February 07, 2017
For the past few years I have been fortunate enough to work closely with startups in Australia, and more specifically Sydney. For anyone who has been part of the ecosystem, there is something somewhat infectious and fascinating about being surrounded by a community of passionate and talented people, hell bent on changing their world in their own unique way.
All through my career working as a scientist, then an engineer, and moving on to work for large and boutique consultancies, there was always something that drew me back to startups. It was a mix of curiosity and admiration spurred on by seeing firsthand the journey these entrepreneurs were undertaking. Naturally curiosity started getting the better of me. So many questions needed to be answered:
• What is it like to launch your own startup? There are plenty of news stories of successes that are after-the-fact, with the full advantages of 20/20 hindsight. But what is it like being in the midst of building the business, surrounded by so much uncertainty?
• Who are the people behind the startups? How did these people go from an idea into taking the plunge of building a business? We often hear that the entrepreneurial journey takes resilience and constant on-the-fly learning. We hear that it is not for the faint of heart, but offers the ultimate reward for those who wish to roll the dice to create their own destiny.
• What is it like to launch a business in one of the other startup hubs around the world “Silicon Valley”, “Silicon Roundabout”, or “Silicon… [Enter geographical feature here]”? Do they face the same challenges as places that are half a world away?
As a keen traveller, it was the last question that piqued my interest the most. So, in October I packed my bags and flew to India.
India has always been of particular interest to me. As an Australian interested in tech, I often heard about the success stories of Indian start-ups, but not much detail beyond that. It came as a surprise to me that India is home to the most so-called “unicorns” (companies with valuations of over $US 1bn) after the US and China. Out of the nine Indian unicorns, five are housed in the southern city of Bengaluru (more commonly known as Bangalore).
A further look at the statistics show the massive growth that is occurring in the city. Per the most recent 2015 Global Ecosystem Study undertaken by Compass, VC investment in companies in Bangalore has quadrupled to US$ 2.256bn, and seed rounds increased by 53% from the prior year. Furthermore, it houses approximately 3,100 – 4,900 active tech startups. This once “pensioner’s paradise” is now a bustling metropolis of 10 million people, teeming with eager investors and even more ambitious entrepreneurs. Surely by sheer numbers, I was bound to find the entrepreneurs in the midst of their journey from whom I wanted to learn.
And that I did. What eventuated was 6 weeks of scratching the surface of a vibrant, optimistic, and dynamic start-up scene that I was so grateful to be welcomed into, and sorry I had to leave.
I am the first to admit that 6 weeks in Bangalore is far from enough time to learn the ins-and-outs of this complex ecosystem. In fact, the place is so dynamic that one would have to be continuously checking the pulse of the city to keep up with its everchanging nature. However, as a newcomer to the city, there were some stark observations I could make with a fresh pair of eyes, and asking a whole lot of curious questions over cups of chai:
1. Bangalore takes its startup hub status seriously, and this permeates through the city.
I arrived in Bangalore via the overnight bus and sleeper train from Kochi. All those questions I mentioned above were still burning. Now I was en route to India’s “Silicon Valley”, and I was eager to plunge myself into the lives of local startup founders and entrepreneurs.
It didn’t take long to find myself surrounded by it. In the neighbourhoods of Indiranagar and Kormangala, you will see the coffee shops bustling with caffeinated co-founders perfecting their slide deck to investors, job interviews for new lead developers, or the lone developer hammering keys until the coffee shop closes (some as late as 2am).
During my first visit to the Starbucks on 100-foot road in Indiranagar, I went through the usual ritual of giving my order and my first name. The barista with a big smile said “Tim, as in Tim Cook?”. I would later learn that it is only in a place like Bangalore that playing a pseudo word association game with a Starbucks barista would my name be likened to the CEO of the largest tech company in the world.
Dunkin Donuts even offer a Bangalore Startup Coffee. As their menu claims, “it’s for the night owls busy working on ideas that will one day (hopefully) change the world”. Aside from the international coffee chains, there are several local institutions set up to cater to the local startup community. Yogi-sthaan is one such example in Indiranagar with speedy Wi-Fi, very delicious chai, and is a great meet up spot for startup founders.
It is not only local coffee shops that have jumped on board. The Times of India (the largest selling English daily in the world) features “Startup Stories”, and the daily edition of The Economic Times has even more updated content and dedicated pages under the header “Disruption: Startups & Tech”. This boasts the latest funding rounds and valuations, acquisitions, tech trends and success stories. The State Bank of India and RBL Bank also have dedicated and exclusive branches for startups in the city, which not only provide financial services, but legal advice and mentorship from technology experts.
The Bangalore startup ecosystem even has a dedicated film, Made with Passion in BLR, which depicts the challenging yet worthwhile journey behind starting up. I met with Manu Srikumar, who lives and breathes the Bangalore start up scene. He is the co-founder of denture Capital (although he much prefers the title “hustler”), the team behind the film. According to Manu, Made with Passion in BLR is a celebration of the Bangalore startup ecosystem. He notes “while a lot of people talk about it, not a lot celebrate it”, and this film is out to change that.
