Ritu Jha-
Madan Padaki, President, The Indus Entrepreneurs (TiE) Bangalore, one of the first TiE chapters outside the US, was in Silicon Valley recently to attend the TiEcon 2023 conference. He has been associated with TiE Bangalore for the past two decades.
In an interview with indica, Padaki spoke extensively about the startup culture in Bangalore, the TiE SV influence, and the ripple effect of Silicon Valley Bank’s collapse on startups back home.
Padaki said SVB’s collapse hit 50 to 60 startups in Bengaluru. “The money in the bank is now out and we have a whole lot of venture capitalists stepping in to help affected startups. The good part is, it impacted only well-funded startups, and they were covered by the VCs. The lesson we learned from this is that as we start scaling, the government’s role must be tightened. It’s not just about government, but also about their governance. During the last few years, we’ve seen a lot of governance collapses. Large unicorns have gone under because of governance issues. In the race to the top, while trying to scale up rapidly, one of the lessons is, don’t take your eyes off governance and risk management.”
Padaki said startup founders are unaware of rules and regulations. He said TiE Bangalore worked with the government of Punjab and listed all the rules and regulations under which an entrepreneur can be jailed. “We found, across all departments, 1,170 such rules and regulations… though no entrepreneur has got jailed, the threat is good enough. So, we helped the government of Punjab, bring that down to about 150. In Karnataka, I co-chair the Karnataka Skills and Entrepreneurship Task Force. We are trying to figure out how to give a boost to entrepreneurship at the district level.”
TiE Bangalore, Padaki said, “has fostered entrepreneurship and helped startups in these regions survive, grow, and thrive.” He has been a TiE Bangalore member for the last 20 years, on the board for the last 15 years, and president for the last three years.
He added, “The startup scene has exploded, especially in the last seven years. There are 18,000 startups in Bengaluru, and 4000 more in the rest of Karnataka. India has close to 100,000 registered startups, of which nearly a quarter are in Karnataka. It is at the cutting edge of the ecosystem. Secondly, the social infrastructure and the overall infrastructure have improved. The government is creating a variety of incentives for businesses to set up outside of Bengaluru.”
Padaki said TiE is working with the government on its startup policy. “Karnataka rolled out its new startup policy in 2022, with a lot of focus on R&D, and product innovation rather than just services. There is emphasis on creating more incubators and accelerators in Tier-3 or emerging markets.”
According to its mission, TiE plays a policy-level role and is also the voice of the entrepreneurs. With over 1,000 members, its mailers reach out to about 35-40,000 entrepreneurs. “We organize a lot of events to understand what entrepreneurs want, their concerns, and what hurdles we can take up with the government. Also, Karnataka is the only state to have four TiE chapters – Mysore, Hubli and Mengaluru, in addition to Bengaluru.”
He credits TiE Silicon Valley for the mushrooming of startups in Karnataka. “There’s a lot to learn from TiE SV but our dream and hope is that maybe in the next few years, Silicon Valley will be called the Bengaluru of the West and not the other way round. In the last five or six years we have seen a huge shift in entrepreneurship. The challenges we face are infrastructure, space, people, local regulations, rules, and compliances. Labor cost has gone up all over in India. But we’ve seen case studies where there is definitely a 25-30% cost arbitrage between Bengaluru and an emerging cluster. That cost differential continues to roll. If a business or startup is set up in a city like Mysuru, there is easily a 25-30% saving on overall costs.”
Padaki was part of the Karnataka Digital Economy Mission (KDEM) delegation that visited Silicon Valley to promote digital opportunities in the southern Indian state. “We want entrepreneurs and investors to visit Karnataka and understand the change, and the startup culture in Mysuru, Hubbali, Dharwad, and Belgavi (earlier Belgaum). We also spoke about the growth possibilities in Bengaluru and beyond.”
‘TiE Bangalore is thriving because TiE Silicon Valley showed the way’: Madan Padaki
