Two decades ago, dreaming big may not have been as easy as it is today. Not only are parents more accepting of their children’s unconventional career choices, there is a climate that encourages innovation as well.
While it presents a great opportunity for the economy, there is also a problem of plenty with ideas falling by the wayside.
As someone who started out as an entrepreneur during the 2000 dotcom boom, Sushanto Mitra says he’s “seen this movie before”.
The founder and CEO of Lead Angels, which assists early stage investments, says India has a long way to go in terms of entrepreneur education. He outlines the distance that needs to be covered, and what entrepreneurs who are starting out need to know.
What’s hot and what’s not
The new generation is far more confident and assertive than the previous generation. The availability of jobs is greater today as well. Youngsters can confidently tell their parents, “Let me give this a try.”
On the other hand, a lot of people venture into the startup space without any idea of what they are getting into. Also, culturally, we don’t encourage children to become entrepreneurs. We have moved to a new caste system: “Do you work with Wipro, Infosys or GE?”
Our approach to starting up is fundamentally flawed. In the US, you would go to a client and say, “If I were to make a product like this would you buy it?”, and then go back and build it. In India, we start by saying, “I am building a product that’s better than those by SAP, Peoplesoft and Oracle.” We sell it, without an understanding of what the market needs.
The education gap
An estimated 4,000 people start their own ventures every month in India. Youngsters have great ideas but need to be trained. A lot of incubators are attempting to fill that gap, but it’s not enough. That’s why you have a high rate of mortality in startups.
Two youngsters came to our office yesterday. One wanted to start a fishing venture, but had no idea that in India, fish needs to be kept at 4 degrees Centigrade to preserve freshness.
He has done his MBA, but jumped into this venture armed with passion and no knowledge. The other one is an accountant who has worked in the US for 11 years. He was interested in starting a community grain storage facility, but had no idea of the dynamics of the rural marketplace.
Learning entrepreneurship at an academic institution is akin to the blind teaching the blind – while the learners have no idea, our institutions are divorced from the commercial world.
We get about 150 proposals a month, of which we choose three for each chapter in Delhi, Mumbai, Bengaluru and Hyderabad. Of these, maybe one gets funded.
The regulatory haze
We have three zones: legal, illegal and in between these lies all that is unregulated. Besides, compliance work is tedious. How does a young entrepreneur navigate all the returns he has to file?
Most countries have tax breaks for angel investors, but here, such a high-risk business gets no tax breaks. Not only are there grey areas in our laws, they also keep changing.
What new entrepreneurs need to know
1. It’s all about timing. No entrepreneur, however smart or experienced, can get it right. A lot of ecommerce companies that came up in India during the 2000 dotcom boom don’t exist today. If Uber had come to India five years ago, they may not have clicked
2. You need to be positive, and yet have your feet on the ground
3. It’s a very lonely world for an entrepreneur. You can’t share what you’re going through with your employees, and you often don’t have the money to pay salaries.
What investors look for
Scalability and the team. Also, entrepreneurs need to have patience, vision and staying power.
Mumbai’s entrepreneurial climate
Mumbai is nowhere compared with Bengaluru, or Delhi, which is a distant second. The cost of doing business is very high in Mumbai. It also doesn’t have enough technical people wanting to join startups, unlike Bengaluru. What Mumbai does is get you to dream. However, Bengaluru and Delhi have more success stories.
—As told to Shubha Sharma