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Entrepreneurship Wars – India Versus Silicon Valley

Entrepreneurship Wars – India Versus Silicon Valley

Lots of Indian entrepreneurs feel inadequate when they compare themselves to Silicon Valley founders. It’s true that the startup ecosystem in San Francisco is highly evolved. It’s much more supportive because mature investors are forgiving of failure. They are much more willing to fund untested founders, take outsize risks and back unproven ideas because they understand the importance of being innovative.

Indian founders believe that Indian investors are too hide-bound and traditional, and are not willing to bankroll the gambles which a startup system thrives on.

There is an element of truth in these complaints, and there is no question that Silicon Valley is much more advanced as compared to Pune and Bengaluru. Money attracts more money, smart founders attract other smart co-founders, and this creates a positive virtuous cycle – after all, that’s what an ecosystem is all about.

The Advantages Of An Evolving Ecosystem

However, rather than complaining and thinking of themselves as being second-class citizens, Indian entrepreneurs need to learn to play to their strengths . Instead of obsessing about their weaknesses, they need to think about what their “unfair” advantage is.

It’s true that Silicon Valley has a certain magic sauce about it. It’s much easier to open doors, get media coverage, get inspired, and find the right connections. Also, getting funded in dollars gives you much more runway as compared to getting funded in rupees.

India, on the other hand, has the big advantage that employees are less expensive and, therefore, running a startup costs less. You can be frugal, and you can do more with less.

The ecosystem is not yet mature, but this can actually be an advantage. It’s now starting to grow, and you have a chance to get in on the ground floor.

Also, the competition is less intense, and you don’t have to struggle as much in order to stand out, as compared to San Francisco, where you are pitted against super-smart founders from all over the world who flock to Silicon Valley to seek their fortune.

The biggest advantage is that when you are in India, you can create stuff for the Indian consumer. The Indian consumer is going to become a significant player in the global market, as India becomes richer.

Make In India – Make It Work

While Indian founders are able to compete successfully in the global market, they have much less competition within the Indian market. Most Silicon Valley entrepreneurs don’t really care about Indian consumers, and this is the sweet spot which Indian founders need to focus on.

They are much better-positioned to develop products for Indian consumers because they are Indian; they live in India, and they understand the Indian consumers’ pain points. They can create India-specific products, and this should give them sufficient traction to grow. Once they start locally, they can then grow globally.

The poor Silicon Valley founder has to start worrying about the competition the minute he starts off – not only from other Silicon Valley startups but from entrepreneurs in Israel and India as well, who can replicate everything he does for a fraction of the cost.

There’s always someone breathing down his neck, and while this keeps him agile, it also exacts a huge emotional toll.

Why Do Indian Founders Continue To Lag Behind?

I don’t think there’s a problem with their intellectual brain power, or their ability to execute. I think it’s partly because they don’t understand the importance of designing and marketing.

This is often where they take a beating, because finished products from Silicon Valley are far more polished and easier to use.

The good news is that the Indian designing ecosystem is gradually maturing, and since a lot of this stuff can be outsourced, Indian founders are now creating products which look and feel world class. Since it’s possible to do this now for a fraction of the cost of which a US entrepreneur can, Indian founders need to build on this opportunity.

We cannot afford to continue remaining copy-cats who create me-too products. The founder’s creed should be – Think India if they want to create a competitive moat.

Connections Matter

Another disadvantage in the past used to be that it was hard to connect with other clever people. This has always been much easier to do in Silicon Valley, because you keep on bumping into investors and founders over a cup of coffee, at conferences, or at a hackathon, because so many smart people are concentrated into a small area.

Things have improved considerably in India recently, thanks to dedicated websites such as VCCircle, Inc42, and YourStory, which focus on Indian startups; the media attention on entrepreneurship because of PM Modi’s Startup India initiative; and a large number of conferences and events about entrepreneurship.

Thanks to globalisation, the disadvantages of being in India are diminishing, while the advantages are growing. Now it’s up to smart founders to capitalise on this, so they can make the best of both worlds.

[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.


Aniruddha is Director at Solidarity Investment Advisors

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