Every time I hear an entrepreneur in India tell me “It’s Angel List meets GitHub” I try not to grimace. Given the ardor of youth and the desire to get their elevator pitches easily understood, I can certainly understand young entrepreneurs pitching in such a manner.
TechCrunch (Alexa score 369) is more popular than livemint.com, India’s #2 biz paper (837) or nextbigwhat.com (640) and yourstory.in (802) – two popular Indian startup destinations. At one level just as the BBC (112), Huffington Post (264) and New York Times (305) are popular in India, it’s not a big surprise that TechCrunch given its brand and Silicon Valley pedigree is followed closely and devoured by the tech startup community in India. However the fact that something is understandable doesn’t make it healthy (as with my Doritos-eating habit).
Silicon Valley, even within the context of the United State is in many ways unique – and unlike anything in India. From the time Fredrick Terman first began molding young minds at Stanford, more than three-quarters of a century has passed before Instagram, Twitter and Facebook appeared on the scene. And before them came the first generation Internet folks – the networking and computing folks before them and the granddaddy semiconductor firms before them, who were themselves preceded by the likes of Hewlett-Packard and Litton. So nearly five distinct generations of companies and innovation preceded this current crop.
Alas, young Indian founders approach TechCrunch without any of this context. For most of them, 2005 when I sold my first tech startup, is practically the dark ages and 1999 another geological era altogether.
As an angel and mentor when I encounter entrepreneurs, I find that TechCrunch plays an inordinate role today in their thought process. This is true particularly with startups dealing with bits rather than atoms.
Many of their assumptions are not grounded in the reality of today’s India – may not even in today’s America.
All they see is that a startup to sell tampons online raised $250K with just an idea on a napkin. Or Pinterest raised whatever astronomical amount of money without any real monetization strategy and Fred Wilson invested in Zemanta (who’d by then acquired a million downloads) even whilst acknowledging that none of them were clear how they’d make money.
The reality of the Indian entrepreneurial ecosystem is that we are yet to see more than one turn or “generation” of tech entrepreneurs. A large amount of money is following very few quality deals. The VCs are acting as PE players would elsewhere. Angel groups are acting like VCs would. Everyone’s looking for revenue, customers, and traction (all of which are good), but not quite the high risk/high reward perspective of early stage funders. To be fair to the funding community in India, the supply side problem of deal quality is compounded by the fact that there have been very few exits, and their LPs may be looking for medium risk/medium returns.
The needs of the Indian market and Indian consumers are quite distinct. Enterprises in India do have needs similar to those of companies elsewhere – databases, analytical tools, HR software, CRM systems – but their behavior and culture often are different. Consumers, on the other hand, can and do have very different needs. So when we talk about “building the Amazon or Zappos of India,” and unimaginatively try reproducing something done elsewhere, it serves no one well.
The good news is that oodles of young entrepreneurs are starting companies each day in India. Now if only they paid a whole lot more attention to what their customers are saying and what problems those customers face than what TechCrunch is reporting from the Valley, I’d like to think, we’d see a whole lot more innovation and business building amongst Indian entrepreneurs.