I recently read an article about the Side-Slip Airline Seat developed by Hank Scott of Molon Labe Designs, a Colorado-based Aircraft Interior Design firm. What an innovation – it will change the flying experience in Economy Class forever.
For several centuries, India was known for its innovations which helped define our lives worldwide – the Button on our shirts, the games of Ludo, Chess and Snakes & Ladders, the first iron-cased and metal-cylinder Rockets, the Ruler (or scale), the first Prefab Home, Shampoo, Algebraic abbreviations, Trigonometric functions, the Zero symbol, Decimals, Cataract Surgery, Plastic Surgery, the list goes on and on.
This leads me to ask why have Indians stopped innovating? Perhaps the last real globe impacting innovation from India was the AKS Primality Test 13 years ago. We had a government body called National Innovation Council (whose website as late as September 2015 – sadly – referred to Pranab Mukherjee as the Finance Minister of India, more than three years after he became the President of India). This body was shut down by the Narendra Modi government two years later, in September 2017.
We have an NGO called National Innovation Foundation, a Government programme by the name of India Innovation Growth Programme, a $1 billion public-private venture fund called Inclusive Innovation Fund, CII’s India Innovation Initiative, Tata Capital’s Innovation Fund, amongst several other such organisations and programmes.
So why have no original ideas from India become unicorns in the startup world? Countries like Germany, Sweden, Canada, New Zeland and Iceland even have innovation ministries. So why do most of the innovations still come out of the US of America? Uber, Airbnb, Palantir, Snapchat, SpaceX, Pinterest, Dropbox, WeWork, Theranos and Spotify are all American companies.
Xiaomi, Didi Kuaidi, Flipkart, Lufax, Snapdeal from China and India did make it to the Unicorns list, but they are me-toos (copies) of original American innovations. I can understand that it is difficult to come up with too many innovations in a communist country. But aren’t we supposed to be living in a democracy? Or, maybe I’m just dreaming.
The problem is not just the fact that all our organisations and programmes are run by committees comprising 65 or 70 year-old bureaucrats and academicians, and the regular who’s who of the corporate world such as Kiran Mazumdar Shaw, Mohandas Pai and Dr. Devi Shetty.
In my opinion, it’s perhaps more likely because we (probably) don’t have enough “intelligent” investors that America does, such as Warren Buffet, Alfred Lin, Jeremy Liew, Jeremy Stoppelman, Jessica Livingston, Kevin Hartz, Mitchell Kapor, Scott Banister and Elon Musk, who believe in taking larger risks for larger rewards – after all, that’s the American way of life.
I read a front page interview of one Indian who’s counted amongst Silicon Valley’s most intelligent investors – Vinod Khosla. And look at what he has to say about Indian investors – the startup valuation bubble (in India) is being caused by bad ideas and copycats, and he prefers staying away from this “herd mentality” of investors.
That’s why you have the likes of Flipkart, Myntra, Snapdeal, PayTM and ShopClues – all of them in essentially the same business of eCommerce – getting over $12.4 billion in funding. Online furniture retailers PepperFry, Urban Ladder, LivSpace, Zansaar, Stitchwood and others have together raised over $350 million.
There are already more than 20 online grocery delivery startups operating in India, including BigBasket, Grofers, Zopnow, Aaramshop, EkStop, AtMyDoorStep, LocalBanya, MyGrahak, and more than a dozen of them have received Angel, Seed or VC funding totalling over $1.46 billion.
Just three Indian OTAs MakeMyTrip, ClearTrip and Yatra (there are several more competing in this business, including global players such as AirBNB, Booking.com, TripAdvisor, Expedia, Hotels.com, Agoda and Priceline) have raised a combined amount of over $740 million. One innovator in this space with some differentiation – TravelTriangle – has managed to raise almost $32 million in five funding rounds to date.
Zomato, Swiggy, TinyOwl, FreshMenu, HolaChef, TastyKhana, Burrp, Yumist, along with dozens of others, are in the same business of ready food delivery (with a couple of small differentiators), and have raised more than $770 million – once again, global players like FoodPanda, JustEat and Domino’s Pizza are also fiercely competing for this business in the Indian market.
Property portals Housing.com, 99acres, MagicBricks, PropTiger, NoBroker, CommonFloor, IndiaProperty, Makaan – all competing for the same market – have together raised over $650 million.
Taxi hailing app Ola alone (a clone of Uber) has received more than $3 billion in funding.
So while investors based in India (whether foreign or domestic) are happy betting more than $19 billion to date in me-too copies of international innovations, most new ideas (or innovations) are not getting funding. It’s like these investors betting on 33 of the 37 numbers on a roulette table and hoping the ball won’t land on the four numbers they haven’t placed their chips on.