Something’s rotten in India’s startup scene – and it’s time to call it out

Photo credit: Evil Erin.

Thousands of startups sprouting each year, hundreds of them getting funded, hundreds of millions of people coming online to create the next great digital market – all is well in the booming startup ecosystem of India.

So why is Sharad Sharma, one of the earliest and most respected startup mentors in India’s tech industry, so worried? Why does he feel that if somebody doesn’t call out the bullshit, the promise of this El Dorado will ultimately peter out?

Calling out the bullshit

The former head of Yahoo R&D in India, who sold his startup in New Jersey to Cisco, is an active angel investor with two dozen investments. Sharad is also co-founder of nonprofit think tank iSPIRT (Indian Software Product Industry Round-Table).

Suddenly the entrepreneurs found themselves confronted with uncomfortable questions from their peers.

ISPIRT held a closed-door retreat in Mysore, 150 kilometers from Bangalore, last month for 200 chosen startups. The idea was to identify startups which had the potential to become leaders in their categories, either globally or at least within the domestic market. It could be a niche category aimed at enterprise users – such as a SaaS (software-as-a-service) solution for auto parts distributors – or a broader one such as a cloud-based customer support kit for multiple industries. Or it could even be a startup targeting a specific segment of the Indian consumer market.

ISPIRT held a closed door retreat in Mysore, last month for 200 chosen startups. Photo credit:
Ahimanikya Satapathy

It was a painful process to identify potential category leaders. First, the workshop leaders had to call out the bullshit of all the participating startups. Suddenly, the entrepreneurs found themselves confronted with uncomfortable questions from their peers, mentors, and professors from Duke and Stanford universities, who were co-hosts of the program called PNGrowth (ProductNation Growth).

This was different from what the entrepreneurs had got used to hearing during years of quick growth. “In our ecosystem, nobody is calling out your bullshit,” points out Sharad. “VCs will politely say come back when you have more traction, because they don’t want to be unpopular with you; mentors are not equipped to call out your bullshit, because we have very poor quality mentors; and paid workshops won’t do it either, because you are their customers.”

PNGrowth, with volunteers from iSPIRT and grants from Duke and Stanford, was free – and held up an unvarnished mirror to the startups. The picture it reflected was not flattering, even though those attending represented the cream of India’s startup scene.

See: VCs fiddled while India’s startup scene rotted – now the shit’s hitting the fan

Elephant in the room

Photo credit: Brian Hillegas

Frogs in a well

Conflicting mindsets