Opinion | Upstarts Or Startups? Why Piyush Goyal Is Not Entirely Wrong

It is not a well-known yet an interesting fact that Vinod Khosla, often described as the hottest venture capitalist on the planet and a technology pioneer who was the founding CEO of Sun Microsystems, had relocated to Delhi, the city he grew up in, around the mid-1990s to be closer to his parents, not far from IIT Delhi where he studied. But the Internet opportunity that followed saw him move back to Silicon Valley, where he remains a cutting-edge figure in areas like artificial intelligence (AI), medical technology and cryptocurrency.

My days tracking and meeting the man who now runs Khosla Ventures after leaving Kleiner Perkins, the VC firm that funded companies like Amazon and Google, came to mind last week as I heard the timely but controversial statement by India's commerce and industry minister at the 'Startup Mahakumbh' jamboree. "Are we going to be happy being delivery boys and girls... Is that the destiny of India? This is not a startup; this is entrepreneurship... What the other side is doing—robotics, machine learning, 3D manufacturing and next generation factories," Goyal said, showing a slide titled ‘India vs China. The Startup Reality Check'.

What To Learn From Khosla

The word ‘startup' is often used loosely, but ideally should refer to technology-driven companies that can grow big through innovations. My view is that cutting-edge entrepreneurship is more about adventurous ambition than just growth. People like Khosla have a mental streak that shows passion for novelty, not mere get-rich-quick ideas. We need more like him.

There's nothing wrong with wanting to be the entrepreneurial plumbers and builders of new technologies as such, but there is more to the future than that. When technology companies like Infosys were built in the 1980s and 1990s, the word ‘startup' was not even in vogue. But then, it became the first Indian company to list on the tech-heavy Nasdaq exchange in 1999.

A subsequent rush of VCs in India became less about technology and more about demographics. India's surging, increasingly affluent population and an Internet boom made VCs fuel a greed to build the so-called ‘unicorn' startups that commanded a valuation of a billion dollars or more - usually with an eye on IPOs.

A 'This Of That' Culture

What we had as a result was what tech investor Kashyap Deorah calls a "this of that" culture: Paytm became the PayPal of India, Flipkart was dubbed the Amazon of India, Swiggy and Zomato cloned Delivery Hero and Yelp with some tweaks. They mostly addressed a local market and built local brands, but not real intellectual property (IP) based on novelty on a global scale. That requires guts and an outlook of a different kind. Somewhere along the way, we started mistaking upstarts for startups. VCs and naive journalists fed into the hype.

The irony is that India has had real startups that are less celebrated. InMobi, a mobile ad platform that rivals Facebook-owner Meta, was hailed as India's first unicorn and is expected to have an IPO this year, nearly two decades into its existence. InMobi is the world's largest independent mobile ad network, engaging more than 750 million consumers across 165 countries. It is said to have turned down an acquisition offer from Google a decade ago.

I-flex solutions, built in the 1990s, was acquired by Oracle for close to a billion dollars. It was a cutting-edge banking software company with a global footprint. Chennai-centred productivity software company Zoho competes with Microsoft.

However, we are yet to produce a breathtaking product like Google. China is not quite there yet, either. But it is trying hard and big, as we have seen with the arrival of DeepSeek, a disruptive AI model.

India has had a long, credible history of nurturing research through the Council of Scientific and Industrial Research and other state-run bodies that set the base for cutting-edge innovation. Even ISRO and the Defence Research and Development Organisation have made quiet innovations. What we lack is new-age thinking by entrepreneurs that goes from ambition to adventure and closer innovation links with these establishments.

When Steel Was Like AI

Let's now raise a toast to the memory of Jamshedji Nusserwanji Tata, who dared to think of making steel in the middle of a rural jungle in a colonially oppressed country in 1907. For the India of those times, steel was like AI. Verghese Kurien built Amul in rural Anand when the word ‘startup' did not exist in the Indian lexicon. The kind of adventurous streak shown in those ventures is something current entrepreneurs could learn from. Patience, patents, and perseverance separate the men from the boys and women from the girls in a true startup universe. Not scale, speed and salesmanship.

But it must be admitted that risk appetite requires context. You have to feel comfortable enough not to confuse a gamble with entrepreneurial chutzpah. We also need to cut down on a dubious culture of startup wannabes wanting corporate freebies from the government - from land to capital to subsidies.

It is worthwhile to point to less-known Indian companies like Hyderabad-based MOSChip Technologies, which has been in the field of semiconductors without being part of the VC-fuelled unicorn hype. Electric carmaker Reva, founded in Bangalore, is now part of the Mahindra group, and deserves praise for its early start and passion.

A few listed small-cap companies fall in that league. Intellect Design Arena and Nucleus Software have built products and intellectual property, but perhaps have not taken the big bets needed to capture glamorous headlines. They were never called startups, but certainly were in the league when they started. 

Let Adventure Reign

What I would like to see is some of India's 200-plus US dollar billionaires throwing a hundred million dollars each at a patent-seeking team of cutting-edge innovators based on deep research. They all may not succeed or grow very big, but some will. Even more important in the current context is a sense of adventure that people like Vinod Khosla, or rival Elon Musk, are famous for.

From AI to quantum computing to genomics, opportunities for discovery and invention are different from those based on scale and speed. New discoveries are ushering in new opportunities. The minister's timing is just right. China's DeepSeek is best seen not as an inspiration but as a wake-up call. As a nation where Jawaharlal Nehru chose to nurture research and development amid and despite a colonially battered, impoverished state, we have no excuses.

(Madhavan Narayanan is a senior editor, writer and columnist with more than 30 years of experience, having worked for Reuters, The Economic Times, Business Standard, and Hindustan Times after starting out in the Times of India Group.)

Disclaimer: These are the personal opinions of the author