Indian AI Startups

A wave of frustration is sweeping through India’s AI and SaaS startup ecosystem, sparking what founders call the ‘Skip India Movement’. There is a growing sentiment that Indian enterprises are not worth the time, effort, or resources required to sell to them.

Vaibhav Domkundwar, CEO of Better Capital, suggested starting the movement and summed up the belief when he said, “AI founders finally skipping selling to Indian customers after doing PoCs after PoCs and then being requested for even more ‘free’ PoCs. There is a limit to this… Enough is enough.”

This isn’t a one-off case. It’s a recurring theme on X and LinkedIn, with founders and tech professionals sharing their exasperation over what they see as an ecosystem that exploits startups’ desperation for early customers, without paying up.

‘Never Do a Free POC’

In India, getting paid for a proof of concept (PoC) is becoming a rare win. Most early-stage startups find themselves in endless sales loops where potential clients demand increasingly elaborate demos, only to ghost when it comes to commercial discussions.

Domkundwar clarified that this is not about India as a market, but about getting the first customer in the B2B software sector. “Our data has time and again converged on the same conclusion. I do hope it changes at some point for everyone’s benefit,” he added.

Many agree with Domkundwar’s assessment. Paras Chopra, founder of Lossfunk, added to the discussion, saying that he has banned builders at his firm from talking to Indian customers. 

“It’s a tiny tech market, but a comfort zone. Many times, founders end up optimising for the Indian market and realise they can’t scale further,” Chopra said. Pratik Desai, founder of Kissan AI, also agreed with the sentiment. 

This can also be correlated to the recent debate around Sarvam AI’s latest model built on top of Mistral. Several critics argue that making a fine-tune model for Indian consumers is not something that startups should necessarily focus on as it can also be replicated by bigger companies like OpenAI and Google.

Read more: Sarvam AI’s Backlash Exposes the Sad State of Indian AI

There are several founders with stories of detailed PoCs that led to silence. “In 2023, a customer ghosted us after we built a detailed PoC,” said Navaneeth PK, founder of Tooljet. “They resurfaced this month asking for technical support to ‘pitch a strong case to management’… again, no clarity on commercials. We said no.”

Some startups are realising that Indian enterprises often use PoCs as bargaining chips. Many customers leverage this technique only to lower the pricing of the preferred vendor. 

Rajeshree Deotalu, co-founder of Vecros tech, captured the emotional fatigue many founders feel when selling to Indian enterprises. “You prove, pilot, impress… and then either get ghosted or asked for yet another free PoC.”

Despite the setbacks, she remains committed. “It’s disappointing, yes—but we’re still in the game, because someone has to build for India and beyond.”

Even for the bigger IT firms of India, a lot of their AI products have been scaling from PoC to production for the last three years.

Better ROI in the West

Founders are now taking their talents elsewhere—mostly to the US, where customers are perceived to be more willing to pay, faster to decide, and more respectful of the time and tech being offered. “If you’re a startup, then absolutely cater to the US first,” said Michael Fowlie. “It’s rich, uniform, and huge.”

The startup founders somehow agree that skipping local POCs can save time and align better with global product-market fit. 

But Indian businesses also need the best software if they want to provide world-class service. Aakrit Vaish, co-founder & CEO of Haptik, disagreed with the movement. He pushed back against this defeatist narrative, arguing that the founders just haven’t gone deep enough into India-specific problems. 

“If you treat Indian enterprises like your ticket to ultimately go to the US, expect the same short-sightedness from them,” he said. “The TAM is now big enough in several segments for India-first B2B software/AI companies to get to $50-75M in ARR in 5-7 years.”

Ritesh Kumar, founder of TranZact, said that if founders shift from “India as PoC” to “India as one of the destinations,” the entire PoC narrative can transform into a collaborative innovation rather than a sales hurdle.“Whether it’s AI or any other tech, it must always be user-first is what we’ve witnessed,” Kumar said.

Some argue that Indian enterprises only take startups seriously when their products come with international validation or pricing. “Indians mostly prefer paying (worthwhile money) for SaaS when it comes outside India. Else, it has to be cheap,” said a user on X.

Naveen Varshneya from Saanjh.ai criticised the trend among product companies in India, saying that a scalable product business requires a 15-day trial period. “Going for a PoC often signals a lack of vision or expertise,” he said, implying that such moves mirror the mindset of service companies.

Domkundwar offered a counterpoint, saying that globally, many product companies run paid PoCs and work with design partners—an accepted practice in B2B. “The problem is, in India, it rarely converts,” he said, highlighting that the free POCs mindset has to die.

Naveen Katti, founder of Track2win, observed that middle management in Indian enterprises often ends up stifling startups, not out of malice, but as a byproduct of trying to please their bosses. “It’s not an explicit intent, but the outcome seems to be that those who haven’t chosen the corporate route shouldn’t survive,” he noted.

Domkundwar added a cynical twist to that dynamic, saying, “Maybe that’s just how they justify the time they spend doing this.”

Prakash Chandra Prodduturi argued that Indian enterprises have long resisted paying for SaaS, and with AI, the internal build mentality has only grown stronger. “They’ll go through long PoCs, use them to learn, and then walk away. A new founder falls for it every time because the lure of a logo is too strong,” he said.

The message from India’s AI founders is clear: They’re done waiting for the Indian market to mature. Until then, the US is just easier.

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