SM: Where are Indian entrepreneurs coming from?
AG: Amazon India has produced several entrepreneurs. They were people who worked for Amazon in India. Similarly, people who worked at Yahoo! India have produced several companies.Those folks are producing more meaningful companies than the back-end office of a small company in San Francisco.
SM: This category of entrepreneurs is people who have been trained in and worked in India. Tell me more about that class of people. Is it a younger age group?
AG: Most of them are indeed young and unfortunately most are guys; there are not enough gals in the mix. This is despite the fact that the few women entrepreneurs I know make very good entrepreneurs.
SM: That is true here as well.
AG: They are mostly younger, in their thirties, looking at online businesses. They are acutely aware that the online business does not necessarily need to be purely an online business. They have a good understanding of the online business to be very good at it; yet, they understand enough of the Indian psyche to not be purely married to an online business.
The few who I know who are older than their thirties have been thinking and thinking but have not been able to act on that urge. The reasons could be that most of the teams are very young. The few senior people are typically folks who have moved from the United States to India, and they fall into our previous bucket of people who are working for large companies and have a good thing going in those companies.
SM: If you look at the segment match, you said that a lot of these companies that are being formed are working in the online world. The early phase of Indian technology entrepreneurship has been outsourcing. After that, as we have matured, we have started to see consumer Internet companies. Have we now gone beyond the predictable concept arbitrage?
AG: Of late, we have seen e-commerce plays which are just trying to do consumer traffic-oriented things. From 2006 to 2007 we had a lot of Web 2.0 companies. They have all pretty much gone to the cleaners. The new stuff that is coming up is around entertainment and commerce.
SM: What are you seeing in commerce?
AG: There are several types of companies trying to sell books. There are a whole bunch of folks trying to go after the “design yourself and sell stuff” model. Also included in commerce are a lot of older, traditional companies that are starting to sell online. That is starting to pick up, but they are not numbers that will blow your socks off.
SM: Part of the numbers problem is that Internet adoption has not taken off.
AG: Indeed. I also think there are other things concerning the commerce numbers. There are not that many women who are home users of the Internet. They happen to be the disproportionate number of folks who end up shopping. The other interesting part is that in India, commerce is as much a social event as it is a transaction. It is looked at as something that you go forward and do. There is also a lot of home delivery. If you can call somebody and get something delivered to your house, why would you bother going online?
Another interesting aspect is that in India most people keep their computer turned off because of power issues. Going online in India is an event as opposed to a reflex. Using the phone is easier than turning on the computer and putzing about. The logistics portion is not as well developed, either, although it is getting better. You can get credit cards delivered by couriers, but somehow large packages have not gotten to that point yet. I am not sure if that is logistics or inter-state tariff issues.