Thursday, May 18, 2006

On Startups...

Read this talk by Paul Graham on startups: How American are Startups? He makes some really interesting points which I have always believed in:

"You need two kinds of people to create a start-up: rich people and nerds."

I have always felt that only a right blend of the two can actually get the engines revved up to go. Startups need money to hire smart people, and its takes really smart peole to turn the investment into a 100X profit. Only an organization driven by innovation/IP can offer these kinds of returns in short period of time. Normally in India there is a disconnect between the two. The "RICH" are mostly people that belong to the old world economies, like the Tatas and the Birlas, most of these are not people who have become rich a part of the new world economy. They are still in the brick and mortar timeframe and I think it makes a lot of sense for them to be so because of the manner in which these industries work. None the less they are changing, but these changes cannot be forces and can only advance organically. There is some money that is coming in though funds like West Bridge Capital, Blue River, Intel Fund for India but its nothing compared to the money floating around in the valley. And most of these funds tareget IT/ITES companies (except the Intel Fund) which is not a really innovative bussiness, at least not a lot of techical innovation takes place in this industry. Most of the good startups in India like TV.Veveo and Riya are funded in the Valley by American funds. Paul specifically metions this "Won't work in a poor company. India might one day produce a Silicon Valley, because it has the right people but it's still very poor. US has never been as poor as some countries are now, so we have no data to say how you get from poor to Silicon Valley. There may be a 'speed limit' to the evolution of an economy." I feel there is still a BIG gap between the nerds and the people with the moolah, the gap of two different economies.

One of his statements that really made me smile was "So basic recipe for a start-up hub is a great university and a nice town. You could improve on Silicon Valley easily. Just let people in." Sadly India still does not have either. Yeah not even the IITs are good enough places for innovation/enerpreneurism, they are just good "undergrad" teaching institutions. And the only one that has some flickr is situated in a God forsaken place called Kalyanpur :p

Drew this while I was getting bored in a telecon... Write in ur suggestions :D