re: bangalore becoming too expensive for startups?

This is in reply to Mekin's post "Bangalore becoming too expensive for startups?".
I feel what he is talking has farther reaching and more important consequences than just what is apparent. My reply is a bit long and something I have given thought to of late and thus I thought of making a separate post out of it:

I actually think what is happening is for the better. Like he mentions, correction is already underway and these are some of the visible effects.

Cost of living in large cities in India has gone up considerably. When people calculate Indian salaries, they often use purchasing power parity which is an Indian average and not reflective of the real cost of living in large cities. Life and its costs are very different in cities like Bombay or Bangalore. For example, people buy Nike shoes and those cost exactly the same here as anywhere else in the world ($100 = Rs.4000). And one really can't counter this with an argument that Nike shoes are a luxury and ask people to buy locally made shoes. The IT industry is like a global economy - salaries here are more equitable across countries than in any other industry. Indian salaries were bound to go up.

There is a real shortage of talent globally. Pay scales for real talent are definitely not due for a correction anytime soon. But one may argue that salaries purely in the Indian context may be inflated and perhaps about to see a decline in their rise.

Another correction that will happen, or is happening is in the minds of the people. Like it or not, India is a hot-bed for skilled labour but not for real talent. The kind of people that the IT services companies need is not the same as that required by startups. The quantity and quality of talent in India is overrated. It could have been a different story but in the last 20 years of an impending IT boom, the people involved or responsible for education here have nursed their myopic vision instrumenting syllabi and processes for churning out armies of Java developers instead of computer scientists.

Indian talent can hardly compete with global talent. The 80-20 rule applies here too and it is not hard to see why expats here are so highly valued.

A third kind of correction I see is also intangible. The Indian IT workforce is very young - most of them only a few years out of school - and the immaturity stares at you in the face. Money is an easy attraction and so we see the job market driven mostly by salaries. Startups can hardly depend on this pool of workers for the stolidity and stability that they need. High enthusiasm and the capacity for a lot of hard work are not sustainable by themselves. The correction I am thinking about here is not really a correction but a process of maturing - in the next 5-7 years growing maturity of the workforce will automatically lend itself to stability.

India is not the ideal place to incubate a startup - it never was. It has just become more apparent now because there are so many startups here. One of the biggest reasons for this is the general lack of passion towards anything. People are by and large indifferent as long as they are getting to blow up money at the malls on poor quality branded clothes, unfunny comedy movies and fancy restaurants with bad food. The "chalta hai" culture is so ingrained that is scares me. With it comes an acceptable mediocrity that falls miles short of being able to give birth to what my manager calls "The Wow Effect". I do not know what it is in the culture that is responsible for the lack of passion and I do not know what the remedy could be but until this gets fixed, the new and the unexplored will face insurmountable obstacles here.