too often in India (people still hang onto jobs for life or long durations). In the Bay Area, if you don’t experiment often to try out different things, you are not innovating fast enough (caveat being if you are content or satisfied with working in a unicorn like amazon or Apple or Microsoft or the Financial services sector)

Another thing I would like to point out is there is a dangerous and serious / gross product management deficit.

As with the Bay Area, Product Management is a smart tribe rare and few and far between.

Product Management is an art and not a science. It involves a mix of gut feel and data in a balance tilting towards gut feel. Data is used as one indicator to drive gut feel and future decisions and not used as a spreadsheet driven Product Manager. Product Managers should be empowered too. I see this all too often in Indian startups as lacking grossly. Training PM’s through an associate Product Manager program is another must. I hate to say this but I have not come out impressed with so called ‘product companies’ giving pseudo Product Manager designations to youngsters and them not having a clue of what this role entails. Also, CEO hubris needs to be contained in allowing the senior Product Management professionals hired for the job to function effectively and get out of the way else the organization is wasting its time calling itself a true ‘product organization’ just to bloat up their valuations in the eyes of the VC’s.

2. The Eco system: The Bay Area has the largest eco system in the world bringing the best VC’s, entrepreneurs, and worldwide consumers to the party. Think Apple, design in CA, build it China, ship to the whole world at inflated prices but making the best products consumers love! Uber which controls its app from its SFO office but hardly has any presence in the countries it rolls out its app for scale. In India, the scenario is different. Its too many VC’s vying for too few deals in India the eco system is just starting to take shape

3. The Economic opportunities presented: As an economy, the USA had transitioned from dial-up to fixed broadband to mobile broadband to now looking ahead at LTE/5G in future. In comparison, India bypassed the browser connected era and therefore is transitioning directly from NO Internet to Mobile broadband and 3G/LTE/4G and, who knows, 5G too! This # 243MM just about lags all the connected users in the USA i.e. 279MM users poised to grow to 500MM by 2020, still lower than the 600MM+ connected users in China but well above the current US connected user count of 279MM users).

4. Flaunting fast gotten wealth: amazon CEO Jeff Bezos still drives in his personal Honda that he used to drive when he started amazon. Some Indian entrepreneurs don’t mind flaunting their newly acquired wealth. Point being, small measurable successes (not at scale, mind you!) get to their head easily (the startup founders here have to learn to scale better as the company scales donning new hats and having the humility to start all over again and unlearn and relearn constantly!)

5. Objective thinking ingrained into the DNA of the company: Bay Area entrepreneurs think objectively more often than not. It still helps if you practice sycophancy in many India startups. It still looks like the fastest way to grow within that startup

6. Product Platform first: Many Bay Area product companies live breathe and think like platform product startups. A passionate product entrepreneur is unheard of since its a given – the use of the word passionate is unnecessary! Indian product entrepreneurs are just beginning their journey into this product world and miles to go before they sleep. They have to learn to practice humility to learn from seasoned product veterans and be ready to agree to a different Bay Area thinking style to build a better product that can evolve into a great platform – to realize the network effect! Also, as Eric Schmidt says rightly, look around you, if you truly aspire to be a global startup, ensure > 50% of your board has product/platform thinkers

7. Understand the differences between product vs. services: There are intrinsic differences in product economies and service economies – one necessarily not being greater than the other except that when it comes to scale and ‘speed of scale’ product wins! Indian entrepreneurs need to ingrain better scaling habits to build better platforms!

