(12 votes, average: 4.67 out of 5)
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Where Are India’s Innovative Companies, Products and Solutions?
India produces some of the brightest minds in technology, science and medicine yet has not demonstrated any truly large scale and breakthrough innovations in those fields. more here
I mean…..why NOT fill the gaps?
The guy who did the investment in Google(I forgot the name) also strategised Googles growth and he is the best in business. I personally would give credit him even more than Sergei. Not all VC’s walk with the entrepenuer the extra mile. After 2004 there is Skype and Youtube. Facebook too may fetch a good price!
In VC community they recruit the best MBA’s and they are expected to do a better analysis of Startups than what I can do for investing in Stocks or companies.
I agree that Vc’s should do more to support and identify innovation and also to take it to the next level.
Rgds
Vyaas
Vyaas
Its a very comprehensive article. I agree that there are certain challenges Indian entrepreneurs have to face. But I am sure that the same exist in any developing country. Indian entrepreneurs believe. that “When the going gets touch, the touch gets going” and their innovations backed by hard work gets acknowledged by the world. I know of two innovative platforms developed by two Indians, focussed on brining a knowledge revolution. These platforms WiZiQ.com and authorSTREAM.com are technologically advanced platform. While WiZiQ provides an excellent platform for Teacher-student interactions, authorstream empowers the powerpoint authors by providing them tools to share and disseminate there creations effectively using blogs and ipods.
RYK,
I’ve analyzed a few sob stories and as I got upclose, I’ve found most of the grief is from “spray paint” innovators that certainly don’t deserve a dime. Perhaps a few, very few original ideas may also have slipped through the cracks, but that’s expected.
VC’s for their part, too have paid a heavy price for moving away from their professed investment strategy with patient capital (PC), superior talent(ST) and alignment of interests(AI). Now they have fewer hits (none since Google in 2004) and have lost their magic and even focus. So in India, they got wiser and are mostly into pre-IPO placements, PIPES and even dangerous Margin Financing (they buy stakes in brokerages!) – all in businesses where they clearly lack expertise. It’s just plain punting and it has its own risk reward. Not surprisingly, they got carried away like any ordinary, gullible momentum investor during the recent boom and those investments are quoting at over 70% discount now. Not surprisingly they are busy averaging.
So you see, they are not much different from you and me. They make the same mistakes. As a corollary, why would they back innovation when you and I clearly don’t?
There is definitely an issue with innovation, but not on the innovator’s side, but more on the side of backing the innovation, especially via finance. For some reason our Angels & VCs are having a tough time latching onto an innovative idea, they don’t seem to get it, and thus we are seeing a trend of me too or “India Arbitrage” ideas being funded. Ofcourse the push back to this is “so what’s wrong in funding India Arbitrage and me too so long as it makes money for us”. Well there is plenty wrong, and that is that an unoriginal idea gets copied very fast and that creates tremendous competition, thus making all the “India Arbitrage” projects unviable. Look at all the “India Arbitrage” social networking, travel, dating (matrimonial), property and job sites we have.
Its too early to prove the above hypothesis, because we are yet to see any exists of early stage India Arbitrage investments. I think the system will mature after we have a few exits and they give poor returns; I think at that point investors will be forced to go for innovation.
I think patenting is an absurd benchmark for India, but the author makes excellent other points about capital, logistics, education and power.
Just heard a story about Mundra which has been transformed dramatically by the new port coming there. And Talegaon where horticulture is set for a boom because of air connectivity (flowers need to get out asap so the gap is filled) And power is a sector we all know can fill enormous gaps in industry. Education cannot be overemphasised but it’s a tough, long process, for which investment is needed over long periods.
I think we have a lot of available capital. It tends to go with these ideas too - the stocks of power companies, education providers and logistic/infrastructure builders are chased constantly by “smart” money. If we’re going to be focussed on a very narrow world - the world of always-on internet, mobile based products or software/IT services - we are missing the forest for the trees. The real story is out there, in mundane, boring stuff like roads, ports, airports, hospitals, power plants, schools and refrigerated trucks.
