The Long and the Short of Indian Startup Ecosystem
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India is at cross-roads — most sectors are struggling to hit the growth numbers achieved in the past and we need the fostering of a vibrant entrepreneurial eco-system so that India sustains 10 percent growth imperative to meet the collective aspirations of a billion Indians. The entrepreneurial movement in the country was given a tremendous boost two years ago with Prime Minister Narendra Modi’s “StartUp India Stand Up India” call. In the first flush of success, it was the much-talked about unicorns, some with business models that were simply a “lift and shift” from US success stories that attracted funding and were praised. The emergence of incubators all over the country helped to boost visibility of the startup eco-system. Cases in point have been the Ten Thousand Startups initiative of NASSCOM, Kerala’s Startup Village with its ambition to create a thousand startups in 10 years and the unique partnership between government, academia and industry that led to the creation of T-Hub in Hyderabad.
THE RIGHT APPROACH
However, hundreds of startups have spluttered after the initial enthusiasm and many funded entities of the first wave are in danger of running out of cash or entering a dreaded “down round” phase. The absence of significant success stories and defensible startup value propositions beyond the oft-repeated PayTM and Flipkart examples has sent tremors through the market and questions are being raised about the sustainability of the entire start-up movement. But there is no need for panic and what is needed in the new year is a clinical assessment of the state of play and the case studies of other eco-systems, which can be emulated in our own entrepreneurial journey and make the startup movement bloom again. Entrepreneur’s vision and success orientation to scale manifold is imperative in the coming years.
One of our group companies, Kalzoom has focused its attention on this segment and identified over 500 firms just in the technology and digital space in India and the US, which are stuck in a quicksand of weak growth after having weathered the initial anxieties. For such firms, it may be time to assess the validity of their business model and the changes in business environment that may necessitate a strategy pivot and find a rich vein of new growth to tap into. For some, it may also be time to evaluate acquisition opportunities, which can get them into adjacent opportunity areas faster than just trying the organic investment route. For others who are struggling, it may be worth considering selling their companies to larger players who can give them the wherewithal in terms of technology infusion or selling bandwidth. Every entrepreneur should put his or her company under this Grow-Buy-Sell lens and take steps in the right direction.
THE ROAD AHEAD
How can 2019 become a watershed year for the entrepreneurial movement in our country? It’s not going to be an easy year, with the triple whammy of a slowing global economy, the uncertainties of policies and actions of the Trump administration in the US and the short-term economic impact of India’s elections all holding the potential to slow down the economy and the fortunes of entrepreneurs. However, with the right strategy and a focused approach to products and markets, there is no reason why existing entrepreneurial companies cannot add scope and scale to their operations and new and scaling companies show success and raise the level of their ambition. It can and must happen!
(This article was first published in the December issue of Entrepreneur Magazine. To subscribe, click here)