8. Scale/innovation: Bay Area is home to many of the world’s best scalable startups that almost live a trillion $ dream! Apple is close, Google will get there eventually. These startups are willing to live a beginners life and start all over again – unlearning the lessons they learnt that were relevant for a different day and age. India has an opportunity to learn this without having to unlearn past habits by trying to be innovative for the 21st century new world economy

9. i18n: Bay area has the world as its stage and it knows its an actor. Scaling geographically means tradeoffs and multiple i18n solutions to scale. Indian product startups need to evaluate if they need to go East and then West or vice versa. IF they indeed head West first, IMHO, they stand a better chance at platformizing a more scalable product – but truth be told, one isn’t necessarily better than the other although odds are if you look West, you learn the nuances of the product and platform world faster than the East as the East is like India – relying on a productized service approach as opposed to a self serve product/platform approach

10. Pivots/business models: Bay Area startups do pivot often. Indian startups are also learning to do this well. The business model of Indian startups will evolve and it will be an incredibly vibrant eco system leading into 2020 with multitude of opportunities as more VC’s and ideas go from the germ of an idea to one that will scale with worldwide scale of growth/innovation – caveat being, ultimately, they don’t get benchmarked with the amazon’s, they get benchmarked with the Alibaba’s – those that make money – if you know what I mean! Technical insights (as Eric Schmidt calls it) are key to growth of any great product startup. Aspire to be the best in your industry – no matter which it is. Good is the enemy of great!

11. Economy and control: Bay Area companies have an inherent advantage in that they rely on VC’s as mentors and they are always advised to build products the world can use but caveat being VC advise should not override common sense and our sense of the product industry (after all, we are supposed to be the experts as entrepreneurs but look to them for the right connections/mentorship!) – the world is their market but that does not always begin there – their market is highly constrained; initially; till that hypothesis made on their early experiments are validated ex: Facebook began as a social network for just universities back when they began in 2005. As Eric Schmidt calls it, its the concept of putting it to a trial by fire i.e. the technical insights that make or break a startup to scale into what the founders never thought possible! The Internet is really the best example of an open platform done well. Don’t let VC’s control your ship to decide when and how you scale, have the leadership team decide this. India has access to a HUGE demographic dividend in the next two-three decades! I sometimes wonder if VC’s get stuck in this endless loop of investing top dollar into companies they think will scale well and artificially buoy the nascent sector. They try to find underserved product markets and fill the gap through bright young entrepreneurs; granted but how much of demand exists and how much of it is artificially created by VC’s is questionable. They are in it for their 10X returns on the next unicorn but is the business model sustainable? I don’t know! Make full use of this VC funded Eco system that solves underserved markets and build fast/launch/iterate/learn/ship products to target a younger customer demographic whilst building products your grandmother can use with little to no training. I call it ‘my simplicity test’! By the way, despite Sergey and Larry taking Google public over a decade+ ago, they control the board. This is one of the mistakes Steve Jobs did and folks I know in my own circle who have been fired! Avoid the perils of giving too much control to non product folks. Its never healthy!

12. Venture funding: I just wrapped up a book on Venture deals by Brad Feld. Very well articulated book that captures the essence of what your VC’s don’t want you to know but something I recommend every wannabe entrepreneur know and understand (me included!)

Caveat: I built a US based consumer product startup between 2001 – 2010 (A California LA product/web service). Joined a mid sized NASDAQ listed enterprise product startup between 2010 – 2013. Joined one of India’s brightest enterprise product startups between 2013 – 2014 and built/shaped the product team there. Joined a large Indian e-commerce product startup in 2014. Here’s an interesting WSJ article on how the startup scene globally looks like with the first Indian player, Flipkart, making its mark on the world stage!

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About Naveen Athresh
Disclaimers/Caveat: All ideas/opinions expressed are the author's own and wherever any item has been taken from a 3rd party website, the appropriate link would've been provided. The author will not be responsible for any misconstrued views/opinions arising out of the discussion contexts chosen. All links taken/referred to are the sole copyright of their owners/parent websites and the author has no relation to the content as referred to/updated in those links. The author takes no responsibility to assume that the content going on this website will be error free as it is narrated from the author's own insights/experiences/focus/group interviews/thoughts. This website does not guarantee any sort of a bias towards any particular product or company/product investment advice and anyone doing so is doing it solely at their own risk and The author assumes no responsibility for the same. Readers are firmly adviced to use their discretionary powers to judge if the content used on this website is authentic etc. after verifying it from independant sources.

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