A decade and a half ago, the term ‘Bangalored’ in the West meant losing jobs. It meant your job had been ‘outsourced’ to a firm housed in the city of Bangalore. A little over fifteen years later Bangalore is buzzing for a completely different reason. The sights and sounds of Bangalore today have everything to do with its transformation into becoming the startup capital of India. Having lived in Bangalore long enough, and having witnessed first hand its evolution into a city of ideas, we were naturally piqued, and enough to explore the reasons behind why it happened to the place we lived in. The search for reasons also has a personal element to it. We believe our venture, Dabit Labs happened because we lived in a city that’s as digitally savvy as it can get. It had to happen here. In trying to get to the bottom of why a city like Bangalore became a magnet for those with ideas and keen to birth startup enterprises we looked at data, sociological, cultural, and economic. We talked to the brightest entrepreneurs housed in the city, trying to get an idea of why they did what they did in the city of Bangalore. Most of who we spoke to were first generation entrepreneurs, and a few from the second generation.

As academics and researchers, we were also keen to distill all the qualitative and quantitative data to arrive at a generic conceptual construct that could point the way to more ‘Bangalores’ happening, in India and elsewhere. Here’s what we found and figured out.

Based on our research we found that for any city to thrive as an entrepreneurial destination, there are three key elements that need to come together. These elements, namely the city, its institutions, and the people that populate it connect to each other in a way that they feed off each other. We tracked each of these broad elements based on their inclinations, and here’s what we arrived at. We found that cities and socio-cultural environments within operate at a macro level with a certain culture that they bring to the fore. Institutions housed in cities for their part function with certain philosophies they hold dear. The last of the three elements, the micro-constituent, people, behave in manners that are outcomes to their mindsets.

Entrepreneurial destination drivers:

City – Culture
Institutions – Philosophy
People – Mindset

To study these three elements with their inclinations that went to the heart of fostering an entrepreneurial ecosystem, we had to map them on a continuum that consisted of 2 key variables namely, ‘openness’ and ‘enterprising’. The 2X2 matrix listed below helps illustrate the interplay of these two variables and the various ecosystem outcomes due to the same.

Entrepreneurial driver matrix, showing axes of high and low enertprising, and low and high openness.

It’s important that the 2 variables be applied to the city, its institutions, and to its people. That is, during the progress of our study, we applied the ‘openness’ variable universally to a city’s culture, its institutional philosophies, and its people’s mindsets. A similar application was done for ‘enterprising’ as a variable. Entrepreneurial ecosystems will thrive in places where the culture is open and enterprising, and when the institutions there, and people populating it also score high on both parameters. When all the three elements score low on both ‘openness’ and ‘enterprising’ for a certain geography, the place can be characterized as ‘regressive’, and the outcome of such a state would be that it would deplete in people numbers. When the three elements are scored either low-high or high-low on ‘openness’ and ‘enterprising’, either such places will witness an exodus due to it’s ‘repressive’ nature with people leaving to entrepreneurship supporting geographies, or they will remain ‘stagnant’ with no significant growth. 

The data that we collected as part of our study comprehensively proved that Bangalore scored high on ,’openness’ and ‘enterprising’ for all three elements, namely, the city’s culture, institutional philosophies, and people’s mindsets. When we quizzed Bangalore based entrepreneurs as to why this came to be for the city, the responses received were eye-openers. Anand GC, a serial entrepreneur who’s co-founded companies like Active Cubes and Fikka believes Bangalore is where pedigrees don’t matter. If you had the idea and could prop it up with a convincing plan you could get could get backers and seed capital. Anand also pointed to the fact that knowledge supported by enabling technology is what drove startup businesses in Bangalore.  This is unlike the traditional trade businesses that flourished in the past started by entrepreneurs living in the West and North of India.  The reason why knowledge driven startups are aplenty can be found in the strong education foundation that thrived in places like Bangalore. Also, if there was one city that welcomed radical ideas it had to be Bangalore.  When we asked why so, Shreyas Shibulal,  second generation entrepreneur pointed to many reasons including that of the city having been a cantonment on the past. With a culture that supported tolerance and acceptance it was natural that Bangalore attracted people from diverse backgrounds to come in and settle. 

This diversity meant generation of differing ideas and a synthesis where people freely participated without rancor and with high levels of acceptance of diversity.  Aslam Hirani, founder of assessment firm, UAssess, along with the other entrepreneurs is firmly of the opinion that Bangalore’s startup ecosystem is unique and probably the best there is in India.  No other city offers the talent pool, funding and mentor support that Bangalore provides, according to him.  Other entrepreneurs we spoke to agree.  Again, all entrepreneurs we spoke to, pointed firmly to Information Technology having transformed Bangalore into a modern, open, and ideating city. It also contributed to the availability of startup funds that backed radical ideas. This meant the backers were betting on the unconventional, and they did.  The technology boom also ensured that startup founders travelled to the West and first hand witnessed what it was like to be in places where ideas mattered and piloted businesses.  This helped immensely in fostering the right startup psyches and attitudes in the ideators housed in the city.

We also found that all answers to ‘why Bangalore’ aren’t easy to come by.  For example, when we asked why a Bangalore didn’t happen elsewhere in India, especially in the South where cultures are a bit similar, the responses aren’t clear in the positions they take. Shreyas Shibulal who originally hails from the neighbouring state of Kerala that has been a model for social progress (he grew up in Bangalore) agrees there is no correlation between society evolving for the better and entrepreneurship flourishing.  Our data proves culture matters, and so does institutional orientations via their philosophies.  People mindsets in line with culture and institutions proved to be the closing link that sealed the entrepreneurial character of a place.  We were also curious to know from the startup founders if they thought Bangalore would sustain as an entrepreneurial hub; all expressed their optimism that it would.  They didn’t see Bangalore’s startup climate dipping in the near future.  They also opined in unison that it’s possible that another city could come along and take the crown away from Bangalore, though it seemed unlikely in the near future.

To understand the reasons behind Bangalore and its startup ecosystem flourishing, it’s important to look an enabling trickle down that happens from culture at a macro level to institutions, and finally to people. If you have openness and enterprising attitudes operating at these three levels in plenty you can bet the place will flourish as a bedrock for ideas and enterprises born out of such ideas.

Bangalore stands testimony to this having happened visibly.  It’s probably why many who come to Bangalore from other parts of India and around the world stick around to contribute to its further progress. We are of course biased towards our city.  We love it here.  We are however certain you will too.

About the Authors

Ray Titus.

Ray Titus is Dean & Professor of Marketing, Alliance School of Business, Alliance University, Bangalore. He is also the author of ‘Round the Clock : How a 24X7 Digital Marketplace is Transforming Business’ and ‘Yuva India: Consumption and Lifestyle Choices of a Young India’.

Sejal Valera is Curriculum Research Lead at the Institute of Product Leadership, Bangalore. She also consults extensively for industry as a Digital & Inbound Marketing specialist.