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The article delves into a critical examination of the Indian startup ecosystem, prompted by a statement made by India's commerce and industry minister, Piyush Goyal, at the 'Startup Mahakumbh' event. Goyal's remarks sparked debate by questioning whether India should be content with being a nation of 'delivery boys and girls,' implying a concern that many Indian startups are focused on replicating existing business models rather than fostering genuine innovation. The article uses Vinod Khosla, a prominent venture capitalist and technology pioneer, as a contrasting example, highlighting his commitment to cutting-edge technology and his passion for novelty. The author, Madhavan Narayanan, draws a distinction between 'upstarts' and 'startups,' arguing that true startups are technology-driven companies with the potential for significant growth through innovation, while upstarts are merely replicating existing models. The piece criticizes the 'this of that' culture that has become prevalent in the Indian startup landscape, where companies like Paytm, Flipkart, Swiggy, and Zomato are seen as clones of successful international businesses such as PayPal, Amazon, Delivery Hero, and Yelp, respectively. While these companies have achieved scale and built local brands, they have not necessarily created substantial intellectual property or driven global innovation. The article points out that the Indian startup ecosystem experienced a rush of venture capital driven by India's growing population and internet boom, which led to a focus on building 'unicorn' startups with billion-dollar valuations, often with the primary goal of achieving an IPO. This emphasis on scale and speed, according to the author, has come at the expense of genuine innovation and the development of groundbreaking technologies. The article also highlights examples of Indian companies that have demonstrated true innovation and achieved global success, such as InMobi, a mobile ad platform that rivals Facebook-owner Meta, I-flex solutions, a banking software company acquired by Oracle, and Zoho, a Chennai-based productivity software company that competes with Microsoft. However, the author laments the fact that India has not yet produced a product as groundbreaking as Google, and acknowledges that China, while not yet fully there, is making significant strides in areas like artificial intelligence with the development of DeepSeek, a disruptive AI model. The article underscores the importance of fostering a culture of research and development, citing India's historical strengths in this area through institutions like the Council of Scientific and Industrial Research (CSIR) and organizations like ISRO and the Defence Research and Development Organisation (DRDO). The author argues that India needs to cultivate new-age thinking among entrepreneurs, encouraging them to pursue adventurous ambitions and forge closer links between innovation and these established research institutions. Drawing parallels between the challenges faced by Jamshedji Nusserwanji Tata, who dared to build a steel plant in colonial India, and the opportunities presented by emerging technologies like AI, the article emphasizes the importance of patience, patents, and perseverance in the startup universe. The author cautions against confusing entrepreneurial chutzpah with mere gambling and criticizes the culture of startup wannabes seeking corporate freebies from the government. He also highlights less-known Indian companies like MOSChip Technologies and Reva, an electric car maker, as examples of businesses that have pursued innovation without the hype of venture capital funding. The article concludes with a call for wealthy Indian billionaires to invest in patent-seeking teams of cutting-edge innovators and emphasizes the need for a sense of adventure akin to that of Vinod Khosla and Elon Musk. The author stresses that opportunities for discovery and invention are distinct from those based on scale and speed, and that India must embrace these new opportunities to avoid being left behind. He views China's DeepSeek as a wake-up call and argues that India, with its history of nurturing research and development, has no excuse for not pursuing genuine innovation. The core message of the article is a plea for a shift in focus within the Indian startup ecosystem, away from merely replicating existing models and towards fostering genuine innovation, deep technology, and a spirit of adventure. It calls for a greater emphasis on research and development, patent creation, and long-term perseverance, rather than solely pursuing scale, speed, and salesmanship. The author suggests that the government and private sector can play a role in fostering this shift by investing in cutting-edge research and providing support for innovative startups that are focused on developing groundbreaking technologies. The ultimate goal is to position India as a global leader in innovation, rather than just a follower of existing trends.
