Are Indian Start-ups Creating Problems that Don't Exist?
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There was a time when entrepreneurs were found in scarcity, they had a story to tell about the struggle, of their family’s disbelief and disapproval of the start-up life. Cut to 2017 and entrepreneurs are found aplenty, some disrupting the sector in which they are operating while some others, well, are finding a problem that doesn’t exist.
Entrepreneurship has moved from being the geek that no one likes to be the guitar-playing heartthrob of the college. Everyone wants to be him or be with him. But this is also where the problem arises, in their efforts to copy the guitar king; their tuning seems to fall apart, as it is not based on the passion for music but a me-too attitude. What next? They sell the guitar in scrap and go back to being the regular kid in college.
2017, So Far
The past few years have seen the birth of many start-ups in the Indian ecosystem. While the count was at a staggering 6,000 in 2016, 2017 so far has seen 800 new kids on the block, according to Tracxn. According to their reports, while 500 startups made it to their deadpool list (failed ventures) in 2016, the number stands at 180 for 2017, so far. At the same time, Indian start-ups have raised over $8 billion in 2017 and when pitted against 2016’s $4.6 billion, the number is at a high even though the number of deals has dropped.
This goes on to prove that India is building a conducive environment for start-ups, funding has almost become omnipresent and like Amitabh Kant, CEO, Niti Aayog, has been quoted saying, “All we are looking for are great innovative ideas”.
Needless to say that the Indian start-up ecosystem has seen the birth of some great ideas but there are also some that fail to be of anyone’s understanding. A case to keep in mind is the startup Mokshshil.com that allows one to pre-book their funeral service. The founding of these start-ups has raised many questions; from who really is prepared for death to do we have to depend on technology for even death?
Some of them might even find the funding but customers fail to use their product. A global example is the Valley-based Juicero, which raised $120mn from investors for its $400 juicer blender, has failed to find a market and is thus, shutting down.
In India, a sector that has fallen prey to this is e-commerce. From start-ups like Bookmybindi or Footsy (online marketplace for just socks) to Bookmyballoon, the e-retail sector has seen the rise of many that fail to convince users. Sadashiva NT, angel investor and formerly with Babajob, believes that it is the vertical space of e-commerce that has found takers which might not be successful. Horizontal e-commerce platforms are the ones that enable selling from a varied range of categories while vertical platforms are the ones that are more in-depth or focussed. “The problem with many players in the vertical space is that they are selling products already available from the horizontal players. The horizontal e-commerce sector already has a few major players like Flipkart, Amazon etc,” said Sadashiva.
With entrepreneurship being the new in-thing, there’s another fear that wannapreneurs have – the fear of missing out. They cannot miss out on the trend, so they end up coming up with a problem, that maybe one for them but fails to find fellow believers.
The hype around entrepreneurship is not one to die believes Rama Iyer, Senior VP, T-Hub, and it is this entrepreneuship mania that has led to a misconception about starting up too. “They see their friends as entrepreneurs and think it is an easy thing to do without having a firm thought process,” said Iyer.
Then there are start-ups that find a solution where one is not needed or are way ahead of their time and thus fail to find users. Sanjay Enishetty, MD & CEO, 50K Ventures, believes that these start-ups will eventually fail because they don’t find users. “Sometimes the market is not ready for their product. For example, the education sector is not yet ready for a lot of deep tech. We need to look beyond being obsessed with AI or Blockchain. Moreover, entrepreneurs need to keep in mind that some unorganised sectors don’t need organising,” he said.
It all boils down to product-market fix, believes Sadashiv. While it has worked for some unicorns in the ecosystem where they have created the product first and then built the market for it, not everyone can walk down the same path successfully he believes. Having a passion for the idea is one thing but execution is what makes the difference. “It’s time for us to turn things around. First understand what the customer needs and then create your product. What the founders believe to be a problem could just be a surface-level one,” he said.
Ideas from the West
While the next Google or Facebook is a far-fetched thought, Indian founders are hopping on the start-up bandwagon with the me-too backpack.
The inspired-from-the-west entrepreneurs are to be found all around now. And Iyer is not one to dismiss them. He believes that even if it is an inspired start-up, the trick lies in developing it for the Indian market which can turn out to be quite tricky.
“The founder or co-founder needs to be from a tech or business background. You cannot be successful if you haven’t even done an analysis of the market to know if your idea is viable enough. Build a good team and make sure that the market still has some room for your idea,” he said.
A Shot at Survival
In true entrepreneurial spirit, many in the ecosystem believe that these start-ups too deserve a chance to succeed. Sandeep Aggarwal, CEO and co-founder, Droom tried out 150 ideas before being remotely successful. Having lived through the struggle of finding the right idea, Aggarwal believes that anyone who dares to solve a problem is a hero and an inventor. There could be many reasons for failure and it’s the opportunity to be able to try to solve a problem is what makes our community thrive, he believes.
According to him, concluding that the problem these entrepreneurs tried to solve did not exist is judgmental and short-term thinking.
"If this is the case, we can never promote experiments, innovations and risks taking abilities type of culture. If people were satisfied with sun light and candle light, Thomas Edison would not have been able to invent the bulb. So, problems always exist and let's not consider final outcome or luck as an indicator of whether the problem really existed,” said Aggarwal.