TO smart and enlightened entrepreneurs, India has always offered a quanda=
ry.
The vast Asian subcontinent has no shortage of smart people. It has no
shortage of business leaders with drive. And in an Internet age, its natu=
ral
advantages in software design should emerge. And yet its best and brighte=
st
often come to the Silicon Valley, stymied at the prospect of building
lasting companies at home. In recent years, they've founded successful lo=
cal
companies like Hotmail and Exodus Communications. Meanwhile, caught up in=
a
sometimes-choking bureaucracy, India slogs on.
With the idea of changing that equation, 80-odd entrepreneurs and investo=
rs
met recently at Stanford University's Hoover Institution for a conference=
on
creating, or ``accessing,'' venture capital in India. The essential plan =
was
to expose some of India's bureaucrats to Silicon Valley -- and to the
representatives of countries like Taiwan and Israel, which have done a
better job of incubating young companies. ``The notion is to let the Indi=
an
bureaucrats say what they think is needed -- and then also hear from the
people here about what is done,'' said Rafiq Dossani, a consulting profes=
sor
at the Asia Pacific Research Center at Stanford.
One of the speakers at the meeting was Kanwal Rekhi, a Silicon Valley ang=
el
who has invested in such companies as Exodus. And he is among the most
outspoken about India's legacy. He says India has adopted its own brand o=
f
bureaucratic socialism from the British. ``We have to unlearn that habit,=
''
he says, pronouncing the Internet a ``gift from the gods'' because it all=
ows
India's talented software engineers to distribute their product easily. I=
t
is not that there is a total lack of venture-style investment in India. S=
an
Francisco-based venture capitalist Bill Draper -- the father of VC Tim --
invests in Indian companies through his Draper International Fund. And th=
e
Indian bureaucracy has begun a few halting steps, setting up an Industria=
l
Finance Corp. in 1975. But the government has restricted the formation of
venture capital funds to banks or financial institutions only, hardly the
most entrepreneurial element of the country.
The Indians, always passionate about politics, are brutally honest about =
the
shortcomings of their system. More than one speaker pointed out that rely=
ing
on government to supervise venture capital investing meant dealing with
issues of potential corruption. And there may well be skepticism that wha=
t
works elsewhere can be easily imported. At the Stanford conference, one k=
ey
Indian government official kept talking with his seatmate during the
presentation from the Taiwanese. And yet maybe there is some hope from an
unexpected quarter. Gokul Agarwalla, a management consultant for technolo=
gy
parks in India, told the group the story of the talented software enginee=
r
who refused to be lured to Silicon Valley. The engineer had three reasons=
:
One was that he could continue to eat his grandmother's cooking in India.
The second was that he believed he could save more -- in absolute terms -=
-
in India than in Silicon Valley. And the third was the conviction he coul=
d
do more cutting-edge work in India, where the necessity of turning out a
product before today's IPO isn't quite so pressing.
Tushar J. Mehta
email: [email protected]
voicemail: (206) 405-2335