– Satyakam Ray
San Jose, in the US, and Evoma coworking space in Whitefield, Bangalore, or costa coffee in Koramangala, Bangalore – have one thing in common. Whether any new idea generation or pitching about it to the VCs, the places are pretty synonyms for the next big thing where it started all! They have been central focal points for many budding young entrepreneurs (incredibly tech) worldwide since the advent of the startup ecosystem.
Other places in the Indian Silicon Valley (Bangalore) are also popular among aspiring geeks, technocrats, and management enthusiasts, such as four startups on the IIM Bangalore campus, the Ants café-HAL, and the minute Bistro. Interestingly, one must pay according to the minutes spent on the premises of the minute Bistro; the actual food is free! These places signify the importance of the proverb- that time is money and reiterates that groundbreaking ideas can hop to mind over a cup of coffee irrespective of the surroundings. No wonder Jeff Bezos started Amazon in his garage!
It’s intriguing to find the similarities between the Indian Silicon Valley and the actual Silicon Valley. Let’s delve more into the eye-opening discussion regarding how Bangalore can become the next big thing. It’s important to acknowledge the prophetic words of late President Dr. Abdul Kalam about the Startup ecosystem we see today.
Dr. Kalam’s words of wisdom:
Back in 2013 (when there was no startup scene in Bangalore or India), Dr. Kalam highlighted the importance of entrepreneurship in the education system at the 54th foundation day of IIT Bombay. He said, “In the present context, the education system must be designed to see that we generate many employment generators and not employment seekers.”
He narrowed down the whole process into three feasible sets of action plans. First, an innovative, robust education system that rewards creativity and not rote learning must be established. Secondly, a sympathetic banking system and VCs are keen on investing money in promising talents and ideas. At last, entrepreneurs must showcase their worth by bringing new innovative, practical products to solve existing problems or remove any deficiencies.
He championed the role of technology when he said, “Technology is the non-linear tool available to humanity, which can affect fundamental changes in the ground rules of economic competitiveness.”
Bangalore startup scene:
Silicon Valley in the US hosts companies like Apple, HP, Google, Oracle, Intel, Cisco, Facebook, Broadcom, Adobe, eBay, and many more stalwarts in tech. The Indian Silicon Valley, Bangalore, is home to numerous home-grown techs. Startups like Team Indus, Ather Energy, Explara, Fabulyst, Nexhop, Zerodha, Zivame, Embibe, Colive, Zoomcar, ClearTax, etc.
Comparing the two lists, one can point out that the former is more recognized and has a global presence, whereas the latter is a new budding enterprise. Still, the Indian counterparts have achieved a lot quicker and are raring to grow.
However, the importance of the startup ecosystem in the Indian Scenario is enormous. With Flipkart, swiggy, Zomato, Amazon, Ola, Uber, and Big basket’s entry into the market, they have benefited Indian households all over the country as they cater to the needs of day-to-day lives. Also, it’s an essential source of job creation in this already gloomy economic Scenario.
Types of Indian startups:
The whole Indian Startup system can be broadly categorized into three types.
- “Inspired” startups: Many consider startups as a means to earn quick bucks. Therefore, they see what’s happening outside India, mainly in the US or other advanced economies, during their stay as professionals or students. Immediately they think of the Indian market and its untapped potential. They launch new ventures just like advanced economies and earn quick bucks. They are inspired by existing companies and make a mere or slightly modified replica in India. The media and ordinary people tout them as heroes because their net worth is so much. One example that fits into this category is Flipkart.
- “Online” versions of existing services: Another way to start is to bring out the online versions (app or website) of existing services. Name any services- food delivery, carpentry, car selling, grocery, educational aids like coaching, and so on- there’s a tendency nowadays to make it online for widespread customers. The same traditional system is modified slightly to look classier and tech-savvy. They save people time, money, and resources, so they are prevalent. Examples- Include big basket, Amazon, and so on. This list is endless and nearly constitutes 80-90% of the Indian ecosystem.
