Courses & Events

Do big problems spell big opportunities in India?

Tuesday, Apr 16, 2013

04:15 pm - 05:30 pm

By Riva Gold, M.A. Candidate, Department of Communications at Stanford University

With over a billion people and a large English-speaking labor force, will India produce the next great global start-up?

Paula Mariwala, Executive Director of Seedfund, an India-based early-stage venture capital fund, says India has all the right ingredients to create great new ventures: a very young population, good financial systems in place, and most importantly, a number of unsolved problems. “We have so many problems, and they are opportunities,” she says.

Deepak Ravindran, Founder and CEO of innoz, was able to seize on a local problem to found a successful new enterprise. In college, “we were sitting on campus, and one of my friends asked me how to impress a girl,” he recalls. “So the immediate answer was to Google her, but the problem was no one had access to Google.” That was a “Eureka moment” for Ravindran and his peers. The country’s lack of access to broadband internet became a valuable business opportunity, and they launched a company that would answer queries through text messages.

In India, he says, “we have 1.2 billion people, and hardly 10 percent can access internet.” At the same time, the county’s 900 million cellphone subscribers, he said, amounted to the largest telecom subscriber base in the world. In the last four years, innoz has been used by 120 million people.

At the same time, Mariwala advises, there are various roadblocks in India that make starting new, high-tech companies a challenge. While the country has a high overall literacy rate, there’s a technology skills gap and income inequality. The education system in India, she adds, does not promote “out-of-the-box thinking.”

On top of that, Mariwala says, the country has a certain cultural resistance to failure and a lack of early adopters. In India, there are few “new economy heroes” blazing the path, and many people continue to work in silos.

In the last few years, Mariwala sees signs of improvements for local entrepreneurs. “There are a lot more funds, more incubators, accelerators,” she says. “There’s a lot of action in early stage, even compared to 2006.” Today, she says technology-enabled consumer products like web applications, mobile platforms and enterprise solutions are driving innovation. To improve prospects, she hopes to see more small-scale mergers and acquisitions, more interactions with mentors and investors, and a talent pool that is more seriously interested in entrepreneurship.

“We are blessed by having seamless internet access, or access to the world’s knowledge,” says Phanindra Sama, founder of redBus, India’s largest bus ticketing company. Unlike in China, high-tech companies in India have direct, unhindered access to resources like Google and TechCrunch, which allows them to compete with larger companies for the next big thing.

As far as advice for young entrepreneurs, Ravindran says the key is to start early. “When you start young, you can take a lot of risks,” he says. “When you become old, you can tell stories later.”

Sama, in turn, emphasizes the value of seeking out strong mentors. The key is to find people who have seen many cycles of companies and know the competition, he says, “and believe in them 100 percent.”

As for Mariwala, while she stresses the importance of keeping local needs in mind, she offers classic advice for entrepreneurs. “Break even quickly, choose the right team, and look for impactful ideas.”

Does India’s diverse population and large mobile market make it a good spot for entrepreneurs?

For additional details about our 2013 distinguished public seminar series on “Entrepreneurship in Asian High-Tech Industries”, please click on the following link.

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