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What U.S. Startups Can Learn From the Country That Matched a NASA Feat at a Fraction of the Cost

What U.S. Startups Can Learn From the Country That Matched a NASA Feat at a Fraction of the Cost By Russell Dreisenstock, International Investments, Naspers Ventures

Published on Entrepreneur.com. View original article here


When looking at technology hotspots outside the U.S., it is difficult to see past India. Home to 1.3 billion people, and the world's seventh largest economy, India is also the birthplace of an outsize influence in Silicon Valley, due to a large diaspora of talent spread across both startups and established technology companies -- look no further than the top executives of two of the world's top five most valuable companies, Satya Nadella at Microsoft and Sundar Pichai at Google.
 
Despite this, India is still seen as a conundrum by many in the technology industry.
 
On one hand, there is huge opportunity. India's economic growth rate is now faster than China's. Not only that, but half of all Indians are under 25, and most of those are digital natives. That means India is coming into the same demographic dividend that China enjoyed as its baby boom generation moved through the workforce and drove economic growth in the 1980s, '90s and early 2000s.
 
At the same time, outside its powerhouse outsourcing companies, India has yet to produce an international technology business with real presence. Its largest and best-known startups, such as Flipkart, Ola and Paytm, are great successes in India but despite their potential have yet to expand to other markets.
 
However, spend any time in India interacting with the startup scene and it becomes obvious that Indian startups have a number of tricks they can teach this generation's hot Valley startups.
 
My personal top five are:
 
Jugaad
A truly Indian concept that is applicable worldwide, Jugaad is defined as being "the most innovative, economical and quality method to accomplish the desired task by unusual or imaginative means and ways." Jugaad is everywhere in India. You see it most obviously in the myriad "life hacks" Indians come up with to solve problems in everyday life. However, it is also a business philosophy that perfectly matches the needs of startups -- never accepting status quo solutions, particularly if they are big, complex or expensive; always looking for innovative ways to achieve the end goal.
 
Jugaad can pay big dividends. A great example is the Indian equivalent to NASA, ISRO (Indian Space Resource Organization). It made global headlines in 2013 after sending an unmanned rocket to orbit Mars at a cost of just $73 million. In comparison, NASA's directly equivalent Maven Mars mission had a $671 million price tag.
 
Bargaining
Negotiating is central to Indian life. It isn't seen as a distasteful activity or a necessary evil as it is viewed by many in the U.S. Instead it is an essential part of the culture -- a way to achieve a balanced outcome -- one where both parties feel they have their fair share of the spoils. This approach enables Indian startups to build great, mutually beneficial relationships with suppliers, funders and customers alike.
 
Respect for experience
At times it seems like Silicon Valley has an obsession with youth -- young founders are routinely lauded for their willingness to "risk it all" for their ideas. However, too often, startups reinvent the wheel, wasting time and money rediscovering best practices that the more experienced already know and understand.
 
India has a culture that respects experience and sees value in knowledge gained over time, leading startups to actively seek out those with experience -- and use it to short-cut mistakes, enabling more time and attention to go to true innovation. Youthful innovation and measured experience is a killer combination.
 
Community
The Indian culture innately values community and long-lasting relationships. Combine this with an institution as dominant in the industry as the Indian Institute of Technology (IIT), and it takes "network effects" to the next level. IIT graduates from the same year (called "batchmates") often start jobs together and continue working together throughout their careers, building unbeatable communities and support networks.
 
Many U.S. colleges already place great effort in developing alumni networks, so dialing back the dog-eat-dog approach prevalent in U.S. startups and encouraging entrepreneurs to build on that work and spend more time developing strong connections can pay dividends down the road.
 
Frugality
Watching your costs isn't a new concept in Silicon Valley -- Eric Ries' Lean Startup approach continues to have many early stage adherents, with good reason. The issue in Silicon Valley is that the "lean" approach too often goes out the window once a good-sized round of funding has been achieved.
 
In India, frugality is a central tenet to life, not a short-term approach, and when you exist in a market with historically low margins, this pays dividends as Indian startups grow. Not only that, but it gives Indian startups greater defensibility against the dominant players in Indian business who can throw money at a market to gain the upper hand -- something that comes in handy when you are fighting FANG (or FAAMA -- pick your poison!).
 
All these lessons can stand alone as good advice, but it isn't by chance that they also play well with each other to create a great recipe for startup success -- focused innovation, lowered costs, reduced inefficiency -- all of which lead to reduced burn rates, less funding needed and a greater ability to match decision-making to the needs of the market, not the needs of funders. Indian startups still have a lot to learn, but it feels like many U.S. startups could apply lessons learned there and apply them to drive even greater success at home.

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