India's Internet startups: challenges and advantages

India has certainly proven its might in terms of global outsourcing. But is the technology-savvy South Asian nation keeping pace with other countries' startup cultures?

In the current issue of The Economist, two complimentary articles analyze how India might succeed in finding its own startup culture -- if the South Asian nation can overcome some daunting obstacles.

One piece, "Looking for India's Zuckerberg," brings up some surprising statistics: e-commerce sales in India are only 6% of those in China, and only 10% of all Indians have access to the Web. That includes shared computers in Internet cafes. India's infamous bureaucratic government poses hurdles, in the context of business regulations and wireless accessibility. But more Indians are leapfrogging PCs by using the mobile Web. And a new generation of Indian entrepreneurs educated in the West are eager to apply startup business models they've seen in the U.S. to the Subcontinent.

The second piece, "The screen revolution," points out examples. These include Olacabs, which offers a mobile app that connects taxis with riders, allowing them to book cars in advance. It was founded in 2010 by a 20-something former Microsoft employee. Makemytrip is a travel site created by an ex-General Electric staff member. Healthcart is a health-related e-commerce site started by a Stanford (and McKinsey) alum. The other examples also have the made-up or misspelled monikers of most Silicon Valley startups of the 2010s: Flipkart, an online bookseller; Snapdeal, an e-commerce marketplace; and Transerv, which offers a pre-paid mobile wallet.

One expert interviewed for the second story, Sandeep Singhal of venture capital firm Nexus, compares the new Indian technology entrepreneurs to a combination of their peers in Israel and China. The former tend to create innovative services and sell to customers outside of Israel, and the latter tend to focus on localizing existing concepts for Chinese audiences. The comparison seems fitting -- thematically and geographically, Indian startups seem to occupy a space in the middle of both.

Image: Grant Eaton/Flickr

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