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IITs & Entrepreneurs

Author: Sashi Reddi
Founder and Chairman, AppLabs and FXLabs
Probably everyone knows of one or more IIT alumni who have become successful entrepreneurs. Who hasn’t heard of Vinod Khosla, the Infosys founding team, Desh Deshpande, Suhas Patil, and others like them? Well, that may lead us to conclude that the IITs are a great grooming ground for future entrepreneurs, much like Stanford. This could not be further from the truth.
I would argue that for all the terrific benefits that come with an IIT brand, there are a surprisingly small number of entrepreneurs. Think of the benefits of an IIT degree:

* Attracting talent: You can attract the best talent to join you - many of these may be people that you already knew from your hostel or class at IIT. Also, employees gain comfort from knowing that they will be working for a team of IIT guys - this continues to be a great recruiting tool.

* Attracting money: You will always get at least one meeting with any VC in the country. One reason could be that most VCs are themselves IIT guys, but everyone assumes that you will have something interesting to say because you are an IIT guy.

* Attracting customers: Every large company in India and many in the U.S. have IIT grads in their senior management. So, as you try and build a business, you know you will get a friendly hearing from your prospective customers.

So with access to the best talent, funds, and customers, you would think that becoming an entrepreneur is the easiest choice for IIT grads. Imagine trying to be an entrepreneur without access to all these benefits, it will be like trying to swim across the Amazon without a swimsuit.

If we took the top 100 colleges in India and analyzed the percentage of grads from each of those colleges that a) became entrepreneurs and b) became successful entrepreneurs, we may find that a) may be similar for all of them - that is, IITs produce no more entrepreneurs than any other decent college; but perhaps b) would be higher for IITs than for the rest of the colleges.

So why don’t more IIT grads build companies? I would speculate that contrary to popular belief, the IIT education system might in fact adversely impact its ability to generate entrepreneurs. Starting with the JEE, where unfortunately getting admission has become a testimony to your rote-learning ability rather than intelligence, the IITs are taking in students that may lack the creativity to think outside the box.

Next comes four years of crammed curriculum where scant attention is paid to soft skills. Students are defined by their GPA. There are no courses (at least when I attended in 1983-87) that help develop soft skills, or adequate general education courses. The few English literature or sociology courses are treated as a joke by most students - an easy way to get some credits without having to attend classes.

Then comes the race to get admission into the IIMs or an entry-level job in a tier-1 IT or consulting company. Based on the typical IIT profile, most find the sanctuary of a big company more appealing than applying their mind to work in a startup.

So, actually if you now look at where IITs have been the most successful, I would argue that they have produced some of the best senior executives in the world. Everyone knows the names of Kanwal Rekhi, Padmasree Warrier, Arun Netravalli, Rajat Gupta, Victor Menezes, and many others. In the olden days, many of the students went on to do PhD and so you will find many of the professors in top universities in the U.S. to be IIT grads. Academics have also been a great success story for IIT grads.

There is no doubt that IITs are a great institution that has done India proud. But let us not wrongly assign the credit of creating entrepreneurs to the IIT system. I think the IITs have to seriously look at why they do not generate many more entrepreneurs who go on to build great companies like Infosys and Sun Microsystems.
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Reader's comments(7)
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3: To be a good entrepreneur, you have to pay your dues by working super hard for a few years in the field of specialization. Without this deep technological experience, it is difficult to be a "good" entrepreneur. In other words, it does not matter the schools one graduates from - it is more important to provide the opportunity for students to think and build systems ground up. And schools should encourage "soft skills". But without a deep technological hands-on experience, it is all empty talk!
Posted by: Jagadish Channagiri - Wednesday 11th, August 2010
4: Rightly said in the concluding paras,many first generation enterprenures have ventured successfuly are the alumnus of other engineering institutions.To name one is Y.M.C.A. Institute of Engineering-Faridabad.The alumnus of YMCA are scattered all over world and catering the industrial requirements of the country. One of the reason of noise all around about IIT's is no noise from other such instituions.There is much more in the world beyond defined boundaries.Let us search in ourselves and create a new world of enthausiasm develop new boundaries of I(Indian) I(Institute) ............... .......... of Tech(Knowledge).
Posted by: Sanjiva Kumar Agarwal - Tuesday 24th, November 2009
5: hi
an nice article but indeed we should start thinking and supporting other college where these private institutions may not sound bigger but there are lot of budding entrepreneurs who are capable of developing big standard companies
as student i think with support of corprates we all can change the concept that only US is best place for research even india is developing t that level and can become equal t other places in terms of research
Posted by: venkatramanan janak - Sunday 01st, November 2009
6: While agreeing with most of the views of Mr.Sashi Reddi,I would like to know how many from IIT are becoming entrepreneures. IIT degree is a quick passport to go abroad and settle there. On the other hand there are many small entrepreneures who graduated from other Institutes like NITs, Private Engineering Colleges. Ofcourse if an IITian applies for any bank to start an Industry there is every likelihood that he receives loan quickly compared to others from other Institutions. If IITians serve the country as entrepreneures they will be not only partners in Industrial development but provide employment to may.

Dr.A.Jagadeesh Nellore (AP)
Posted by: Anumakonda Jagadeesh - Thursday 22nd, October 2009
7: This article is good and impartial.This will help all those who wants to understand the real issue and that is, in India, all the reputed institutions are equally goods and NIts,IITs and other reputed institutions are at par.
Earlier we understand this, it is good. At least it will stop spreading incresaing numbers of IITs in India for no reason. It is advisable to make other institutions strong rather than increasing numbers of IITs.
If we realy conduct market survey, we will find there is no significant contribution from highly pampered IITans and in fact grads from NITs and reputed local engg colleges are better by way of their contributions.
Posted by: Vishwas Prabhakar Pitke - Thursday 15th, October 2009
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