The Death of Indian Innovation: Why Indian Start Ups are failing to Innovate?
Lately, I have been thinking very deeply about my college days when the Flipkart story had inspired the entire lot of my batch at IIT-D. We were starry eyed college kids who wanted to do something innovative in India and break away from the "three" most popular moves after IIT: 1. UPSC 2. MBA 3. MS/PhD abroad I proceeded to then work in various Indian startups and noticed an alarming thing. I began to realise a pattern across all my stints: The initial founding team does exceptional work innovating, they excel at what Thiel calls "Zero to One", the act of creation. I will concede that although most founders fail to innovate by often copying what worked in the west but the initial founding team usually excels in execution. It allows for initial traction as it breathes a fresh breath in the\ space that they are operating in. Almost always, when Product Market Fit is "achieved"(whatever that means), the founders begin to deploy insane amounts of funds into growth. By definition, Growth is not a bad thing. But, I have been noticing that across all startups I have worked at( all raised funds from the largest global funds) that it comes at the expense of product building. And during this era of hypergrowth, the product starts to stagnate while focus becomes marketing and sales. I often felt that this was temporary. That once we reach enough scale, we would start to innovate again. But time and time again, the ability to innovate atrophies over time. Rather than building something that has enduring value by executing faster than anyone, the focus becomes achieving growth at all costs. This ultimately leads to two outcomes: 1. The startup cannot sustain this growth and retention begins to look dire. The churn becomes unbearable and the startup goes out of business. 2. The startup gets acquired by someone bigger, allowing founders and investors to believe that they created value where none existed in the first place. I am completely dejected at this.
India has always been a development center and not a country that innovates much. People dropping out of schools or colleges also just end up in development field and not real engineering.
Even Flipkart was/is a copy cat. Although I don't have an MBA/MS, I have utmost respect for them, since it imparts at least some knowledge around the topic, further leading to thinking differently or innovating something.
The scope for innovation will stay high only if teams try their level best to stay bootstrapped, while having a small team that prefers working from office/any place where team is together.
But our mindset is also another problem. Even if there's some innovation, and unless it's useful for a business, common people won't want to pay for it. YouTube is a good example. People excessively use it, but cry saying that it's showing ads - and at the same time they are not willing to take premium subscription. How can they sustain a big service if they're not generating revenue?
Hence, by default, India becomes just a market to improve numbers.
I believe that it would take more products like Zomato, Zepto, etc which would bring a mindset shift before innovative would make sense in India again.
PS: this just my rant/take. I'm sorry if it's not aligning with how you think about it.
LooseGoose
Stealth
a year ago
I mostly agree, but the caveat is what works in America might not work the same in India and that difference in execution and figuring out still takes effort. And that even copying playbooks to create copycat businesses aren't as easy because it still comes down to who can execute better with lesser resources.
It's for this reason so many Indians are in SaaS I believe, because the resources required in India are much cheaper on average.
Completely agree with you. I respect all the companies, irrespective of how they've ended up. I believe, all of them started with a clean mission.
And yes, most of the foreign companies have an office in India majorly to save money in labour, but then they say Indian team is extended HQ, etc 😂
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Megamind007
Stealth
a year ago
Adding personal Points(out of context):
2) Indian developers have no Cult Culture:
I feel we lack the cult Culture of Innovation. A group of students/developers pursuing non existent technology, newer personal original concept/system architecture, scratch from basic first principle of anything.....so one. I don't find the cult of building a new programming language, new Operating System, Android System, Android OS, emotional Intelligence development,..... The cult for these doesn't exist in our ecosystem.
3) Mostly the network between different categories developers is not well established:
We live in a sparsely distributed society and lack a centred connecting platform to connect similar minds.
4) Indians are way too practical, real then they should be. No Visionary:
Ignoring the poor as a major factor, we as developers are so crippled about practical use-case, economic use-case, blah blah we don't care to chase impossible and build that. If a 12th grade child approaches you and says, " hey buddy let's build Web technologies. I have one in mind. It is an open decentralized protocol for phone/contact details sharing globally without revealing phone numbers."
