A friend of mine and I, had this elaborate discussion on some of the advantages of actually being in the valley. Well, Thomas Fieldman is proving himself to be right with the globe turning more and more flat as the years pass by and I am quite positively sure that position holds not that much of a relevance and trumph card anymore.
As it is, I understand that most startup projects that are happening in the valley are being outsourced to companies here in India to be developed. The reason being cost and the availability of talent.
The fact that the dollar is dropping, added to the fact that the ruppee is appreciated is really not helping the case. In most cases, apart from the added headache of managing your team remotely, your cost also ends up being the same. What is even more empathetic is that most of these silicon valley companies end up handing their product developments to companies that probably aren’t the best of the breed when it comes to development – the biggest issue when it comes to outsourcing.
I am all for outsourcing service-related work. Management of networks, servers and mindless crunching of data and numbers seems to be a valid point, but would a startup want to outsource its most crucial asset – the product itself? Hmm… I am not sure if thats the right way to go.
So, what does a startup need anyways?
Access to the market, capital, human resources and the depth in a market to build a product that actually makes sense. An entrepreneur from the valley will always have his roots there, and does have the liberty to fly to and forth, along with taking advantage of the evolving business models of the east.
Being a global entrepreneur, might be the trend of the future to match up with the world becoming flat.
I question, Why don’t most of these silicon valley entrepreneurs move to India anyways? It might not be the way to go as the business scales up, but for being on bootstrapping mode and to get a product and team together, I strongly believe that India is the way to go. If you are the next Mark Zuckerburg trying to build the next big thing, India is very much the place to be.
An elaborate post on this, is soon to follow.
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No worries Vijay – nothing like a good debate 🙂
Sagar,
I beg to differ. I think we are generalizing a bit too much here.
There are two loose issues with your assumptions.
1. Incapable talent: I am personally aware of startups themselves who are doing consultancy and development work for companies in the valley, as an alternative source of revenue. Being in the mode of doing product development themselves, i’ve seen them write very good quality code.
2.Availability of talent:
One of the biggest issue that is pounding on companies in the valley is talent. Take any startup – including all of the ones that Y combinator puts together, all of them are struggling to find talent.You can go check out their site and see. Why else do you think people come up with concepts such as “startup lunch”, and still not find enough people?
As we figured out in IIT long time ago, “extraordinary, is to make ordinary people do extraordinary tasks”. That said, we have a major population of ordinary folks. But we do have our share of geniuses. I refute people who claim that silicon valley has more.
And as for the changing definitions and tasks, there is this concept of “Agile Development”, you should look up. Its a mature enough program management concept to precisely tackle the very same. You’d be surprised how many companies are capable of handling that – i know this because a friend of mine is building a tool to manage these tasks and he is quite successful in it.
Too many assumptions, my friend.
Many startups tried to take advantage of outsourcing to india last few years begining from 2003, but most of their efforts failed badly and they closed or scaled down india operations. Reasons are many, engineers especially in individual contributor role are much less experienced than what they get in US. So the productivity level is low and they needs to babysit them. Also engineers in india are good in implementing stuff when everything is clearly defined, but in startups that won’t be the case. Requirements and features change every day!. Outsourcing to india is good for big corporations where they have the luxury of time and money. Startups don’t gain much in both by doing development in India.
Alrighty, I agree. Mark was a bad example. 🙂
I think we all mean the same thing, but are speaking from a slightly different context. In general, I agree with Deepak that its best to be close to your customers. Having said that, I think Vijay’s position is valid for a vast number of products / services.
There is one aspect where I have a serious difference – is that US-focused (or any other country) Consumer Internet plays cannot be built and launched from India, and the example of Zuckerberg was a bad one. If Mark attempted to explain the concept of Facebook to an Indian team, they’d wonder which planet this guy came from. Another important aspect is that consumers are so different in India and US. There is not one Indian consumer site that would be deemed “usable” by US consumers. Consumers expect different and are willing to tolerate different things from a website in these two countries. These differences are too vast at this point, and perhaps there will be convergence in about 5 years or so.