Cover Story: The Momentum

Behold the Digital Deliverer

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Modi dazzles the smartest in Silicon Valley

The salad plates have just been cleared and the green tang of cilantro lingers in the air, somewhat at odds with the summer blooms atop the tables. Gathered for a special dinner this Saturday night, at a hotel in San Jose less than 5 miles from the airport, over 300 movers and shakers of Silicon Valley are awaiting the arrival of the star ingredient from India. By the time Prime Minister Narendra Modi breezes in, attired in a light brown bandgala suit, and takes his place onstage among a handful of illustrious Indians, this is already starting to look like a winning recipe. Adobe Systems CEO Shantanu Narayen, sporting a beard, hails the historic visit; Microsoft CEO Satya Nadella talks of making data, analytics and cloud services available to municipalities and students in Surat; Qualcomm Executive Chairman Paul E Jacobs announces a $150 million fund for Indian startups; the unassuming Sundar Pichai promises Google will connect hundreds of millions of Indians and add support for Indic languages including Gujarati; John Chambers, executive chairman and former CEO of Cisco Systems, reposes faith in Modi to “change the world and change India”. On their own, they are all perfectly good speeches, inspired, perhaps a little too readily, by the idea of a resurgent India. But there is a sense that the best is yet to come—from the man who, these smartest of executives believe, will help India meet its digital future.

As Modi takes the podium, many in the room, including Indians, reach for their headsets, resigned to an English interpretation of his address. At table 12, Vish Mishra, an entrepreneur, mentor, investor and among the best-connected Indians in the Valley, jokingly offers his translation services. As it turns out, nobody will be needing them. For Modi speaks in pithy English, eliciting surprise and applause. “I am sure this was not pre- arranged. But, here on stage, you see a perfect picture of India-US partnership in the digital economy,” he says. “It is not even his second language,” Mishra, a founding member of The Indus Entrepreneurs, a global nonprofit that promotes entrepreneurship, exclaims to a young man at the table that also seats Valley veteran Ram Reddy, a serial entrepreneur and active investor in startups here. Everyone looks impressed. On top of Modi’s relentless pursuit of technology, English gives him a contemporary gloss they clearly did not expect from a prime minister who hails from modest means.

So what does Silicon Valley see in Modi? The idolatry is partly because he is a self-made man, like every other Indian here. To intuit the aura of Modi in California, I linger for the better part of the Sunday morning in the bustling lobby of the Fairmont, while he is away at Facebook making hundreds of adults tear up with his choked-back answer to Mark Zuckerberg’s question about his mother. This weekend, the hotel, across the street from the Tech Museum of Innovation in downtown San Jose, is witnessing the pageantry of Modi’s coronation as auteur of a new, digitised India. “For the first time after Independence, India has an opportunity to find its real identity,” says VA Shiva Ayyadurai, an entrepreneur from Cambridge, Massachusetts, whose claim to fame is the ‘invention’ of email. As a teenager living in New Jersey, Ayyadurai, a Tamil born in Mumbai, devised an electronic mail system, a version of which would later become famous as e-mail. Despite several degrees from MIT and an aggressive PR campaign, he never quite managed to get the stamp of legitimacy, allegedly because of racist sentiments within the American science and tech community. “The colonialists brainwashed Indians to think that they could only be good workers. Modi is talking about innovation and startups. He is an entrepreneur in a sense, an outsider who started out with nothing. Things were not given to this individual. I think people in the Valley identify with this,” says Ayyadurai, a well-tailored butterfly flitting among confréres from television channels.

By virtue of being Indian, I am directed to the imposing stairs and escalators on either side of the lobby leading to the upper floor, the site of much action today. Later in the day, in one of its halls, an exhibit by over 30 startups from India, including a path-breaking preventive eye care product, will vie for the Prime Minister’s attention. Another will host a roundtable on renewable energy, the second focus area of Modi’s visit to California. Ahead of the meeting, a chatty official from the US Embassy in India tells me in a conspiratorial tone that Chinese President Xi Jinping’s first visit to the US appears ‘downright frosty’ compared to the pliant, amicable posturing of Modi. “Everyone knows Modi is one man trying to change things, and with many states soon going to the polls, we cannot expect much reform. Yet, there is hope like never before,” he says.