THINK ABOUT What would be your response?
We don't do anything that is not useful to society, we need to be either startup or benefit personally.
And 1) Indian developers are less collaborative, dedicated to open/properitary projects: If you think you are collaborative, contact me at secondary email [email protected]
BTW I'M in Web 4.0 Cult community with 18 projects ongoing (IDK of those, I don't have access). Did any of you ever thought to join or build something like that?
LooseGoose
Stealth
a year ago
Ummm, web3 is barely here. Wtf is web4.
Megamind007
Stealth
a year ago
My bro...Web 3.0 has nothing to do with development of Web 4.0 or Web 5.0 You should at least understand that.
Answering the question: Web 3.0 is read, write and own with decentralisation as core emotion with blockchain, DAO, crypto, nft as technologies, focused mostly on the finance sector, gaming sector. And, on a personal point, it is devoured by bigger scams, misuse of trust in blockchain technology, and still follows the digital complexity same as WEB 2.0 (from consumer POV).
All Web 1, Web 2, Web 3 are business-centric approaches while Web 4.0 is the first individual user-centric approach in history.
WEB 4.0 is read, write, own, share, & regulate, a combination of Web 2.0 (development flexibility) with Web 3.0 technologies with user-centric, zero privacy, and human emotion as the centre of core principle. It is a combination of intelligent Web networks (personal network and internet network) to comprehend human emotion, decentralized, semantic, edge computing built on the foundation of AI, ML, NLP, BIG DATA, IOTs personal network, Personalization technology, intelligent protocols, access protocols, open protocols.... accessible by consumers in a simpler, modular and social environment. It can be used for different sectors such as e-commerce, blogging/news, finance, gaming, entertainment (I'm unsure of this one).
It is trying to simplify the current chaotic internet by breaking into respective sectors, building the respective Web ecosystem from scratch using the first principle method,..... for simple, social and seamless access to all people with a hyper-personalized experience.
TBH, it is awesome. Literally shakes the perspective and makes you see the internet as it is. Google the master of the ring by controlling what people discover, keeping stagnant in development, bottleneck growth using SEO as a distributed weapon and made profit by increasing competition in the market. The startup/business failure is directly influenced by Google.
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Innovation in india can only be done in areas where people are willing to pay for it and sadly the depth of indian market is less, day to day life affecting products/services will be the only ones paid for.
Discretionary products never have a consistent income stream in india.
Bumpy_Stock
Stealth
a year ago
That is so true. Majority Indian consumers are stressed on money. Luxury items like buying games online is not yet mainstream in India. In the US, luxury items like AAA games could build a successful company eg. Activision, EA etc.
Also, India has a population on 140 Cr whereas US has 33Cr. Increased population, increases competition or demand for resources like education, degrees, house rates in Mumbai/Bangalore. Demand is driving up the inflation.
These money stressed consumers will only go products they use on a daily basis and won't pay for some premium AI productivity email app.
If I am not mistaken, mostly of the funding rounds come with a clear expectation of growth metrics. Well unfortunately it is growth metrics, not profit metrics so it is easier to achieve the growth spending money than product development.
I think what you notice is a cultural issue. Building at scale is a completely different skill set. Unfortunately every startup employee is made to believe that large companies do not innovate. So the people that build a product from zero to one are task tasked to scale up which they fail miserably. Take for instance Facebook gave React and Cassandra, and Google Hadoop, how many startup CTOs, think of building such products for their problems which takes time and skill.
No need to get dejected. A decade and half ago, IT jobs was reserved for only class toppers from tier 1 college only. We have come a long way. The future should be equally bright minus minor blips along the way.
LooseGoose
Stealth
a year ago
There is a distinction here too though, PE investors and family offices and HNIs are more driven by profit metrics while venture capital is driven by growth metrics.
I liked the point that building at scale is a different game. It is not that large companies don't innovate. Building at scale is a very different ballgame, really.
