Zoho Corp founder and former CEO Sridhar Vembu warned Indian entrepreneurs against copying “Silicon Valley” business models and focus instead on building technology sovereignty in India. In his wide-ranging address at the Huddle Global startup event on Thursday, Vembu warned that India risked becoming a “training ground for Silicon Valley” if it continued to imitate the American venture capital ecosystem.
“All that we end up doing is be a big team or a training ground for Silicon Valley. We sell your raw material cheap, in our case brains, and buy the finished product expensive, which are the technology products. This is colonial economics to the core,” he said to a packed hall of founders, investors, and bureaucrats.
Vembu, one of India’s most vocal proponents of decentralised tech innovation, said India cannot have national sovereignty without technology sovereignty. “If we don’t gain control of critical technologies, we will forever be held hostage.”
Copying Foreign VC Models Has Failed India
“We’ve had venture capital in India for 30 years. Yet, we have not produced a single major global player,” he said, adding that copying the Silicon Valley model has not worked even in other regions within America.
To achieve technological independence, Vembu urged entrepreneurs to focus on designing chips in the country and study the models necessary for that. He pointed to the global shortage of high-end chips as an example of “digital colonialism.”
“All of India can get only 50,000 chips, no matter whether we are ready to pay or not. This is basically a form of digital colonialism and that’s why we should reject this,” he said, adding that the guts of a lot of GPUs are designed by Indians, both in India and in Silicon Valley, and yet India doesn’t get access to the product.
Focus on Chip Design
Earlier this year, Vembu invested in Kerala-based semiconductor startup Netrasemi in its Rs 107 crore Series A round, alongside Unicorn India Ventures, to design the next generation of chips in India. Zoho is also an investor in fabless semiconductor firm Signalchip.
Besides focusing on domestic chip production, Vembu emphasized Kerala as an emerging global R&D hub because of its quality of life and depth of talent. Across both Kerala and his home state, Tamil Nadu, Vembu is fostering research and development ecosystems with the local talent available.
Vembu, who mostly operates out of a small town in Tamil Nadu named Tenkasi, has often emphasised the need to move innovation ecosystems outside of the major metro cities and into rural areas.