I am very impressed by the ingenuity and resourcefulness of Indian entrepreneurs. Having invested in 20+ companies in Silicon Valley and 7 here, I believe great entrepreneurs exist in both locations. Notwithstanding all the inherent challenges (smaller markets, lots of red-tape, insufficient infrastructure, etc.) of the Indian ecosystem, the founders in India go through a ton of “useless time-wasting nonsense” to build their ventures.
Let me first mention this post is not about Indian entrepreneurs VS. American ones. Its about how Indian entrepreneurs can create as lasting institutions as American entrepreneurs have done targeting American markets.
There are 3 things that cause startup success according to Marc Andreessen:
three core elements of each startup — team, product, and market.
Most entrepreneurial teams in India are arguably (I believe you can debate this, but both sides of the argument will be valid) of equal caliber to those in America.
Product to me is a function of ideas and insights that meet a market need or problem. Which I think Indian entrepreneurs can do better, but are pretty good at. Notice the number of US startups that have either built parts or all of their product with Indian talent.
There’s one thing inherently missing that Indian entrepreneurs lack that hurts them more than anything else.
Lack of market knowledge.
What is market knowledge? In my own terms it comprises of 3 things:
1. Information about size, landscape, key players (existing vendors, customers, partners, etc.) and the inherent workings of any market.
2. Relationships with key landscape players that will help obtain more “inside working information” – not illegal information, just the inner workings which anyone who’s been in an industry or market knows more than outsiders.
3. Problems or inherent issues with that market. Customers of that industry or market know what works and what does not. Any company that wants to disrupt that market, needs to understand the problems of existing solutions and envision what a future solution might look like.
These 3 items of the American market (or any other market other than India) are largely unavailable to Indian entrepreneurs.
Which is why I keep seeing good ideas to very small problems (lets fix auto rickshaw meters with a GPS enabled smart phone, or we want to sell provide certification training to vocational education trainers) within the Indian market.
If Indian entrepreneurs had knowledge and information about world markets as well as they did about Indian ones, they have both the talent (team, caliber) and product development knowledge to disrupt external economies. I am sure the argument holds true even for other entrepreneurs in other countries. If they did have the knowledge they can come up with ideas to solve those problems.
So what’s the solution?
Curated Market Knowledge.
The solution is not a series of whitepapers, books, PPT presentations or blog posts.
The information part alone can be shared by Indian entrepreneurs learning from Indians in America. Lets pick about 10 vertical industries we wish to participate in (Besides IT outsourcing, which we are disrupting with cost arbitrage alone) and have as many people in those markets share their inner workings with us.
Of the 3 items I mentioned about the market earlier, relationships are the hardest. That problem though, exists even for American entrepreneurs. The average young American entrepreneur has no more or less relationships in American than the average Indian entrepreneur in those markets. So we are on a level playing field.
The problems part of the market requires both knowledge and time / patience to understand. We in India call this “a mindset issue”. We are willing and able to live with small “jugaad” or the “lets adjust” mindset to many problems. We should not.
If you are a young entrepreneur I urge you to seek out your friends who have moved to America and keep talking about the market they are in, what the landscape looks like and how you can innovate or make a new product to fit the market need.
The key advantage we do have is our relative cost structure. Its still 2-3 times less expensive to build a prototype or version 1 product here in India than in America. Be willing to experiment, fail and go back to experimenting again.
I also think there’s a big need for a community event, exchange of ideas and an ongoing series of discussions with Indian Americans and Indian entrepreneurs, who can help learn and teach this market knowledge.
The government of India has a Pravasi Bharati Divas which connects Indian diaspora with India. I dont think its the government’s responsibility to teach market knowledge to entrepreneurs, but a day or two after that day could be a great time to start.
The Indian diaspora is already in India and I am sure we can convince them to stay for a few days more to help the Indian entrepreneur ecosystem.