The Indian start-up engine is roaring full throttle
India is changing and more and more start-ups are successfully taking off in a variety of sectors and industries
As a culture, India has never boasted of an inherent risk-embracing entrepreneurial energy, unlessthe reference is to particular localized pockets in certain communities. However, these were typically small, well-established, family-run business owners who used to be fairly averse to risk, and will stay well within the limits of their cash-flow setups. But times are changing.
For a while many young guns of business familieshave been traveling abroad to gain international exposure and education. When they are back on their turf, they introduce new concepts that they have imbibed on these stints.
The Start-up Story
Furthermore, in the last decade, start-ups have been writing a whole new chapter for corporate India, and there are a number of interesting trendsemerging. In fact, all the founders of BookMyShow.com— Ashish Hemrajani, Parikshit Dar and Rajesh Balpande— have a degree in management, as does Peyush Bansal, the founder of Lenskart.com and Bhavish Aggarwal,who started Olacabs.com. The much-in-news founder duo of Urban Ladder, Ashish Goel and Rajiv Srivatsa, has charted a similar trajectory.
The growth in the volume of start-ups in the country seems directly linked to the increase in the number of highly-educated CEOs at helm of these outfits. While this may seem like the story of only the sunrise industry of ecommerce, and that is partly true, other sectors are being jostled into a phase of frenzied entrepreneurial interest and activity as well, and not without good reasons.
The academic foundations of entrepreneur aside, there are several factors at work that directly contribute to a start-up-friendly environment in the economy. Here are a few.
- The idea is to solve big infrastructure problems
The new-age businessmen no longer begin with the idea of starting a business; for them the business is a means to solve a problem. Phanindra Sama could not meet his family on a festival, and that got him thinking about the problem. Soon after, he founded Redbus to provide a resolution to a missing online ticketing structure.
On similar lines, Flipkart faced huge challenges in timely and efficient shipping of consignments. It soon found a way out – Flipkart Logistics – so that itenjoyed complete control over the cash-on-delivery payments and logistics infrastructure.
- High Appetite for Risk
Not only are people actively working from a problem towards a solution when thinking of a start-up, they are also less restricted by fears of failure and charting unexplored territory.
Even two years ago, one could not have imagined an online possibility of ordering a homemade meal at reasonable rates. The Powai-based ensemble called Holachefmakes it a reality today. A start-up in the food technology space established in May 2014, it curates chefs and allows them to sell select dishes every day. From five requests per day at the time it started operations in September 2014, Holachef has graduated to more than 150 in January 2015. A calculated risk, but a risk that has worked.
In fact, there are even instances of traditional business houses placing high-ticket bets on rank new businesses. No one is surprised that Ratan Tata, who is revered as India’s best known business icon, is seen backing several start-ups these days such as Myntra, Bluestone and Urban Ladder.
This is clearly indicative of our changing attitude to, and appetite for, risk.
- Support in the form of hubs, investments and incubators
According to a study by NASSCOM titled ‘Tech Start-up in India: A Bright Future’, with more than 3,000 technology start-ups, India is the fourth largest base for nascent businesses anywhere in the world. By 2020, this number is expected to rise to 11,500 tech start-ups.
As a fledgling sector trying to consolidate its position, start-ups are increasing depending on each other for assistance and offering support for their own kind as well. According to AngelList (a platform for start-up, investing and fund-raising), Bangalore is at the top of the leaderboard in terms of the sheer volume of start-ups, followed by New Delhi, Mumbai and Hyderabad. And each of these cities has events or activity centers that support start-ups in need.
Investors, too, are playing their part by placing trust in new start-ups and investing big. Urban Ladder, BlueStone, Paytm, Housing.com, and Ola Cabs are just some of the new businesses that grabbed headlines by attracting investor attention, sometimes several times over.
A Strong Foundation
There are also nurturing hubs like Microsoft Ventures and WeSchoolthat empowernascent causes to do more. The WeSchool-MIT Venture Mentoring Service (VMS) is a very special one. Born out of the belief that active support of entrepreneurial activities contributes to the entrepreneurship education of the community, this chapter of the VMS plays the part of a supporting platform for start-ups and aspiring entrepreneurs in their pursuit of creating a successful venture.
Having started the journey with 19 student ventures in December 2013, WeSchool VMShas created a thriving ecosystem that fosters the entrepreneurial spirit within the campus as well as in the corridors of the Mumbai B-Schools fraternity. For the current academic year,VMS already has twelve ventures in the pipeline.
The journey ahead
Start-ups are driven by passion, unencumbered by any baggage; hence giving free reign to innovation in business. And this channel is fuel to India’s economy, a fact that did not escape even Barack Obama. No wonder the US President once said, “India is not simply emerging; it has emerged.”
India’s start-up sceneis at apromising juncture. How the industry fares will be seen in the days to come, but, at this point in time,each sectoral component is playing its part and that’s vital.