LOOKING AHEAD
companies which were already successful. They are unlike the start-ups in the US, where young first-generation entrepreneurs, leveraging the eco-system of high-quality universities, angel investors and venture capitalists, have created companies like Microsoft, Intel and Google. Compared to them, successful first-generation entrepreneurs in India mostly built companies either in, or fuelled by, the services sector. So, while questions about the existence of Indian products continued to be raised, slowly and steadily, over the last decade, an eco-system, similar to that in Silicon Valley and Route 128 in the USA, has been emerging in India. Over the past few years, the Department of Science and Technology has helped set-up scores of incubators in universities; though still in their infancy, they are learning and evolving fast. At the same time, a number of successful professionals and businessmen have become angel-investors; organisations like
funds, like Venture-East TeNeT fund, and Indian Angels Network, which have been providing seed capital and first round funding. Even numerous government departments have launched a number of schemes to provide seed funds for product development for start-ups. Recently, there’s been an emergence of some larger venture funds focused on startups (though, most of the venture funds still look for late-stage investment and function more like growth capital funds). On top of that, there are conferences like Proto.in and business plan and start-up competitions in different parts of the country. A large number of youngsters in and around universities have been hooked to entrepreneurship. The eco-system is ready The outlook of this eco-system is similar to that in the USA. The free spirit and huge amount of energy are already there. There are also some early signs of success. The number of people who do see entrepreneurship as a way of life has vastly increased. A city like Chennai, for example, sees roughly about 600 new tech start-ups every six months; Bengaluru sees about 700. In the coming decade, this will become a force to reckon with. One will see all types of start-ups and all kinds of products. The difference from the past may be that they will first look at succeeding in the Indian market, before going world-wide. The success of IT companies had taught us the reverse lesson. In the past, start-ups
In the coming decade, start-ups will first look at succeeding in the Indian market before going world-wide. The Indus Entrepreneurs (TiE) have emerged in most cities, acting as mentors to start-ups. Also, organisations like National Entrepreneurship Network (NEN) are today active in more than 300 campuses across the country. While not everybody becomes an entrepreneur right after graduating, these are students who are aware and equipped to start. Further, there are now several small
were often told to “build a global company,” which was a euphemism for focusing on and winning in the West (as there was no sizeable Indian market). With the recent global economic crisis, where the domestic Indian market emerged not only robust but also growing very rapidly, the correction was done. Now the start-ups are correctly pushed to focus on the local market, where they can not only afford to fail and learn with low penalty, but where they can build a successful revenue stream that could fund their “go to the world” drive later-on. The local focus is also of importance because funding for start-ups continues to be an issue. Companies focus on the local market to figure out a way to make revenues early on, without spending money on travel. The constraint to rapid growth is the lack of adequate skilled workforce and talent to build up these businesses as they scale up. Anyone from a bakery to an IT company to a product firm requires product managers and quality talent. Perhaps India should open up our processes for talent from other countries to these opportunities. There is a lot of hard work that still needs to be done. But then entrepreneurship is any way about hard work. One has to get going; we have to learn to fail many times and accept failures. Success will follow. A new kind of entrepreneurship The coming decade will also see another interesting phenomenon in entrepreneurship, peculiar to India. The robust economic growth that India has achieved over the past two decades has had lots of positives, including the confidence it has given to its youngsters to venture into new ideas and opportunities. It has made a significant difference to the incomes of Indian households
“I honestly feel I would have failed as an entrepreneur if I had to start from scratch. To be successful as an entpreneur, you need passion as much as perseverance. There is no success without failure.”
—Adi Godrej, Chairman, Godrej Industries
FEBRUARY 2011
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