The Indian start-up ecosystem has changed dramatically in the last two decades, but we still have a long way to go to match Silicon Valley, the gold standard in the world. Let me explain.
Educational institutions like Stanford and Berkeley encourage critical thinking among intelligent young people, many of whom go on to become entrepreneurs. While India does boast many reputed institutions, most of them focus on rote, and the academic prowess of a student is determined through examination marks.
School kids in the US regularly participate in fairs, where they prepare and sell stuff like lemonade — a great learning experience at a young age on product development, pricing, sales and marketing. On the other hand, Indian parents would be horrified by any such attempt by their child, viewing it as beneath the ‘family image’.
There is a need for high-impact entrepreneurs who have built successful businesses while operating with the highest standards of personal integrity and can inspire the next generation of entrepreneurs. Silicon Valley has spawned some of the most iconic founders ever, but we have very few such figures in India. No, famous founders of loss-making unicorns don’t count. Incubators and accelerators offering support systems to young founders are coming up steadily across Indian cities and towns. While there are a few committed and selfless ones like Headstart, most others lack quality mentors who are willing to commit valuable time to start-ups.
Abundant capital is now available in India from angels, micro funds, large venture capitalists and even private equity firms; but, unfortunately, much of this capital is from entities outside India that fund ideas that are a copy of American start-ups and also have a limited time horizon to exit. What we need is patient Indian capital, and I hope large Indian corporates start venture funds and run it independent of their core business.
Government regulations are a serious issue. Most start-ups fail and the entrepreneurs must be able to shut down the failed ventures quickly and move on to the next idea, like it happens in Silicon Valley; in India, shutting down a venture takes enormous time thanks to impractical rules and documentation needs. Culture is another issue. Start-up veterans in Silicon Valley pay it forward and selflessly help strangers who are starting up, whereas in India this is quite rare. Silicon Valley also values failed founders immensely. New start-ups try to entice failed founders to join them as they bring invaluable experience to the table. On the other hand, India celebrates only successful entrepreneurs and treats failed founders like a contagious disease.
As I said earlier, we are doing well; but to be a Silicon Valley, there’s so much more we must imbibe and learn.
(The writer is a serial entrepreneur and best-selling author of the book ‘Failing to Succeed’; posts on X @vaitheek)