Joseph Schumpeter, creative destruction, and the signficance of business strategy

Artificial Intelligence (AI), the way it has progressed in the past few years, has surprised me, like many of you. And yet, it feels like a dejavu. It feels as though I have been here multiple times before. It felt uneasy to see many people in my neighborhood lose their jobs in the 1980s as cotton mills in Bombay (now Mumbai) shut down. Both my father and father-in-law were either forced to retire or lost their jobs. Today, we have super-tall buildings in their place in the Prabhadevi-Parel area, including one Trump Tower. Then came PCs and the Internet in the 90s. In 1991, Bill Gates announced that "Kodak is toast" at the Buffett Group gathering. It took time, but slowly most Kodak film studios in my neighborhood vanished. This was followed by the mobile revolution, and the landline monopoly of BSNL crumbled. Gone are the days when one could wave a hand and an auto/taxi would stop. The person who said that this phenomenon, which he called "creative destruction", is at the heart of capitalism is Joseph Schumpeter. A study of capitalism that ignores creative destruction is like "Hamlet without the Danish prince," said Schumpeter in the closing line of chapter 7 of his most famous book, "Capitalism, socialism, and democracy" (CS&D), published in 1942. What was Schumpeter trying to say in this chapter titled "The process of creative destruction"? And how does it relate to business strategy? Let's explore this in this article.

Schumpeter wrote CS&D from 1939 to 1942 while he was a faculty member at Harvard. He had just finished writing a massive treatise called "Business Cycles". It was published in 1939 in two volumes totaling 1095 pages. In 1941, he was invited to The Lowell Institute in Boston to deliver eight public lectures on "An economic interpretation of our times". This is where he first presented the ideas he had been working on that became CS&D. This was a turbulent period in Schumpeter's life. He was disturbed by the war in Europe. Moreover, in 1941, he was under investigation by the FBI for possible espionage, and he was ostracized in the social circles of Cambridge. He had begun to scrutinize his life and felt he was "worthless", "frivolous", "vain", and a "snob", and his life had been "a failure". It is remarkable to see someone produce such a marvelous book under such circumstances.

Who was Schumpeter responding to when he wrote CS&D, particularly the creative destruction chapter? This chapter is in Part II of the book entitled "Can capitalism survive?" In the first few chapters of Part II, Schumpeter is presenting his view of how contemporary capitalism works. He felt that most economists treated the economy as static and competition as perfect. Schumpeter felt that the economy is an evolutionary process. He says, "The essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process." He gives credit to Karl Marx for emphasizing this aspect. Thus, he is primarily responding to the economists who treat the economy and capitalism as a static entity. Schumpeter says, "The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates."

Schumpeter says due to this process of creative destruction, competition is an "ever-present threat" even though a business may be a monopoly or a part of an oligopoly. He illustrates his point with the example of retail trade. "In the case of retail trade the competition that matters arises not from additional shops of the same type, but from the department store, the chain store, the mail-order house and the supermarket which are bound to destroy those pyramids sooner or later."

One implication of this evolutionary process undergoing "industrial mutation" from time to time is that "there is no point in appraising the performance of that process ex visu of a given point of time; we must judge its performance over time, as it unfolds through decades or centuries." The second implication is that "since we are dealing with an organic process, analysis of what happens in any particular part of it - say, in an individual concern or industry - may indeed clarify details of mechanism but is inconclusive beyond that." Schumpeter is saying that we shouldn't be analyzing the impact of AI on one company or sector; the effect is likely to spread to the entire economy over time. 

This is where Schumpeter brings in the role of strategy. The term "business strategy" wasn't as fashionable then as it is now. Schumpeter says, "Every piece of business strategy acquires its true significance only against the background of that process and within the situation created by it. It must be seen in its role in the perennial gale of creative destruction; it cannot be understood irrespective of it or, in fact, on the hypothesis that there is a perennial lull." The primary purpose of business strategy, according to Schumpeter, is to watch out for strong winds or waves - technological, regulatory, fashion, demographic - that are likely to disrupt the business and to prepare the organization to ride them with appropriate responses. 

I found the chapter "The process of creative destruction" both readable and quite significant for today's context. Eighty years after this chapter was written, many of us still feel ill-prepared to face the strong winds of AI and automation.

