No appetite for risk-taking, and our education system
This is part of an email conversation I had with a friend, a doctorate in higher mathematics from a top US university (a medal winner to boot) and now working at one of the top information technology companies there. His earlier education in India provides him with the right perspective to answer the question raised here. Here is an extract from his email.
I disagree with you. Success of Jobs and Gates was because of the capital they could raise and the talent they could hire….
The “environment” certainly made Steve Jobs. Indians value stability, gradual progress. Steve Jobs is produced by an environment that encourages massive risks with miserable failures and resounding success. Environment which encourages massive risk-taking is what creates giants in the High Tech sector.
Let us first take a look at risk-taking:
India has no culture of venture capitalists. It is not that we don’t have rich people — we have many many rich people. We dont have people who think that investing large amounts of money on a new business is by itself a legitimate vocation. I don’t know why this is the case.
Are Indians risk-averse? In the silicon valley 9 out of 10 start-ups fail. The investors look for a 1:12 return on their investment. So on the average, they come out ahead. So if you are a VC, you should be prepared to see 9 out of your 10 investments (which are typically in millions of dollars) go belly up. And one of those to hit the ball out of the park. This type of massive risk may not be something that Indians have a cultural appetite for.
Do Indians look upon VC as “moneylending” ? Lending in India has been the mainstay of two kinds of people. Bankers (who don’t lend to everyone) and Moneylenders (who fleece their clients). Because banks dont have an appetite for the kind of risk I mentioned, lending to risky clients have been the solely from “Moneylenders”. Maybe their profession is derided and not looked upon as desirable or lucrative. In the US, a lot of people who become millionaires due to startups, becomes VCs, because the job is looked upon as sexy.
Are enough Indians motivated to start companies? Parents want their kids to become doctors and engineers. In my father’s generation, Parents wanted their kids to join the government (stable job, pension, perks like housing and phone). Nobody encourages their kids to go and start a business. Somehow starting a business is mixed up with inability to study and “business” alludes to a roadside grocery shop. In the US, even though college dropouts who made it big are talked about (Bill G, Steve Jobs), most High Tech companies are started by great programmers, or people with PhDs. This include HP, Facebook, Amazon, almost every chip company (Intel, AMD, TI, Synopsys, Cadence, Tensilica, Qualcomm, Broadcomm, Nvidia). People who are highly educated in India want to join companies rather than start companies. People who start companies and fail are valued highly in the US (for their experience at managing every aspect of the company). People who start companies and fail are looked upon as failures in India and they probably wont get a job afterwards.
Read up on Narayana Murthy’s interview where he talked about his early days. His father in law didn’t want to give his daughter in marriage to a guy “who had no job”. People thought he was crazy to give up his job to start a company. In short, there is no environment of risk taking. People don’t take risks. People who do are not appreciated.
A second aspect is our education system:
What made the silicon valley? I would argue that Universities made the Silicon Valley. Not because they produced good students, but because they encouraged professors to be entrepreneurs. Stanford for example, lets professors take leaves of absence to start companies and then come back. Almost all professors at stanford have started companies or in the boards of companies. Students idolize their professors and want to go the same way. Larry Page (CEO of Google) talked about how he wanted to start a Search Engine Company. Talked to his professor (The Brilliant Rajeev Motwani) who gave him advice on how to go about hiring people, introduced him to VCs, mentored him for the first few years. Google is a 180 Billion $ company now. There are many many such stories.
He has nailed the problem correctly. It is for good reason that India is unlikely to produce path-breaking innovative entrepreneurs.
