A friend of mine and I, had this elaborate discussion on some of the advantages of actually being in the valley. Well, Thomas Fieldman is proving himself to be right with the globe turning more and more flat as the years pass by and I am quite positively sure that position holds not that much of a relevance and trumph card anymore.
As it is, I understand that most startup projects that are happening in the valley are being outsourced to companies here in India to be developed. The reason being cost and the availability of talent.
The fact that the dollar is dropping, added to the fact that the ruppee is appreciated is really not helping the case. In most cases, apart from the added headache of managing your team remotely, your cost also ends up being the same. What is even more empathetic is that most of these silicon valley companies end up handing their product developments to companies that probably aren’t the best of the breed when it comes to development – the biggest issue when it comes to outsourcing.
I am all for outsourcing service-related work. Management of networks, servers and mindless crunching of data and numbers seems to be a valid point, but would a startup want to outsource its most crucial asset – the product itself? Hmm… I am not sure if thats the right way to go.
So, what does a startup need anyways?
Access to the market, capital, human resources and the depth in a market to build a product that actually makes sense. An entrepreneur from the valley will always have his roots there, and does have the liberty to fly to and forth, along with taking advantage of the evolving business models of the east.
Being a global entrepreneur, might be the trend of the future to match up with the world becoming flat.
I question, Why don’t most of these silicon valley entrepreneurs move to India anyways? It might not be the way to go as the business scales up, but for being on bootstrapping mode and to get a product and team together, I strongly believe that India is the way to go. If you are the next Mark Zuckerburg trying to build the next big thing, India is very much the place to be.
An elaborate post on this, is soon to follow.
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Do recessions really change things? Yeah, in some level we lose big orders, but what are these startups doing anyways?
Its mostly the smaller companies that are most active during periods of economic recession. For example, that is what happened in the US and is still going on, and there are companies that have minted money using it as a springboard.
I’d say an economic recession is one time when the playing field is levelled. Big corporates are scared about their fragility and play it safe, and working for a corporate or for a startup, they all seem the same, except that a startup is much more focused, and agile enough to adapt.
I still think we’ve digressed away from the topic.
The question was, What does it take for Indian companies to target a global market.
Vijay, Interesting that you brought in Europe. Europe has almost no timezone issues with us so that is fine. Assuming Europe is not hit badly with the US recession (an assumption I am not sure I agree with but for the discussion) we have different challenges in India for Europe.
Language, for one. If the Eastern Europe/China brigade couldn’t beat us to the US markets because of our knowledge of English, Europe will level the field for us.
Innovation – Europe isn’t really an innovator’s paradise anymore. In fact innovation can be stifled by laws like 35 hour work weeks, or the French disallowing “free shipping” by Amazon because they don’t allow more than 5% discount from publisher prices.
Culture: Selling takes a lot more time and effort in Europe, and needs more staying power (bootstrappers beware types).
But coming back to the orig. equation: Europe is too intertwined with the US to not be affected by a US recession.
I think we’ve successfully managed to go all over the platter on the topic, but the initial thought was on, Is India a suitable place for people from the valley or from Eastern Europe or China to come and setup base and build a company. And if Not, if it can be made that way, and the advantages that will come into place – for one, the IP laws will definitely become better, much much better.