Sources:

"Capitalism, socialism, and democracy," Joseph Schumpeter, Routledge, 1994 (chapter 7)

"Prophet of innovation: Joseph Schumpeter and creative destruction", Thomas McCraw, Harvard University Press, 2007 (chapter 21)

Related articles:

A century of innovation economics: Schumpeter's 5 types of innovations, April 6, 2010
Joseph Schumpeter and the principle of indeterminateness, December 9, 2013

Catalign Quarterly - Issue #1 - June 2026

After a two-year gap, I am restarting Catalign Quarterly, a newsletter that doesn’t have a good track record of running quarterly. The motivation is twofold: it nudges me to reflect on my work, and it creates an opportunity to keep in touch with clients, friends, and well-wishers.

Crux of the challenge-based strategy: The quarter began with a day spent with the managers of Broadridge India at Lahari Resorts on the outskirts of Hyderabad. During the workshop, we explored what it means to identify the crux of business challenges, develop a response based on an internal bright spot, and design low-cost experiments to validate the response's assumptions. Thanks to Krishna Kumar of ISEC for the opportunity.

Strategic innovation: It has been fifteen years since I began teaching in the executive education programs on management of innovation at IIM Bangalore, thanks to the break given by my friend Prof Rishikesha Krishnan.  This quarter, I had the opportunity to teach in the Strategic Management of Innovation program run by Prof Sai Yayavaram in April. With the trade war and the US-Iran war in the background, it wasn’t too difficult to communicate the significance of building technology-based innovation capacity.

Designing robust interventions: I became curious when I read Joseph Stiglitz talk about robust interventions, “interventions that are simple enough that you don’t have to very fine-tune to make them work, even if you have a bad president like President Bush.” That was fifteen years ago. It became the theme of the year for me in 2011. I also gave a talk on designing robust interventions at TISS, Mumbai, the same year. Ideas don’t leave you easily. I facilitated a 2-day workshop on the same topic last April in the beautiful Kuppam campus of Agastya International Foundation for the K V Raghavan Fellows.

Design thinking: It was a pleasure to introduce design thinking to women entrepreneurs of the Goldman Sachs 10K Women program at IIMB’s incubator. And also, to the executives of Mann+Hummel and transitioning Defence officers at IIMB.

Confusion to clarity:  Thanks to the encouragement from Prof Vasanthi Srinivasan, I got an opportunity to combine two of my favorite topics - innovation stamina and mindfulness to offer sessions on “Confusion to clarity: a work-life alignment exercise”. It was well received by the executives of ComputaCenter and the participants of Tanmatra, IIMB’s flagship program for women leaders.

Young entrepreneurs in deep-tech: Last year, I wrote about my feeling that India just woke up in 2025 to realize its lack of deep-tech capacity. In January, I invited young entrepreneurs, in their teens and twenties, to talk about their deep-tech venture experiences during my course on “Managing technological innovation” at IIT Bombay. I summarized their talks recently: Dr. Darshit Parmar of Flash Cryogenics, and Khushi Chandak on her electrochrome-based startup journey. I also got a chance to interview my nephew Neel Redkar, 21, who is doing exciting work on foundational video-action models at Standard Intelligence in San Francisco (summary of the interview, Spotify podcast).

Reading & writing: While reading was scattered this quarter, I managed to finish the first part of the Ibis trilogy “Sea of poppies” by Amitav Ghosh and “Disloyal: a memoir” by Michael Cohen, Donald Trump’s fixer and personal attorney for a decade. I enjoyed both books and hope to write about them. I wrote my takeaways from “The Dark Side of Camelot”, a JFK biography by Seymour Hersh, and My 3 takeaways from Richard Gombrich’s “What the Buddha thought”. My reading in the next quarter will be influenced by my preparation for the upcoming course at IIMB, “Strategic management of technology and innovation” starting in September (8^th year). But I hope to finish “Power and Progress” by Daren Acemoglu.

