I was visiting the San Francisco bay area after almost a year. I was excited about meeting old friends and looking forward to catching up with the new set of entrepreneurs and startups. There is no better place than Silicon Valley for ‘startup-watching’ as it throws up brand new ones unfailingly year after year, month after month, why, even week after week!
And I was not disappointed. A whole new crop of companies showed up on my radar; some in the consumer space; many in the enterprise space; some started by seasoned entrepreneurs and many by young first-time founders. Interestingly, this time around, technology was more of a lever but the real business seemed to be more old-world, like education, hospitality, or healthcare.
Perhaps that explains why Uber, a startup that provides on-demand cab service in New York, San Francisco, Boston and other metros, is a big rage with the vcs. There is also a palpable sense of urgency with a growing number of incubators promising a cookie-cutter model for launching successful startups in a crunched time frame of 3-6 months.
I began to ask myself, “Are we in the midst of yet another bubble, especially after the disappointing ipos of Zynga, Facebook and Groupon?” It was natural for me to wonder if this were a return to the Pets.com and WebVan era. So, I decided to talk to my friends and get a sense of what was happening. A lot of them have seen multiple cycles, and are not ones to see the world exclusively through rose-tinted glasses. So, here is what I found, looking at this phenomenon through their eyes.
I started my meetings with Keval Desai, a partner with InterWest Partners,who is on the board of many of the new-generation startups like Flurry, Locbox, Gojee, etc. He has been around in the industry for a while, having worked at Tandem in the 90s and more recently, at Google and Digg. Keval says ‘social’ is just getting started and the real impact of overlaying ‘social’ on the way we live and work will be felt over the next 10 years. He believes that the road ahead will have its bumps but we will see some serious growth as three big technological changes, viz: Social, Cloud and Mobile, are coming together for the first time. And better still, the place is awash with entrepreneurs, with ex-Googlers, ex-PayPalers and now ex-Facebookers, all in the fray as investors, inventors and mentors.
Says Keval, ‘‘Companies like Google not only provide a fantastic platform to learn the art and science of building successful products, but also instill a strong ‘can do’ attitude’. He still recollects the eclectic array of speakers — like Mohammed Yunus, Bill Joy, Bill Gates, Gwyneth Paltrow, Colin Powell, Jimmy Carter and many others — who he heard speak at the TechTalk@Google programme. “When you hear them talk about how they changed the face of a nation, company, technology, culture etc, adding one more feature to Gmail seems so very doable!”, says Keval.
As I left his office, I was still marveling at the impact that a company like Google makes, way beyond just its products and services! What we are witnessing today in the valley are the fruits of seeds sown a decade back, similar to the impact the earlier ones like Sun, hp and the likes have had on enabling a Google to happen.
My next stop was the office of Shyam Sankar, who heads business development for Palantir, a hotshot company in the much-talked about ‘Big Data’ space. Shyam is passionate about solving complex, real world, problems through ‘computer science’, which is what got him into Palantir as its employee #13. He believes that companies like Palantir are attracting the best brains because they are staying true to the original Silicon Valley spirit — viz, that of using technology to improve the quality of lives of people manifold. Palantir is spearheading the new mantra that the best results are achieved when you leverage the exponential effect of human-computer symbiosis.
They do this by empowering Data Analysts, experts in their domain, whether be it security, finance or medicine, to do their job better and faster. Palantir’s analysis platform is a powerful tool for visualising large data sets, identifying relationships, and doing rapid data modelling. This, in the hands of smart people, can help detect frauds in large-scale mortgage financing, determine source of large epidemic outbreaks in public health systems, discover potential terrorist threats, and solve many more such complex problems.
Shyam feels that developing countries like India that are struggling to invest monies in putting physical security in place to counter terrorist attacks, could leverage such technology to catch potential terrorists at a much lower cost. And he hopes that Indian decision makers will wake up to this before more innocent people die or get injured, like his uncle did in the Mumbai train bombings in 2006.
Shyam’s trait of practical idealism is something that kept recurring across the diverse set of companies and people that I met. There is an intense urge among the new entrepreneurs to move beyond just sharing music and movies, to leverage new techniques like crowd-sourcing, social network, search etc to solve basic problems of people. One such venture is Gooru, a new search engine for learning (www.goorulearning.com).
