What’s wrong with Indian startup scene?

I was at an Indian startup event today and did not enjoy the experience. It felt typical of what Indian startup scene has come to be (it is my perspective, of course. Feel free to disagree). There are two specific things which are wrong about startup scene in India: a) it’s a huge “ego-chamber”; b) most of early stage entrepreneurs are not solving problems for global market.

About “Ego-chamber”

Indian startup community is a tightly knit one and ironically it is also one of the biggest disadvantages. In today’s event, I saw entrepreneurs discussing ideas amongst themselves. One would say: “your idea is cool“. The other would respond: “no man, your idea is cool“. You see — perfect ego boosting so that nobody feels bad about their efforts. The tiny startup community in India has absolutely no connection to outside world and the actual customers are least bothered about these startup events. The worst part, in fact, is that since entrepreneurs talk to other fellow entrepreneurs at such events and no body wants to be the bad guy, they end up getting false hopes about coolness of their startup. The only solution to this is getting away from ego-boosting talk at startup events and actually testing your product validity with customers and being ruthless at that.

Another aspect to this “ego-chamber” is that there are lot of buzzwords that entrepreneurs keep hearing without knowing the full context. People will talk about persistence, distribution channels, cloud computing, social media analytics and what not. But where’s the story I can understand? Who is going to tell me why persistence matters or how distribution channels increased your revenue by 10x? The startup community would throw around all these buzzwords and sadly nobody disagrees or asks for clarification because no body wants to be the bad guy crushing the other entrepreneur’s ego. I say: crush each other’s ego. It’s the last thing you want to have when starting out. Seek criticism.

Being nice. Yes, that’s the biggest problem with Indian startup community. For example, if an entrepreneur is working on a social network around Bollywood movies, instead of saying it is cool why can’t you ask: how are you going to make money, without funding how are you going to find initial users, how big is the market, what traction have you got so far and how you honestly think it is the lamest idea ever.

2nd problem: solving a small problem specifically for Indian market

Internet in India hasn’t still fully matured. People still buy more books in offline stores than online stores. There’s no money in advertising. On Internet, you never have to meet your customers in person and mostly nobody cares if you are based out of India or Mongolia. All they want is a product that delivers value to them. So, why do I see many entrepreneurs solving following problems:

  • Videos aggregator of Indian movies
  • Job tracking system for Indian market
  • ERP solutions for Indian SMEs
  • Vertical search engine for India
  • Event aggregator for Indian events

Notice that most of the problems are global in nature, so why specifically target Indian market (which isn’t even mature yet). Why don’t you launch your product for US, UK, Europe or Australia? An excuse could be that you haven’t got a product to compete globally but that’s a poor excuse. Improve your product and make it globally competitive. What’s stopping you? Another excuse could be lack of funding. Well if you are ready to launch without funding in India, why can’t you launch without funding in San Francisco? It costs practically the same to launch a job tracking system in US. All you have to do is to run some targeted AdWords campaigns. (Just an example but my point is that launching is nothing fancy. You have to see where most of your customers are and launch there instead of launching and remaining only in India)

Please answer me: why is Indian market special even though it is small and with much less revenue potential?

If you can’t answer this, better gear up your product to compete Internationally. There’s a vast market out there!

21 thoughts on “What’s wrong with Indian startup scene?”

  1. Paras, your points are very valid. Even though you said the issue in two points, the actual reality is more complex.

    i feel there is no problem being INDIA centric at all, because, all biggies in corporate world are concentrating on india, why not Indians concentrate on india ?

    Ego issue, is common in Indians, i hope its far less when comparing to Westerners.

    But the main problem with Indian start-up companies is, the will to go ahead in full thrust. I have interacted with many entrepreneurs and found that, once they reach a certain level, ( which is very less when comparing to their potential) they will start relaxing on a glass of alcohol. This tendency is making Indians less aggressive and less go getters.

    We need more narayanamoorthys, Ambanis, Mittals to show that india also has corporate which can spread its operations across the world.

    We need more mentors to show the right path to our start-ups, we need good govt policies which will help entrepreneurs to grow in a right conditions.

  2. What you’re saying goes well for technology product startups and you’ve set a good example of that with VWO. I think FusionCharts, Kayako etc. are other examples who ‘get it’. But let’s not stop there and limit the definition of what Indian startups are (or should be) doing.

    There’s other domains like ecommerce, healthcare, education, logistics etc to name a few. There’s a large amount of offline operations and/or localization behind such businesses. Physical location does matter in that case. India is no small country either :)

  3. Now that you said we need not have to be nice I am going to be little less of it, so :)

    What is special about Indian market?

    1. Job tracking – it takes lot of leg work to get sales done. Job board is basically a service rather than a product which requires lot of sales resources and understanding of local market to get growth.

