Infosys co-founder N R Narayana Murthy on Thursday compared the focus on revenues without giving adequate attention to the bottom lines, and the valuation jumps of startups thereof, to a “Ponzi scheme”.
He said the blame for allowing such a system to flourish lies with the “mature” venture capital funds and a company’s board of directors, and not with the young entrepreneurs. Speaking at a Nasscom event, Murthy said Infosys itself had to make a lot of tough calls for the longer term benefits, and asked VC funds to be open and honest about speaking about things. In a cycle of increasing valuations with repeated funding rounds, the price a company is available at keeps on going up till a setback or an impact arises due to any event and all falls down, Murthy said.
Speaking about the impact on demand for IT companies amid a global macroeconomic environment saddled with negatives, Murthy told reporters that Indian technology companies have always benefitted in times of difficulties. He also said that generative artificial intelligence platforms like ChatGPT will not have any impact on Indian IT jobs because of those. Murthy said he has himself tried such platforms, and added that concerns about the impact on jobs were also raised in the 1970s when computers had arrived on the scene.
