Efforts are being made to elevate Bangalore from its current global ranking of 19 among startup destinations. So, what’s not been going right for entrepreneurs in the Silicon Valley of India of late? Priyanka Golikeri finds out.
wentythree-year-old Aruj Garg has two roles to juggle. Being a fifth year student at the National Law School in Nagarbhavi calls for a rigorous curriculum and projects. And running a food venture simultaneously proves equally daunting. Alongside attending lectures at NLS, he has to run around getting supplies at wholesale rates, ensure that his staff is manning the food outlet properly, chalk out expansion plans, and run after investors for funding. But Garg enjoys it all. His venture Bhukkad, a food outlet in the NLS campus ends up raking in Rs2,000 per day by selling an array of sandwiches, smoothies and burgers to students. He now has plans of expanding Bhukkad to other campuses in the city and is in talks with college administrations to lend him some campus space. Getting started, however, was quite a mean task, recollects Garg. Forget the external funding, or lobbying for space in the campus, or even hiring personnel to man the outlet. It’s firstly about convincing the family into accepting entrepreneurship, he contends. “Like most Indian parents, even mine wanted their son to have a secure job, especially after I got enrolled in NLS. So, it was a hard time convincing them ,” says Garg. In his case, not only was he starting his own little business, but was breaking away completely from the legal profession. “Unlike abroad, where being an entrepreneur does not result in raised eyebrows, in India it is still a nascent phenomenon. People say from a budding lawyer I ended up becoming a dukandaar (shopkeeper),” points out Garg, adding it will still be some time before society in general adopts a more welcoming approach towards entrepre-
neurship. Bangalore, nonetheless, sees far more startups mushrooming around each year compared to any other city in the country. Rough estimates suggest anywhere between 1000-1200 new ventures take shape annually in the city, across verticals like clean technology, food, education, healthcare, microfinance, transport, cloud, mobile and of course technology. “Bangalore leads with 36 per cent of the total startups in India emerging here,” says Vlad Dubovskiy, founder of Unstoppable.in, a group which helps build entrepreneurial ecosystems. Globally, the city’s ranking is a decent 19 as per a recent study (see table). ‘Startup’ has become the new party word, says Kush Medhora, co-founder, Dream:In, an organisation which supports entrepreneurs. “Right now it is just scratching the surface.” “A lot has to be done if Bangalore is to break into the top 10 or top 5 league globally. The whole ecosystem has to be built that can encourage entrepreneurship,” argues Dubovskiy.
Ecosystem While Bangalore is busy getting itself the title, Silicon Valley of India, the city should look deeper into the other aspect on which Silicon Valley in California thrives. “Silicon Valley no doubt is the No 1 startup destination globally as they really foster the spirit of entrepreneurship,” says Dubovskiy. Like Silicon Valley, Bangalore should establish “startup centres”, where all the basic facilities and infrastructure is provided to upcoming ventures at minimal rates, say experts. “When I visited Silicon Valley, there
were these centres exclusively for startups,” says Phanindra Sama, CEO of online bus ticketing firm redBus. Such centres have a reception, internet facility, post box, audio-video conferencing facilities where all those starting out can come and work in a conducive environment. Almost all startups get shaped up with initial funding from the entrepreneurs themselves and thus in the beginning, money is a key concern. So are rentals and other costs associated with internet connection, getting various softwares like photoflash and dreamweaver, as well as putting up audiovideo conferencing systems etc. “Often, budding entrepreneurs have to run from pillar to post to get a high bandwidth internet connection. It proves expensive to get a good net connection and find a decent place to put up the first office,” rues Sama. Since space and rentals prove another major headache, most ventures start from the homes of the entrepreneurs. KK Cariapa, chief buddy, Opsbuds Solutions, who has started four companies in the city, says his first firm Mainstay Teleconsultancy began from a dog house located under the staircase of his home. “But as the venture grows gradually, there is a need for a conference room, among other things. This, very often, is not possible if the venture is getting operated out of someone’s home,” explains Sama. Thus, there is a pressing need for a startup centre in the city where all budding businesses can work and avail of common infrastructure as well as have access to lawyers, chartered accountants who can help them with the legal and accounting practices. If these nitty-gritties associated with infrastructure and rentals are taken care of,
for startups it is like winning one-third of the battle.
