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December 09, 2013

Why NEN's Srikrishna wants Indian entrepreneurs to stop reading Techcrunch

From Srikrishna's blog post (emphasis mine)

    Every time I hear an entrepreneur in India tell me “It’s Angel List meets GitHub” I try not to grimace...Silicon Valley, even within the context of the United State is in many ways unique – and unlike anything in India...Many of their assumptions are not grounded in the reality of today’s India – may not even in today’s America. All they see is that a startup to sell tampons online raised $250K with just an idea on a napkin. Or Pinterest raised whatever astronomical amount of money without any real monetization strategy and Fred Wilson invested in Zemanta (who’d by then acquired a million downloads) even whilst acknowledging that none of them were clear how they’d make money.

    The reality of the Indian entrepreneurial ecosystem is that we are yet to see more than one turn or “generation” of tech entrepreneurs. A large amount of money is following very few quality deals. The VCs are acting as PE players would elsewhere. Angel groups are acting like VCs would. Everyone’s looking for revenue, customers and traction (all of which are good), but not quite the high risk/high reward perspective of early stage funders. To be fair to the funding community in India, the supply side problem of deal quality is compounded by the fact that there have been very few exits, and their LPs, may be looking for medium risk/medium returns.

    The needs of the Indian market and Indian consumers are quite distinct. Enterprises in India do have needs similar to those of companies elsewhere – databases, analytical tools, HR software, CRM systems – but their behavior and culture often are different. Consumers on the other hand can and do have very different needs. So when we talk of “building the Amazon or Zappos of India,” and unimaginatively try reproducing something done elsewhere, it serves no one well. The good news is that oodles of young entrepreneurs are starting companies each day in India. Now if only they paid a whole lot more attention to what their customers are saying and what problems those customers face than what TechCrunch is reporting from the Valley, I’d like to think, we’d see a whole lot more innovation and business building amongst Indian entrepreneurs.

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