Global Comment

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India’s blooming tech scene is no red-headed stepchild

A group of people sitting around a desk, chatting.

Even as you read this article, any information I can offer is already becoming obsolete. India is one of the fastest-growing ecosystems I have ever seen and it would be foolish of me to try to reference the current key players or the latest unicorns.

This article is more about sharing my experience and feelings on the South Indian tech ecosystem, with a slight taste of this “Frenchies” vision. It’s also since I realized how few people know anything about this country. As a lot of stereotypes remain, the danger is to see just one side of it all, when there are a thousand facets to explore.

India is a hot innovative place, the world just doesn’t “see it”

For a long time, Bangalore was synonymous of giant hub for outsourcers and call centers for the multinationals coming from all over the western world. But over the past years, the city of 10 million has enjoyed a “second coming” thanks to the mushrooming internet economy, and a true entrepreneurship excitement all over the country.

What happens when you put hundreds of thousands of smart, young, ambitious kids on a call center job? Very quickly, they get bored, and they start innovating, and they start telling the boss how to do this job better, and out of this process innovation comes product innovations, which are then marketed around the world. —Nirmalya Kumar, marketing professor at London Business School.

According to him, India has already become a global innovation hub, but the world don’t necessarily see it yet. There are no “Indian Googles” or iPods, which is innovation for end users, the visible tip of the iceberg.

However, if you take a broader conceptualization of innovation, India is actually very well represented in what he has called “invisible innovation” that will be innovation in process or in outsourcing, which is the submerged portion of the innovation iceberg.

The top management of the future will have to come out of India or China

Because that’s where the product leadership is, and the market leadership.

India knows that Innovation needs to focus on its domestic market first, in order to reduce the inequalities between cities and villages, starting with access to running water, medical care, education, as well as technology. Straddling the Himalayas, in the region of Ladakh, I saw isolated villages equipped with hot water tanks, produced by Tata, yet another domain where the Indian giant excels. The overall cost of the equipment — under 4000 rupees, around 60 dollars. This is no longer offshore frugality, but a highly-effective transition towards other sectors, from which all actors in change management, be it companies or administrations, should take inspiration.

Global customers looking for IT solutions came to India for the cost, stayed for the quality, but will now continue the journey for the innovation. — R. Chandrasekaran, Chairman of Nasscom.

India’s response to Silicon Valley: not a passing trend, a genuine revolution

India has become the fourth largest base of technology startups. Since 2010, the Indian tech start-up landscape has seen a sharp rise in the creation of new startups.

Bangalore is known as the Silicon Valley of India. The city has risen four places in the latest Global Startup Ecosystem Ranking by San Francisco-based Compass, becoming the 2nd fastest-moving startup ecosystem, with some of the youngest entrepreneurs in the world.

The numbers are telling — from 3,100 startups in 2014 to a projection of more than 11,500 by 2020. This is certainly not a passing trend, it’s a genuine revolution. And it’s going to change the way the markets are working today in India.

India boasts an increasingly stable economy and is looking to attract more foreign investment, especially after the crash of the Chinese financial market. And it is working: In 2015, India is one of the top 10 countries attracting Foreign Direct Investment (FDI), according to a survey by leading global management consulting AT Kearney.

The whole ecosystem is becoming more & more vibrant and multiple indicators point towards further growth in this direction. The Indian middle class is producing more voracious consumers of digital solutions, while e-commerce, marketplaces and mobile apps are increasingly driving people online.

I met with Vikas Malpani, co-founder of CommonFloor, a platform with 10 million homes mapped and over 500,000 active property listings. It currently has a team of more than 1,000 employees. In a statement the company said that this is Google Capital’s third biggest investment in Asia. To my question “what are your next markets outside of India” he answered, amused: “Why would I go abroad? The market is already huge here”. And Google knows it!

Two people sitting outside eating lunch.

In India, either you see great chaos, or great opportunities

That’s one of the 1st thing our partner Naresh V. Narasimhan told us as we landed in the country. He is a well-known architect, as well as an enthusiast urbanist and entrepreneur who has created one of the first coworking space in the city, soon to become a great Innovation Hub with NUMA Bengaluru.

I quickly realized how meaningful this quote was. So what are some of the next challenges this young population of entrepreneurs will have to face?

Start-up funding is maturing significantly in deal value and in diversity of focus areas, but the access to sources of funding remains complex, and the demand for supportive government policies is poor. Today, there are 770 investors residing in the country, compared to 25 000 in the US.

In terms of education, there is a big gap between scholarship and professional life and actual corporate needs. After their studies, they need to learn methodology because a lot engineers are simply not “employable”, internships are not something that’s working well in India. That’s how structures as Jagaa were born, to help young entrepreneurs to create web and mobile applications through coding classes.
There is also a need for directional efforts to help increase supportive government policies (ease of doing business, tax incentives, participation in government contracts, availability of risk capital, etc.).

Finally, I heard several times that Indian startups allegedly copy foreign start-ups. Fair enough. Know that an Indian entrepreneur, trying to scale up to a national market, needs to translate to +15 languages (as only 6% of the population speaks English fluently), adapt to strong cultural differences, and often change its business model. They might copy you, but ideas aren’t worth much if you can’t apply them to your market.

The Coworking space: the new socio-economic escalator?

Even if we have heard about the cast system before setting foot in India, being faced with this reality is always a bit of a shock for a French observer.

Yet, if there’s a particular DNA that is synonymous with start-ups and Silicon Valley, it is of a horizontal nature. This is the quintessential American Dream — no matter what your social status, your religion, your gender, everyone is free to work in a space that is open to all.

The coworking space in India is a place of hope for the blending of classes and genders, for the creation of serendipity in a place where the only thing that matters at the end of the day is the idea.

While Indian entrepreneurs may still seem at times a little shy, discreetly sharing a desk with their peers, they have created new ice-breaking activities in coworking spaces — role play, movie nights, yoga classes… hosted by the entrepreneurs themselves. Their collective mindset is evolving at break-neck speed and it won’t take NUMA much more than 6 months on site before we see some remarkable encounters, fusing ideas for this new generation of “entrepreneurs sans frontière”, taking real issues head on.

This feature and accompanying images originally appeared at Medium and have been reprinted with permission.