Think Californian

Jan 11 2014, 05:56 IST
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SummaryFacebook acquiring LEL should make Indian tech start-ups consider the build-operate-sell model

On its first shopping trip in India, Facebook has picked up Bangalore-based analytical software makers, Little Eye Labs (LEL). Its products help to benchmark Android apps and improve their design, a sign that the social media giant, which has lagged in adjusting to the form factor wars, is taking the mobile platform very seriously. Having relinquished hopes of building a phone of its own, it is now investing in the development of the Android ecosystem.

What does it mean for Indian startups? Most obviously, it reaffirms that technology is value-centred and geography-agnostic. The internet was supposed to ignore borders. Technologists were supposed to be able to collaborate and make great products over Skype and digital whiteboards. But in reality, the industry has remained clustered in hubs like California, and this is the first Indian acquisition by a major firm since Cadence was picked by Cosmic Circuits in May last year.

Besides, LEL is being shipped lock, stock and human resources to Menlo Park, so maybe the industry remains limited by geography.

Maybe this sale should be read by the Indian industry simply as encouragement to think Californian. Though India has promising startup ideas and energetic technological entrepreneurs, the build-operate-sell model is not a popular flavour. The Indian tradition is to nurture companies, hold on to their intellectual capital and skill base until they begin to generate wealth, and then to diversify to gain new opportunities and spread risk. The long haul actually increases risk in the internet business, which is a fast-changing landscape in which waiting to encash guarantees superannuation. These are lessons that young entrepreneurs may have learned well, but not their ecosystem. The LEL sale busts one huge myth—that digital India is a service economy, that Indian software companies cannot make good products. Now, it is time for the enabling environment to learn to think Californian.

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