India's New Generation of IT Entrepreneurs Driving Social and Economic Change
BY Lisa Goldman | Tuesday, October 23 2012
As India's information technology sector continues to grow, new startups are looking toward the domestic market rather than focusing primarily on developing platforms and apps for export. Driven by a rapidly growing middle class, the boom in India's IT industry is fueling an optimism that would make Silicon Valley veterans shed a tear of nostalgia for the halcyon days of the 1990s. But while these entrepreneurs are driven by old-fashioned capitalism, they also recognize the potential of low-cost, profitable solutions that benefit India’s poor — and, by extension, civil society.
While the southern city of Bangalore has been a major hub for at least a decade, with multinational companies presiding over large "campuses" devoted primarily to R&D for export, over the past few years there has been a shift in focus to finding solutions for the domestic market. Talented Indians who once traveled abroad to make their careers in IT are now returning home in significant numbers — up to 100,000 per year.
The Startup Centre, located about three hours' drive from Bangalore in the city of Chennai, illustrates the shift in India's demographics and market. Founder Vijay Anand, 30, was raised in Dubai, attended university in Canada and returned to India in 2004 to work with the prestigious Indian Institutes of Technology (IIT). He established the Centre as a place where young entrepreneurs can pitch their ideas, learn from mentors how to make a product marketable, and benefit from introductions to potential investors. Anand explained that the Centre hosts about 14 events per year, including 50-hour hackathons that attract young people with smart-but-undeveloped ideas from all over the region. A successful pitch is rewarded with six months of incubation time at the Centre. If the idea is successfully sold to investors at the end of that period, Anand and his team receive a percentage.
Jazeel Badur Ferry, 23, was able to bring his idea to launch through the Startup Centre. The 23 year-old is from Mangalore, where he completed an undergraduate degree in computer science and engineering. Last year he and his team successfully pitched an idea at one of the Centre's hackathons; and today they are the proprietors of a company called Eventifier — a platform that allows users to aggregate, archive and organize information about events, like speakers, schedule or photos, that would otherwise be scattered across a broad spectrum of social media platforms.
The soft-spoken Badur Ferry explained why the Startup Centre was significant to him and his team as they launched their company.
Without the Startup Centre we would not have been able to move forward. The Centre saved us so much time — we didn’t have to spend months developing a failed idea. It's better to spend a week and understand why the idea is a failure — to have a quick failure rather than a slow, expensive one.
Anand suggested Badur Ferry as a case study for this article because he is representative of the emerging IT class. Like the majority of Indians, he is under 25; he is also from an upwardly mobile class of recent university graduates who have been able to break into the IT market via hard work and knowledge, rather than family connections. Ten years ago, there would have been very limited opportunities to incubate an idea and launch a startup — the funding and access to connections did not exist. Now it is possible to access VC investment and mentoring through places like the Startup Centre.
While India's middle class is expanding, more than 70 percent of the country's population of 1.2 billion still lives in small towns and villages. Overall, 45 percent of Indians live in homes that are not wired for electricity . On the other hand, mobile phones are prevalent in India, even amongst the very poor. Low-cost handsets are driving projections that 71 percent of Indians will possess a mobile phone by 2016. As in Africa, impoverished rural Indians are increasingly finding that a low cost mobile phone can be a tool that helps them achieve a measure of stability and prosperity.
India has the highest rate of illiteracy in the world, with the majority of illiterate people concentrated in rural areas and a significantly higher rate amongst rural women than men. This is a huge problem — but, according to entrepreneur Umesh Sachdev, it is also an opportunity.
Sachdev is the CEO of Uniphore, a three-year-old startup that customizes speech recognition and speech biometrics for a range of uses — including a Siri-like voice recognition application that works on low cost mobile phones without Internet access. The application is available in 11 Indian languages and a range of dialects, providing access to information for the poor and illiterate that was previously unavailable. The technology, explained Sachdev, is making life easier for the poor and also creating "a lot of livelihood opportunities." This, he said, is a source of excitement for young Indian entrepreneurs. "There is a social impact in everything we do, but we are a private company with shareholders and this is very important too," Sachdev said.
Everything we do is engineered to be built for scale and to affect the masses. Therefore it is not just useful, it is cheap to use. When we attract users we offer services that are affordable at a very low price point, and which affects their lives. We add value to our customers by engaging with a lot of them to try to understand the impact we have on their life cycle in terms of rupee bills. We communicate with them. This is the sort of impact the end consumer has because of our involvement.
Uniphore's website shows a traditionally dressed Indian farmer squatting in a field, a mobile phone pressed to his ear. The caption is, "Uniphore helps your business deliver customized information to farmers through pre-scheduled voice and SMS announcements." The messages can be delivered in the local dialect, providing crucial information about weather, crop prices and other essential information to farmers who do not understand Hindi or read well enough to decipher a text message. Given its low cost and flexibility, it is not difficult to imagine how bright idealists might someday harness Uniphore's potential to solve civic problems. Uniphore is already used by health care organizations to provide "efficient, affordable health care".
Entrepreneurs like Vijay Anand and Umesh Sachdev seem to be looking at ways to monetize ideas that better society — whether by offering opportunities to bright young people from smaller cities who lack connections in the business world; or by creating platforms that can be used for a wide swathe of the population, from wealthy bankers to struggling farmers. This kind of pragmatic idealism is what makes India's economy one that bears watching, more than ever.
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