Why building a disruptive technology company from India is hard and how you can do it anyway

3rd Oct 2015
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I will cover what I have observed over the last few years about what's right and what's needed to be improved in our system that have, by most measures, failed to produce ground-breaking research and innovation as seen in Silicon Valley and Israel. This is in no way comprehensive and it only highlights a subset of the overall problem. My intention is to bring to notice some of the problems that can be solved with better collaboration among the stakeholders and what innovative tech entrepreneurs can do to succeed despite the challenges posed by the existing system.

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The Good

India is going through unprecedented transformation as a nation. It's turning into a product economy from a service economy. We are no longer looked upon as an outsourcing destination for availability of inexpensive software talent. Today's youth is well-informed and they no longer aspire to work at service giants like Infosys and Wipro.

They want to build product startups of their own or join a startup with the expectation of a better learning opportunity and growth. We have a number of really outstanding product companies in India now. Some of my favourites are InMobi and Practo - both are global, mostly original and highly ambitious.

There are all kinds of startups. Some are for-profit and some are non-profit. Among the for-profit ones, some of the traditional ones are e-commerce, payment, SaaS and delivery startups, all of which rely on technology. On the other hand, we also have place for cutting-edge technology startups in fields like AI, robotics, AR/VR and advanced analytics - the ones that are high risk and high reward and need good amount of R&D investment.

We do have a few startups in these sectors and there are good signs that they could get better support from the ecosystem here in the next few years. Different types of startups require different kind of leaders, mindsets and ecosystems. In the last few years, the ecosystem in our country has gone through a metamorphosis. You have more angels than ever; there are a number of home-grown and international VC firms that are ready to bet on your big idea, and more young people who want to try their luck at entrepreneurship.

The Bad

Despite the evolving technology entrepreneurship landscape in the country, we unfortunately are a nation of followers and not pioneers when it comes to new technology. Technology innovation has taken a backseat with many of our entrepreneurs being content with their business model innovation.

Building an innovative technology startup in India is very hard. Only few of our startups are original and disruptive enough to change the way people do day-to-day activities the world over. Like the iPhone in the case of smartphones, Tesla in automobile and Twitter in communication. If you are not a copy of someone in the US or even China to some extent, traditional investors won't look at you. If you are a brilliant young fresher but not from an IIT/IIM - no matter how good you are with tech/science - you are bound to have double fun along the way.

Let's talk about the two major possibilities in technology products : software and hardware. Doing hardware in India is out of the question even though there are signs of change due to crowd-funding platforms like Kickstarter and Indigogo. Software innovation, until a month ago, was not even recognised by the Indian patent system.

One can't apply for a patent for an ingenious algorithm as a result of years of research. A highly differentiated software product comes from IP, which requires high amount of R&D and possibly some collaboration with academic universities. The quality of CS research at IITs and IISc and many of the other top institutes is not really commendable. On the other hand, many of of the top technology companies in the US hold a huge number of software patents, which traditionally have given them huge competitive advantages.

I believe the lack of collaboration among educational institutes, military research and companies here in India is the major culprit for the sheer dearth of disruptive new technologies coming out of our country. I've had a hard time talking to some of the top universities in the country to collaborate on research projects. They seem to have developed a disdain for commercialisation of their research even if it solves some real problems. There is much attention given to theoretical work but not much on the importance of applied work. This is very different from what is happening in Silicon Valley and Israel, two of the most innovative ecosystems in the world. At both of these ecosystems, there is strong collaboration among academic institutes, military research and technology companies. Stanford, DARPA and Google are some of the top guys that come to my mind.

The Alternative

According to a popular study by Idealab founder Bill Gross, the five most important things for the success of a startup in the decreasing order of importance are timing, team, idea, business model and then funding. As you see, timing combined with team is probably one of the most important factors for your startup’s success. You can always find the business model for your idea along the way. And as for funding, in many of the cases, founders should delay it as long as possible and then raise it at the right time. Until then, you can always rely on friends and family or some revenue, however small, from your early set of customers.

It will take another five years before the ecosystem here is mature enough to support disruptive new ideas that have global potential. I've seen so many good ideas die before they see light of the day and some are shifting entirely to Silicon Valley for a chance to succeed only based on merit of the technology and team.

If you want to build something and feel passionate about it, you should still go ahead and put your 100 per cent in it. You may have to compromise a little bit on your overall vision and strategy for the short term but then you will probably get the right people to help you along the way.

In your early days, keep your burn rate as low as possible, relentlessly pursue your passion and believe in your team. Prioritise making money from your customers first and prove that you got the skills to build a sustainable business. One day, you will be noticed, people will believe in your vision and write a cheque for you. This happened with me and it can happen with you too.

About the Author

Navneet Sharma is an entrepreneur and founder at AI startup SnapShopr. He is an ardent believer in design thinking as a powerful tool to solve complex problems. He is a movie buff and believes that being a founder and a filmmaker have a lot in common. He writes his personal blog at www.medium.com/@navsha and can be reached on Twitter @NavSha

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory)

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