Subhash Menon, the MD and CEO of Subex, and Chairman of the Nasscom Product Forum in his article on the status quo of the Indian tech sector hit the nail on its head –  “It has been established that overseas venture capitalists are increasingly demanding that product firms in the West should locate as many functions as possible in India to save costs. A recent example is that of a Silicon Valley firm that managed to get through two years of operations with only about $5 million (by depending on India) instead of about $15-20 million that they would have otherwise invested. When overseas start-ups have woken up to this advantage, Indian companies should not be left behind. India is today at an inflection point with advantages eclipsing problems for setting up a software product company here.”

So are Indians rising to the innovation challenge?

Enterprising Indians have always been at it albeit at a smaller scale. A couple examples of Indian innovations with global impact show signs of things to come.

A recent economist article talks about Dr. Vivek Jawali and his team and their “beating heart” bypass surgery which causes little pain and does not require general anaesthesia or blood thinners, leading to speedy recovery. This approach, pioneered by Wockhardt, an Indian hospital chain, has proved so safe and successful that medical tourists come to Bangalore from all over the world. This is just one of many innovations in health care that have been devised in India. Its entrepreneurs are channelling the country’s rich technological and medical talent towards frugal approaches that have much to teach the rich world’s bloated health-care systems. Paul Yock, head of the bio-design laboratory at Stanford University, which develops medical devices, argues that medical-technology giants have “looked at need, but been blind to cost.” Amid growing concern about runaway health spending, he thinks the industry can find inspiration in India.

We have all heard of the much touted Tata Nano, the world’s cheapest car with great fuel efficiency and low emissions. The real innovation in the Nano for me is its intended product delivery – the Car in a Box! The open distribution mechanism for the Nano does the same thing to the auto industry that IKEA did to the furniture industry. With American auto makers coming to India for additional revenues, Indian auto maker Tata Motors is now eyeing America as a market in addition to the booming Indian markets.

While these are great examples of innovations from a developing India, given the size of my birth country both in terms of land mass and the population inhabiting it; we will need at least one million innovations to make India the land where people think of ideas and make them happen instead of the land of people who do well what they are told to do by others.

Manoj Kothari, a designer in Pune shares his experiences on his blog about the changing landscape of his client engagements. He says,  ”For me, who saw a lot of rants around the Chinese onslaught of consumer products, the growth of the service economy and two rounds of recession, dating with foreign brands, technologies, collaborations and even consultants; it is heartening to know that India is moving up the value-chain of innovation. It may not be pacing up but inching up for sure.”

Meanwhile, Gordon Orr @ McKinsey Digital argues that China and India are taking it to the next level. He highlights that Indian & Chinese entrepreneurs are forced to be frugal so they tend to leverage heavily on technology and come up with new capital light models. The advantages of scale and talent are intrinsic to the massive countries meaning since there are so many of us ultimately finding talented employees is not a problem; at the same token the market opportunity even for a niche product is 5x  domestically compared to other countries. Gordon also talks about favorable factors like the increasing spending power at the burgeoning low income levels, the government shaping new policies and the rising importance of intellectual property. Specific to India, he does falter when he says that funding startups is an easy proposition with government, VC, private equity, angels, banks all waiting for their $$$ to be invested. Compared to Silicon Valley, I think its extremely difficult to raise money in India especially at the seed stage – bootstrapping is the trend in this part of the world.

Gordon ends his piece on an inspirational note:

“Can India and China sustain this pace and eventually move to the next level of technological innovation? Absolutely. The talent is there, as are capital and effective government encouragement. With stronger protection and rewards for intellectual property—a likely development as international companies begin to license technology from Indian and Chinese entrepreneurs—the stage will be set for the next step forward.”

A source of innovation becoming widely recognized, is end-user innovation. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs. This is very interesting, normal users unimpressed with off the shelf solutions create new products. An easy example that comes to mind – the Dyson vaccum cleaner. How many times have we all used some daily life product and thought “I could have designed this better myself”, but how many of us have turned our thoughts into actions?

At Stanford Professor Tse says “Users make a product innovative. If users cannot take an idea beyond what you originally thought they could use, then you probably do not have an innovation”. This means giving customers (and even your competitors) access to tools to create their own experiences and in the process creating a whole new ecosystem of value creators and value users. The Internet world is littered with examples of companies who have made millions by giving away their product [Google, Linux, Mozilla, Appstore]. Digital commerce works in counter-intuitive ways.

Over the last few decades innovation centers have risen and fallen – Apple went from an innovation hotbed to nothing and then came back as the poster child of innovation with its ipod, appstore and iphone. Downturns like the one in 2001 and 2008 have taught us that ultimately it is survival of the fittest – the companies to survive are those that delivered real products to market, resulting in tangible revenues.

We at Zaak are 100% focused on customer oriented product innovation. Our thinking is that those who design products must first learn to respect those who are going to use the products. If we can think with our user caps on and develop products that best serve user needs we will end up building products that deliver value and thereby generate revenue.

The key takeaways here are:

• Forget about consumers (those who consume what you provide) and embrace the fact that the Customer is King (you provide what customers want).

• Indulge your ideas, explore market opportunities and involve real users early on to see their reactions and improvize accordingly.

There you go – a simple recipe for some home (or shall we say garage) brewed new products!

Want to add or subtract to our thoughts just leave a comment.