Testament to this is the local cult following the film has attracted. From Fintech meetups at the NUMA accelerator on MG road, to the bars of Kormangala, it is hard to miss one of the local aspiring entrepreneurs sporting their trademark T-shirt promoting the film. The team also have a YouTube channel, with regular updates on the local start up community, as well as tongue-in-cheek videos which give you a glimpse in the life of a local entrepreneur.
2. Bangalore’s innovation can be partly attributed to it being a crossroads of diverse ideas and cultures, in a city that openly welcomes them
For those who haven’t been to India, one of the first things that may strike you is how diverse India is. State to state, city to city, even village to village have a sense of culture and identity that stretches back generations, even millennia.
Karnataka, the state which Bangalore lies, is populated by Kannidigas. Admittedly, identity is a complex issue (an understatement, I know), however this article in the Hindu discusses the reason behind Bangalores uniquely cosmopolitan nature. Chandan Gowda, a Kannadiga himself, and a professor of sociology at the Azim Premji University, observes: “I follow a lot of these discussions in various media, and the general impression is that the Kannadiga is a tolerant, non-aggressive, pleasant person who doesn’t impose his culture on others and is accepting of non-locals”. Musician Raghu Dixit adds “I think among Kannadigas we’re all sorted! We’re tolerant, accommodative, welcoming; and Bangalore is a great example of all that”.
Bangalore is a living case study of Richard Florida’s thesis on the 3 Ts. Richard Florida is an urban theorist who posits the theory that a city with an abundant “creative class” will confer economic benefits such as new ideas and innovation, high-tech industries, and regional growth. To attract this creative class, as the theory goes, a city must possess the “3 Ts” - Talent (a highly talented/educated/skilled population), Tolerance (a diverse community, which has a 'live and let live' ethos), and Technology (the technological infrastructure necessary to fuel an entrepreneurial culture). Along with the tolerance mentioned above, Bangalore also boasts the highest number of engineering colleges in the world (within city limits), and a significantly improving local IT and telecommunications infrastructure which allows Bangalore to prosper in this space.
In my short time in Bangalore, my experience was that I was made to feel very welcome in the startup and creative community. I was met with genuine interest about what I was doing and offers of assistance wherever I needed (even to the extent that people were offering to lend me money, essentially a complete stranger, during the midst of demonetisation). It must also be said that this display of openness and generosity was not limited to the Kannidigas, but most of the people I met in Bangalore that call it home. It is predicted that immigrants now make up 70% of the population, which I believe shows what an open and welcoming culture Bangalore has instilled in its citizens, new and old.
A microcosm of the startup ecosystem of Bangalore could be found at Construkt, which co-founder Karan Bahadur describes as “a convenient, community-curated, business-friendly hostel accommodation designed to cater to the travelling startup and creative community”. In reality it is much more; it is a cosmopolitan creative community in itself.
Construkt lies on the edge of Indiranagar and was my home for the time I was in Bangalore. Karan greeted me with a warm smile when I arrived, backpack in tow and laptop under the arm. I introduced myself, however he reminded me that we had already met. He was in fact the friendly passer-by who gave my Uber directions the night before, as a very confused looking person was coming out of Church Street Social bar, which is incidentally (read: conveniently) right next to the NUMA innovation and accelerator hub. This hospitality was indicative of the month to come.
For all of November, I shared a house with travelling creatives and film makers from Mumbai, Edutech entrepreneurs from Delhi, freelance developers from the US, computer science academics from Spain. Some would pass through for a few nights, some would stay for months, but nearly all of us joined the nightly pilgrimage to the lassi shop at the end of the street. The kitchen would smell of a mix of Spanish omelette, Dhal and freshly brewed chai and filtered coffee, as people in the dining room would hammer the keys of their laptop late into the night. It wasn’t all work, the table in the dining room would also host conversations as varied as life at home, football, to the latest technologies, VC funding, and pitch refinements. Most importantly, you could see constant collaboration happening, from helping with tricky bug fixes, to finding new opportunities for people and businesses to work together.
Karan and the team at Construkt have done a wonderful job at creating an environment that stays true to its fundamental belief that the most disruptive innovation and efficient learning experiences of tomorrow will rise when trans-disciplinary thinking collides. The Construkt WhatsApp group still sets off buzzing in my pocket, as this tight knit group organise trips to the movies or the latest Tech Showcase or meetup. It’s a bittersweet reminder of a nurturing community that I am so glad to be a part of.
3. The stakeholders are young, optimistic and enthusiastic.
Another striking observation of the startup ecosystem in Bangalore is how young, optimistic, and enthusiastic the participants are. It thus came as no surprise when I found out that the average age of startup founders is 28.5 (compared to 36.2 in Silicon Valley or 32.4 as the APAC average).
Ashish Gupta, senior MD of one of the most active VC firms in India, shares this observation. His credentials are impressive, he holds a PhD from Stanford University, has several patents and publications, and has cofounded two successful companies (Tavant Technologies and Junglee (acquired by Amazon in 1998). In his current role as a senior MD for Helion Venture Partners over the last decade, he has seen first-hand the evolution of the startup ecosystem in Bangalore, especially considering they were early investors in highly successful local companies such as Flipkart (a now billion-dollar company) and Redbus. During our catch-up, he shared with me his observation that the local startup founder community has never been so optimistic, with a new crop of young entrepreneurs determined to make a change, provide solutions to local problems, and follow the footsteps of the growing number of revered and successful entrepreneurs who have paved the way in the last decade.