Trekking and retreat in the Kumaon region of Uttarakhand: During the trek to Pindari glacier last month, what struck me was the adoption of solar everywhere in the mountains. In contrast, we could also see the opportunity Jio is trying to tap – that of satellite-based phones; even Pindari Baba is waiting for it at 12500 ft. We also spent 3 days at the serene Krishnamurti Foundation India (KFI) retreat at Jalna near Almoda and did a group reading-cum-reflection on his Colombo talk in 1980, “The book of life”.

My 3 takeaways from Richard Gombrich’s “What the Buddha thought”

I used to think that saying anything about what the Buddha taught two thousand five hundred years ago was bold. But people like Walpola Rahula, Thich Nhat Hanh, Bhikku Bodhi, and others have attempted it and done a good job. However, I have been highly sceptical about anything said about what the Buddha thought. That requires the knowledge of pre-existing ideas on which Buddha might have built his ideas, apart from, of course, his own contemplative insight. That looked formidable to me. Hence, I kept avoiding Richard Gombrich’s book “What the Buddha Thought”. One day in 2023, YouTube recommended that I listen to Gombrich’s talk on the same topic. YouTube recommendations are like a God-sent message of the day, isn’t it? So I listened to his 2013 talk at the University of Hyderabad. My scepticism didn’t go away after listening to the talk. However, I was impressed by his command of Pali, Sanskrit, and ancient Indian texts like the Vedas, Upanishads, and the Jain practices, which either preceded or co-existed with Buddha. I was even more impressed by his methodology. Gombrich begins by saying, “I only have fifty minutes to speak to you. And the Buddha had many more thoughts that can be expressed or explained in fifty minutes.  So if you would like to hear or learn about more of them, please read my book.”  So I turned to the book during my sojourn in coastal Karnataka at Kalyanapura and Gokarna last December. 

Main objective of the book: Gombrich's main objective in the book is to illustrate that the Buddha’s main ideological opponents were brahmins, and he used their metaphors with new meanings to attack them. In such an endeavour, understanding the historical context is very important. For example, Gombrich shows that the Buddha was familiar with the Bṛhadāranyaka Upanishad (BU) and he built upon and modified the ideas of karma and rebirth found in BU.

Here are my three takeaways from the book:

1. Asking the right question: Upanishads, the texts that carry the essence of the Vedas, emphasized the question, “What exists?” The answer to which goes into the notions of Atman and Brahman. Gombrich says, “The Buddha said that this is the wrong question.” He feels that the Buddha was primarily concerned with what we can experience, what can be present to consciousness. To Gombrich, the doctrine looks like pragmatic empiricism.

I searched to see if the Pali canon contains Buddha explicitly saying “wrong question”. I couldn’t find one. Instead, what I found were Buddha’s responses to questions related to existence or non-existence. For example, in Kaccanagotta Sutta (SN12.15), Buddha says, “‘All exists’, Kaccana, this is one extreme. ‘All does not exist’: this is the second extreme. Without veering towards either of these extremes, the Tathagata teaches the Dhamma by the middle.” 

2. Ethicization and universalization of karma: I must admit that I was completely ignorant of how Buddha innovated the karma doctrine until I read this book. And I got even more intrigued when Gombrich mentioned, “Karma is my favourite point of entry to the Buddha’s worldview”. He adds, “It is not only fundamental to the Buddha’s whole view of life, but also a kind of lynchpin which holds the rest of the basic tenets together.” The suspense deepened.

Indian society, even today, is fairly ritual-bound. As I was growing up, there would be a Satyanarayan pooja at home once every few years, and especially before or after a major event like a wedding or recovery from some illness. A religious ritual is supposed to accumulate merit (or puṇya). That was the case during Buddha’s time as well. However, the accumulation of merit depended upon the correctness of ritual, sacrifice, and ceremony, and the type of ritual varied by gender and caste. Buddha said, “It is intention, monks, that I call karma." (Cetanāhaṃ bhikkhave kammaṃ vadāmi) (AN 6.63). Buddha said the state of mind (with what intent) matters more than the correctness of the action itself. Gombrich called this ethicization of karma – i.e. karma depends on moral intention rather than ritual action.

