Early Stage Technology Entrepreneurship and Incubators in India

My first experience of technology entrepreneurship in India was in 1994 while I was still a grad student at MIT. The most vivid memory I have of that experience is that it took me 6 months to get a phone line. It was before wireless. It was, most certainly, before venture capital in India.

Things have obviously come a long way. Last summer, I did a body of research on the Indian entrepreneurship scene, as I watched huge amounts of capital finding its way to India. Through that work, I also came to the conclusion that there is way too much money, and not enough fundable deals, and that India needs more incubator funds.

A year has gone by. Not a whole lot has changed.

So I chose to revisit the topic of Incubators in India in a series of posts, on which I would like to hear from entrepreneurs, investors, incubator managers, and whomever else in the ecosystem with meaningful input.

Here are the posts:

I look forward to your comments.

5 Responses to “Early Stage Technology Entrepreneurship and Incubators in India”

  1. Dr Shabeer says:

    Hi,

    Read the article. Looking for a start up fund for jaundice detection using mobile phone images& acquiring license from the university. Could anyone assist selecting the right fund
    in this incubation venture?

  2. AmitC says:

    It depends what we mean by huge capital. Venture money seems to be seeping in now, but its limited to that. If you are referring to stats, those that I know of also include PE deals to 500 crore (yet unlisted) companies, and certainly those are VC funds.
    Both entrepreneurs and VCs with mandate to invest in early(read risky)stages are going through a learning phase now and the impacts of gradual funding is being tracked closely. But it is precisely here that my concerns lie. If this phase extends before VCs can take categorical positions in the Indian scene, we may just miss the bus. Sure capital is precious and returns more so,but there is an urgent need for a more concrete fund strategy for the local ecosystem.
    Currently I see a lot of activity in ventures catering to local markets, which in a way again reflects the trial n error approach – lets try in India , get a market and then go global. That is something unlikley to bear expected fruits. Historically we have seen in 70s thru 80s financial institutions funding import substitutions rather than export. This conservative approach smacks like that and needs to change if Indian ventures are going to make any sustained impact in the global space.

  3. Suramya says:

    Jaspreet / Nishant,

    Most of the pointers are agreeable. What I would like to emphasis, desire to excel or compete with oneself. We (as Indians) do not love ourself but our society. Entire enthusiasm gets compromised on the namesake of socially approved / feasible or no-foolish steps.

    We need to be crazy/visionary technocrat if we do not want to be mediocre.

  4. Jaspreet says:

    My views -

    1. “Technology” incubation is a very loose term. I guess incubation needs to be very much focused. e.g. some Indian VCs include social networking in technology startup.

    2. Guidance for _Productization_ is what i could call a key to setting up incubators and angle groups here in India. Most Indians work for US companies, for US markets without a direct customer interaction. Hence, getting the product right and selling in alternate market is very difficult.

    3. Team size – no startup needs more than 10 people in their first 1/2 years of existence and specially in incubation period. They need to focus on understanding the market right and get guidance to carve a product out of technology. Which cuts the necessity and need for any senior management, IMO this comes much later.

    4. Getting good techies in India is very difficult .. Indian education system including IITs are masters in creating mediocre. Majority of people here are what their parents chose for them.

    - J

  5. Nishant says:

    Indian entrepreneurs do face a lot of systemic challenges, but at the same time there are issues which work to their advantage – lower wage costs for example. Afaik entrepreneurship is hard everywhere – but human will much stronger.

    I think there is single factor which contributes more to the lack of Indian startups than any you mentioned – which is that most Indians choose to do their startups outside of India. Every startup founded in the U.S by Indians is one less startup in India – count those in and I think you will not complain about the numbers.

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