He notes that another contributing factor to Bangalore’s increasing success is its strong mentorship culture; whereby experienced members of the community are ready and willing to give back. I saw a great example at the local edition of “F*ckup Night”, run by Bhive Workspace. This concept originally started in Mexico in 2012, but has grown into a global movement whereby local entrepreneurs share their failures in an open, honest, and light hearted way in front of hundreds of aspiring entrepreneurs. At Beer Café in Kormangala, Kothandaraman (K) Vaitheeswaran took the stage and reminded the crowd that although “95% of startups will fail, 100% of entrepreneurs will succeed. This is because the act of starting up in itself is the success”.
As an esteemed entrepreneur in his own right (including co-founding India’s first ecommerce company in 1999), it was refreshing to see K Vaitheeswaran give such an honest account of the lessons he has learned. This is especially important to him, as “he sees the main challenge in India is that the success of the venture is too closely linked to the individual”. Unfortunately, this manifests a negative social stigma to failure, which is a crucial part of the entrepreneurial journey. No doubt the audience that night became a little more comfortable with the idea of failure by hearing one of their mentors speak so earnestly on stage.
4. The ecosystem is becoming more organised, with clear innovation policy and agendas being developed and implemented to improve Indian quality of life
In August 2015, Prime Minister of India, Narendra Modi, proclaimed to the world that it was ready for business and ready to be recognised. In his address, he told India (and the world) to Stand Up, Start Up. His optimism cannot be misinterpreted:
If India has millions of problems, it boasts a billion plus minds (to solve them) as well.
For a country which has 800 million talented youth (under 35) and tremendous opportunities, nothing is impossible.
Casting aside the political rhetoric for now, it is evident that the seeds of change had already been sewn for India’s rising prominence as a legitimate world leader for start-ups and entrepreneurs. However, now there appears to be a clear objective for governments and other industry bodies to align their efforts to aid the startup community, and work towards injecting this startup enthusiasm and visible success into the wider community.
Ravi Ranjan personifies the enthusiasm of those involved in the policy and support sector. I remember meeting him during a group conversation that had deviated to the topic of cricket. When the conversation was directed to him, he quipped “I don’t care about sport, I care about startups”. This is no small statement in a country where cricket holds a near religious following.
Ravi works for NASSCOM, which is the premier policy and trade association for software and services companies in India. More specifically, he works with their 10,000 startup initiative, which is a government supported program aimed to “incubate, fund and provide ambient support to impact 10,000 technology startups in India, by 2023”. This support comes in the form of access to startup incubators, accelerators, angel investors, venture capitalists, funding, startup support groups, mentors, and a “startup kit” containing free business tools from Microsoft, AWS, and Google.
Ravi gave me a tour around the “warehouse” on the edge of Indiranagar, which houses the successful applicants to the 10,000 startup program. I was there during a showcase event, where a youthful bunch of founders and entrepreneurs stood by their stations with sporadically scattered pizza boxes, eagerly awaiting to catch the attention of the circulating VCs with their clipboards. Many of the residents were working in exciting and emerging new verticals, such as Edutech, Healthtech, Fintech, and exhibit emerging technologies such as blockchain technology, Internet of Things (IoT), Machine Learning and Artificial Intelligence.
It was also clear to see that there is an increasing focus in the startup community to use these technologies to build businesses which provide Indian solutions to Indian problems. One such example is how Fintech startups are planning or currently leveraging Aadhaar data to solve the issue of financial inclusion in India. Financial inclusion is broadly defined as universal access to a wide range of financial services at a reasonable cost, such as bank accounts for savings and transactional purposes, low cost credit, financial advisory services, and insurance facilities. It has been a major problem in India, where a quarter of the population is illiterate. This renders processes such as opening a bank account, and thus obtaining credit or even pension payments, very difficult.
Companies such as PayHind are aiming to change this. By leveraging of Aadhaar, (a government program which aims to collect the biometric data of over 1 billion Indian citizens in a large central database), the company is working on IoT technology to develop portable hardware which is android based and interfaces with a fingerprint scanner. This will enable registered citizens to use these kiosks (operated by a trusted network of agents) for a variety of financial services, with no more input than a fingerprint and their unique Aadhaar number. The relevance and scalability of such a solution is enormous, providing financial independence to vulnerable citizens who are often subjects of fraud, and expensive private money lenders.
As my time in Bangalore draws to a close, it is safe to say that my experiences and observations were very different to what I expected when I set out almost 2 months ago. We are often so Americentric that we hear so little about the astounding growth of the startup community across the Indian ocean. Although I feel like there is still so much more still to learn, it is clear that there are abundant opportunities for us to collaborate, to leverage off each other’s talents and expertise, and share a prosperous common future. I look forward to coming back!
Thanks for having me Bangalore.