"Innovation many a time happens informally, even over a coffee table," he said brushing aside popular notions that it happens at serious business meetings or at conclaves of researchers and round-table conferences.

Innovation did not require a huge workforce and could happen with just handful of individuals thinking over a solution, he said citing the example of i-Pod wherein the idea basically sprung up from five individuals. Many a time, great products were those that were developed by a start-up, he added.

However, innovation must be backed by an attitude to take up risk. "Do not be afraid of taking risk," he said. "Nine out of 10 products might fail as they do in Silicon Valley. But the success of Silicon Valley is based on these failures," he said while stating that a single success story could turn the tide. "We need to see a few breakthroughs in this space like it happened in the Silicon Valley," he said.

An innovative product must be one that "addresses a genuine problem" and offers an effective solution to the world market, he said while narrating the success of hotmail.

The crux of the product should be that it should be able to "find a problem and provide a solution", he said. Once a product was launched, it could take some time before it turned into a success story, but once it happened the gains could be huge, he said.  

Founder of Hotmail.com, Sabeer Bhatia at Nasscom's IT Conclave

Photograph: Dibyangshu Sarkar/AFP/Getty Images