Book excerpt: In Unboxing Bengaluru, reasons why Bangalore works for startups

Opportunities for serendipity and networks so strong, they remind you of the so-called PayPal Mafia of Silicon Valley are among the reasons why Bangalore has a thriving start-up system, co-authors Malini Goyal and Prashanth Prakash write in Unboxing Bengaluru: The City Of New Beginnings. In the following excerpt, they unpack three factors that make Bangalore different from other start-up cities around India:

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According to the 2011 Census, the urban area in Delhi was 1,139 sq. km and in Greater Mumbai was 1,063 sq. km. In contrast, Bengaluru was just 748 sq. km. Further, in Bengaluru most of the startup action is concentrated in the small area of Koramangala, Indiranagar and HSR Layout—an area that Sajith Pai, director, Blume Ventures, calls ‘Silicon Halli’, a play on words that perfectly describes the village-sized area, halli, that it covers, and which sort of rhymes with its Californian counterpart.

Two, a very strong tech culture shapes Bengaluru’s ethos and cultural underpinnings. In contrast, NCR, spread across three states, is a diverse and diffused urban agglomeration, its social chatter strongly shaped by politics, power and bureaucracy. Mumbai buzzes with the film industry’s glamour quotient, shifts in the stock market and the RBI’s crisp comments. With the daily grind, costly living and fast-paced life, Mumbaikars walk a tightrope with little room for nonessential indulgences. In Bengaluru, the dominant narrative revolves around startups, technology, founders and the ensuing hustle culture. This means that the network effect in Bengaluru is not just far more apparent but also much more amplified in length and breadth. Pune-based techie Sahil Khan shifted to Bengaluru during the pandemic exactly for those reasons. The product design executive at the startup Last9 explains, ‘You walk into a cafe in Indiranagar and you meet so many product managers within hours in one place. This is even without going to a meetup. It is almost impossible in any other city.’

This vibe is widely felt. ‘In Delhi, techies are second-class citizens. Politicians, bureaucrats and the trading class make up the top tier. In Bengaluru, techies are the top layer. They are the moneyed and aspirational class,’ adds Ramashish Baranwal, ex-Flipkart, ex-Yahoo, now co-founder of the startup Kislay Veggifarm.

Layer these two factors with a third, very important, one. Historically, Bengaluru has always been a migrant hub with an educated middle class. While networks of kinship and clans do exist, those built on friendships, professional pursuits and passions hold far greater sway. Because migrants often shape the narrative in Bengaluru, their networks are fairly porous and the entry less strictly regulated. Another reason: in a rapidly evolving tech hub, new technologies frequently build and destroy fortunes, creating a rapid churn in the elite club. Since the 1990s, the city has seen multiple waves of superstar tech founders, from Infosys’ N.R. Narayana Murthy, Nandan Nilekani and Kris Gopalakrishnan to Flipkart’s Sachin Bansal and Binny Bansal and Zerodha’s Nithin and Nikhil Kamath. Many others are in the making. This dynamism infuses the city’s elite club with a unique humility, a groundedness. ‘The beauty of Bengaluru is that I could email anybody when I was nobody and starting up. Even if they didn’t know me, they would respond. Over 80 per cent of them actually did,’ says Amrit Acharya, co-founder, Zetwerk.

Some attribute the city’s charm to its unique cultural DNA of understated display of wealth and power. Stack up Wipro Group’s self-effacing Azim Premji against Reliance Group’s visibly wealthy Mumbai-based Mukesh Ambani, and you get the drift. Some attribute it to the inspiring role-modelling by Bengaluru’s early-wave successful entrepreneurs, the so-called leaders of the mafia, who set the tone. Nandan Nilekani, for instance. Despite his success and credentials—at Infosys and as the architect of UIDAI—he remains accessible and responds promptly to phone messages and emails even from people he doesn’t know. ‘Entrepreneurship is a lonely journey. Unlike in any other city, the ecosystem here is very supportive,’ says Ananth Narayanan, founder of Mensa Brands. When he was starting up, he found Nandan Nilekani and Accel partner Subrata Mitra very helpful. ‘Neither Nandan nor Subrata invested in my startup. Yet, they were generous with their time and advice. It doesn’t happen everywhere.’ When starting up, he had many doubts in his mind: would this work? Was it an idea worth chasing? And, most important of all, would he have the energy in his forties to build a startup again? ‘Having people around you who are positive, supportive and also risk-takers is important. I don’t think I would have started Mensa if I was anywhere else,’ Narayanan says.

Whatever the reason, the reality is that Bengaluru’s pay-it-forward culture makes it a compelling ecosystem. Almost every other entrepreneur I spoke to had a story about how, with no prior relationship, no agenda, they received help out of the blue and from someone who could have easily said no. Tarun Mehta, co-founder of EV startup Ather Energy, remembers his first brush with this culture in 2014. He was incubating his startup at IIT Madras. That summer, he cold-emailed Sachin Bansal, who had just raised $1 billion for Flipkart. ‘He was big. I had zero connections. Amazingly, he replied the same night,’ he recalls. They met soon after in Bengaluru. That meeting with Bansal shaped Mehta’s limited experience and understanding of Bengaluru. Impressed, he soon shifted Ather’s base to Bengaluru, ‘a vibrant city brimming with optimism, ambition and risk-takers in search of possibilities’.

Months later, Mehta reached out to Bansal again. His fledgling startup was burning money. He had spent over a year pitching Ather to investors but raising funds for an EV startup seemed almost impossible. Bansal had introduced him to a few other investors but nothing materialized. Mehta had borrowed whatever he could from his parents and now he was staring at a dead end. He remembers that day well. It was the night before Flipkart’s Big Billion Day sale. Mehta knew Bansal would be super busy, yet, walking down Bengaluru’s Lavelle Road, he sent him a message. To his surprise, Bansal replied within the hour, asking him to come to Flipkart’s office. There, a squeamish Mehta requested a cheque for Rs 20–30 lakh at a $6 million valuation. The Flipkart co-founder placed just one condition—that he would be the sole investor, putting in the entire $1 million round. Mehta was ecstatic. What more could he have asked for? ‘I didn’t have a second investor,’ he says. Sachin Bansal then roped in Flipkart co-founder Binny Bansal, and the duo decided on the spot to split the $1 million investment round between them. ‘His agility, the implicit trust. Sachin may not realize this but he saved us, he saved the company,’ says Mehta.

Rajan Bajaj, co-founder of fintech startup Slice, has a similar story. ‘We have gone through many crisis moments. There have been multiple phases of money running out as we tweaked and pivoted our business models. Almost always, we found people willing to help us with no expectations. Having a network of friends to lean on when you are in survival mode makes this city very special.’

Hard to notice and harder to replicate is this cocktail of factors—of informal networks, potent mafias, their influential dons, the pay-it-forward culture and the intrinsically risk-taking and trusting cultural DNA—that commingle to engineer serendipity with a frequency that makes Bengaluru such a pulsating startup hub. ‘When you go to Silicon Valley, you can almost sense something special in the air. Bengaluru gives me that same vibe,’ says Mehta.