Dr Suhas S Patil is founder & Chairman Emeritus of Cirrus Logic Inc, a leading semiconductor company in the USA. Founded in 1984, Cirrus Logic is recognised for creating the business model of semiconductor companies. The company brought to fruition the VLSI design methodology work he did at MIT and the University of Utah. He is also a founder and the first president of The Indus Entrepreneurs (TiE), a global non-profit organisation teaching and fostering entrepreneurship. In his recent visit to India, he spoke with Manoj Gairola on the state of affairs in the Indian IT industry. Excerpts:• At present, Indian IT companies are more focused towards the service sector. Why is this so? When do you think Indian companies will start developing their own products for domestic and global markets? When Indian IT companies started operations, they did not have access to risk capital in the form of Venture Capital investment but they did have access to human capital, which they used to build world class service companies. Building a product requires both risk capital and sharp understanding of the market. As a result of providing IT services all over the world, I believe that the Indian IT industry and its workforce has now acquired a very good understanding of the market. Risk capital to invest in developing products is now available to startup companies in India and established IT companies have the financial strength to self-fund product development. Therefore, I believe that the time is ripe for the emergence of IT product companies in India. I am sure that within the next decade, substantial product companies with branded software products for the global markets will emerge from India.• Do you find any change in the business environment in India? Have VCs and investors become more comfortable investing in Indian start-ups? Major American VCs and other global financial institutions are, indeed, now comfortable in investing in Indian start-up companies. Early stage venture capital, as well as angle investment, is however seriously lagging. The Indian Government must resolve issues of double taxation, which are preventing direct investment by NRI angle investors. This issue has been brought to the attention of officials of the Government but I do not think they have yet grasped the importance of this issue in the development of start-up companies specially product companies and, as such, it has not received any attention. • What role can the Government play in creating the right kind of environment for VCs to invest in India?Successful models of how Government can foster development of innovative companies in areas of national interest and of creating funds without the use of taxpayers monies to enhance size of venture funds is well developed in the US in the form of methods developed by Small Business Administration. I suggest that the Indian Government study these methods and implement what is appropriate for the Indian situation to boost entrepreneurship on a broader scale. In this regard The Indus Entrepreneurs (TiE) which was started in Silicon Valley 15 years ago can be of great help. • What challenges do VCs face in India?Indians are risk takers, hardworking and intellectually strong. Most of the entrepreneurs understand the sole proprietary model of business but lack understanding of companies professionally organised to leverage financial and human capital for rapid growth. This gap in understanding must be closed. • What can we do to develop entrepreneurial education?Entrepreneurs should take advantage of the seminars and conferences organised by chapters of TiE through out the year. Entrepreneurship is not something one can teach though conventional means of imparting education. The process of learning and development of an entrepreneur begins when one gets inspired and becomes convinced about the possibility of becoming a successful entrepreneur against all odds.
