Wednesday, June 22, 2016

The start up eco system of india , Entrepreneur's View

There has been a lot of brouha about Start up in india . The start up in the current times means starting a business with some tech involvement and trying to do things in a different manner and thereby disrupting the whole eco system . My observation is that india has been a land of entrepreneur , entrepreneur by compulsion . Most of the entrepreneur in india are because they had to do something to feed there family and do not have that many opportunities.That's why we see all the Paan Shops , street food vendors etc etc . With the glamorization of 'Start Up' culture we see a tonne of youngster jumping the bandwagon . You see an idea being discussed in every corridor of Engg/MBA school to alleys of software/consulting companies .

You see youngster leaving the regular job and taking a plunge to create the next 'Housing','Tinyowl','peppertap','roadrunner','paytm','Uber for X' etc etc . Most of the Techpreneur ,which I have come across, are very passionate and are ready to take the risk . There passion and energy is highly infectious . They are ready to take on the world and work against the odd ..Whether leaving the comfortable and cushy jobs or living in office cum home set up with bare necessities or in some cases even borrowing money from friends.Most of these entrepreneur are from typical middle class background and are ready to take on the world, have'nt seen this type of passion earlier . You go to any meet up and will find a tonne of them . When ever they spot a 'Hero' of the current disposition , read VC's and founder of top 20 funded start up , they are awe stuck and are re-energised. VC's are the 'Ganesha' of the new Eco System , This job was never that high coveted till the current wave. The amount of linkedin request they get is humongous . Nothing wrong in that but what ails in the current system is that a majority of current start ups are making their business plan based on
  • What is the current flavor of the month 
  • What is the equivalent in US 
That are the typical questions which an analyst asks from the entrepreneur when he or she approaches a VC and post that the typical template changes to MOM Growth ,GMV , Run rates etc etc . My experience tells me that this is harming more to this eco system than helping it. VC's are a very important pivot of harnessing this energy as they provide one of the biggest fuel,read MONEY, but what they also usually bring in is expertise in managing growth . VC's are the backbone of this movement and work more in the background. This is typically missing in the case of india . The reason I could find was that most of the VC's in india have not been entrepreneur's , I feel this is one of the biggest difference in valley and indian eco system . This very genetic difference of this community is one of the biggest differentiator .  I strongly feel that the eco system needs VC's with an entrepreneurship background . Its no co-incidence that some of the most successful VC's have been successful entrepreneur - Vinod Khosla ,Pramod Haque and the list goes on . VC's not only provide the risk capital but they hand held the founders in the nuances of running and scaling the business .We don't need experts classes in PPT and XLS ,what we need is somebody who has been through the journey himself . Entrepreneurship is like taking on the Everest , the mountaineer take with him a Sherpa and according to me a VC is like a Sherpa . A VC should command respect from the entrepreneur ,Will be easier if he has done that journey himself otherwise they usually have all bad words about most of them the moment they get the cheque  . Their insights about the sector gets exposed and thus loose their respect, that's the case in 80% of VC's . I am unable to fathom the fact that why haven't the pricipal's in US are not following the same template which they do in US for india as well . Infact its more important in india because a true blood entrepreneur will be able to grasp and handle the local eco-system much better rather than one who just sees the world in templates .
VC's are putting in risk capital and that too somebody else's money so they need to cover their asses but in turn to safeguard their investment they should work more as partners rather than just investors infact they can add much more value by hand holding the entrepreneur , on the contrary in a tonne pf cases they usually drop the entrepreneur high and dry . It become all the more important in the current scenario since this space of techno-economy is in a very nascent stage & not many people have solid background of business matrix This has led to mushrooming a lot of hustlers ,Guys with scheme to manage these matrix - Be it app downloads , fake order booking , AD mob frauds etc . Thus the VC getting fooled by these type of tricks is quite high , entrepreneur and VC's have to be smart enough to not fall for these honey traps and harm the whole system.
My take is that the entrepreneurship in india is at its peak , we need to harness that energy and need experienced people to help them achieve the same . If we falter than we might not be get the desired results which we can achieve by harnessing this energy . VC should start getting more involved in the investee company and get more entrepreneur on board of the investment team and provide thought leadership as well as mentorships to its investee companies .I have personally seen that the moment one gets institutional money , the major energy of the founder is channelised in managing the investors and his reporting templates .
Focus should be more on creating businesses rather than individuals .What we are seeing is that brand Bansal's , Sharma's,Aggarwal's etc have become bigger than the businesses.Media also has a very important role ,it should also stop evaluating a success by the amount of fund raised by the companies but needs to focus more on products and differentiated services which a company is providing . This will help in doing the requisite changes in the eco-system.
There is too much entropy in the system right now . A shake up is already taking place. Things are going to be pretty exciting in next couple of years and some serious business disruptions are going to happen .We have the talent/energy/market to think & create a Silicon Valley in india ,all we need is create the right Eco system to celebrate innovation and failure.


  1. Amit, you've made some very good observations, funny and poignant at the same time.

    Cheers to your enthusiasm!