The important thing about Modi is that “he talks our language,” says Deep Nishar, managing director, Softbank, a Japanese technology company with significant investments in India including in internet marketplace Snapdeal and in Ola Cabs. “He is embracing technology at a rapid pace at a time when Indians themselves are adopting it. He has expressed a desire to streamline processes and make it easier to do business in India. He seems to get it,” Nishar says. What Modi has got is a vigorous hug, the kind he is partial to, from Silicon Valley. The first Indian Prime Minister to directly appeal to this diaspora of wealthy, smart and influential Indians, Modi is entranced by the successes they have scripted in the Valley’s digital economy— as entrepreneurs, investors, engineers and executives at infotech companies—and how they can be tapped for the benefit of a country where technology is a desideratum of development. “If there was ever a gathering under one roof that could claim to be shaping the world, it is this…. [California] is one of the last places in the world to see the sun set. But, it is here that new ideas see the first light of the day,” says Modi, making eye contact with his audience. The panegyric conveys a deeper message: that Valley Indians, by contributing to digital India, will be a part of not just writing history but living it.

Vivek Wadhwa, an entrepreneur and academic based in the Valley, finds the Digital India project unambitious but agrees that Modi has a vision for technology and articulates it well. “He held his own with five of the top CEOs and his was by far the best speech,” says Wadhwa. “You couldn’t believe it, considering his limited background in technology.”

Modi’s polished prose alone cannot explain the scorching hype around his trip to California. He is the leader, by a large mandate, of the fastest growing economy in the world and the next big market for technology companies after China. India will have 200 million smartphones by next year and 650 million by 2019. By 2017, the number of internet users in India is projected to hit 500 million. During Modi’s two-day Valley tour, several American CEOs who had importuned to get facetime with him were reportedly turned down. “Much as India may stand to benefit from collaborations with Valley companies, the Prime Minister should convince them of the vast opportunities awaiting them in India, the biggest open market that everyone is eyeing today,” says Kumar Malavalli, an entrepreneur, investor and philanthropist. Malavalli is the chief strategy officer and co-founder of Glassbeam, a Santa Clara, California-based Internet of Things (IoT) analytics startup. “We are increasingly looking at India as a market for IoT,” he says. “For instance, we are running a pilot for an Indian bank to analyse the data generated by its ATMs. Analytics could tell us when the machine will be due for a refill, and warn us if the printer or the keyboard is about to fail.” After living and working for 23 years in Canada, Malavalli came to this salubrious land of opportunity in 1995 in search of venture capital. “Finally, India has a prime minister who understands the disruptive power of startups,” he says.

Wadhwa says most startups in India have so far been ‘petty’ copies of global startups. “With a billion people coming online in the next four to five years, I am hopeful this will change and we will see important startups in India,” he says. “The market is in its infancy and we cannot use the metrics of Silicon Valley’s success to measure that of startups back home.” Almost 16 per cent of startups in the Valley are founded by Indians. Many of them have one foot in India, says Anukool Lakhina, founder and CEO of Guavus, a big data analytics company with offices in San Mateo, California, Gurgaon, Ahmedabad and other cities across the world. Lakhina’s firm supplies analytics to the telecommunications sector, but even with 300 people in India developing all its core IP, it did not see a viable market there. “But this is changing rapidly,” Lakhina says. “Corruption was rife among telcos and India was late to the 3G game. We had to stay away. Now we are talking to two of the biggest telecom companies back home and exploring partnerships, and we are pleasantly surprised to be dealing with professionals who know what they want.” Guavus is also mulling an expansion into China, but cannot set up an R&D centre there because of restrictive IP policies. India’s own IP regime is vague about software innovation, but in late August, the Indian Patent Office released a new set of guidelines on infotech invention that could prove more limiting than before. A decade ago, lured by the Vajpayee-led NDA Government’s ‘India Shining’ campaign, Lakhina had moved to India, lock, stock and barrel, only to find a crippling disconnect in the venture ecosystem. “When I approached a venture capitalist, he told me he wouldn’t know a network router if it hit him on the head. I realised I had to relocate to the Valley. Today, of course, there is an active venture community in India,” he says.

Sharad Sharma, former Yahoo India CEO and co-founder of iSPIRT, an Indian software product think tank, argues that the Indian Prime Minister relies too much on the largesse of Valley behemoths. “The key idea that Silicon Valley represents is that challengers are more important than incumbents. However, the Government is ignoring Indian challengers to Google, like Inmobi in mobile advertising. The commercial interests of incumbents like Facebook, Google and Microsoft are not necessarily aligned to the national interest of India. The Government should focus, instead, on doing away with regulatory and financial difficulties in investing in startups,” Sharma says, adding, “Last year 54 per cent of the funded startups left India for Singapore or the US.”

