It is educational to compare and contrast the two tech. booms that this world is witnessing right now. Silicon Valley is going thru a mini deja-vu of sorts, what with the spurt of so called web 2.0 companies mushrooming all over the place. The buzz word this time around is “build to flip” – build something cool and innovative and hope it catches the eyes of one of the big three – Google, Microsoft or Yahoo (affectionately termed as GYM). The VC community can’t hide its excitement as well and funds have come up to focus exclusively on emerging technologies like RSS. Earlier this year, during my visit to the Valley, I happened to go to the Canvas cafe with Marc. We were able to spot half a dozen leading thinkers there deep in conversation and bainstorming ideas. In short, a boom in Silicon Valley means lots of new startups, exciting ideas, coolio conferences and most importantly small companies giving big companies a run for their money. Exciting times indeed!
Now, let us turn our attention to our own..ahem… IT boom. What we term as a boom is actually creation of behemoth billion dollar companies with tens of thousands of employees. This has led to rising salaries and growing concerns about attrition and employee retention. Don’t get me wrong – it is great that the software sector has been able to generate such wealth and employment. But, unfortunately, our boom has so far not been about technology or innovation. Our tech. industry has its head buried so deep down in servicing offshore clients, that we are taking no notice of the other boom on that side of atlantic. Everyday I still run into tech. savvy engineers who don’t know the silicon valley has already moved onto web 2.0. We are running way behind the curve and not making much of an effort to catch up. The outsourcing business is so huge and lucrative, that it has almost become an albatross around our neck. The big 3 – Infy, Wipro and TCS should be investing in creating more awareness and spurring innovation – but they are not. Why do we see no or few technology conferences? Why is this IT boom just about outsourcing? Where are the startups, I ask!
I think our VC community can play a big role in changing things. They need to make some big bets. Fund a risky idea. Bet a few million on something that is untested and never done before (of course easy to say for me coz it ain’t my money!) Encourage technology development for local market. Convince Indian engineers and entrepreneurs abroad to return back and do statups. Even during the dotcom boom we saw much more buzz and excitement in India (India World, Naukri, Jobsahead etc all started before or around that time). But since Y2K, its been all downhill.
This outsourcing thing killed the startup culture!
- Winners of TiE-Canaan Entrepreneurship Challenge announced - December 18, 2006
- TiECon Delhi underway - October 28, 2006
- Canaan Teams with Yahoo! Inc. in an $8.6 Million Investment in Bharat Matrimony, an Online Marriage Service - August 2, 2006
Its unfair to present a uni-dimensional picture of service orgs – tho I do believe there is lots they could do but have not. Infy has spawned OnMobile, Yantra and their own banking products have pretty sales – all this does need some risk taking too. Yes they’re more concerned about ensuring there’s enough bread – but thats not necessarily a bad thing – they have created enough wealth to participate in creating the ecosyetm – funding and a huge talent pool, plus a focus on Bangalore which has made VCs and others consider this as a possible destination.
Also, there’s innovation of the non-tech kind. These orgs have created methodologies and processes, and models for outsourcing to take on the IBMs, Accentures of the world (yes, there’re *huge* service orgs everywhere). They’re also doing ‘experimental’ work in trying to create tools and methods to take productivty enhancements beyond whats thought conventionally possible.
Yes there is a downside of having ‘safe’ companies around – but as an entrepreneur looking for people to share the vision and risk of taking a new idea to market – I do believe that the same is true for the Amazons, Yahoos and Google’s of the world. The comfort of a big brand and monthly paycheque does work for many – and also has to do with your life-stage in the Indian context. Risk is not a great mortgage payer, so I do see their rationale for the security that a ‘brand’ brings.
Of course, Subroto Bagchi’s article about risk perception in today’s TOI is awesome in the current context.
Whatever innovative thing is happening in india is being overshadowed by the outsourcing cult. In india its more of short term planning and short sightedness. This is making them reap rich rewards but alas not for long. Some of the even companies which were into product development have moved to outsourcing bandwagon as the returns seem to be attractive. Its more like may hay while sunshines. I had read an article a year age where in one of the co-founders of a CAD CNC machining company had termed the some of the software engineers in “silicon valley of india” as Cyber Coolies, this article resulted in uproar among the people who went to the extent of banning the company from the borders of bangalore!!!!
Its interesting that Mr. Mungee says
“Finally, I agree with Alok. Web 2.0 might be sexy – but where is the revenue ”
A typical Big 3 thinking I would say. (I mean, if the revenues are easily visible they would have created all sorts of noise there)
Innovation and VC ing is not just about creating web2.0 sites and generating Ad revenues 🙂
If Google had thought the same as “where are the revenues…” we wouldn’t be seeing one of the marvels in the IT industry ?
Long Live our mentality !! 😉
Gaurav, Very well Put.
Its a mixture of things that is keeping us behind the curve
1. Aversion to risk — Cultural :
Infact a huge percentage of the society thinks that working for the Big 3 is major achievement and every engineer should strive for the same. Poor students are buckling under this societal pressure
2. As you said, the Big 3 are least bothered about Innovation , staying ahead of the curve etc. They only have the time to look for deals whereby they can recruit hordes of freshers from college, employee them for peanuts and then maximise profit to boost share price. Thats the SOLE aim.
I think perhaps we don’t have any active forums at the ground level where people even discuss technology. Everyone is just busy serving his/her own company needs and there is no out of the box thinking. It’s also much harder for people to break the salary jinx.
Is there any forum where one can know what indian tech startups, if any, are upto ?