Mentorship Further to setting up startup centres, foremost among the requirements is a strong set of mentors who can guide the projects in their initial stages. Cariapa says mentors with their vast knowledge and experience not just advice startups, they also help structure the ideas in a manner that appears attractive to investors and provide the initial hand-holding. “ I may have a base idea in mind like starting food chains for college students. This idea has to be structured in a way that the food chain will become popular not just with the target student community, but also with investors as well as the college administrations who can lend me space,” says Garg. The Indus Entrepreneurs (TiE) and Dream:In recently held activities across the city where upcoming entrepreneurs could interact with mentors. Brij Bhasin from GSF India, another organisation fostering entrepreneurship, says they hold accelerator programmes twice a year for startups where mentorship is provided. “We hold two batches of five startups each, wherein they are assisted to figure out their business model.”
Talent Even though ventures begin as the idea of a bunch of enthusiastic individuals, they soon need a pool of talent to steer the idea ahead. And getting talent to work for something that is yet to even get officially recognised is a Herculean task. “In India, the option of working for a startup is virtually non-existent for
youngsters. Most are encouraged only to join well-known firms,” says Naganand Doraswamy, president, TiE. Startups need people not just at the fresher level, but also experienced minds to take care of domains like finance, accounting, technology, marketing, etc. Sama says initially they had to rope in their peers and get people through word of mouth. Again, a mindset change is needed whereby individuals start thinking of startups as a serious career choice and perceive them at par with any other firm when it comes to job safety and security, says Bhasin. Moreover, each startup today employs anything between 5 and 250 people. “When talk of job scarcity is at its peak, startups are able to provide a breather to jobseekers,” says Medhora. Regarding provisions like health cover and provident fund, several startups incorporate these segments under the health allowance and other allowance components of the pay structure. Says Rangan Varadan, founder of microfinance startup MircoGraam, “As per government rules, a firm can allot PF only if it has more than 25 employees. So instead of reserving certain amount separately as PF, startups tend to give it along with the salary as part of the various allowances.” To encourage talent infusion in startups, regular round job exchange programmes will be held in Bangalore starting this year, that will be a platform for both job seekers and the startups to meet at a common level. Shashikiran, associate director with TiE, says jobseekers and freshers need more awareness about the career opportunities that exist in start-up firms. “We will hold job exchange programmes say once a month or once in three months so that
start-ups that are on the look-out for talent and job seekers can meet, discuss and get to know the opportunities.”
Investors Another big, and expected, headache is getting funding. All startups commence operations after the founders shell out money from their savings. Garg worked for four months and used the Rs 25,000 he earned in the process to launch Bhukkad. Sama says investors would ask them about the market size of the domain they operate in. “We had no data on that. Later on, we did find venture capital firms who sat with us, heard us out, believed in our idea and agreed to pump in funds.” Experts say there is a need for more platforms wherein upcoming firms can acquaint themselves with investors. According to Bhasin, when startups join their accelerator programme, they are provided with a seed funding of up to $ 30,000. “Towards the completion of the programme that runs for two to three months, startups get to present themselves before a group of 300-400 investors.” The pathway to entrepreneurship in the city might be riddled with hurdles. But that fire to do something on your own is the key driver of all the ventures. “Belief in certain concepts and the ability to deliver them is important,” says Cariapa, explaining that a risk taking appetite, focus, patience and courage to face challenging situations is all that is needed to give birth and nurture a professional baby. Sama has the last word, “An entrepreneur has to keep figuring our solutions to problems and never lose hope.” firstname.lastname@example.org
Published on Mar 13, 2013
Published on Mar 13, 2013
Efforts are being made to elevate Bangalore from its current global ranking of 19 among startup destinations. So, what’s not been going righ...