down upon initially, it is only now that investors are beginning to appreciate why products matter in the long run. As the cost of labor started to rise over the years, margins from IT services started to come down, and competition emerged from other geographies where labor is cheaper.

Between entities such as Infosys, Cognizant, TCS, Wipro, and some mavericks who pushed the pedal to the metal on products, start-ups in India are looking at a contemporary narrative. One example of such a maverick is Zoho, which was founded in 1996. Zoho builds a range of Web-based technology tools aimed at improving the productivity of businesses. Its founder, Sridhar Vembu, on encountering the unfair conditions of venture capitalists, swore to build a company without going to VCs. Zoho’s revenue is estimated to be around $500 million.

One interesting innovation of Zoho’s is its training program, which selects students (typically from poor backgrounds) from schools and teaches them to code. Some students from early instances of the program are now product managers at Zoho.

Zoho is not the only enterprise tech company that has made its mark in the product space. Fresh-works, started by a former employee of Zoho, also focuses on the SMB market and has innovated on the Inside Sales model.

India today has more than 10 B2B companies with Unicorn status; some reached this milestone in less than three years. Companies like BlackBuck, Udaan, Power2SME, Delhivery, and Capillary Technologies are trying to solve some of India’s problems. Deep technology security companies like Druva, Qubole, and CloudCherry are leveraging India as a base for their development.

From Jugaad to Cutting Edge

For years, Indian innovation was
mostly associated with the word
Jugaad. The flip side to this is that
it indicates short-term vision that
moves from one kind of ‘duct tape’
to fix a problem to another, instead
of asking deeper questions about
design.
Yet Jugaad has evolved in its own
way, and has come to mean frugal
innovation; coming up with solu-
tions using minimal resources, for
a market that could not afford ex-
pensive products or solutions. Con-
sumer products company Godrej
developed ChotuKool, a portable
refrigerator that consumes minimal
power, for villages facing continu-
ing power outages.
Underlying the change from
Jugaad to frugal innovation is the
belief that it is possible to build
world-class products with limited
resources. One of the insights of
C.K. Prahalad is that innovations
made for the bottom of the pyramid
often work for segments that oc-
cupy the higher levels.
These three shifts—from the
copy-paste model to local innova-
tion, from software outsourcing to
product development, from Jugaad
to frugal innovation—have given
way to a new breed of start-ups that
are hugely aspirational.
Sharad Sharma, co-founder of
the Indian Software Products In-
dustry Round Table (iSPIRT), makes
the distinction between mercenary
start-ups whose primary goal is to
make money, and missionary start-
ups whose primary goal is to solve
impossible problems.
An example of such a mission-
ary start-up is TeamIndus, India’s
only entrant in the competition for
the Lunar X Prize, in which teams
are challenged to “land a robot on
the surface of the Moon, travel 500
meters over the lunar surface, and
send images and data back to the
Earth.” TeamIndus did not win the
Lunar X Prize; no one did. But the
point about start-ups such as Team-
Indus is their goal is not just to win
a prize, but to show it is possible to
aim high.
TeamIndus is just one example
of a start-up that many would not
instinctively associate with India.
There are many start-ups in India
that work on cutting-edge technolo-
gies. Medical diagnostics start-up
Sig Tuple Labs uses AI to analyze
visual medical data, while Mitra
Biotech is advancing personalized
oncology treatment and supporting
more effective and efficient cancer
drug development. GreyOrange is a
focused robotics warehouse man-
agement company. Julia Computing
has developed a unique, high-per-
formance programming language
with rich applications in AI and
machine learning capabilities.

Lessons

These three shifts offer two broad lessons to start-up ecosystems across the world:

The starting point does not mat-
ter; the direction does.

It does not matter where the story starts, or where the motivation comes from. It could have been in copy-pasting Western business models, bidding for software coding services based on labor arbitrage, or even Jugaad. What matters is the evolution.

Context matters; start-ups come
to life in a society.

However, evolution seldom happens on its own. Evolution happens within a context; when entrepreneurs start solving a problem for the society in which they live, they experiment, scale up, and reach out to new customers.

Charles Assisi is co-founder and director of Founding Fuel, Mumbai, India. He is co-author (with NS Ramnath) of The Aadhaar Effect: Why the World’s Largest Identity Project Matters.

Avinash Raghava is Community Platform Evangelist for Accel, Bangalore, India.

NS Ramnath is part of the founding team at Founding Fuel, Bengaluru, India, where he now serves as a senior writer.

The views expressed here are the authors’ and do not necessarily reflect those of their employers.

© 2019 ACM 0001-0792/19/11