The First International Workshop on
Technology Business Incubators in India (ITBI India 2001)
29-31 January 2001, Bangalore, India
Promoting Business-ideas Through Environments:
Experience From Indian Software
by
Parthasarathi Banerjee
Tabassum Jamal
New companies and start-ups in software business from India share certain interesting features.
Technological competency brewed with incompetence’s in entrepreneurship and unsupported by
an environment of competitive or market-creating networks, are the distinguishing features of new
activities in software business. We highlight the importance of business ideas and that of an
environment which help germinate such ideas. We came across several new firms in software
who have been doing modest business and who have good technological ideas, but who appear
to sadly lack a good business idea. We argue that a principal function of incubation in India ought
to address this deficiency.
This paper borrows on a recently concluded study on competencies of software firms in
India. Long interviews with the entrepreneurs, brain-storming workshop and questionnaire-based
surveys were undertaken to elicit the pattern. Published sources of information such as Annual
Reports too were consulted.
Entrepreneurs showed a preference for developing products compared to providing
software projects as services. They were more inclined to be measured up according to their
competencies in product development, though while questioned on the wherewithal, such as
those relating to marketing or generations of business ideas, they seemed to possess scanty and
vague ideas on entrepreneurally developing a business. In fact, if all the responses of theirs are
taken into account, projects in contrast to products, appear to enjoy supreme concern.
A comparative study on importance’s given to some competencies would indicate that
there are large and wide variations across these new or start-up firms. Competencies of product
and projects, considered often complementary, experience wide fluctuations. It appears,
entrepreneurs and managers are somewhat unsure of the steps to be taken.
In almost all the cases, firms began on resources pooled together, later only to be
supplemented by regular cash flows from the software projects, or else as in only a few cases, by
venture/institutional working capital support. Business ideas came to these entrepreneurs from
interactions with the large clients, mostly from abroad, who had evinced an interest in the
prospective sources of software supply having had known software technological competencies
of the prospective entrepreneurs. Advance payment to such projects by these large clients acted
as it were as the angel funding. We did not come across any case of R&D acquisition, nor did we
come across any case of angel funding. Venture funding, when it was offered, came at a later
stage. Venture funds did not offer in any of these cases non-financial promotional supports and
advices.
Business ideas, including offering IPOs or negotiating with prospective acquirers or, as in
earlier stages of seeding a product-idea or incubating an R&D idea – do not appear to enjoy an
environment which both offers signals of potential new market and signals of harsh competition
from existing product/projects market. We distinguish between ideas on software and ideas on
business. The former appears to have enjoyed a certain life in a few cities where professional
groups of students, researchers and professionals share platforms. However, ideas on business,
in short on entrepreneurship, could not benefit a comparable space. Traditional entrepreneur
caste groups lineages, or networks of personal knowledge, or even a first-hand experience of the
dynamics of the market – are mostly amiss; and as it appears, entrepreneurship is pivoted on that
crucial discovery of business idea.
Three points we would like to draw attention to:
1) Coordinative benchmarking or else rating of competencies and its indicators should be
invigorated; knowledge of which should be widely put up.
2) Environment of business ideas should be promoted through promoting discourses on
creating markets and through providing links to several existing markets.
3) Promoting technological ideas and competencies through several types of meets,
including those held in virtual space.