Gombrich also says that the Buddha universalized karma. Once you say karma is moral intention, it applies to everybody and everywhere, whether you are helping, insulting, cursing in your mind, or praying for someone. Buddha said that this process of karmic merit/de-merit accumulation continues through rebirth and breaks only when one sees reality clearly, and called this cycle-break nibbāna or liberation. Gombrich shows in the book how this process of ethicization and universalization of karma had begun in Brahminism, specifically in Brhadāraṇyakā Upanishad, which predates the Buddha, and in Jainism, where non-violence (ahimsā) is paramount.

3. Fire as the central metaphor for experience as a process: What is Buddha’s most important philosophical idea? People would have different answers. Gombrich feels, “What we can experience is only process. This may be his most important philosophical idea.” And Buddha used fire as the central metaphor to communicate this.

The most popular fire-related sermon is the third, known in English as “The Fire sermon” (SN35.28) or sometimes called “The all”. In Pali, it is called A̅ditta-pariyāya, ‘The way of putting things as being on fire’. The sermon begins: ‘Everything, O monks, is on fire.’ Then Buddha explains what ‘everything’ means. It is all our faculties – the five senses plus the mind – and their objects and operations and the feelings they give rise to. And Buddha refers to three fires. Everything is on fire with the fires of passion, hatred, and delusion. Why three fires?

Fire had a major significance in the Vedic tradition. The brahmin householder had the duty to keep alight a set of three fires, which he tended daily. Buddha assigned a new meaning to each fire. In the second fire sermon (Dutiya Aggi Sutta AN 7.47), he says the brahmin should abandon the three unwholesome fires of greed, hatred, and delusion. And cultivate the three wholesome fires of one’s parents, one’s household and dependents, and holy men (renunciates and brahmins), suggesting taking care of the people around oneself.

In the first sermon, known as Dhammacakkappavattana Sutta (SN 56.11) (Setting in motion the wheel of dhamma), Buddha defines dukkha as pañcupādānakkhandhā. This is generally translated as the five aggregates of grasping. Gombrich gives a different interpretation of the Pali phrase upādāna khandhā. He feels that the Buddha is employing the metaphor of fire here and trying to communicate the same message as the Fire Sermon. Upādāna, Gombrich argues, means that which fuels an active process and keeps it alive. He translates upādāna-khandhā as ‘blazing masses of fuel’.

According to Gombrich, Buddha is suggesting that life experience is not a thing but a process. It is a causally conditioned process. Our experience is like burning bundles of firewood to feed the fires of passion, hatred, and confusion. And the moment the fuel is over, the fire goes out. This is the literal meaning of the Sanskrit word nirvāna, where the verbal root vā means ‘to blow,’ and with the prefix nir, the meaning is ‘cease to burn, go out’ (like a flame). It was a pleasant surprise to see Gombrich bring out the significance of process, something I wrote about almost a decade ago, without much understanding of Buddhism.

Richard Gombrich’s “What the Buddha Thought” is not light reading. It demands delving into the meanings of Sanskrit and Pali phrases and seeing the Buddha’s context through Vedic rituals, the Bṛhadāraṇyaka and Chāndogya Upanishads, and Jain texts. The book offers a glimpse into the scholarly work of Joanna Jurewicz, the Polish linguist, and Sue Hamilton on early Buddhism. I enjoyed reading it and will keep going back to it.

Neel Redkar, 21, shares his journey on organizing hackathons, AI research, and building video action models

At 21, most students are finishing their undergraduate studies and getting busy with job applications. In contrast, Neel Redkar has already made significant contributions to building video action models and raising capital at Standard Intelligence (SI), an AGI startup based in San Francisco. The six-member team at SI recently raised $75M with a $500M valuation. Neel has published a single-author paper at the Neural Information Processing Systems (NeurIPS) conference in 2023 when he was still a teenager, and he participated in a week-long cross-country hackathon from Vermont to Los Angeles when he was 16 years old. Neel is my nephew, and I got an opportunity to talk to him while he was visiting Mumbai for his cousin's wedding last month. You can listen to the interview podcast here and interview transcript is available here. Here are some of the highlights from the interview:

From science projects to AI programming: Neel started learning Python when he was in the third grade. In eighth grade, he started using machine learning libraries while doing a science project that distinguishes trash from recyclable material and compost. Learning initially began by watching YouTube videos, but he soon realized that it was much faster to read the documentation. He says, “I knew how to program derivatives before I knew the word derivative.” By ninth grade, he became familiar with math, i.e., derivatives and matrix multiplication, required to understand machine learning algorithms. He built an application that tried to predict earthquakes in California. It had very low accuracy. However, he ended up creating a large dataset on earthquakes in California and made it public.

