The discussion was themed around how the technology story of companies in Bangalore is in a next generation transition and was ably chaired by Jessie Paul. Other eminent members in the panel were Sanjay Nayak of Tejas Networks, Sean Blagsvedt of Babajob, Manohar Atreya of o3 Capital and Sunil Maheshwari of Mango Technologies.
The discussion started with Jessie doing a recap on the formation of software services industry in India as a result of globalization and posing a few questions to the panelists.
Sanjay, who has raised 5 rounds of private financing till now added that companies in the west are more focussed on marketing and adoption of products whereas companies in India are more focussed on building great technology. He emphasized that technology does not build great companies, great marketing does. He also stressed the need of participation by the government to help take the sector to the next level and push India into the reckoning as the hub for software products.
Sean emphasized on the fact that while the services industry was timely and was responsible for creation of a lot of jobs in the market, it has not done anything for the masses. Until we setup an infrastructure where it is easier for entrepreneurs to come in and create companies out of India, we cannot move to the next level. He also stressed that the current venture funding setup seems to work in the west but may not be suitable for India where a lot of companies can benefit from a small amount of capital vs a few companies benefiting from a large amount of capital.
Sunil added that companies that do not wait for the next game changing opportunity to become obvious and drive change will be the ones that will be successful. He cited the example of iPhone which was conceptualized by Apple with zero experience in mobile device area – the product has been extensively copied by competitors but no one has been able to dislodge Apple from the slot it has occupied.
Manohar gave his perspective on the venture business where he said that venture funds are in the game to make money and hence they remain extremely choosy about their investments. He also pointed to the fact that venture industry in US started in early 70s whereas the one in India started in 90s – as a result, the industry is still in its learning phase and will take some time to mature. He advised entrepreneurs to be patient, persistent and remain passionate about the idea and be prepared to slog it out for a year and a half to receive capital for their venture.
For my part, I added that to build a successful business, you need to have a combination of Market + Idea + Capital. With the mobile phone market exploding in the past few years, this creates a lot of users and plenty of opportunity for new business to use it as a channel to enable their services. In 2000, a similar proliferation of web services led to the dot com bubble, but the market seems to have learnt from it and the investment in mobile companies, though growing at an encouraging pace is not yet showing the signs of a bubble.
The salient points from the discussion were summarized by Jessie and followed up with questions from the audience. Overall, it was great connecting with the fellow panelists and I had a good time in the panel and overall at the VC Circle conference.