Founded more than three decades ago by seven engineers with just $250 (Rs.16,945), Infosys has put India on the map of the digital world. It has grown to become a $9.21 billion (Rs.62,406 crore) company with over 1,93,000 employees worldwide.
Third largest start-up ecosystem
Till now, no other tech start-up idea especially product company has become as big as Infosys in the country. India is now the world’s third largest start-up ecosystem. There are now over 18,000 start-ups in the country and about 5,000 new age firms got created last year according to TV Mohandas Pai, India's top angel investor and former Infosys director.
Nagging worry
However, there is a nagging worry that there are only handful of companies that can be called as leaders in their category. And India’s start-up ecosystem has started to realise this.
This month something very unusual happened at the Infosys Mysore campus. Over 200 product start-up founders operating ventures ranging from healthcare to education huddled together in one big room. They took part in an experiment run by software product think tank iSPIRT and was backed by research grants from Stanford Graduate School of Business and Duke University. Infosys provided the campus facilities.
‘Secret sauce’
The aim of the researchers was to help the start-up founders to find the ‘secret sauce’ of how to take on the big companies operating in their space and become a category leader.
“Do you remember the fourth largest search engine or smartphone maker, the answer is no, because the ‘winner takes it all’,” said Sharad Sharma, co-founder of iSPIRT. “You don’t become Sachin Tendulkar or Usain Bolt by accident. There is a science management behind it.”
For instance, U.S. is home to success stories such as Apple, Google, Facebook, and countless others. Just these three companies combined have a market cap of $1.5 trillion and employ more than 1,65,000 people worldwide, according to research firm Compass.
Even a small country like South Korea has produced category leaders like Samsung, one of the world’s largest smartphone maker and Hyundai Motor, one of the world’s largest car maker.
“We have big companies here, but they fall in copycat category. Ola is competing with Uber and Flipkart is competing with Amazon,” said Amit Somani, Managing Partner at venture capital firm Prime Venture Partners. “To give an analogy, it is like why Indian’s have so few Olympians and gold medallists?”
Science behind the category leader
At the Mysore Campus, researchers from Stanford and Duke University in collaboration with iSPIRT made the 200 start-up founders go through a three day programme to help them become category leaders.
It included peer-to-peer learning, sharing of academic framework and case studies of experienced founders of top technology firms such as Zoho, Freshdesk and InMobi.
“Indian start-up ecosystem is at an inflection point,” said Sharique Hasan, Associate Professor of Organisational Behaviour at Stanford University.
“The challenge is that it is much harder to create businesses that operate at a global scale.” A sense of community also developed among the tech entrepreneurs. They shared knowledge, trade secrets and learning to help each other.
‘Unfair advantage’
“You were made to do self-introspection and come up with an ‘unfair advantage’ that would help you to succeed against large companies,” said Mandeep Makkar, co-founder at financial media firm Amigobulls and one of the participants.
Her start-up offers stock analysis in the form of easy to follow videos instead of lengthy text information.
New businesses must stand out to make a dent in the industry. The young firms went through a ‘Shark Tank’ module where a founder challenged the fellow entrepreneur, if the person can become a category leader.
“As Indians, we are nice to each other,” said Pallav Nadhani, founder of FusionCharts, a maker of software for data visualisation used by customers like U.S. space agency NASA and technology companies such as Apple, General Electric and defence firm Lockheed Martin.
“In this programme we gave brutally honest opinions to each other,” said Mr. Nadhani.
One of the participants, Ahimanikya Satapathy, founder at healthcare tech firm DocEngage said that he realised that it is very important to have a belief that can adapt to the changing environment. “For instance the belief of sportswear giant Nike is to make the life of an athlete better rather than just making jackets,” said Mr. Satapathy.
The researchers at Stanford and Duke have developed a software which would track the performance of these 200 founders and their companies in future. Both the universities have also provided a grant of $57,000 (Rs.38 lakh) to run the programme.
One of the top mentors at the event was Phanindra Sama, co-founder of redBus which transformed long distance bus travel.
RedBus centralised ticket sales on its system and brought a fragmented market of thousands of private coach firms online. He said till now, the country has been building products which have only filled the gaps left by large technology companies like Oracle and SAP.
“We are mentoring these firms not to get the leftovers but eat the whole pie,” said Mr. Sama who sold redBus to Ibibo Group, a subsidiary of South Africa-based media company Naspers, for $135 million (Rs.914 crore). “If we have to displace large firms, we need to think big,” he said.
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