Produce in Silicon Valley Sell in India

Very interesting news bytes appeared at WSJ. This story is unlike popular talk about production hub in India and marketing and sales centre point in USA. The story also emphasizes the importance of a vibrant ecosystem to support innovations and developments.

The core of the story is that there is increasing evidence that companies are choosing silicon valley for hi-tech product development even if the primary target market is developing economy. Primary reason -- such products are only possible in silicon valley that has a vibrant ecosystem of technology expertize, capital availability combined with hi-tech startup culture that are critical for success.

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Subodh Vinchurkar, is founder of youmagix.com and can be reached at subodhv AT gmail.com

Corporate Venture Investment Revisited

In one of my earlier writings on corporate venture investment I had discussed economic fundamentals of venturing and why it may and may not work.

Today, I see a very elaborate analysis of Google's venture investment activity in business week. The article lists strategic reasons why corporates may want to invest in early stage startups. Some of the notable reasons given are

1. To get first right to acquire the startup in case it succeeds and a potential bidding war can risk invaluable IP going to competitor's hand

2. To deploy oodles of cash lying undeployed & get better returns on idle cash.

While I accept the first as a valid strategic reason, I reject the second as an inferior way to deploy idle cash as this can potentially harm investors interest.

In short, Google's core competence is technology innovation and not financial investment and that's what investors would like Google to do first (For theoretically inclined, there is vibrant literature available on why it is better to return cash to investors by buying back shares or paying dividends rather than venturing beyond core competence.)

Well, again, as an entrepreneur, one can only be happy to find competition for the right to acquire a share in future.

Entrepreneurial EcoSystem -What is important?

In an interesting article, Blodget, Merrill Lynch tech analyst, compared entrepreneurial ecosystem in Silicon Valley to that of NY. As one of the noteworthy arguments he states that proximity to previous generation of successful players is more significant contributor to startup ecosystem success than that of proximity to great engineering institutions (read Stanford). The basis? -- An increasingly global engineering talent that is virtually accessible from anywhere.

May I venture to imagine that the flood of green-field investment by global tech firms in India will eventually lead to a vibrant tech innovation environment. Not a bad thought though.

Interesting article worth a read checkout