    2. ERP systems for Indian market – Local laws, compliance management etc. I developed in-house system to manage STPI compliances, would have loved to have something off the shelf to do it! Same is true for manufacturing industry.

    3. Event aggregates – same as job board.

    What you need to get out of is – just because you feel passionate about some global problems, does not necessarily mean I want to as well!

    And FWIW – Indian internet market is now 100million mostly of well to do middle-higher middle class which is hungry now for services and products and there is definite market potential.

    Why do you think even as large companies as facebook will have targeted marketing strategies to crack markets like India? Because they know that just having a web-app does not mean people will start using it. You need to get in front of people and start selling.

  4. I do not think there is anything wrong for someone in India to build a start-up which solves problems that are specific to India market. If it is a good solution, there are other markets that are like India in nature and can pick up the solution.

  5. I totally agree with you Paras. This has been my take on Indian startup scene from a long time. People are not thinking out of the box, but limiting themselves to India. If you are building a good product, why not sell it globally? The only constraint is if the product solves an India specific problem, it can not be sold globally due to logistics or regulation issues and is scalable enough with in India.

    I have noticed this one particular guy who shows up at most startup events and he always have the same question, “How can we do this in rural India?” Once he even went on to ask, “How can we make a Facebook for rural India?” I was like, dude get electricity, water and Internet in rural India first.

  6. What Sushrut said. The number of global problems that can be targeted from anywhere in the world is minuscule compared to local opportunities within political boundaries. Just because you found something that works for you doesn’t mean it applies to everyone else.

    Entrepreneurs face enough discouragement in daily life. They could do with having other entrepreneurs for moral support. Nobody is handing out free money. They still have to make their living by making sales to real customers.

  7. @Kiran: everyone speaks of their own experience. Learning would not exist if people stop talking about their experiences. Of course, I would only talk about what seems logical to me. Isn’t it?

  8. It is true that everybody is trying to be nice at such events. But you have to kill that problem not by ignoring those events, but by giving out the signals that you’re willing to accept criticism by saying “How can we improve?” or “Our product is good, it lacks only xyz.” – Once that follows, you will get the true advice which matters. I personally consider such generic and safe responses as “I don’t give a shit about your product, whats next?” or “okay, you’re good, okay, when’s the lunch?” most of the time. And someone who tells me that “your idea is cool because xyz…”, that is the time to feel good and start a real conversation.

    I disagree on “solving for Indian market”, I’ve met many entrepreneurs at NASSCOM and various other events, If they are doing “ERP solutions for Indian SMEs”, why isn’t that “mature”? They might be focusing a local market segment or might be testing a market. I also believe that the majority is switching towards global marketplace than local.

  9. > This has been my take on Indian startup scene from a long time. People are not thinking out of the box, but limiting themselves to India.

    @Ravish That’s the most racist comment I’ve ever heard.

  10. One reason people keep attempting stuff like ERP for Indian market is lack of awarness about the number of people who have attempted and failed before. There are very few cases of failure being highlighted, while minor succcesses or media hype gets disproportionate attention. It’s very important for us to have out own blogs and folklore where people openly share this kind of information. Currently there’s very little of that and given our societal attitude to failure, it’s highly unlikely to change. The local market is practically non-existent for products that cost more than a couple of lakhs (it’s non-existent in most sectors for prices below that as well). I keep saying that unless the eighties and nineties born people get into positions where they can influence purchasing decisions, we are not going to notice much improvement. It’s a given that the local ecnonomy needs to improve as well. The other minor reason for the me-too businesses is that a small proportion of founders are out to game the system. The negative responses to your post is itself evidence how immature our startup founders and people who work there are – may be they’ll spend a decade before they lose this ‘local delusion’ market. Seriously how many are there ? Tally, then ? Tell me about some product (app/saas) that has been around for a reasonable amount of time, does all it’s development and design mostly inhouse, has been steadily growing, and is really Indian (no foreign founders, NRIs etc), caters only to the Indian market., etc

  11. Paras – I somewhat agree with what you are trying to say on Indian startups focusing on local problems. Your conclusion that somehow that’s too narrow is wrong though. You do understand that India is not unique in that aspect, right? Most global technology startups have been born in US. Startups from Germany, UK, France and the BRIC have focused more on local markets than global. Take China for example and think Baidu, Sohu, Netease, Sina…

    From Mexico to New Zealand there are several players who are trying to replicate the success of US business models in local markets. I have spoken to several VCs in US who think there is NOTHING wrong with say a Mexican equivalent of Yelp.

    If anything, the ego play is the other way around with entrepreneurs who are stuck up thinking global only while local solutions wait in queue…

  12. @Sourabh: for some solutions local makes sense. And for some solutions global makes sense. My argument is simple: not going global for clearly global problems doesn’t make sense.

