5 myths about startups in India
Globally, startups have become more diverse and abundant. There is an ecosystem that has been under creation over a decade and now seems to be working in a seamless order, with a heavy machinery of experts, venture capitalists and successful entrepreneurs mentoring the newcomers and backing the bright ideas.
Besides the risk bearing attitude of a millennial generation today, innovation and technology is further fuelling the ecosystem. Globally, it is estimated there are over 100 billion dollar startups that have seen valuations going up right from their seed stage.
India’s business skyline boasts of several startups, some around 200 last year. The World Bank and the IMF had forecasted that India will outpace China's growth in 2016-17 after a robust 7.5 per cent expansion in the October-December quarter last year. Despite, estimates reveal that for every hundred new ventures, at least 90 per cent fail, and there are factors other than just idea turning into a trash. Hence, it is important to understand some myths associated with starting up and being an entrepreneur:
5 myths for an Indian Entrepreneur to face:
1. Entrepreneurs are born not made
This is a biggest myth. Look around and you will hardly see second or third generation entrepreneurs. Either there are bootstrapped startups or there are professionals that have sought funding from Angels or VCs. It starts with grit and loads of willingness along with a great idea that can be backed by innovation in terms of technology or product / service offerings. Practice makes an entrepreneur perfect or nearly so.
2. Entrepreneurs are stakers
Now, this is lunatic. From an investor’s point of view whether angel or institution, risks are more or less of same magnitude. Factors for entrepreneurs, while starting of his own, remains the same – there are bucks riding on his idea, his risk bearing attitude, his people management skills and ability to scale up. His energy, time, focus and clarity about running his business imply whether it will turn into a failure or a success. There is a big chance for him to prove his mettle; it will not only be disheartening for him to face a failure, it will be a big dampener to his self confidence, at least for a while till he starts all over again.
3. Motivated primarily by money
Recent examples of Founders and CEOs of Indian startups could be seen, who have left their own businesses due to differences with management or the company turning too commercial. This is usually noticeable soon after too many hands i.e., investors take over the realms. They are seen as high headed as they forego big monies after the venture has reached huge valuations running into billions of dollars. At times, it is seen they leave as their passion and energies have seen a downslide. Once a dream turns into a nightmare for them, they feel suffocated and drained.
4. Entrepreneur should be young
Not unless they are Bill Gates or Mark Zuckerberg. Younger the better but not mandatory, there are no rule books that are sacrosanct. Apple was founded by Steve Jobs at a very young age, but it was his second coming at later age that led Apple to greater heights. Qualcomm, for example, was founded by Irwin Jacobs when he was 52 and Andrew Viterbi, who was 50.
5. ESOPs and flexible timings are enough
While young college pass outs are still open to working in new organizations, middle level or top level executives may still fear joining young organisations simply due to the way they have been groomed in bigger and more professional looking set-ups. Definition of demonstrating good attitude for work in a startup may mean differently, it is primarily to do with people volunteering to take up extra responsibilities or challenges, are self motivating, perform multiple tasking and are driven by passion to work and coping up ability. They may be happy with ESOPs and flexible working hours but they need more like team spirit building exercises, empowerment in terms of taking decisions regarding their work plans and a lot of one-on-one time with the leader.
Dr. Yasho V Verma is also a former COO at LG, an academician, a startup mentor and a veteran in consumer durables. Currently, he is advisor to Videocon and a member on board of Dena Bank. Dr. Verma is a PHD in organizational behavior from IIT Kharagpur.