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Comment by beachgeek | Hacker News Reader

I think his point was that Chinese startups have the advantage of serving a large internal market of Mandarin speakers, while Indian startups need to compete in the English speaking world.

On that note I have a question for smg. I have not been able to figure out why there are so few Indian tech startups serving the Indian market. I can only think of naukri and makemytrip. Do you know why? I read somewhere that there are 120M Internet users in India now, up from 80M two years ago. Do you think it now makes sense for Indian web startups?

I'm not familiar with mobile startups in India though, so maybe there are a lot of those.

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A few years ago there were a large number of Indian startup trying to become the youtube or facebook of India. Because almost all the internet users in India are also English savy, they found that the youtube of India is youtube unlike say youku in China. Doing a consumer web startup in India is very difficult as you end up competing with far more mature SV startups who have almost limitless resources. Companies with a uniquely local twist like Flipkart or Burrp have had more success.

Also, the great firewall of China, and their Internet Content Provider license (which can only be obtained by Chinese companies) make it nearly impossible for foreign companies to compete in the Chinese market. Even foreign sites which aren't blocked in China are frequently a lot flakier due to the firewall, and they can't put servers inside the firewall without an ICP license. The usual way around this is to partner with a Chinese company, but frequently the Chinese company will wind up cloning your service and becoming a competitor.

The Chinese market is stacked against foreign competition; I don't think that the Indian market is likewise restricted.

There are probably a couple of reasons:

1. The total number of startups is going to be lesser due to redtape although I believe that is becoming less of an issue as time goes on.

2. It is probably perceived to be more lucrative to target the American market. I would think that a larger proportion of the ~ 120M internet users in India would be similar (young urban professional) and therefore easier to release products compared to the general public (cultural variations and interests make it harder to disrupt outside the cities).

OK. If you look at the growth amongst Internet users in India between, say 2009 and estimates for 2011, it resembles the growth amongst Internet users in US in the late 90s. US had 120M Internet users around the time of the Web 1.0 boom.

Mobile usage is even higher as you know so it seems like mobile app startups could do really well. If the growth is happening in small towns/rural areas even better, no SV company is going to want to spend time in Gummmidipoondi to understand their target customer. I don't know if cultural variation is really an issue: look at iPad for instance, even a non-English speaker has a finger with which they can tap on the screen.

I've heard horror stories about red-tape, corrupt officials and so on from friends. But every time I've dealt with GOI officials they've been extremely helpful. Maybe I just got lucky.

Reg: redtape: I have personal experience with trading stocks in both india and U.S. I have found that the real problem has simply been in finding the tax agreements btw the countries and finding bankers who understand and fix the issue. Not sure that's relevant to startup company space.

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