Silicon Valley expats spur innovation in India

Another Valley resident and co-founder of Indian IT giant HCL, Yogesh Vaidya, runs a national network of schools to train recent graduates in the skills needed to work in global enterprises.

This combination of money and experience can be potent. Bala Manian, a founder of six Bay Area companies, is a case in point. His latest start-up ReaMetrics, based in Silicon Valley and Bangalore, employs a team laced with returnees. Manian moves between the Valley and Bangalore every six weeks, focusing also on his role as investment committee chair of India Innovation Fund. Most of the entrepreneurs approaching the firm have US and Valley roots.

Through all this a cultural conversation is taking place. Despite its success in IT, an army of engineers, and world-class educational institutions, risk-taking in India is not engrained and failure is usually permanent - in contrast to Silicon Valley where the start-up ethos is pervasive, risk-taking is expected, and failure is accepted. Few technological breakthroughs have originated in India, and an entrepreneurial innovation culture has yet to take hold, as the highest goal of university graduates is typically to work for a major IT firm, not start a company.

Silicon Valley venture funds, and advisers such as Silicon Valley Bank, aren’t just bringing capital and supporting entrepreneurs. They also bring the experience, networking and hands-on support that help convey the Valley’s entrepreneurial ethos. Recent beneficiaries include the first consumer internet company in India to go public (Nauri.com, funded by Kleiner Perkins), India’s first online gaming company (Kreda, funded by IDG Ventures), India’s version of Expedia (Make My Trip.com, funded by Sierra Ventures), and Café Coffee Day, India’s answer to Starbucks (funded by Sequoia Capital.)

With its large market and many low-income consumers, India is developing its own brand of innovation, based on effective and low-cost services and technology deployment. Initially targeting domestic markets, potential applications are global. This home-grown entrepreneurship will gather momentum of its own. But for now, India’s Silicon Valley diaspora is proving a key resource for both countries, recycling to India much of the energy, creativity and experience that made the Valley a global technology icon.