At my blog, extracts from an email conversation with a friend. "Why there will be no Steve Jobs in India?" http://t.co/lYuONCH5
Why there will be no Steve Jobs in India?: No appetite for risk-taking, and our education system
This is part of… http://t.co/kjbepguS
The bitter reality. Why entrepreneurs in India seek investments from the West? Simple. There isn’t any in India. http://t.co/7yhXNC62 #fb
Why there will be no Steve Jobs in India? http://t.co/zfzOoJJz | Nails it superbly. Personal experience in Entrepreneurship is similar
Brilliant. Why India doesnt have risk taking appetite . http://t.co/WvCTYD3W ( by @pragmatic_d )
good one and well presented take. Why there will be no Steve Jobs in India? http://t.co/VhJVitQ6
In fewest words possible, the social infrastructure is lacking.
Why there will be no Steve Jobs in India? http://t.co/mikqJcZo
Not only business, in all departments Indians never take risk. Our educational system encourages only to score higher marks or grades. It never encourage students to be creative and innovative. This is how we have been brought up for several centuries. We also never see beyond our family and friends circle. Until, I, Indian, satisfy my family and friends, life is good. That is the mentality of Indians.
Even our rich people concentrate only how to get more money from existing business or system. For example, how late we got 3G connections for phones. As like all Indians, rich people also have no innovative ideas and future vision. If they have money, they spend them with luxury life styles. Thats it.
More over, we are happy to work under another men. We never dreamt to be leaders.
Why there will be no Steve Jobs in India. http://t.co/89UTv4Ao (via @salilb)
@anagawat my first tweet to u! y cant india produce steve jobs? http://t.co/B3EUOQWD
so true .. @insurgent_tej RT y cant india produce a steve jobs? http://t.co/C7pp7JlD
Indians donot take risks in every aspect of their life. One can count Indians who marry for the love out of caste or religion .for sheer joy of taking once in life risk , they look at their parents so that all blame goes to them. Same is the case for choosing a course in colleges or universities and choosing a job of choice is rather rremote. Getting green card after getting an IT job is end all of these Cyber coolies. In fact I find ladies show more adventurism in India than men. It is rich who should show this adventurism but they are the ones who show maximum cowardice.
Pragmatic Euphony ยป Why there will be no Steve Jobs in India? http://t.co/zFyaqYG0
Politely disagree wrt the point you made on risk taking. There are a lot of Indians (who went through the Indian schooling system and have retained some of the ‘Indian mindset’) in the US starting companies. Also, there is a large entrepreneurial class in India , though the traditional business class has not done much in technology, with some exceptions. Many of the Indian IT companies have been started in the last 20 years or so by first gen entrepreneurs.
Now the Indian IT companies do not make innovative products, it is true. But it is to do more with the fact that there is not much of a product market in India. Companies who started off in the product market decided that services were way more lucrative and made the switch. At the end of the day, entrepreneurs follow the money.
Another thing wrt risk taking in the US. There is very little downside to taking risks in Silicon Valley. If you drop out of college to start a company and it fails, your backers the VCs shrug and move on to the next thing, you can go back to college to finish your education or start another company. I’d argue that the traditional entrepreneurial class in India as well as the new entrepreneurs face harsher consequences if they fail. And VCs consist largely of former entrepreneurs who struck gold and are looking for new investments. I really don’t think that the growth of VC in India is constrained by people’s attitudes towards ‘money lending.’
One thought to end this rather long post: Social conservativeness may not always constrain innovation. For example, the Victorian era was very conservative socially but there was a lot of new invention and new discoveries happening. These changes in turn made society less conservative. I think something like that perhaps might happen in India.
Another reason why Steve Jobs could not have been fro India – he would have been aborted by his teen mother who had him out of wedlock for fear of a society – the same society who would have laughed at his adoptive parents for suffering from some sexual disorder!!!!!! Ain’t that the sad truth??????
@Cephas75
. In the end indians say oh we atleast have culture, BuLL$hIT, all it is is some random prestige game between friends and relatives
Dude you are awsome, sooo true, soooooooo true. On similar lines Jobs said doing acid was one of the three most important things in his life. Try that in india
Why there will be no Steve Jobs in India? http://t.co/CcesvOjA
Pragmatic | Why there will be no Steve Jobs in India? http://t.co/thIJR111