Organizing hackathons: In eighth grade, Neel attended a local hackathon and enjoyed it. He made new friends and joined the Slack group of their hack club. This led him to a workshop on organizing hackathons in San Francisco during the summer after eighth grade. Neel says, “I think this was really important for me,” because it was the first time he realized it was possible to raise $ 10K–$15 K to organize a hackathon by just sending emails. Subsequently, he, along with others, organized many hackathons, including some at Angel Hacks. In 2021, at age 16, Neel participated in The Hacker Zephyr, the world’s longest (3502 miles) cross-country hackathon, in which 42 kids traveled from Vermont to Los Angeles on a train converted into a hacking playground.

Independent AI research: At age 18, Neel got a Davidson scholarship to do research on creating new AI algorithms to make artificial photosynthesis & carbon capture a reality, and presented his work at the AAAI23 conference. The same year, he presented a single-author paper at the Neural Information Processing Systems (NeurIPS-2023) Conference on language-to-material generation architecture for crystal discovery. Neel managed to get his own grant for traveling to New Orleans for NeurIPS. He says, “(At NeurIPS) I met tons of people who are great friends.”

Leaving UCLA and Standard Intelligence: During the Sophomore year at UCLA, Neel tried to balance three things: classes, research, and social life. However, as the year proceeded, he realized, “I am not doing well socially, I am not doing well research-wise, and I’m not doing well class-wise.” So he decided to take a gap year and joined Standard Intelligence (SI), an AGI startup in San Francisco. In the past year at SI, Neel has contributed to creating a video action model (FDM-1) that is trained on 11 million hours of video and operates on a context window of 1 hour 50 minutes. This is likely to be an order of magnitude more than what a typical LLM like ChatGPT has been trained on. And they managed to build their own data storage cluster at a fractional cost of a typical cloud provider. It is not surprising that the team at SI has raised $75M with a $500M valuation in a funding round co-led by Sequoia and Stark Capital. Neel also managed to create a demo of their video action model to drive a car in a parking lot. Neel says, “The demo attracted a lot of attention from the investor community as well as people like Andrej (Karpathy).” At this stage, he admits, “Things are going so well, there’s no reason to go back (to UCLA)”.

Being intentional and taking upside-down risks: I asked Neel for advice to the college kids who are worried about finding a job in the AI world. Neel says, “A lot of college or high school students love to defer their decisions to other people. Like, my mom told me I need to go to college.” Neel’s suggestion is to be intentional about what you do. Ask yourself, “Why am I going to college?” If the answer is “to study,” then focus on studies; if the answer is “to make friends,” then focus on making friends. He feels people should identify what their interests are, search up interesting problems in the field, do something about it, ignore everyone telling you, you can’t do it, make something, and then cold email people with the cool thing they made. “You want to maximize upside risk,” says Neel. When you send 100 cold emails, the chance is high that one will respond. He says, “By taking small risks consistently that offer you no negative consequences, you’re always going to do something interesting with your life.”

At 21, Neel's clarity about why he is doing what he is doing is impressive. I wish him all the best for the journey ahead. Hope you find this podcast useful.

John F Kennedy (JFK) and the freedom of the free world

John F Kennedy (JFK) was the torchbearer of the free world at the height of the Cold War. The New York Times hailed him as someone who “reasserted American leadership of the free world”. When JFK visited the Berlin Wall for the first time on June 23, 1963, he said, “There are many people in the world who really don’t understand, or say they don’t, what is the great issue between the free world and the communist world.” JFK paused and then added, “Lassen sie nach Berlin kommen!” (“Let them come to Berlin!”) What did freedom mean to JFK? I got a glimpse of it when I read the then New York Times bestseller, “The Dark Side of Camelot,” written by Pulitzer Prize-winning journalist Seymour Hersh. Some of the claims made in the book are disputed. However, the broad tone is not. Here is what I gathered from the book about what freedom meant to JFK:

