Sunday, 18th June 2006
Paul Graham, Silicon Valley And Startups
One of the best writers in the IT industry is Paul Graham and Paul recently wrote a couple of thought-provoking essays on the social and economic conditions that are most conducive to the formation of startup companies. His two essays How to Be Silicon Valley and Why startups condense in America really got me thinking.
In his article, he explains why India would have a hard time producing a Silicon Valley which can foster the growth of startup companies. Silicon Startups mushroom in US cities cities like California, Boston, Chicago and Miami. Why doesn't it happen in India? We have the necessary human resource, and a similar democratic setup that America has. Why then can't be come up with a Silicon Valley? Some quick thoughts i had.
The US Is a Rich Country.India is not
A quote from Paul's article
I could see India one day producing a rival to Silicon Valley. Obviously they have the right people: you can tell that by the number of Indians in the current Silicon Valley. The problem with India itself is that it's still so poor.In poor countries, things we take for granted are missing. A friend of mine visiting India sprained her ankle falling down the steps in a railway station. When she turned to see what had happened, she found the steps were all different heights. In industrialized countries we walk down steps our whole lives and never think about this, because there's an infrastructure that prevents such a staircase from being built.
I agree with Paul Graham about the lack of infrastructure back in India. Bangalore for example is an infrastructural disaster - a small town's infrastructure supporting a huge, rapidly growing, global city. The problem is too many people, rapid growth and lack of any substantial effort from the local government to improve the infrastructure.
It is these set of small nitty-gritty issues which are stopping from a silicon valley springing up in India. Take for example the extremely sloppy airport in Bangalore. It is quite brilliantly expressed by Graham by the railway station steps analogy (the quote above). There are too many trivial, ridiculous things that bother you if you want to run a startup in India.
Higher Education
Another quote from Paul's article
Those worried about America's "competitiveness" often suggest spending more on public schools. But perhaps America's lousy public schools have a hidden advantage. Because they're so bad, the kids adopt an attitude of waiting for college.Certainly if I had to choose between bad high schools and good universities, like the US, and good high schools and bad universities, like most other industrialized countries, I'd take the US system. Better to make everyone feel like a late bloomer than a failed child prodigy.
We seem to have fairly good institutions for higher education and i grew up in Bangalore and it attracts thousands of students and professionals from all over India. It has the highest number of engineering colleges in the country. Software Services companies like Infosys and Wipro has its headquarters here. Other biggies like Intel, TI, Microsoft and IBM have a strong presence. Inspite of all these it doesn't even come closer to Silicon Valley (people here still like to call it SV of India). What we have today is a large, intelligent and efficient workforce, that spend their time catering to outsourced projects. And where we are heading to is a even larger, not-so-intelligent and mediocre corporate workforce.
Most kids graduating from college still think they're supposed to get jobs, as if you couldn't be productive without being someone's employee. And ideally you were still supposed to get a job with a big company, just so you have more bragging rights. The mentality of the people is more leaning towards working for a services based company. Also the quality of engineers that are coming out of colleges is not going to help startups. The increasing demand from IT services companies has made universities to prepare graduates who are custom made to work for a company like Infosys.
Final Thoughts
Bangalore does have a lot of startups, but not of the same type one would find in the US. They have to choose between low end tech projects with guaranteed returns and high end technical work with significant amount of risk involved. High volume and low value seems to be the mantra.
The point is that big companies dont make a Silicon Valley, startups do. People are easily fooled by the presense of these big named companies into believing that Silicon Valley exists around them. Service based companies dont make Silicon Valley, companies with innovation do. Infrastructure plays a big role in attracting innovative companies. The lack of an infrastructure is the single biggest excuse, i can offer for bangalore not becoming a Silicon Valley. But the good news is, the situation is apparently improving in other parts of the country and everyone in India has a positive outlook about the future. Maybe someday we will have a silicon valley like Palo Alto or Tel Aviv. Somehow i have a hard time buying that.
Posted by Nikhil on Sunday, 18th June 2006 in TechnoBabble | Fun | Nonsense