The changing climate of opinion on India, apparently bolstered by its booming digital economy and by Modi’s ever-expanding national narrative, is often clouded by scepticism, a pause for proof that India is indeed the forward-looking free market utopia of Modi’s prophesies. “There were big expectations from Modi, especially because he has projected India’s power so well in front of the world. But the reality is starting to sink in,” says MR Rangaswami, an investor. “What he has accomplished is this: he has somehow instilled a great sense of pride in being Indian and by doing so, infused energy in the Valley.”

Ahead of the community reception for Modi at the SAP Centre in San Jose on Sunday afternoon, as de rigueur protest groups and his supporters line the security barricades, and the street begins to resemble a Gujarati masquerade ball, I wonder if his speech will seek the consolation of myth and past glory or hinge on the hoary notion of culture. But his is not a static language. In keeping with the carnivalesque spirit of this roaring gathering of 18,000, Modi trades in the restraint of his earlier address to Silicon Valley bigwigs for the sentimental rhetoric of a mannerist. He speaks loudly in Hindi, taking a dig at the vulnerable political reputations of all other leaders in India, and demands a ‘certificate’ for the work he has done as Prime Minister. The 21st century, he declares, smiling away the crowd’s delirious chant of “Modi Modi Modi”, is India’s. Amid the whoops and cheers, one can almost hear the fluttering of the Indian-American spirit, long blinkered by ambition and growth, and now eager for a deeper bond with the motherland. “I do not think of it as brain drain, but as brain deposit,” Modi assures his audience. “The day it finds the opportunities, it will benefit Mother India. And now that season for opportunity has come,” he says.

At the messy Ananda Bhavan stall in the corridor outside, Ashwini and Arvind Rangaswamy, both 42 years of age, are buying a $10 combo of lemon rice, curd rice, vada and dessert for their daughter Nitya, 6. Since her birth, the Fremont-based couple have been forced to revisit the classic desi conundrum: to leave or not to leave. “We believe India will be a better place in three or four years. We almost bought a flat in Whitefield, Bangalore, last year, but the lack of infrastructure—good roads, power, water— deterred us,” says Arvind, who works for a biotech startup. Ashwini, who majored in semiconductor design from the University of California, Los Angeles, is a technical writer for a website and confesses she is put off by the daily grind. “Unless you strike it big with a startup idea, or prefer to work at a software giant, you can easily find yourself relegated to small, inconsequential roles that may pay well, but that give you little satisfaction,” she says. “They keep saying there is a talent crunch in Silicon Valley, but I would wager that most people are just in the wrong jobs.” Working in India, she may not be able to afford her navy Prada tote or her iPhone 6 plus, but the Rangaswamys are keen to give their startup idea— in the area of sports and recreation—a shot in Bangalore or Chennai. “I have lived here, in the cradle of innovation, for 18 years, but I feel India has a more permissive environment,” Arvind says. “The problem arises when you fail. Indians just cannot accept failure.” In a short while, Modi will confirm his fears, underscoring the importance of succeeding at first attempt, be it the Mars Mission or a prime ministerial bid.

In contrast, Deep Nishar of Softbank says he has seen Indians in the Valley take a lot of risks. The first person to go to college in his family, he arrived here at the turn of the century to build a web services-based software firm. The venture, which was ahead of its time, failed, but he “did not think twice about it”. “I learned as much in three years as most people would in a decade. How you handle closure and accept failure, these are some of the seminal moments of your life. In this society, we view them as positive,” he says. But when Nishar left behind a lucrative career at Google in 2008 to join LinkedIn, which was “a sleepy little startup back then”, his mentors cautioned against the move. He went on to grow LinkedIn’s user base from 30 million in 2009 to over 340 million at the time of his leaving the company earlier this year. “There are many examples of risk taking. The ability to take unconventional paths is even more evident among second- generation Indians. My daughter, for instance, explores art and wants to be a designer,” he says. Nishar’s father, who never went to school and moved to Bombay at the age of 10 to find work, only visited him once in the US, when he graduated from Harvard Business School. If there is one thing his father taught him, Nishar says, it was to create tangible, enduring value wherever he worked. If Modi manages to transcend the feel-good schmaltz and effect tangible change in India’s internet and investment policy, this showy visit would have served its purpose.