[Editorial Notes: This article is dedicated to all those who have blamed VCs for lack of a strong startup ecosystem in India. At Pluggd.in, we completely agree/endorse with a candid view presented by Preetham, founder of Quantama, a LBS service]
Indian VCs are dumb f**ks. They do not have the balls or the brains to invest in Indian startups which can become the next Google, Facebook or Twitter !! If I can get a rupee for every time I hear these sentiments I will be reasonably rich soon.
The argument goes that VCs and Angels in US have invested in such start-ups even while revenue models have not been obvious. Fair. VCs in US invested in anything that had a ‘dot’ in a dot-com during the boom as well!!! What happened to all those companies?? This does not showcase that American VCs have bigger balls or better brains. It only tells that the supply and demand (of surplus funds) in that part of the economy (for that period of time) is different. India is NOT America or Israel or Bangladesh or Taiwan or China or…
Economy across countries differ. Heck, Economy in the same country across timelines differ!! Its not the same USA that it is now when it was 6years back. Reflect on the spectacular failures the so called awesome investors in USA has caused through prescient acquisition of sub-prime mortgages inflating the markets. The world economy nearly crashed.
Money is only a very small part of the equation of why a Google or a Facebook is what it is. If money and smart entrepreneurs alone can have spectacular home runs, then the world will be a different place. How about luck? Does that play a part? We hear about these start-ups only because they are successful. What about all of the ones which got funded in US by the US investors (which had super awesome teams) and failed? Should we really have such retro-rational arguments on successful businesses which is across a geography and from a different time?
What if Google had messed it up? Huh? Would you blame the VC then or the Entrepreneur?
IMO The most important aspect for any start-up to ‘survive’ is finding traction with early adopters in the right markets. And subsequently for a start-up to ‘succeed’ they need to cross the chasm to find early majority.
Finding early adopters and early majority is NOT a function of getting funded. A market has many constraints ranging from economics, culture, social-influences, demographics, psychographics, clusters, niches, segments, categories, attribute ownership etc. The Diffusion of innovation and business is completely different for every possible combination of the above dynamics. The rate of acceptance or adoption of a ‘utility’ differ significantly for these combinations across industry verticals.
Among the stated dynamics, culture and social-influences play a priority. Tangential to this debate let us ask the hard questions first.
Why do Indians throw garbage on the roadside? Why do we spit on the walls? Why do we pee outside on the wall of the public toilets? Why do we kill baby girls? (I know you may be nodding your head in disbelief how these questions slipped by in this article!!) Well I will say that you just missed the clue train then.
How many of you have used a really good hyper-local news and deal app that a good friend of mine has built? How many of you have participated in making it viral?
How about a great crowd-sourced testing platform from India that another good friend has built? How about a really cool platform for secondary markets for used-items? How about a book and content publishing platform? You would know the names only if you are early adopters. And hell NO, early adopters are NOT marketed to. There is no marketing budgets for early adopters (Not even in your beloved USofA. There were no marketing budgets for the big three sexy companies you quote in the debates as well).
I do not have anything against US VCs nor am I in bed with the Indian VCs. I feel all VCs are opportunists. They are all the same. They have to make money for their LPs. Yes some are smart others are not. The point is, it is not specific to any geography or time or color of the skin or the size of their you know what.
Indian start-ups fail or succeed because of Indians. Period. (I am an Indian entrepreneur in India building a India specific platform for Indian markets).
I know most of you will not like this post and you will have intelligent arguments supporting your claim. I also know that if you get funded when you do not understand market economics, then, not only will you NOT give us a winning sixer, but you will also mess the case for the other deserving ones. Think through that, Arighty? Peace…
[Article reproduced from Preetham’s blog.]