Mumbai-based entrepreneurs Mahesh Murthy and Vishal Gunda know each other but don’t work together. Both are, like Steve Jobs and Bill Gates, successful college dropouts, and both now work with startups. To do this, each created what Murthy calls an outcubator.
“The Indian Google will be Google, and the Indian Facebook will be Facebook,” Murthy says. But India needs other services and startups. The real challenge is finding a way to help them grow in a way adapted specifically to India.
One of the startups that Gundal invested in is DocSuggest, a site that helps patients find doctors. (I write about it in more detail here). He connects founders with lawyers and other companies. they need. For him, the “spray and pray” model, investing in a hundred companies in the hopes that one or two succeed, doesn’t work for India. “I’d rather invest in ten and do everything so that eight of them can succeed.” He meets with them at least once a week, answers all their phone calls.
Why such an artisanal manner? “India’s markets aren’t mature,” he says. “What takes 2 years in the U.S. takes 4 or 5 here.” In 1999, when Gundal was 18, he founded Indiagames, India’s largest mobile-gaming company, which now has a presence in 75 countries and was recently acquired by Disney.
After finding success in Silicon Valley, Murthy launched Pinstorm, the leader in integrated digital marketing. India initially positioned itself as making the same things as the U.S. and Europe, but more cheaply. Now that it has innovated in this area, now it needs to innovate with its products. Murthy’s investment group, Seed Fund, has already invested in 13 startups. Among these are RedBus.in, which aggregates the schedules of India’s innumerable bus companies, an invaluable service for those who want to travel the country.
“Throwing tons of money at them won’t solve the problems our startups face,” Murthy says. “This is why I don’t see American companies succeeding here. There are problems that are unique to India, and they’re the ones I want to solve. It ‘s something that takes time.”
When I ask how well his model works, he says: “I’m efficient when I’m at my office. As far as the startups go, its almost always less expensive to make them work at home and and go see them, or have them come in and see us, once a week. We don’t have enough success stories or mentors yet.” His outcubator addresses this.
Gundal’s fund is called Sweat and Blood. “That’s what you need to succeed,” he says. “I turn my ecosystem into a sort of incubator that lets me grow how I want, to adapt to India’s multiple cultures, where the saying ‘Culture eats strategy for breakfast,’ is totally appropriate.”
The future seems bright to him. “Silicon Valley is still the place where a company can grow ten times in little time,” Gundal says. “But the Indian company that succeeds like that will be worth hundreds of billions of dollars. Facebook has 900 million users – India has 1.2 billion citizens. Facebook isn’t that big. Its valuation at 100 billion dollars incredible, but valuation of the Indian company that succeeds will be just as incredible.”