The startup ecosystem in India is schizopherenic

Okay now that I have your attention with that ridiculous headline, let me define a few things first.

Schizophrenia is a complex mental disorder that makes it difficult to:

  • Tell the difference between real and unreal experiences
  • Think logically
  • Have normal emotional responses,
  • Behave normally in social situations

Lets try and list all the players in this ecosystem. I have provided this list sorted by the importance of the player to the ecosystem (obviously this is my opinion and hence biased).

1. Entrepreneurs – the heart and soul of the ecosystem

2. Talent for the entrepreneurs (meaning people to hire)

3. The early adopters (Both consumer and businesses)

4. Investors – Angels and Venture Capitalists

5. Incubators and Accelerators

6. Universities & research institutions

7.  Advisors, mentors, coaches

8. Startup communities, media and events organizations

9. Service providers – lawyers, accountants, etc.

10. Larger companies for partnerships, distribution and marketing

11. (Dare I say) Government – yes for things such as incorporation, taxes, etc.

12. Cheerleaders and poster girls (or pinup guys if you like).

13. Successful startups and successful / failed entrepreneurs

14. Associations, government liaisons and trade organizations

15. Interested public

Do I have an exhaustive list? Probably not, but this is a good enough start.

Every player has something unique they bring to the table and has a perspective on what’s good and bad about our Indian startup ecosystem.

Even if we mostly stick to the technology space, we say one thing and do the exact opposite.

No wonder most entrepreneurs get confused.

1. We want more innovative product companies but we end up funding mostly me-too eCommerce companies.

2. We want to build the next facebook and Google and yet most entrepreneurs have a “consulting / services” company on the side to make money.

3. We want to work on cutting-edge technologies, but end up picking yesterday’s tech stack since “there’s a lack of talent’.

4. We want to encourage the government to participate, but end up bad-mouthing them at every event (One panel member even suggested they were out to kill startups).

5. We want to have a clean incorporation, but still choose the cheapest service provider to incorporate the company (a lawyer even told me yesterday, he has to turn down 2 companies a week who want his services for free).

6. We want to be first to try a new piece of technology but are unwilling to pay to be an early adopter.

7. We want to encourage more entrepreneurs to participate in an incubator, but keep ridiculous anti-dilution clauses to maximize upside.

I could go on, but you get my point.

Is this an India thing alone? No, I have seen many of the same in Silicon Valley as well.

But at the center of the valley is an entrepreneur with an idea who wants to change something and everyone else is rooting for her.

In India I dont believe we quite know who’s at the center. We make rock stars of our VC’s, large company CEO’s and Government officials.

So if you are part of this ecosystem I would request you to please keep only one question in mind when you have to make choices:

” Will this help more entrepreneurs get excited about starting a company in India?”.

Then please do the right thing and don’t just say the right thing.

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6 thoughts on “The startup ecosystem in India is schizopherenic”

  1. One key malaise is the extremely small eco-system. Hopefully, free market theories and law of averages will correct this once the ecosystem is larger.

  2. Mukund,

    Very good observations again, good hints for all. More positive actions than sole talks n bashing can help ecosystem better. Your blog is great for entrepreneur as a reference. Thanks for sharing all your thoughts/experiences, helps lot of us like me.

  3. Mukund, you hit the nail dead center: “But at the center of the valley is an entrepreneur with an idea who wants to change something and everyone else is rooting for her.” I think we need more people ROOTING for entrepreneurs, more than anything else. I believe we have talent, and to some extent the entrepreneurial education too, bu the ecosystem is still missing.

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