Hotmail co-founder Sabeer Bhatia strongly criticized India’s startup ecosystem, blaming rigid bureaucracy and a lack of risk-taking culture for stifling innovation. Speaking on a podcast, he claimed India had the potential to build something even bigger than WhatsApp, but bureaucratic overreach destroyed promising ideas. Recalling one of his own ventures allegedly shut down by TRAI, Bhatia said, “We didn’t break any rules, but an official’s interpretation killed it. Had this happened in the U.S., it would’ve scaled.”
Bhatia argued that India rewards rule-following over innovation. He cited Uber’s rise—despite breaking taxi norms—as something unlikely to happen in India, where officials focus more on enforcing rules than supporting disruption. He believes the problem is cultural, not just systemic. “New ideas need fresh thinking, but in India, the first reaction is usually to shut it down,” he said.
Drawing from personal experience, Bhatia highlighted the discouraging atmosphere for out-of-the-box thinkers. “In Silicon Valley, people support bold ideas. In India, 20 people will discourage you right away,” he said. He also noted that most aspiring entrepreneurs in India are driven by money, not problem-solving—a contrast to his approach with Hotmail.
Bhatia also took aim at the education system, calling it outdated and ineffective. He criticized the focus on rote learning and exam preparation, questioning whether the 65,000 students going to Kota annually to crack JEE are learning to innovate or just damaging their creativity. He lamented that even top IIT graduates often aim for jobs at companies like JP Morgan instead of thinking independently.