The article further argues that the Indian startup ecosystem has become overly focused on achieving unicorn status and attracting venture capital funding, often at the expense of genuine innovation. The author suggests that many Indian startups are simply replicating successful business models from other countries, rather than developing unique and groundbreaking technologies. This 'this of that' culture, as it is referred to in the article, has led to a proliferation of companies that are essentially clones of existing businesses, rather than true innovators. The article cites examples of Indian companies like Paytm, Flipkart, Swiggy, and Zomato, which are often compared to their international counterparts PayPal, Amazon, Delivery Hero, and Yelp, respectively. While these companies have achieved significant scale and built strong brands in the Indian market, the author argues that they have not necessarily created substantial intellectual property or driven global innovation. The article also criticizes the venture capital industry for fueling this trend by prioritizing investments in companies that are likely to achieve rapid growth and generate quick returns, rather than those that are focused on developing long-term, innovative technologies. This short-term focus has, according to the author, stifled innovation and led to a situation where many Indian startups are more concerned with achieving unicorn status than with creating groundbreaking products or services. The author contends that India has the potential to become a global leader in innovation, but that this potential is being squandered by the current focus on replication and short-term gains. The article calls for a shift in mindset, with entrepreneurs, investors, and policymakers all recognizing the importance of genuine innovation and long-term investment. The author also emphasizes the need for India to foster a stronger culture of research and development, and to encourage collaboration between academia, industry, and government. He argues that India has a rich history of scientific and technological achievement, but that this history needs to be leveraged to create a new generation of innovative companies that can compete on the global stage. The article highlights several examples of Indian companies that have demonstrated true innovation, such as InMobi, I-flex solutions, and Zoho. These companies have achieved global success by developing unique and groundbreaking technologies, and they serve as examples of what is possible when Indian entrepreneurs focus on innovation rather than replication. The author suggests that India needs to create an environment that is more conducive to innovation, with policies and regulations that support research and development, and a culture that celebrates risk-taking and experimentation. He also calls for greater investment in education and training, to ensure that Indian workers have the skills and knowledge necessary to compete in the global economy. The article concludes by reiterating the importance of genuine innovation and long-term investment, and by calling for a collective effort to transform the Indian startup ecosystem into one that is focused on creating groundbreaking technologies and driving global innovation.
Furthermore, the narrative underscores the critical role of government policy and private sector investment in fostering a culture of deep-tech innovation within India. The author subtly critiques the tendency of some startups to seek government handouts, arguing for a more meritocratic system where innovation is rewarded, not simply incentivized through subsidies and freebies. The comparison to Jamshedji Tata’s pioneering steel venture in the early 20th century serves as a powerful reminder that transformative innovation often requires immense perseverance, vision, and a willingness to take risks in the face of adversity. The author's assertion that 'steel was like AI' in the context of colonial India highlights the magnitude of Tata's ambition and the transformative impact that such ventures can have on a nation's development. Similarly, the mention of Verghese Kurien and the Amul cooperative underscores the power of innovation to uplift rural communities and create lasting economic value. The article suggests that today's entrepreneurs can draw inspiration from these historical examples, learning from their patience, dedication, and unwavering commitment to building enduring institutions. The call for wealthy Indian billionaires to invest in patent-seeking teams of cutting-edge innovators is a direct challenge to the established order, urging the private sector to play a more active role in funding high-risk, high-reward ventures. The author believes that this type of investment is crucial for nurturing the next generation of Indian innovators and ensuring that India remains competitive in the global technology landscape. The article also emphasizes the importance of linking academic research with commercial applications, suggesting that closer collaboration between universities, research institutions, and private companies can help to accelerate the pace of innovation. The author points to the success of countries like China, which have made significant investments in research and development, as evidence of the benefits of this approach. By creating a more supportive ecosystem for innovation, India can attract and retain top talent, encourage entrepreneurship, and drive economic growth. The author's concluding remarks are a call to action, urging India to embrace its history of scientific and technological achievement and to strive for a future where innovation is at the heart of its economic development. He sees China's advancements in AI as a wake-up call, urging India to take bold steps to catch up and surpass its regional rival. By fostering a culture of deep-tech innovation, India can unlock its full potential and become a global leader in the 21st century.
Source: Upstarts Or Startups? Why Piyush Goyal Is Not Entirely Wrong