By Sanjay Jain
Child in a toy shop finds everything exciting and would never want to leave the place. Indian start-up space is just like that – awesomely exciting, useful and everyone who explores it once wants to stay in it in some way or the other.
In a very short span it has moved from curiosity to very serious business opportunity with billions being invested and many billions waiting on the sidelines. I do not know if there was any 'Soney ki chidiya' in olden times but start-ups do look like they are the 'Soney ki Chidiya' that will change the face of India like never before and feel proud like never before.
Rightly so, the time is right for the start-ups as the perfect storm is brewing with large enough middle class (bigger then most developed nations) finally having a purchasing power (ofcourse value conscious and hard bargain drivers), reasonable connectivity, angels and VCs willing to take reasonable risk (one would expect more but then it’s a good start) to propel and sustain new entrepreneurs and the new age economy.
Start-ups with their fresh thinking and attacking the problems with technology are creating an environment of efficiency, predictability, transparency, speed, safety, reducing losses, wastages etc. that were never associated or experienced that effectively in India.
As simple as getting a taxi or an auto is itself a miracle unleashed by Uber, Ola and other companies. Similarly, availability of doctors, hospitals and other services can be found out easily and utilised based on the criteria that best match the user. In fact these start-ups are making the traditional manufacturers and traders more efficient and profitable by enabling them predict demand and accordingly distribute efficiently and minimise wastes and loses. Million more applications in every sphere.
Start-ups are hence no more on fringe of the economy with some cute apps/games, and shortly would be central piece of the economy with having started their march towards the trillion dollar mark. These are here to stay solving Indian and global problems and creating millions of jobs both skilled and unskilled. These opportunities are here to stay, unlike in the past where BPO etc. created a flash in India in late 90s and now vanished to other cheaper markets like Philippines.
Tech start-ups will propel Indian economy to the next level, as in most of the other sectors Indian firms including software companies have missed the opportunity by not investing enough in R&D or innovation to create unique products that can be sold to the world (not as the lowest cost seller).
In fact our record is not so great for domestic markets as well, as most of the value added products that we use are either re-assembled here or are imported. Erstwhile emerging countries like China, South Korea etc, who like India, started with technology transfers but soon got on to the task of developing on those and today are selling us everything from high speed trains to cars to Tvs to Acs and the list is endless.
‘Make in India’ in today's scenario would not be human capital intensive but technology and robot driven manufacturing. These emerging start-ups are creating employment like never before across the towns that we have not even heard off, besides absorbing lakhs of engineers, technicians and other skilled & professional graduates.
There is no doubt that start-ups is what will drive India into the future and the trillion dollar mark will be achieved sooner then anyone expects. For this to happen a lot of attention and enabling environment needs to be created from both government and the investors. Yes there will be few closures, few missed turns, few collapses and some other stupidities and snafus.
These youngsters didn’t claim to be known as business experts, but came with vision and passion to solve a problem/inefficiency. So lets not blame them for lack of business acumen or ability to create a rock solid fool proof business processes.
Investors need to work with these visionaries to find mature experienced business experts to partner these young visionaries who can give them a long leeway to experiment and innovate and also bring in focus, controls and processes. This will in turn ensure they are a great business and also act as voice of sanity and buffer between investors themselves who some time want to to move at break-neck speeds that could be unviable for the business.
In Silicon Valley after initial 3/4 years start-ups and VCs find seasoned professionals to create a rock solid business from great vision, passion & energy like Eric Schmidt @Google, Meg Whitman @Ebay, Sheryl Sandberg @FB without diluting the founders vision or role. Time is ripe in India for many of these start-ups to search their co-partner and leader for the next phase.
With thousand of crores at disposal the founders would need some serious experts to guide and lead other than the VCs and investors so as to strike healthy balance between sustainable good business and race to become the next Unicorns rather than take short-term measures to inflate metrics and valuations.
For trillion dollar mark our entrepreneurs need to be super dedicated, motivated and our language of evaluations has to change from win and fail. The outcome may not be desirable but that does not mean one has failed. Fail is finality!. In start-ups when outcomes are not upto mark you start-up all over again and create new ways to tackle the issues.
Why is big Indian money shying away from this sector when foreigners seem to have so much confidence in our visionaries? All the big money has come from Alibaba, Tiger, Sequoia, Baidu, SoftBank, Jafco, Vertex, etc. and there is not even one big Indian HNI in this league.
Trillion dollar mark wont be achieved by just off shore funds. VCs have managed to raise billions of dollars for encouraging start-ups in India but Indian HNIs have not managed to show same enthusiasm for the next big thing which is now and here.
After seeing the dizzying valuations of the start-ups many of the Indian conglomerates have started copying them and announced e-commerce/ market place platforms. It takes no rocket science to guess they stand no chance in succeeding there. However, it would be great that they or the scions of these families start active investment at both early and late stage in these start-ups as their own wealth diversifications strategy and bring their Indian experience and learnings to the founders so as to avoid pitfalls and faster growth in tricky Indian markets.
This could be a game changer for Indian start-ups as this would be an unbeatable combo of old wolves with new vision. Investment is needed in all areas whether health care, logistics, analytics, big data, food, agriculture, medicine, genetics, you name it and it needs to be fixed. The HNIs can pick what they know best or are comfortable, and bring about the change by encouraging the visionary entrepreneurs.
As they say ‘Let a thousand flowers bloom” and lets not get too judgemental at such an early stage as every new movement needs time to settle down and find its feet. With active support and collaboration I am sure trillion dollars (India needs every dollar of this GDP for India's survival in this next century) is just a milestone which will soon be passed without even surprise by these start-ups. Infact 'Yeh Dil Mangey More' of start-ups to make India find its rightful place and respect in the world.
The writer is Strayed and now a Squatter in this start-up toyshop/ecosystem.