I spent time talking with Gooru’s founder & CEO, Prasad Ram, a successful engineer and leader who embodies the spirit of free and open access to education for all. The Gooru team has built the world’s first, free, content curating, sharing and learning platform. I got to know Prasad when he moved to India, first as the cto of Yahoo and later as the head of Google’s research and development centre in Bengaluru. Like Shyam, Prasad is passionate about using technology for social transformation. While there are many important social challenges facing the world today, he believes that education is the solution to creating a productive, empowered and well-meaning society. With this in mind, Prasad set out to build Gooru with a focus on how to create a learning solution for every student that would simultaneously stimulate the educational ecosystem.
Teachers and students can find collections that are aligned to standards, and cover every 5th-12th-grade topic of their interest. Gooru enables every student, regardless of socio-economic status, to attain the same level of learning, by providing access to the best content curated by world-class teachers. To do this, its engineers have had to build an intelligent recommendation engine, crawl the web for content, build the taxonomy, engineer an education-specific search engine and provide easy-to-use tools to enable educators to curate lessons and quizzes from the web resources.
Prasad says that the whole effort was made possible because of the Silicon Valley ecosystem. He signed up investors like Ram Sriram, Google ventures etc, when he had nothing to show besides his cv, and a desire to do some good. Today, Gooru is growing rapidly, with over two million educational resources and nearly 5,000 collections and quizzes, all of which are available at www.goorulearning.org to anybody with internet access.
Interestingly, today’s startups are doing these wonderful things with very little money. Thanks to cloud infrastructure coming of age via Amazon’s AWS services, and availability of open source software, getting off the ground does not require a huge investment.
Pooja Sankar, founder of Piazza, who agreed to meet me despite her hectic schedule with a newborn baby, corroborated this as a big factor that’s fuelling the startup frenzy in silcon valley. But she believes that it’s finally the entrepreneur’s passion that gets a venture started, and makes it succesful.
She says that, in her case, the opportunity cost of leaving a job with Facebook, where she was an early employee, was way too high to make sense, except that she had an idea that she just could not get out of her head! It was around helping girls in engineering do their homework and thereby learn faster; a cause that was close to her heart, and a need she had experienced first-hand while studying at IIT. That’s how Piazza was born.
Now comes the interesting part — Piazza has a total strength of just 12 engineers and product folks, even as it has put out a product that is being used by over half the student population at Stanford, Mit, and even a few IITs. Piazza is a powerful social network of students, professors and tas, which allows them to ask questions, solve problems and seek help virtually in real time. It has virally spread through word of mouth referral from one professor to another, and from one institute to another. Piazza has no big sales force, and no major marketing budget, as the users have taken over these critical roles, unsolicited! My son’s friends at mit told me how much they love Piazza. In fact, they could not imagine how they ever survived earlier, without Piazza!!
Where will India figure in this new startup equation?, I kept asking myself. My meeting with Bipul Sinha, Partner with Lightspeed, and a very successful investor in companies like Nutanix, Hootsuite, Pulse, Peel etc, provided me one part of this answer. Bipul says that the time to scale and build has accelerated so much now, that offshore product engineering is hard to justify initially. Most products are launched quickly to get the initial user feedback. Quick product iterations, and scaling when you spot an inflection point, required the team to be in one place without unnecessary communication overheads. No wonder then that companies are choosing to hire talent where they can find them and bring them over to their HQ, rather than set up shop outside.
Facebook, Google, Palantir and the likes are scouring the talent market in places like India, and hiring directly for the US! This is true even for incubators like Y Combinator, 500 Startups, and TechStars, which are aggressively reaching out to potential entrepreneurs in places like India.
Paul Singh, Partner at 500 Startups, says he is planning to put a person on the ground in India so that they can increase the pipeline of Indian entrepreneurs. Again he reiterated that they offer the same valuation, term sheet, etc, to their entrepreneurs in India as they would to a US-based team.
This should get alarm bells ringing in the Indian startup community, as the competition for startup talent is turning truly global, and we cannot afford our ‘India is different’ line anymore!
On the other side, I heard from Mark Straub, Co-founder of Khosla Impact Fund, on where the bigger opportunity for India lies. He believes, strongly, that India will be the ‘Sandbox’ for any new venture that redefines the price-point and caters to the larger `300 crore market place.
Mark plans to actively invest in India in education, healthcare, water sector, etc, with the objective of creating global enterprises that can make a distinct socio-economic impact going beyond India.
We live in truly interesting times. Finally, the traditional barriers to achievement, like access to high quality education, access to capital and information, etc, are getting demolished with technology.
Indian entrepreneurs today have a unique chance to move to the global stage by building products and services which go well beyond customising the Amazons and Ebays for India. It’s time for us to move beyond traditional labour arbitrage models, to leveraging human capital to produce real innovations that can change the lives of people in India and elsewhere. Can we rise up to the challenge?
