Will the Revolution Happen?

Revolution is not an easy word to throw around. Those cheering for a software products revolution in India must look at the historical context.

Innovation Factory

So many countries and communities have tried to emulate the amazing startup culture that exists in the United States, specifically in the Silicon Valley. The Valley is not only a fountainhead of creation and innovation in computer technology but also of commercial execution and expansion. For those who have some interest in this phenomenon, the reasons are obvious. Few weeks ago, I came across the wonderful book about the Bell Labs, “Innovation Factory” and it gave this phenomenon yet another perspective.

The book traces the history of how a powerful team came together to solve a big problem for humanity and also monopolistic wealth creation. The Bell Labs, in the decades before and after the second world war, was pretty much where everything that is the basis of modern communication and computer technology was invented. From the transistor to satellite communication, from fiber optics to UNIX, the Bell Labs became a factory of sorts for innovation. The labs were manned and managed by some of the finest brains of the time, sourced from the best American universities. Together, they had an opportunity and to solve a great problem for humanity, how to bring people who lived far apart, closer. And in return they ran a near monopoly in telecommunications in the United States, protected by dubious patent laws.

This team in the Bell Labs was the precursor to the next revolution, the one that came a few decades later, when the action shifted to the West Coast and Stanford University, when William Shockley, the co-inventor of the transistor moved to the West Coast to setup his semiconductor venture. Almost all of the semi-conductor companies found in the silicon valley at that time were started by employees who left the Shockley venture. Soon semicondutors became cheap and the startup culture spread fast. This second revolution, was driven by teenage hobbyists who later founded billionaire empires. To help these hobbyists build empires, the mandarins of finance, the venture capitalists, were already there, bringing in their networks and money.

The Indian Context

When we compare this culture to the Indian culture of innovation and wealth creation, we find stark differences. Our telecom revolution, when it finally came, has become synonymous with crony capitalism and corruption. Instead of creating new technologies, we have created new business models, where our telecom tycoons have outsourced the technology and we are completely dependent on our neighbours for handsets, weakening our foreign trade balance and dependency on outside technology.

Our famed IITs are another dismal example how things can go completely wrong. Even as we praise the IITs for producing some of our brightest minds, we should also remember that they have failed miserably compared to their counterparts in other parts of the world to produce any volume of innovation.

Even as we are saddled with “third world” problems, our governance is stuck in the 19th century. The Bell Labs had access to a unified market which helped them scale quickly. Our big problems of housing, sanitation and healthcare are all fraught with legal and regulatory red-tape. The only recent example of wealth creation is that of the IT Service industry which was again, less of an organic phenomenon and more a beneficiary of globalisation and reducing cost of communications.

So when we talk of starting a software products revolution in India, we are in effect talking of replicating the American culture of high paced innovation and commercialization in India. But what we forget is that we lack any historical or cultural context to bring in this revolution. Just because we have a whole lot of software engineers, there is nothing to suggest that they will start innovating suddenly and recreate the decades of learning that is subtly passed on through culture and smalltalk.

E-Commerce Nation

This places where technology built by Indians has touched common people are in e-commerce, travel and classifieds. Here we have home-grown companies that have created technology solutions and enabled people to see the benefit of transacting online. Even though these are still not pure technology companies, a number of Indian software products are founded by employees of these early e-commerce companies.

But what is badly needed is a “breakout” success, but there is no guarantee how soon that can happen. We can only hope that one of these companies becomes very large and creates a “mothership” like Bell Labs that then becomes the fountainhead of a revolution.

The other thing to note is that these revolutions were brought about by a significant shift in technology that opened new avenues for communication and commerce and these opportunities were successfully monetized by companies that were closest to these innovations. Hence to bring in such a revolution, we must build engines that invent those paradigm shifting technologies.

The real problem in Indian product companies is not lead generation or sales, but building innovative technology. On top of it, most Indian software products lack good quality and are not designed to be inspiring, though this is slowly changing. The problem in this model is that we are now competing with the best in the world and time is running out. My guess is that the Indian company that breaks this mould of mediocre technology, quality and design will most likely be the Indian mothership.