Dear readers,
This is a nice article written by Rajat Gupta, former MD, McKinsey on “India needs more entrepreneurs”. A classic. Perhaps a little commercial on ISB but good reading:
http://www.mckinsey.com/aboutus/mckinseynews/pressarchive/indiaentrenprenership.asp
-Shiva Venkatraman
Latest posts by Shiva Venkatraman (see all)
- Rajat Gupta’s article: a classic - July 4, 2006
- How do founders meet and decide to “DO A STARTUP”? - July 2, 2006
- Startup Culture Report: Emailed to everyone who had asked for it - July 2, 2006
0
I read the Rajat Gupta article for a 2nd time based on your recommendation.
Overall it makes sense but I just wanted to make a few points (which I think people often miss).
1. Its a common gripe that we have not created a Silicon Valley type ecosystem here. In reality, I see millions of entrepreneurs in India who are happily running their ventures. Entrepreneurship need not be equated with venture capital and existence of an ecosystem. A majority of entrepreneurs in India are innovative small businesses funded by the founder and in no hurry to “exit”. Thus they are not greedy to earn money on their equity. They’d rather earn money from cash flows. After all, ancient Indian philosophy (which is more ingrained in our modern blood than we care to admit) says that greed is NOT good. The VCs certainly don’t want to hear all this. As a result, they prefer to work with an entrepreneur who may be lower in quality but measures well on the greed quotient.
2. Also an ecosystem will develop when EACH member of the ecosystem can take something home in return for his contribution. In the Valley when VCs or experienced angels offer to spend time with you and guide you, they often do it under the implicit assumption that when the venture flies, they will get some equity for services or being on advisory board. That’s the norm in the Valley and entreprereneurs there do not mind large dilutions in each subsequent round. Whereas in India, every other entrepreneur is extremely protective about his equity and often wants FREE help from senior folks, mentors, and ‘venture helpers’. This is one reason why you don’t see that many ‘venture helpers’. They have been duped by the smart-ass entrepreneurs.
Shiva,
This was written in 2001. A lot has changed since then for the better. The fact that India needs lot of entrepreneurs is correct . The best part is that I see a lot of young talent trying to do startups or joining startups.