BoogieMan
Stealth
a year ago
Rather than just startups, I am taking a more macro view of this. Here are my thoughts.
Very innovative countries have a few prerequisites. First, they have undergone industrialization. Second, per capita income >= middle income status. We can't be 2500 USD per capita country and expect ourselves to produce Googles, Metas and OpenAI's of the world. I am going to also add a third here, innovation in the tech domain also requires some amount of government protectionism to insulate from the monopolist thrust of tech based business models.
Sadly, we have failed to consistently industrialise ourselves, but surprisingly, not for actually trying them. Since 1947, the socialist secular parties, with INC at the pinnacle of them all, realised doing manufacturing is super tough, so they went with the easy 'services' path.
Only since 2014, has the Modi led government sought to focus on manufacturing and after initial setbacks (manufacturing is hard) sort of salvaged the situation to an extent by borrowing from a nationalist cum East Asian model of industrial policy making (which has also received a bit of a very welcome helpful hand through the decoupling with China process). A long road lies ahead and much needs to be achieved, but finally it seems like we are taking the right step or two. But this doesn't guarantee anything at all. All of the positive scenario is assuming the communal bigoted INC and their regional counterparts don't come back to power.
Great innovation is downstream of these processes fructifying.
Qwerty2398
Stealth
a year ago
Sustainable growth takes time. The areas that most startups work are not technologies that can be protected. Once an idea is established and it will be copied people with bigger money bags . The one with the bigger money bag will always win. So te founders try to scale up ASAP so that they have brand recognition and first mover advt. And eventually fail.
Most of these start up are "trading" companies. They neither have control supply nor the demand. Most of the startup names thatbwe heard after covid will fail. They wont see the next decade.
LooseGoose
Stealth
a year ago
Second outcome is a problem why? They innovated to some extent, created value, and got acquired. That's a rare dream come true for most entrepreneurs and a win win for everyone.
LooseGoose
Stealth
a year ago
Haven't looked into details of acquisitions but I don't see why it matters. Byjus is just one business among lakhs.
Acquisitions happen in regular businesses too, tech startups are not the be all end all.
SharpOmelet
Stealth
a year ago
From what it seems, looks like you are overthinking.
A startup is to come up with an innovative product, find PMF, scale it; and work on new products of its. The innovation is still in the blood. You may need to look better into the other verticals the startup runs.
Indusplateau
Stealth
a year ago
Too much competition, it brutal if business doesn't grow.
Umadbro
Stealth
a year ago
In any social setting, you see more of what you promote. USA has that innovation culture because they heavily promoted the cult of self made man, that a person can be rich in one generation by doing some business in USA. They incentivize risk, treating it as a good thing. They created the systems to build sort of safety nets around these risks. Systems enabled that risk apetite or risk enabled systems is debatable, for now both exist and augment individuals for risk taking.
In india, you need to have a frugal innovation. The story needs to be that xyz person did this great thing in so little amount of money. The definition of accepted innovation is narrow. We discredit the ones where people spent a lot of money to create something great. VCs put in money when the startup is derisked even at pre seed stage. Look at how many openai wrappers were funded in india v usa.
Then the other element is structural. Inherent lack of trust and envy is counter productive in the long run.
Anomie
Student
a year ago
The problem being - most startups founded in India are service based startups and some of these service industries have low profits associated. So the decision usually is either of the two.
1. target a new service sector or
2. Invest in growth and Marketing
And the usual decision is the 2nd one because its the easier choice and already a tapped market
On the other hand deep tech startups have potential for great innovation but india being a service based industry these have a high chance of failure and low funding opportunities or people not just going that way because of time required for product development (And probability for success)
I have seen some innovative tech startups from my batch/seniors at IITD but they still have a long way to go to be scaled at to a higher level mostly because of time required for product development.
seyerite
Stealth
a year ago
There are still very few examples to learn how to build a company in India. Also, by examples I don't mean high valuation.
