 "Indian entrepreneurs need to be bolder, less shy: Zack Weisfeld")
Zack Weisfeld, head, Microsoft Ventures Europe and Global Accelerator Programme, has been called one of the 10 most influential Israelis in the world of technology by Business Insider this year. An apt assessment of the 42-year-old, who has been a serial entrepreneur and an investor in the course of his exciting corporate career, and is now mentoring entrepreneurs and start-up teams in Bengaluru, Beijing, Tel-Aviv, Berlin, London and Paris. On the sidelines of an event to announce the graduation of the fifth batch of Microsoft's accelerator programme in India, Weisfeld spoke to Itika Sharma Punit and Anita Babu about how the Indian start-up ecosystem fairs against other countries.
How do you think India's start-up ecosystem fairs vis-a-vis countries like the US and Israel?
I think India has great technologists and many of those I have met here are world class. They compare with many great entrepreneurs that I have seen around the world. But there are a few areas that they could do better in. From my experience, they need to be bolder about what they do. I think it is something about the culture that stops them from being more forthright, which can be good and bad in different ways.
Could you elaborate on this?
At very early stage of our accelerator programme, we do this process called "customer development". We call the start-ups and tell them that no one in the world wants to use what they are building. It is tough to hear that because you have just been accepted for the programme. But the fact with start-ups is that it takes you a couple of years to build a product which customers are willing to pay for. So we try to put a mirror to them, and ask them to go out, talk to people and learn before getting back and strengthening their products.
In the US, the feedback we get from entrepreneurs is, "Thank you very much, we have learnt a lot". In Tel-Aviv, usually we hear things like "You have no idea what you are talking about and we know much better". But when we do this process here in India, we have had cases where entrepreneurs start getting offended and they start crying. It's like you just told them that their baby is ugly. So we are adapting this process culturally now for India. But entrepreneurs need to understand that it's a tough world out there and so they need to be prepared.
Based on interactions with other ecosystems, what do you think is the world's view on Indian start-ups?
In many circles, India is still perceived strong only in the information technology services space. But now it's taking the next global step with start-ups. If we compare it to that from a couple of years ago, India was far ahead of China. But now China has been growing very fast, especially when it comes to funding. India is perceived as an early stage ecosystem. I usually don't get a question on why India. Certainly it makes a lot more sense because of some great Indian entrepreneurs in the US and other places. There's a long runway here, there's room to grow here.
What are your observations about the investment environment for start-ups in India?
There are certain ecosystem pieces in India that need to see some evolution. I think there are ways to go with the investors. I am still learning why is that the cycles of investment take longer here in India than some other countries. Also, there is a lot of money but it does not come from the good investors, which means several investors here are too predatory and ask for constant reporting. Entrepreneurs need free space to do things on their pace. There is also impatience about breaking-even, which is more like an e-commerce start-up and less for breakthrough technologies. But I think these cycles will shorten much faster because the world is changing fast.
Some people ask if there is a bubble in the start-up ecosystem in India. What do you think?
When I look at other ecosystems and then I look at India, I don't think there is any bubble. While I am trying to learn why investments are slower here, the feedback I get is that although there is a big information technology (IT) sector here, companies here are not usually early adopters of new technologies. That is a shame because it then takes longer to get your first customer and to get your first test stories. I hope that the ecosystem will evolve and change gears.
M&A is a big focus for start-ups in India. Do you think that is a parameter to gauge the health of the ecosystem?
Mergers and acquisitions is probably one of the parameters that can be used. A good parameter could be traction and long-term success, clients, etc. However, we are in a competitive world and accelerators across the world measure themselves on amount of funding raised by their graduates. It's not bad because if you are doing something people would want to invest money.
Is Microsoft Ventures localising for India in any way?
We act locally according to what is relevant for the local ecosystem. The India team has been experimenting a lot of things outside of the blueprint. For example, the Accelerator Plus programme. Our programme in India is one of the successful ones and we are very happy from the results.
How do you think India's start-up ecosystem fairs vis-a-vis countries like the US and Israel?
I think India has great technologists and many of those I have met here are world class. They compare with many great entrepreneurs that I have seen around the world. But there are a few areas that they could do better in. From my experience, they need to be bolder about what they do. I think it is something about the culture that stops them from being more forthright, which can be good and bad in different ways.
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At very early stage of our accelerator programme, we do this process called "customer development". We call the start-ups and tell them that no one in the world wants to use what they are building. It is tough to hear that because you have just been accepted for the programme. But the fact with start-ups is that it takes you a couple of years to build a product which customers are willing to pay for. So we try to put a mirror to them, and ask them to go out, talk to people and learn before getting back and strengthening their products.
In the US, the feedback we get from entrepreneurs is, "Thank you very much, we have learnt a lot". In Tel-Aviv, usually we hear things like "You have no idea what you are talking about and we know much better". But when we do this process here in India, we have had cases where entrepreneurs start getting offended and they start crying. It's like you just told them that their baby is ugly. So we are adapting this process culturally now for India. But entrepreneurs need to understand that it's a tough world out there and so they need to be prepared.
Based on interactions with other ecosystems, what do you think is the world's view on Indian start-ups?
In many circles, India is still perceived strong only in the information technology services space. But now it's taking the next global step with start-ups. If we compare it to that from a couple of years ago, India was far ahead of China. But now China has been growing very fast, especially when it comes to funding. India is perceived as an early stage ecosystem. I usually don't get a question on why India. Certainly it makes a lot more sense because of some great Indian entrepreneurs in the US and other places. There's a long runway here, there's room to grow here.
What are your observations about the investment environment for start-ups in India?
There are certain ecosystem pieces in India that need to see some evolution. I think there are ways to go with the investors. I am still learning why is that the cycles of investment take longer here in India than some other countries. Also, there is a lot of money but it does not come from the good investors, which means several investors here are too predatory and ask for constant reporting. Entrepreneurs need free space to do things on their pace. There is also impatience about breaking-even, which is more like an e-commerce start-up and less for breakthrough technologies. But I think these cycles will shorten much faster because the world is changing fast.
Some people ask if there is a bubble in the start-up ecosystem in India. What do you think?
When I look at other ecosystems and then I look at India, I don't think there is any bubble. While I am trying to learn why investments are slower here, the feedback I get is that although there is a big information technology (IT) sector here, companies here are not usually early adopters of new technologies. That is a shame because it then takes longer to get your first customer and to get your first test stories. I hope that the ecosystem will evolve and change gears.
M&A is a big focus for start-ups in India. Do you think that is a parameter to gauge the health of the ecosystem?
Mergers and acquisitions is probably one of the parameters that can be used. A good parameter could be traction and long-term success, clients, etc. However, we are in a competitive world and accelerators across the world measure themselves on amount of funding raised by their graduates. It's not bad because if you are doing something people would want to invest money.
Is Microsoft Ventures localising for India in any way?
We act locally according to what is relevant for the local ecosystem. The India team has been experimenting a lot of things outside of the blueprint. For example, the Accelerator Plus programme. Our programme in India is one of the successful ones and we are very happy from the results.