She is currently in Indonesia as a guest of a new local startup awards show, SparxUp. In the last two years, she has traveled to emerging markets including Latin America, Africa and Asia for her upcoming book, “Brilliant, Crazy, Cocky: How the Top 1% of Entrepreneurs Profit from Global Chaos,” which details her take on entrepreneurship in these countries.
After covering startups and technology innovation in Silicon Valley for a decade, Lacy has an interesting perspective on technology shifts happening in Asia. We sat down with her for a short chat and got to know her varied thoughts on innovation models in Asian countries, the evolution of India, China and Indonesia, and the characteristics of a successful startup ecosystem.
Why Asia?
Sarah Lacy is one of the few Silicon Valley-based journalists covering the Asian startup scene. When asked about what is motivating her sojourn to this part of the world, she said:
“The cost of starting up has been so compressed, what’s been happening is – way more founders are becoming millionaires. Great story on a human individual level, but when it comes to my career as a business reporter – it’s not a very interesting story – by and large people are taking less risks, people are building evolutionary and not revolutionary technologies. US is becoming very hostile to immigrants when immigrants have become the reason for disruption in silicon valley. I have seen a lot of trends that points towards not Silicon Valley falling towards the ocean, but Silicon Valley certainly not being part of a huge company formation that it was.”
“The biggest opportunities are not in the call centers and outsourcing and utilizing cheap talent to make the US companies better. Big stories are companies like Tencent, Reliance and who’ve been building huge things for local markets and you don’t get to see those things in US.”
“I saw the next ten years of my career in terms of what the big story is and I saw the unique opportunity to tell it and certainly no one from Silicon Valley who had the expertise in covering high growth companies was spending any time overseas.”
On cities being touted as the “next Silicon Valley”
“I am absolutely incensed when CNN or The New York Times writes a headline saying – ‘Is China the next Silicon Valley’. I’m like, think about what you just said – you were talking about a massive swath of land with one billion population to a 50 miles land that blossomed during the era of computing. How would those two be remotely similar? It’s such a flawed assumption. You’re doing a disservice to the emerging world trying to draw that parallel.”
She however doesn’t disagree with the notion that there are some common characteristics that define a innovative startup land.
“Everyone needs an ecosystem, that plays to countries endemic strengths. I think there are some understated and some overstated. Good educational systems, companies that employ a lot of high skilled labor that people can spin off from, govt. policy that doesn’t have stringent labor laws, basic professionals like the lawyers and accountants and how to very quickly create companies. The single thing that outdoes all these things is the culture of risk taking. That’s why immigrants play such a big role in Silicon Valley, ” Lacy says.
On India vs China vs Indonesia
Next in our discussion was the hot topic of technology and startups in India and China. Clichéd as it might be, I had to ask her that question, given that she spent a lot of time in both these countries and this is what she had to say on that subject:
“I think India and China are vastly different. Everyone I know in both countries get irritated when the US press tends to lump them together.”
“What’s interesting about India is what Narayana Murthy (chairman of Infosys) said – China gave its people economic freedom first and then will work towards political freedom, India did the opposite.”
“Personally I think China model is better. I think poverty is sad and crushing in India – from what I’ve seen from the UN and the NGO data. And that corruption is worse and I don’t see the advantage of political freedom in India where people are still starving and less than 1% people have benefited from globalization. If you compare and contrast last three decades, 75% of people who have been lifted from poverty have all been from China versus India, who has made progress every year but if you normalize across birth and death rate, life expectancy, literacy, sanitation and almost any other metric it improves at 1% a year. It’s hard to look at that and be in the country to see people suffering and have that western view of – oh democracy is so much better. ”
“At least in the big cities like Jakarta, I was stunned at how progressive Jakarta was and how good the infrastructure was because frankly having been to India I thought Indonesia would have been behind India. But I think in a lot of ways Jakarta is definitely more together than any big city in India I have been to. I think the level goes down so quickly after Jakarta that it’s hard to generalize. While I think the infrastructure is better in Indonesia than India and I think they have a unique set of challenges.”
“India and Indonesia are going to grow dramatically different from China, because it has to do with the infrastructure of the country. China is probably the last country where the ecosystem will revolve around a computer and not mobile. It’s certainly the only other country where there are several multi-billion dollar Internet companies and 400 million Internet users, probably 20% of the population. China is definitely something unique.”
On Asia’s mobile opportunities
“In Indonesia, the mobile opportunity seem to be centered across Blackberry and smartphones, whereas mobile opportunity in India seems centered across feature phones and I see them taking off in completely different directions. When it comes to Indonesia, from what I’ve heard from people building apps for Blackberry that it’s really hard to get paid from carriers. I think in India, there is amazingly innovative opportunities around feature phones, so many entrepreneurs who are doing fascinating things around language learning, mobile banking and entertainment services, group messaging and news delivery — Justdial, redBus is an interesting company. I think there is something incredibly beautiful about building something in constraints, which is why during recessions some of the best companies in Silicon Valley comes about, because it forces you to be creative.”
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