• Freedom to manipulate elections: Chapter ten is titled ‘The stolen election’. Hersh argues that JFK’s father, Joseph P. Kennedy, contracted with Chicago mafia leader Sam Giancana and got help from the organized crime syndicate to manipulate the election, especially in Illinois and West Virginia. It involved vote fraud and vote buying. Not all historians agree on whether the Kennedys had a deal with organized crime. However, most agree that there was localized vote fraud. But then the fraud might have been there on both the Democratic and Republican sides. And perhaps vote fraud has been a part of the democratic election process from the beginning. In Hersh’s words, “Money bought Joseph P. Kennedy enormous personal freedom, and bought his son the presidency.” My takeaway is that the Kennedys had the means to manipulate the election, and they exercised it.

• Freedom to overthrow and kill foreign leaders and civilians: Hersh and most historians agree that JFK approved and sustained intense covert efforts to remove Fidel Castro from power, including operations that explicitly involved assassination. The first major operation, the Bay of Pigs, was a major disaster. The CIA recruited and trained 1400 Cuban exiles in Florida for attacking and overthrowing Fidel Castro. On April 17, 1961, the CIA-recruited army made an amphibious landing at the Bay of Pigs, on Cuba’s south coast. The expectation was that there would be widespread revolt against the Castro regime. Instead, two days of fierce fighting resulted in 114 deaths, and 1200 from the exile army were captured. Hersh quotes Kennedy saying, “If we have to get rid of these…men, it is much better to dump them in Cuba than in the United States, especially if that is where they want to go.

Another major overthrow operation supported by the JFK government was to outlive not only JFK, but would consume three more US presidents and eight successive military governments in South Vietnam. JFK approved US support for a coup against Ngo Dinh Diem and his brother Ngo Dinh Nhu in 1963. Ironically, it was JFK who had strongly armed and supported Diem during the early part of his tenure. American troops in Vietnam went from 900 in 1961 to 16,000 in 1963. They were officially classified as “advisors”, though many were involved in combat-related operations. With US support, Diem was expected to fight against communist-backed opposition; instead, he started fighting Buddhist and other independent political groups. On November 2, 1963, Diem and Nhu were seized by General Minh’s troops in a Roman Catholic church, blindfolded, and executed by gunshots to the back of the head. “Americans are gratified by a sense of joy that they find in Saigon,” the New York Times commented in an editorial on November 4. While the number of people (civilians + military) killed during the coup was small (less than 50), over the years, the Vietnam War would cost the lives of close to 3 million Vietnamese (military + civilians) and over 50,000 US soldiers. 

• Freedom to use women like painkillers: “You know, I get a migraine headache if I don’t get a strange piece of ass every day,” JFK is quoted as saying in the book. Whether true or not, historians agree that JFK was extraordinarily promiscuous and compulsive in his pursuit of women. JFK’s partners included women from the glamour world, such as Marilyn Monroe and Judith Campbell Exner, who was also a friend of Mafia don Sam Giancana. But they also included a nineteen-year-old White House intern (who published her memoir in 2012), and numerous others whose names JFK couldn’t remember. So, he would say, ‘Hello, kid. How are you?’ One of his lovers recalls in the book, “I was just thrilled. Here is this handsome older man. He’s interested in me. But in retrospect, it’s really sad. I was just another girl. There was a compartment for girls, and once you were in the sex compartment, you weren’t a person anymore. I got declassed and depersonalized.”

So, what did freedom mean to JFK? Was it about using money, power, and position to fulfil one’s desires? Was it about changing the world to match your desired image, one in which there is no communism and the US is ruling the world? Perhaps, it was all of this. Daniel Kahneman says in ‘Thinking, Fast and Slow’, “We can be blind to the obvious, and we can be blind to our blindness.” Whether JFK was blind to his obvious biases, I don’t know. From his actions, he appeared to be a prisoner of his biases, yet he successfully managed his image as a hardworking chief executive and an attentive husband. But then, who is not a prisoner of his biases?

