By C P Gurnani
A bourgeoning smartphone market bringing millions of people online, thousands of startups with excellent talent, and an improving environment for doing business – are all driving a rush of venture capital into India over the last two years. Behind each start-up is a burning ambition inspired by such disruptive business models as those of AirBnB, the billion-dollar furrows of Uber, or the brand recognition of Instagram. The ecosystem has truly taken off and come into its own — driven by factors including funding, technology that is evolving at a blazing pace and a burgeoning domestic market.
While some domestic startups have cruised past the billion-dollar valuation mark, a majority of tech startups still have some ways to go to achieve the status or financial backing of these high-profile companies. Where most start-ups struggle, is in converting a great start to staying-power. What they need is a seamless shift from a beta version of their offering to a full-fledged presence in the marketplace – which needs mentoring, strategic thinking, planning and the most critical of all - execution.
Critical Mass is building up
1) Brilliant entrepreneurs who give up cushy jobs and lives of luxury to go after their passion.
2) Equally brilliant ideas that stem from personal experience of gaps that the market wants to see filled.
3) Access to Enablers, accelerators, and incubators so that initial requirements of space and IT infrastructure are taken care of.
4) Access to mentors who help entrepreneurs refine their ideas of what the market wants and what investors want.
5) Successful entrepreneurs, who, while still running their own ventures, are now investing in and mentoring other start-ups. Being closest to ground reality, their mentoring carries credibility.
Enablers like NASSCOM, TiE and iSpirt bring together key stakeholders of the ecosystem, including startup incubators, accelerators, angel investors, venture capitalists, support groups, mentors, and technology corporations.
The Nasscom 10,000 Start-ups is a good example of an apex organization offering to help use the resources, connections and knowledge to convert intention to impact!
The Indian government too has helped bring the glamour of the start-up culture to centre-stage. By talking about start-ups and planning for an ecosystem that is supportive, it not only helps many succeed, but it has also helped remove the stigma from possible failure.
It is also planning a series of measures that it hopes will curb startups from changing location, reacting to concerns that companies prefer to domicile overseas after reaching a certain size. A promising move by the government is that it will announce broad measures to help startups "Stay in India”. This will attract and encourage more and more young talent.
With Prime Minister Narendra Modi highlighting the importance of creating and enhancing the start-up ecosystem, the government has acknowledged that it is start-ups that create jobs in a country, far more than giant corporates do. Skill India is one such marvelous effort which will start bearing fruit in the years to come.
With 72 percent of the founders less than 35 years old in India, our country is the youngest startup nation in the world. This lends wings to our hopes for out-of-the-ordinary ideas garnering great market share globally.
Moving from Potential to Success
Scale, Pricing, Utility value
With digital technologies, the barriers to entry are low. So, most offerings that see light of day will have to scale significantly, quickly. That begs the question: “Who wants to use or buy this offering?” Once that is clear, at what price will the buyer put his money where his mouth is? While you may not get it right the first time, a persistent, laser-sharp focus will eventually pay off.
Make innovation your agenda
We live in a VUCA world. If we cannot learn, change and disrupt ourselves, how will we add to the disruptive thinking of our customers? And, an innovative idea always has the first-mover advantage.
Need vs Want
Startups are synonymous with frugal innovation and India is home to some of the most acclaimed frugal innovations. At work, focus on what you came out to build. Warren Buffett, the most successful investor on earth, still drives his old car and his favourite pastime is eating popcorn while watching movies on TV.
A word of caution
It is easy to fall into the trap of building business models and scenarios to satisfy the investor. While an investor is important for several reasons, do remember that you are in this game to service your customer. Once you have that right, a paying customer is proof of how valuable your offering is. Investors will then come to you, instead.
The author is MD & CEO, Tech Mahindra