Sridhar Vembu, co-founder and Chief Scientist at Zoho has expressed concerns around the growing Y Combinator (YC) startup model in India, raising concerns over founder depression and exit culture that is not fit to build companies that will be rooted in India.
In a detailed post on X (formerly Twitter), Vembu noted that he and his co-founder Tony Thomas were present in Silicon Valley during the early wave of YC-backed companies and now feels that the boom was merely built on getting Indian talent and has more or less paused.
“YC model worked in silicon valley. One of the reasons it worked was that silicon valley could get any talent from anywhere in the world, notably from India, easily. That era may have ended or at least on pause right now,” he stated.
He reflects even Bengaluru tested the same culture, but did not succeed.
“Bengaluru has tried the same thing but with “any talent from anywhere in India” and we have not yet created huge companies. India needs its Huawei and Xiaomi and BYD and these companies are Chinese to the core, built by patriotic Chinese. Indian talent, staying in India, rooted in India, is going to have to build companies like them.” he noted.
He acknowledged learning valuable lessons from them but highlighted that Zoho consciously chose a different path – one rooted in long-term, bootstrapped growth rather than the typical venture-backed trajectory.
I am happy to see the YCombinator wave arriving in India. Our co-founder Tony and I were in silicon valley during the original YC wave of companies. We learned a lot from the YC companies. We also made the conscious choice to pursue a different course.
In the ancient Bharatiya… https://t.co/hQz4E7mD37
— Sridhar Vembu (@svembu) April 20, 2026
The hidden pressure of startup clusters
Vembu raised concerns about the cultural and psychological downsides of the YC-style ecosystem. He warned that tight-knit startup clusters can create unhealthy comparisons. “YC companies tend to geographically cluster, and that can lead to subtle peer pressure and group-think… the result is ‘founder depression’,” he noted, adding that even YC recognises this with built-in counseling support.
Drawing from Zoho’s own journey, he reminded readers that unconventional paths often face skepticism. “By the standards of 2007 Silicon Valley or even 2014 Silicon Valley, we were thought to be losers. Just keep that in mind.”
Vembu also drew attention to the nature of deep-tech innovation, which he believes doesn’t fit neatly into the fast-paced startup cycles popularised by accelerators. “Many deep tech problems… require long focus and patient execution and lots of capital. These are endurance tests, not weekly sprints,” he said.
One of his sharpest critiques was aimed at the “exit-first” mindset. “YC too often optimizes companies for ‘exit’. That philosophy was built for and requires prolonged bubbles,” he argued, linking it to rising inequality and political divisions in the United States. “If you love India, you should not wish for similar bubbles.”
‘Small passionate teams can do magic’: Biggest lesson from YC
Framing his thoughts in what he called the “ancient Bharatiya tradition of philosophical debate,” Vembu began by agreeing with some of YC’s core principles. He highlighted one of the most enduring lessons from the accelerator: “The biggest lesson anyone can learn from YC: small passionate teams can do magic. This was true way before AI coding arrived and will always be true.”
He also backed YC’s pragmatic stance on innovation, noting that originality isn’t always the winning formula. “YC is absolutely right to not over-emphasize ‘innovation’. Doing a similar product as the bigger guys, faster and cheaper, is often the best course,” he wrote, pointing out that even companies like Google, OpenAI, and Anthropic did not invent their respective domains but executed effectively within them.
He further pointed out that YC’s success in Silicon Valley was deeply tied to its access to global talent, a dynamic that may no longer be as fluid. “That era may have ended or at least on pause right now,” he observed.
Vembu was responding to Jared Friedman, who made a strong case for India as the launchpad for the next wave of globally competitive, AI-native startups. He pointed to companies like Emergent, Giga, and Zepto as proof that being a first mover matters less than superior execution, and argued that Indian engineering talent is world-class enough to beat US teams on the global stage. He urged founders to look at promising ideas already gaining traction and simply build them better and faster.