Contrary to popular perception, Chennai is a vibrant place for technology start-ups. It may not figure high on the list for angel and venture capital investments, compared to Bangalore or Mumbai or Delhi. That is because entrepreneurs in Chennai prefer to keep the ownership closely held, at least till the business attains a certain level.

The positive aspects for Chennai include a large pool of educated people, loyalty among employees and a culture of innovation.

Three points

These points came up during a roundtable discussion with five entrepreneurs, organised on the sidelines of a Nasscom event here. One of them, Dr K. Thirugnanam, CEO, Ascenders Technologies, disagrees that Chennai lags behind other cities in terms of start-ups. “I would say that at least 10 start-ups are coming up daily,” he adds.

The other entrepreneurs around the table – Mr K.C. Raju, Managing Director, Sphata Systems Pvt Ltd; Mr Venkat Rangan, co-founder & CEO, INXS Technologies; Mr George John Vettath, Managing Director, Kallos Solutions; and, Mr Umesh Sachdev, co-founder & CEO, Uniphore Software Systems – were in full agreement with Dr Thirugnanam.

The IQ per Rupee, according to Mr Vettath, is clearly higher in Chennai than anywhere else.

Mr Som Mittal, President, National Association of Software and Service Companies (Nasscom), put the start-up scene in perspective by pointing out that the large number of technical educational institutions gave Chennai an advantage. From being a place for software service offerings, Chennai had transformed to product development.

Big advantage

Loyalty of the employees is a big advantage in Chennai. For instance, says Mr Vettath, six or seven of his employees have been with him for about five years and they even took a 30 per cent cut in pay during a downturn, rather than switching jobs.

Mr Sachdev from Delhi, preferred to start his venture in Chennai because of the facilities it offered. However, just as any place had its challenges, Chennai too had its share. One of this was that he found it difficult to get middle-to-senior level sales personnel to relocate from other cities to Chennai. He did not face that problem on the technical side. This might be because of a lack of cosmopolitan outlook in the city. “It is like what Bangalore was 20 years ago,” he said, and added that things would change in the next five years.

It would change in a year, piped in Mr Vettath. Look at the number of cross-cuisines restaurants in the city.

(This article was published on June 26, 2012)
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