Many things about Chennai go unnoticed. It is still seen as a laid-back city where youngsters will go to engineering colleges, settle for safe and steady jobs and not take risks. However, that image of Chennai is fast fading.
Says city-based serial entrepreneur Chandu Nair, ?Even in supposedly ?conservative Chennai?, a business is no longer something you have to inherit in order to own or run it. Nearly 600 startups are coming up every quarter, according to the Registrar of Companies. Chennai ranks among the top three cities in India for women entrepreneurship.?
Nair is a KPO business pioneer and is currently engaged with early-stage and growth entrepreneurs. ?In the late 1980s, when I turned entrepreneur, an angel had nothing to with money,? he says. ?A first-generation entrepreneur had no one to turn to for assistance, funding, support of any kind. We?ve come a long way since then and post the dot-com boom, there has been a sea change in the entrepreneur ecosystem in the city and for certain newer industries.?
Among the other things that people overlook about Chennai is the city is fast evolving as a centre for technology start-ups, especially IT products. According to Nasscom the next wave of growth for the Indian IT industry would be driven by product companies. An entirely new breed of entrepreneurs who are making the most of this trend is entering the scene in Chennai.
A good example is OrangeScape, a firm promoted by Suresh Sambandam, a successful start-up from Chennai. It has been named the prime technology partner for Google?s App Engine and it is the only company worldwide to be chosen by Google. Sambandam, who discovered computers as a teenager in small-town Cuddalore, set up OrangeScape in 2004 with a vision of simplifying the entire programming paradigm.
?When cloud computing came, we took our chances with Google and it paid off,? says Sambandam.
The cloud has three layers ? one is hardware, which is at the bottom. The software application is at the top. In the middle is the platform and OrangeScape is at the platform level. OrangeScape is today among 10 companies worldwide to be featured by US-based technology and market research company Forrester and Gartner in the PaaS (platform as a service) category. This $5-million company hopes to grow to a billion-dollar company in five years.
?Building an IT product company is very different from building an IT service company. You require a gestation period of at least three to five years to create a product. When there is a lot of buzz around an industry, as in services, it becomes noise. People don?t settle down. In Bangalore people change jobs within 18 months. In services it may work, not in products,? says Sambandam.
Chennai offers a reasonably stable workforce. Tamil Nadu is known for its engineering colleges. ?Graduates from Coimbatore, Erode or Salem just don?t switch jobs,? points out Sambandam.
Sambandam had to go to Bangalore when he graduated in the 1990s because it was not possible to find a job in the IT industry unless one went to Mumbai or Bangalore. By the turn of the century things began to change.
Devendra Saharia, co-founder and president, Ajuba International, was a young investment banker doing mergers and acquisitions for technology companies in San Francisco during the late 1990s. When the entrepreneurial bug bit him, he decided to return to India and checked out several cities, before opting to set up his business in Chennai . Ajuba provides billing and revenue cycle management solutions to healthcare providers in the US.
Saharia exited Ajuba last year and launched AGS Health, again in Chennai, and once again targeting the American healthcare market. He already has three centres in Chennai. ?We are doing high-end work with technology and analytics orientation,? he says. ?Chennai has a diverse talent pool. There is hardcore engineering talent, hardware talent because of the automobile industry and also a vast IT talent pool. Chennai is ideal for companies that combine IT services with technology.?
Dorai Thodla, a serial entrepreneur and an engineer from Chennai, started two companies in India and two in the US. iMorph is his fourth company, which he set up after he moved to the US. It has an office in Silicon Valley and in Chennai. Thodla, who has been shuttling between Chennai and the US, says Chennai has changed a lot in the last five or six years. He wants to help create an ecosystem for entrepreneurs as it exists in Silicon Valley.
Thodla has been working with a lot of start-up groups in Chennai. He is part of the TiE Chennai chapter, whose members mentor and help start-ups. He has actively promoted the Chennai Open Coffee Club, a meeting place for young people with ideas. He says it has grown from a few people discussing things in a coffee shop to conducting meetings in conference rooms. Chennai Gigs, where all those who want to set up technology companies meet, is another group he has promoted and is actively involved with.
Thodla says that there is quite a bit of micro product work going on in the city. There are any number of youngsters doing products for gaming sites, phone games and Android games. They earn about Rs 1 lakh every month. ?Some of them produce a product every three months,? he says. There are also a growing number of award-winning companies with turnovers between Rs 20 crore and 40 crore a year emerging from the city.
One of the companies around which there is a buzz is ArrayShield, a provider of innovative pattern-based two-factor authentication products. It has recently won the Nasscom Emerge 50 Award in the start-up category.
Another such firm is Unmetric, which uses a combination of advanced algorithms and human computing power to deliver relevant data and benchmarking insights into social media metrics, and caters to several industries.
Then there is Railsfactory, a Ruby on Rails application development and consulting company offering high-end solutions for various business needs. In five years it has emerged as one of the premier RoR consultants worldwide. The list of emerging start-ups and those on the verge of hitting the big time is quite long.
The next few years will determine whether Chennai will evolve as the next big thing in IT products and technology. Says Nair, ?A lot more needs to be done to have a truly entrepreneur-friendly ecosystem of the sort that exists in the Valley; that requires the active involvement of educational institutions, research centres, established firms and government bodies.?
