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The Rise of the Innovatopreneur

Ashwin Raguraman
Ashwin Raguraman
Vice President, 
India Innovation Fund
A couple of years back I shared a ride to the Airport from an Innovation event with the Head of R&D at a Multinational which developed cutting edge technology. We got talking on new areas that his company was working on and he shared with me their progress on cutting edge technology they had developed applicable in healthcare space. Impressed at what I had just heard, and told that this would take a couple of years to become a commercial offering, I was curious to understand how far behind competition were on this technology. "We are not concerned about our obvious, large competitors – we know exactly where they are," I was told. "What we are worried about is that there is a start-up somewhere in a corner of India which has built technology that can compete with ours."

This statement alone is a testimony of the quality of cutting edge technology that has begun to emerge from young firms in India. Be it the need to survive and distinguish themselves in an environment where technology firms are mushrooming all over the place, the inclination of a generation of professionals with significant experience in a domain turning entrepreneurs, the emergence of India as a significant market or the gradual maturing of the entrepreneurial ecosystem, the number of innovative, high technology start-ups I have seen since, provides enough evidence to corroborate that statement.

Consider the case of a start-up in the engine electronic space, in which we, the India Innovation Fund, will close an investment shortly. This firm has managed to deliver a cost effective solution (at half the price point of its global competitor) to its clients – OEMs in low margin businesses – not through labour arbitrage, or on account of low component cost. Their ability to reduce costs has been driven by a complex technology solution where they have used software algorithms to perform a high precision task hitherto performed by hardware. We see this trend across multiple sectors – the medical device space, telecommunication equipment, manufacturing and automotive sectors, clean technology and more.

The challenge however is to convert innovative technology offerings into successful commercial ventures. The bridge is the business model. A lack of a practical and efficient business model is what has led to the demise of many technology start-ups which had advanced new technologies. It is therefore heartening to note that there are a few young firms which are innovating on their business models to solve unique problems. Take for example a number of start-ups, with offerings for rural India, which are grappling with innovating on the age old distribution model, hitherto exclusively in the domain of FMCGs such as Hindustan Lever. Innovation in business model has a multiplier effect on a strong technology offering. A weak business model equates to a failed start-up.
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