Q: What’s the change you see in India?
A: Last December I was in Bilaspur (Chattisgarh), where the local engineering college principal wanted me to talk to students about career opportunities in Silicon Valley . The questions were, `I have this idea, how do I do this that?’, `do I need a co-founder?’, `where do I get money?’ and so on. It was quite an experience for me. None of these 20–year olds talked about getting a job. This is a remarkable transformation, like a journey of a thousand miles. It will take a while before we see this impacting the actual products developed in the country .
Entrepreneurship has captured the imagination of the people of India. There are lot of good innovations in labs and universities all over India, but they don’t know how to commercialize it. If India starts innovating for itself, it will be a fundamental shift, changing the dynamics of the ecosystem. The biggest problem is government regulation. But the current government’s attitude is positive and startups are seen as engines of job creation.
Q: What do you think of the flux in the start-up ecosystem? There has been a boom and a bust in the last two years.
A: The so-called boom was driven by late stage investments by foreign investors in a few companies. That cyclical behaviour is inherent in private capital. When times are good, people become more optimistic than they should be and when times are bad, they become more pessimistic than they should be. For early stage investments, the boom is now.
Q: What is the problem in the system?
A: Now, it is not just e-commerce that people are thinking of. People are thinking of solving some real problems that India has. When you bring a successful model from developed countries, there is an upper limit to how much you can grow. Flipkart and Snapdeal are discovering it now. If you solve problems that do not exist in the US, you have good chances of being successful not only in India but also in 60 other countries.
Q: Are we creating a mindset where the focus is on external funding rather than positive cash flow? Is this a bad precedent for future entrepreneurs?
A: Not every startup or business needs external funds. But if you want to build something of scale, you need money , unless you have the patience to build it over 10-15 years. To make a big impact soon, chances are that you will need outside capital.
Think of the world’s biggest companies that have made an impact in your life that did not take external funding. Apple, Microsoft, Google, Twitter, Uber, Facebook, WhatsApp have taken external money . It is not bad that you need outside money . People who put in money also bring a level of expertise and become force multipliers for you. Around 90% capital in the Indian startup ecosystem comes from outside and that has been the case in the last 10 years.
Q: What does TiE do to foster entrepreneurship in the country?
A: We have a bottom-up approach. We have 50 chapters in 17 countries. My role is to foster entrepreneurship globally and my contribution is miniscule at an individual level. Each chapter finds local entrepreneurs, gives them money , mentors them and tries to make them successful. Wealth creation and job creation are noble activities.
Q: Do you come to India often?
A: This year, I have been travelling to India a lot. I have a fund in Silicon Valley that is legally allowed to invest only in the US. When I raise my next fund, we can have a different mandate and might be open to investments in India.I am also involved with a non-profit, Foundation for Excellence in Bengaluru, which gives scholarships to underprivileged medical college students.
Source: The Economic Times