Learnings from Khushi Chandak on her electrochrome-based startup journey

Khushi Chandak was a second-year Electrical Engineering student when she attended my course "Managing technological innovation" in Spring 2025 at Desai Sethi School of Entrepreneurship (DSSE) at IIT Bombay. After the first or second class, she told me she had a startup on sustainable e-ink displays. I was surprised. In the second year of B.Tech., you don't start a company on display technology. I would have been less surprised if Khushi had said her company was into JEE mentoring marketplace or genAI-based animation. Anyway, she was absent for most of the course. Then I bumped into her this Spring when I was back on campus teaching the same half-semester course. I was curious about her startup journey, and she readily agreed to share it with the class.

"Imagine these class walls are made of glass, and with a tap of the switch, I can make it opaque or change its tint. Power consumption is an issue in commercial buildings with a high window-to-wall ratio. A tint can reduce sunlight entering the building and make it more power efficient." - This is how Khushi started her talk. We were curious now.

Here are the key points from Khushi's startup journey:

• Finding the right technology & experts: It began at the start of Khushi's second year, when she and her co-founder thought they could make eyeglasses in which a tap could change the lens color. The idea was selected for the IDEAS program run by DSSE, where selected teams go through customer and technology discovery over six months with the help of mentors. While researching, they realized that they needed to use electrochrome technology, in which material properties like color change with electricity. They found that IIT Bombay has a faculty working on the technology. They approached the professor for advice, and the discussion led to the professor joining them as a co-founder. This was a turning point.

• The danger of attachment to an idea: Khushi and her friend met between 100 and 150 people - potential customers and opticians, local vendors, as well as branded ones like Lenskart and luxury brands. They tried to find out if the idea is interesting and how much people would pay. They also started building a prototype and realized that 500 ml chemical costs Rs 35,000. Working on the prototype during Dec '24-Jan '25, they realized the glasses won't sell below Rs 20K. Then they reached out to experts working on electrochrome technology, mostly within India, but a few outside India. Three research groups were working on it in India. But the technology had not scaled like battery technology.

But the team decided to go ahead with prototyping plans. They were able to demo small glass prototypes changing colors. For three months, two of them were working late nights, with 2-3 hours of sleep. Their project got selected at an IIT Madras competition in the top 25 out of 200 applications. Here, they got a strong negative feedback and were convinced that the product won't sell. One month was spent in frustration, but finally, there was an acceptance, and they decided to pivot. "Don't get too attached to the idea," Khushi said.

• Learning to fail fast: They decided to work on flexible plastic sheets. In two weeks, they realized this idea is not viable. The market for e-paper displays was still in its infancy in India. This was faster. What next? Then they looked at buildings with high glass facades and with openings for natural light. They talked to architects and builders. The market looked promising. However, they realized they needed to move from a 5cm x 5cm prototype to a 4 ft x 6 ft window. This would take 4 to 6 years and significant capital before they reach the market with a product.

They incorporated the company in May 2025 and received multiple grants. They could demonstrate a 5 cm x 5 cm display for 5K cycles, perhaps a first time in India for the type of electrochromic technology they were working on. However, at this juncture, the girls asked if they are ready to make a long term commitment to this venture and decided to back out.  

• Productizing small wins: Looking back, Khushi felt they could have considered productizing the small glasses they had prototyped, perhaps as part of a larger painting, such as a Varli painting.

Despite the setback, Khushi and her co-founder are still together, looking for their next idea. Khushi, who made the presentation in my class last January, was definitely more mature and more confident than the Khushi I met a year ago. While she had put in a lot of effort for the venture, she had been wise enough not to borrow money or dip into her savings. Wishing her the best in her journey ahead.

Insights from a deep-tech entrepreneur, Dr. Darshit Parmar, CEO, Flash Cryogenics

It was a pleasure to have Dr. Darshit Parmar, Co-founder and CEO, Flash Cryogenics, give a guest talk in my class at Desai Sethi School of Entrepreneurship (DSSE), IIT Bombay, a few months ago. Darshit is no stranger to the campus where Flash Cryogenics (FC) is incubated. In fact, the campus has been virtually his home since he came here from Rajkot almost a decade ago to do his M.Tech. in Mechanical Engineering. By the time Flash Cryogenics was officially registered in 2024, Darshit had spent 8 years researching and maturing a cryogenics technology. He was the third PhD student, working on this technology, at the cryogenics lab led by Prof Milind Atrey, who is a co-founder and mentor at FC and presently the Deputy Director of the institute.