Innovation is much needed here - making power transmission efficient, road signage or toll booth innovations, logistic support for ports etc. In education for example the problem of teacher absenteeism was partially addressed by fitting cameras in classes and transitting footage to a central server through VSAT or cable. There’s a lot to be done, and it’ll be interesting to see angel funding move into these areas as well.
I am sure we will soon have our own brand of innovation movement. But I wonder why many of our cash rich enterprises (barring a few like Glenmark, Lupin, ITC) are lagging behind.
Why not embrace the Skunk Works culture? Endow their organizational brain trust with sufficient financial and strategic resources so that there does exist headroom for trial and error. Allow heads and hearts to rule with no immediate ROI imperatives; and let those few pairs of hands have some creative rest. Be ruthless with silos and individual fiefdoms that discourage collaboration. I think one big mistake they all make is to load the CEO with innovation responsibility – he’ll make sure that he disrupts the disruptors because for him it’s an avoidable risk, a tyranny of outcome based `either’/`or’.
One sure way is to tie up with Universities and autonomous educational/research institutions and working closely with them. We can’t expect all this to happen with R&D budgets in balance sheets looking like rounding errors. Enterprises will have to take shareholders into confidence, urging them to look beyond a few quarters, if it were to get stretched. In cases of startup initiatives, early stage investors will have to be a bit charitable.
A bit too much to ask, huh
Completely agree with Mukul and Jaspreet.
India is JUGADU and thats the primary form of innovation in a disorganised market where a 1000 languages and sub dialects co-exist in cacaphony. I recently saw an interview where Edward De Bono was asked about the power of JUGAD and he nodded in the affirmative when explained what it meant. JUGAD when accompanied with increasing opportunity and a culture of upward mobility is a very powerful combination and as the eco system gets more organised, the multiplier effect will be evident. And hence Mukul, you are absolutely right that the definition of innovation is different in the Indian context.
My long response to it
I don’t agree a lot of it and doesn’t believe that number of patents is an indicator of Innovation. The term and concept “Innovation” can be different in different countries. “BlueLine Online” - an Innovation in United States might not be an innovation in India. Or might not be relevant in India at this point of time. I don’t think it’s lack of Venture Capital or Government Support. At lot of places market is not present in business models, which are proven in United States. Let me put some of the Innovation in India and some of these are almost irrelevant in US.
1.) SKS Microfinance - Microfinance business to lend amount as small as $100 to Individuals. AND MAKING MONEY - lot of VC money has gone into such companies. No bank in United States can work at such low levels of credit.
2.) Oxigen - It’s a chain of kiosks and retail stores which are used to collect cash from individuals and deliver services like Bus Tickets, Train Tickets, Utility Bills etc - India is a cash economy and internet penetration is less. It’s an innovation in Business Model and Microsoft has invested in it.
3.) mChek/Paymate - You can pay your utility bills, transfer money, top up pre paid card using mobile on a SMS. India has low GPRS connectivity and people love SMS. Totally irrelevant for US
And there are many more which can’t be thought by western thinkers. Does it mean that West lacks innovation? I suppose not. My small message is that Innovation is depended on user needs. And there are challenges I agree. India is very young on Angel Investing/ Venture Capital etc etc. But definition of innovation is different in Indian contest.
Patents are not a good way to judge innovation.
80% of developers at Druvaa have patents on their names. Total of 26 patents
And we know its all BS (bull sh*t)
Yes, i do agree that not much good stuff is coming out India. But take a look at - www.leadinvent.com and www.agami.com
Very soon you would hear from us on innovation front as well.
Patents are not a good way to judge innovation.
80% of developers at Druvaa have patents on their names. Total of 26
And we all know is BS (bull sh*t)
Yes, i do agree not much good stuff coming out India. But take a look at - www.leadinvent.com and www.agami.com
Very soon, you would hear from us on innovation front.