  13. People want to run startup but they dont want to pay big.If you dont pay high than how you will attract talent?Dont get me wrong.By paying high ,i mean that if you dont have cash than at least you can offer stocks.Great startups have always shared their revenues.I find indian startups to be a cheap clone of MNC companies.They call their companies startups to boost their ego.

  14. @Paras
    Agree with the article especially the point about the Indian startup scene being an ‘ego chamber’.I am from the marketing-communications side of Digital & dabbled (& soon plan to do it again) in the product startup scene.
    Seen similar issues-it’s the same set of people talking,generic conversation with no specific execution details being discussed & hardly any honest,hard conversation about the startup scene.A nascent ambition is to change that,a platform where people who actual doing something worthwile can connect up & others interact with them-looking for like minded people who find the thought interesting.
    Regards
    Saurabh
    http://in.linkedin.com/in/saurabhparmar
    ps-Impressed by what little I have seen of your product,been trying to sell it to clients for the last few months but everyone seems to be happy with a free tool like GA.Still koshish jaari rahegi :)

  15. I feel a bit cautious about commenting here as I bring a very outside view of India and the Indian technology culture to the debate…

    As a bit of background I’ve been involved with development that’s been outsourced to India for over 15 years and spent the last four taking a product that was designed and built in India and making it work in the UK market.

    I don’t think *all* Indian startups need to develop for the global market rather than the home market but I think Indian startups will have made it when they make an impact on the global market.

    From my experiences in India I see a culture of teaching rather than learning i.e. people want to be taught stuff rather than getting out there and learning for themselves.

    Conformity and respect are also two big things I saw in India but surely startups are about learning for yourself, not to a certain extent not conforming or respecting the current status quo.

    One thing I could never quite get to grips with is what technology background people have – I grew up with computers in the house but I’ve always presumed that only a very small slice of the Indian population have access to technology outside of work and if my view is accurate I think this may limit the number of entrepreneurs – people need time to learn and play.

    One area where I do thing India has a significant advantage is in mobile, for many people it will be the only way of getting information and there is a whole market that people in the west will never look at because they don’t see it (or perceive it as too low value)

    India needs to learn to “execute” there are too many people talking a big game but not delivering against it – I saw quite a few people with weak technical skills who were convinced they were strong (I’m not sure it a problem confined to India but it was certainly something I came across). As an outsider I’m not sure how much things like sect and status play in the whole talking the big game thing.

    A bit of a series of random thoughts but there are obviously people who do get it and produce successful startups, you are one example of that more will surely come.

    Andy (@andydavies)

  16. @Andy: thanks for dropping by and commenting. I think you are right in your observation that the culture of being in love with technology outside work has still to seep into mainstream Indian mindset. But I see it changing slowly (for good).

  17. very nice post. i completely agree with you. what we lack in india is entrepreneur mindset which essentially boils down to taking risk, setting our minds free to dream ideas solving real problems which i believe are plenty. india has matured service industry and offeres attractive stable income jobs to new graduates, this first step kills the whole startup spirit. In addition to this we lack infrastructure which is a whole new debate in itself.
    but i hope with increased involvement of private sector along with infrastructure improvement can lead to a change which no doubt will be painfully slow.

  18. Hi Paras
    I have a base at Melbourne (Aus). I will be shifting soon there from Delhi. If you know someone who has some solution/product, say some unique solution for sales improvement/management for Cafe (Melbourne has huge nos of Cafe/rest/hotels) then i am keen to discuss the sales business here. Any other product from any other field is also open for discussion.
    Thanks.
    Rajiv 0061 435 785 685 (Aus), 9311889310 (Delhi)

  19. It sounds to me like a lack of understanding, it seems to echo what you see in replies from indian webmasters on the major webmaster forums, they seem to repeat buzz words there too.

    As a UK individual (white, not Indian) i rarely see indian webmasters wanting to spend money, i imagine that this rubs off onto the startup scene, i feel that they can be very naive, not saying this is exclusive of indian webmasters, but i see a lot of it.

    The following comes to mind “If you say that someone talks the talk but does not walk the walk, you mean that they do not act in a way that agrees with the things they say”

    Its like some are blagging their way through hoping people dont spot anything wrong until they can make it, at the same time spending nothing or next to nothing.

  20. Most startups have to find local customers. Show me one startup that started with a remote customer. I am not talking about 2 sided ventures like Alibaba where their customers where overseas. Its easy to talk the talk .. Have you walked the walk?

    I live overseas and I tried talking to Indian businesses thinking they would support an Indian entrepreneur but I didnt find any support there. Most others were supportive but the Indians were actually hostile.

    I am starting up a business now and I dont plan to approach any Indian owned businesses outside India. They are definitely not the early adopters.

    Read the Lean Startup Book. Validate your ideas in the market and experiment. Find your early adopters whether they are Indian, in India or in Uzbekiztan.

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