- “Actual” Innovative ideas: It’s heartening to see the many young aspiring entrepreneurs develop new ideas to tackle any ongoing problem. Many startups have delivered innovative solutions/products to tackle the pandemic, whether Biocon or Bangalore Bio-innovation center. Similarly, we Indians rejoiced when Team Indus (Axiom Research Labs) signed a working agreement with OrbitBeyond that bid and won a NASA CLPS award to land several commercial payloads on the Moon. Many pass-outs from eminent engineering institutes like IIT, IIM, BITS-Pilani, IIIT, and NITs are venturing out with new tech-savvy ideas to increase Indian knowledge and wealth simultaneously.
Where do we stand now?
2015-16 saw a massive surge in the number of startups getting funded and few getting IPO- a good sign. Many were into sectors like e-commerce, food tech, enterprise/SaaS space, Healthtech, fintech, edtech, consumer internet, transportation, digital media, and logistics. AI, Machine-learning, and cloud-based applications are the front-runners in tech entrepreneurship.
But still, Indian entrepreneurship faces many issues.
- Directionless product/service: Many tech Innovators believe in their product as the ultimate solution to the concerned problems and take pride in that. That aspect is pleasing if the product uses relevant market research and considers the untapped market potential. If the drive is directionless, it will automatically lead to a financial debacle. No market demand for the product means the whole effort is gone for a toss.
- Lack of Funding/Connectivity: Many new ventures are started from the pockets of the founding members. After a while, new refueling (money) is needed to run the business. A lack of knowledge about Venture capital, crowdfunding, angel investment, product pre-sale, or govt funding might halt the mere survival or any expansion plan. Well-connected people in the industry are more successful than that tech—geniuses who, in real life, tend to remain aloof.
- Aversion to Marketing: The product will speak on behalf of itself. Hardly in the real world, this philosophy works. To make a better future product, one must popularize it through social media or any proper business channel. That’s why a good marketing team, an admin team, or a group of good HRs are the prerequisites for the company’s functioning.
- Failure to Capitalize on the trend: A strong business sense and a penchant for capturing customer needs are successful entrepreneur traits. Many Indian entrepreneurs don’t acknowledge the market needs and go on an imaginary path, believing they will succeed.
- Govt. Red tapes: A lot has been said in the print and news media about the ease of doing business in India. In the World Bank’s ease of doing business 2020 report, the country jumped to 63rd among 190 nations. Though there has been an improvement in the ranking, India is still not among the top 50 countries in the world.
The way ahead?
Funding: Whether it’s VC, angel investment, or govt. Funding: Entrepreneurs should get all the benefits without bias if the idea is bright. Educational background, professional networking, and other connections help get the financing in a few cases. But that should not be a factor in deciding the funding if the entrepreneur is new to the scene without any recommendations or networking. In any case, they can go for crowdfunding.
Skillset and Knowledge: Indian academia heavily relies on theoretical aspects and less on the practical values of wealth creation and entrepreneurship. The education system must be robust to the next big thing in tech. It will come from the hostel rooms of the premier Indian institutes.
Connectivity: Indian academia and the whole industry are two disjoint sets. In recent years, a sort of intersection has been done through the help of numerous coding marathons, hackathons, business idea presentations, seminars, webinars, and informal social group formation to spread the latest news on tech and entrepreneurship among everybody.
Brainstorming: The peer group interaction among young entrepreneurs should be knowledge-oriented. Sharing knowledge promotes the product/service and creates a sort of bonhomie among the group, which is an excellent thing for the ecosystem.
Leadership: The leadership group of the startup should be tech savvy, a marketing expert in niche tech, and communicates with target clients and investors. A strong sense of business dealings is of paramount importance.
Social Acceptance: Close family members and relatives often create a ruckus if one decides to go a startup way. A solid emotional backing and a transparent financial safety chain should be set to realize the entrepreneurial dream. After all, the family is the backbone of the most successful people.