Darshit began our class with the question: What is cryogenics? When you use refrigeration for creating spaces below -150 °C, it involves cryogenics. MRI machines with cool superconducting magnets, preserving biological specimens like stem cells, liquified natural gas (LNG), and rocket fuels such as liquid hydrogen and oxygen, need cryogenics.

Here are my four key takeaways from Darshit’s talk:

1.   Need to perfect the technology before taking it to the market: Darshit began his research with the question - Can we use HVAC materials and reach cryogenic temperatures? Like most of his classmates, he thought he would take up a job after finishing his Master's. Prof Atrey used to bring visitors from industry and academia to the lab, and the students would demonstrate how a normal HVAC compressor can be used to achieve -200 °C. The visitors used to be surprised. This convinced Darshit that this technology is likely to have commercial potential. However, it had missing pieces. Darshit spent the next 4-5 years maturing the technology.

2.   Customer discovery is very important: In 2018-19, Darshit realized that he needed a business plan. He joined the I-NCUBATE program jointly organised by DSSE (DCE at that time), IIT Bombay, and GDC, IIT Madras, which nudged him towards customer discovery. He dropped out in the middle, perhaps due to demands from his research; however, he realized the importance of answering the question – Who is my customer? One possibility was blood banks. They said they were ready for pilots. However, no one submitted a letter of intent. Healthcare is a heavily regulated industry, and hence, not a good place to start your journey. Then came the pilot project from the chemistry lab. It was completed successfully. However, there was also a realization that the market for such refrigerators is very small. This is when, in Darshit’s words, the shit hit the fan. It led to introspection – What is our USP? 3 things came up – 1) temperature flexibility  -40 °C all the way to -200 °C, 2) energy efficiency 20-30% cooling efficiency, 3) sustainable refrigerators when one combines ozone depletion potential and global warming potential. Could LNG be a market? Yes, very small in India right now, but growing. Could data center cooling be a market? Yes, mostly outside India right now. Could Liquified Bio Gas (LBG) be a market? Yes, potentially. During customer interaction, a new problem was discovered, biogas separation – separating CO2 and Methane. Could FC solve the problem for the customer? Could FC build a cryotherapy chamber for a resort? As the FC team began interacting with customers, new avenues opened. Now, FC has reached a point where there are orders, and the FC team needs to deliver. And eventually see which option scales.

3.   Cost and speed of experimentation matter: A company like Zepto gets started with two people, two laptops, and starts generating revenue from day one. A company like FC works differently. Simulations do get started on a laptop. However, the proof of pudding lies in showing a physical demo. For Darshit, the prototype was built when he got a couple of grants, one from the institute itself and another from Nidhi Prayas from the Department of Science and Technology (DST). Many experiments didn’t work. For example, the compressor module worked well, but the freezer cabinet failed for a couple of iterations. For an energy solution, it is important to have your own test lab. If there are claims to be made about energy efficiency, it helps to be confident through internal testing before going for an external energy audit. Initially, FC had to outsource the freezer chamber. It cost more, it had quality issues, and each improvement iteration took longer. For example, the local vendor didn’t understand what vacuum insulation means. Eventually, FC built its own workshop and testbed with cutting tools and a welding machine. Darshit knew a bit about fabrication, which helped.

4.   Patent where it is really important: Patenting is expensive. Filing a patent for India region costs about ₹1.5 Lakh, and filing a patent for protection in the US costs ₹20 Lakh. If you want to cover all regions, such as the UK, the EU, Australia, etc., it will cost ₹70-80 Lakh. Moreover, big organizations easily find ways to circumvent a patent filed by a startup. For example, if FC files a patent to protect a refrigerant mix that improves energy efficiency by 30-40%, a big player can easily change the mix a little bit and get the advantage. Hence, Darshit feels that startups should patent where it is really important. Does it mean you should not patent at all? No, a big player is also worried about its brand being damaged if found infringing on other players’ patents. Legal battles are very expensive. It is best not to get into it in the first place.

With an energy crisis looming large across India, we need companies like Flash Cryogenics, which can play a role in liquifying biogas and natural gas. Deep tech is a game of patience, and FC is still exploring its product-market fit. We wish Darshit and the FC team all the very best in their journey ahead.