Awhile ago, I was pitching my idea of building a global opinion platform to a well-known Indian angel investor. He immediately suggested I move to Silicon Valley to pursue this. The response was probably based on his understanding of global market (or a casual excuse to pass on the investment), but it triggered my curiosity and I questioned him on his judgment. He posed the rhetorical question, “Why there are no Facebook/WhatsApp-like startups from India?” Since that day, this question has been bothering me. Every time I meet any 'startup guru', I shoot this question. With a few exceptions, most responded: “India doesn’t have the right ecosystem for such startups.”
They say it takes a village to raise a child, and the same holds for startups. The 'ecosystem' could mean a lot of things, be it ease of investment, market behaviour, availability of talent or just the maturity in the mindset. Below are a few reasons why people think India hasn’t produced such startups yet.
- It’s easy for such ideas to get funded in Silicon Valley. Even though early stage investors in India have grown significantly in number in the past few years, the risk appetite for Indian investors is still lower than Valley-based investors.
Statistically, more than 90 percent of startups fail. Accepting this sense of risk while investing money requires a maturity from investors. This sense of maturity typically builds over time, and after a few success stories, which India is yet to produce. Although, a lot of investors had managed super-normal returns in India, we are yet to see Facebook/WhatsApp-like startups making billions for investors.
- The Indian market is not the same as the one in the US. This could be attributed to our cultural mindset, societal behaviour, and so on. Traditionally, Indian mindset values western products and brands higher than local products. This perception has been extrapolated to tech products, which makes it difficult to get early traction for such startups. In short, the dynamics that drive the growth of such startups in early stage have somehow flipped in India. In our country, app install means Rs 100 discount, 3G data is “precious” and paying for an app is a luxury.
- Not many entrepreneurs dare to spend their time and money on such ideas. Its obvious that the success rates for such startups are lower, as there are too many uncertainties and not-so-obvious variables involved in their success. Indian society has evolved from a middle-class mindset where savings and security comes first. Though the entrepreneurial wave is taking many of us out of our comfort zone, opting for a safer option still remains deeply entrenched in our DNA.
- The Indian startup ecosystem lacks a culture of support from fellow entrepreneurs. This could mean right from sharing or re-tweeting posts to trying out new products developed by friends/fellow entrepreneurs, we are just not there yet. Successful entrepreneurs must take out time for newbies, established startups must use services from early-stage startups, and society must embrace that such supportive ecosystem is mutually beneficial.
Although the above points summarise my interactions with people over the past few months, not all of them represent my own opinion. I am a firm believer that India has the necessary talent and resources to build a global startup, and it's just a matter of time before we see one coming out from our own land. The best is yet to come!
I’m sure pretty much everyone will have an opinion on this, and therefore I’ve embedded few polls where you can share your thoughts too!
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)