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Flipkart Co-founder Sachin Bansal said what Indian needs to do is what China did 15 years ago and tell the world that the country needs their capital, not their companies

At an event in Bangalore on Thursday, Flipkart Co-founder Sachin Bansal and Ola Co-founder Bhavish Agarwal — two poster boys of Indian startups ecosystem — made a “weird” appeal to the government that India should formulate policies that favour homegrown companies.

According to a report by the Economic Times, Bansal said that what Indian needs to do is what China did (15 years ago) and tell the world that the country needs their capital, not their companies, whereas Agarwal opined that the real fight between foreign and Indian companies are on capital, not innovation.

Their demands for “protectionist government policies” evoked widespread criticism from people across the startup industry. Some find their demand ridiculous and said these companies focus on good execution and giving great customer experience, rather than “begging” for favourable policies. Experts say that they made this demand as they are unable to compete with the likes of Uber and Amazon — two foreign internet giants posing significant threat to their respective businesses.

Murthy also added that patriotism is the last refuge of the failing copycat.

“Patriotism is the last refuge of the failing copycat” – my view on @Flipkart @Olacabs begging govt for protectionhttps://t.co/ARiiTQG2UQ

— Mahesh Murthy (@maheshmurthy) December 8, 2016

The irony is that both Ola and Flipkart are foreign incorporated companies, which, Mahesh Murthy Co-founder of Seedfund and a vocal critic of Flipkart, sarcastically put in a Twitter post: ”Now Singapore firm @Flipkart & Canadian-Russian-Japanese firm @Olacabs claim they’re Indian & govt should stop US firms @amazonIN & @Uber:)”

Now Singapore firm @Flipkart & Canadian-Russian-Japanese firm @Olacabs claim they’re Indian & govt should stop US firms @amazonIN & @Uber🙂 http://pic.twitter.com/vbHbXZgjHK

— Mahesh Murthy (@maheshmurthy) December 8, 2016

Samar Singla, Founder and CEO of Jugnoo, an on-demand auto rickshaw hailing startup, echoes Murthy’s views: “I think it is sad and ironic. One, they are not even Indian companies by any standards and secondly, they did the exact same thing to all the smaller players using foreign capital. We feel innovation is what will differentiate winners at a 10 year scale.”

A few months ago, Paytm-backed Jugnoo had accused Ola of “employing unethical practices to sabotage their business”.

According to Samir Kumar, Managing Director of Inventus Capital, their is an extremely ridiculous demand. “These (Sachin Bansal and Bhavish Agarwal) are smart entrepreneurs, who, in my view, are capable of competing with the best in the world if they maintain a relentless focus on execution. And not go around thinking they’ve arrived, when there are still miles to go….”

“Hubris may have taken their eyes off the ball, but I don’t really blame them. When investors show such desperation to invest in your company, including offering huge secondaries to entrepreneurs well before companies have reached anywhere close to profitability, even the best can be affected — and that’s perhaps what’s happened here,” he tell me.

He has, however, added that deep within they realise the hollowness of their demand: “Where does this end? Should only foreign companies be disadvantaged? Why not companies with foreign investors?.”

“I think these smart entrepreneurs, deep within, realise the hollowness of their demand. I’m hoping they’ll soon see this, will hunker down like they did in their early days, and focus exclusively on top class execution that delights their customers. Because, in the ultimate analysis, it’s only customers who determine winners — not government policies that favour one over the other to the detriment of the consumer,” he explains.

Jayadevan PK, Co-founder and Managing Director of FactorDaily believes that India is too far into globalisation to think like China now and shut out foreign companies. Homegrown companies should compete on innovation and the government should treat both Indian and foreign companies equally, he adds.

“This is a complex question because we absolutely do need Indian companies winning for the venture ecosystem to thrive. We absolutely need companies like Flipkart or Ola to be large, sustainable profitable businesses with good value creation for stakeholders like employees and investors. However, I am hesitant to say that this can be a question of government policy,” a leading VC investor tells e27, on a condition of anonymity.

Rajesh Sawhney, Co-founder of InnerChef, a foodtech startup backed by Masayoshi Son’s brother Taizo Son, and Founder of GSF Accelerator, had a different take on this demand. He tell me that he supports both Agarwal and Basnal on this, but for some different reasons.

“Global tech companies are even more powerful than normal MNC businesses. If left unregulated, these will create dangerous monopolies. Monopolies are bad for consumers eventually, you would agree. It’s the job of Governments to ensure that consumers have choice and monopolies aren’t created whether domestic or of foreign origins,” he said.

Sawhney added that these global tech companies amass vast amount of data on a country’s citizens and institutions. No such data should be allowed to be taken out of the country. No way American government would have allowed an Indian or a Chinese company to amass this kind of unregulated access to information on its citizens and institutions, he shared.

“Unless we create our own big ecosystem, we will not create true innovation. Chinese were able to do as they leveraged their market to build big tech companies across e-com, search, media and mobile. They are now challenging Silicon Valley in innovation. However, India can adopt a different strategy where both international players and domestic players are given enough room to play but not at the cost of one another. Our inability to do so will keep us a poor cousin of Silicon Valley,” he concludes.

Image Credit: lightwise / 123RF Stock Photo

The post Patriotism is the last refuge of the failing copycats: Experts flay Flipkart’s demand for protectionist policies appeared first on e27.

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