CHENNAI: In a city where traditional businesses have dominated, startup activity is blossoming like never before. Chennai is a stronghold of companies offering software-as-a-service ( SaaS ) and its hardware ecosystem is embracing a culture of bold, advanced experimenting. At The Economic Times Power of Ideas event in the city on Wednesday, panelists from a cross-section of the startup world--entrepreneurs, investors and academia--discussed this transformation of Chennai's business landscape threadbare."(When I started out) there was no such angel investor or venture capital," said Murugavel Janakiraman , among Chennai's earliest internet entrepreneurs and who took his company, Matrimony.com , public in September. "All this happened only in 2007-08. But today, thanks to companies like Freshworks and Zoho , Chennai has evolved as a strong SaaS ecosystem.“Janakiraman is a typical Chennai entrepreneur, conservative with money and focused on steady growth."Relative to other cities, where if people have Rs 10 in the pocket they are thinking of a business plan of Rs 100, (in Chennai), if a person has Rs 100 in his pocket he is thinking of a business plan of Rs 10," said K Ramakrishnan, senior MD-strategic relationships at Spark Capital Advisors , an independent full-service investment bank. "That is the cultural conditioning that entrepreneurs have here. I think this has percolated down from traditional business houses and old-economy businesses, and the new-economy entrepreneurs seem to have embraced it." The conservatism has resulted in Chennai having a comparatively slow but steady rise in startup activity. In recent years, SaaS has become an integral part of the city's startup story. Arvind Parthiban , whose website analytics company Zarget was acquired by Freshworks in August, compared the Chennai startup story to the evolution of Silicon Valley as a global tech and startup hub because of early success stories. "Why do you think Silicon Valley is Silicon Valley today? It is because someone talked about it many years ago and the ecosystem is creating big companies.That is what is happening in Chennai now. There was a time when services companies (like Zoho) that brought business from the US to India... started as product companies. People came out of Zoho and started other companies... This will create an ecosystem of talented people like product managers, data scientists," said Parthiban, who is now director of marketing at Freshworks.If SaaS is one successful theme for Chennai, the increasing number of core engineering product companies coming out of IIT-Madras is another. "At (IITM's) incubation cell, we have 70-odd companies and more than 80 % are in that (product) space. A vast majority of them are pure technology companies that have come out of research labs. The beauty of those kinds of companies is that in many ways, they are long-term solutions to real problems," said Mahesh Panchagnula, associate faculty-in charge, IIT-Madras Incubation Cell."The ecosystem that is required to make these companies come out by the dozens is what IIT-Madras has fortunately been able to assemble."The panelists said there was a strong need for startups to have access to mentors who have built companies as well as access to early-stage funding. All said and done, Chennai certainly has built a brand. "The brand power that emana tes from here is incredible," said Bruce Schwack, director of communications at online pharmacy Netmeds . "Chennai is an incredible place to work and build a business. All of India is starting to recognise that."(The Economic Times Power of Ideas is presented by Facebook, in partnership with DST , Govt of India, and CIIE, IIM Ahmedabad)Run a Business? Get Your Free Business Listing on Economic Times. Click Here