Most successful start-ups were launched during the recession and hence the current phase is perhaps the best for entrepreneurs to roll out more.
Participating in a debate on “India’s start-up story: Where do we go from here?” at The Huddle here on Sunday, Mahesh Murthy, co-founder of Seedfund, said start-ups which got launched when the markets were doing well could sometimes fall into a false sense of security. Hence when the markets were down, there was enough time to tweak the business model and make it stronger to perform better when the situation improved.
Rajiv Lochan, Managing Director and Chief Executive Officer of The Hindu Group, who moderated the discussion, set the tone of the debate, pointing out how the newspaper headlines about start-ups swung from the mega funding they received to the taps running dry, reflecting their evolution in the country.
K. Ganesh, co-founder and chairman of Portea Medical, said start-ups had seen multiple cycles. “Hence, to get worried about swinging from huge euphoria to complete depression is unwarranted. There is a lot of sanity which is coming into the sector,” Mr. Ganesh said.
Making an impact
Anu Acharya, chief executive officer of Mapmygenome, said it was important to build a good business and make an impact. “It takes time to build a company. For me, building a company is not to follow the money trail, but to make an impact and not worry about whether people are listening or not, but at some point they will,”she said.
Ananth Narayanan, chief executive officer of Myntra and Jabong, said start-ups like his had created a sustainable business based on a combination of India-specific innovation and technology, which had resulted in an ecosystem for entrepreneurs to take risks.
Mr. Murthy spoke of how a copy-and-paste culture had set in among the start-ups in India. “Take what is in the U.S. and copy and paste it here. It has worked in China and Russia because of the environment there,” he said. However, to replicate it here may not always work.
Mr. Ganesh, however, said taking good practices from the so-called copy-and-paste model and evolving one’s own unique model was one way out. For example, the cash-on-delivery model was an India-specific model, which had worked very well for the Indian consumers. “There are good things to be learnt from what has worked in the U.S. There is nothing called a copy-and-paste model. We should be slightly more generous with our start-ups before judging them,” he said.
Mr. Murthy countered it by pointing out that 15 to 20 years ago, the markets were a lot more forgiving, but today, just two or three start-ups dominated each sector and hence one should create a model for the market that the start-ups were playing in.
Agreeing with Mr. Ganesh, Mr. Narayanan pointed out that the country’s fashion industry was mostly unbranded and hence his start-up came up with private-label initiatives, which had worked. Earlier, there were 10 to 15 start-ups in the space, but one had seen a consolidation since then because those which survived came up with India-specific innovation, he said.
All the panellists agreed that the start-ups which were critical about capital dumping by foreign-based ventures were not being fair as those against the practice too had received funds from overseas.
To a question from the audience about the reason for the lack of funding for non-technology start-ups, Mr. Murthy said most investments were driven by tenure and it became necessary to find start-ups which could give returns within a span of eight to 10 years. Most tech start-ups had a better chance of giving better returns within that timespan.
