It has been two months since I started working as an intern for a Delhi based startup, and with some free time on my hands, I thought that it would be best to exercise my brain cells. So I enrolled into a new course named “Entrepreneurship in Emerging Economies” at EdX, and believe me you, it was perhaps one of the best decisions I had ever made.
STARTUPS, THE REAL PICTURE
Startups are great for the country. What started in 1980’s as an unsure revenue stream for a couple of business minded people is slowly becoming one of the most sought after career goals for the young intrepid India. It created over 80’000 jobs in 2015 alone. And this number sure is rising.
So what’s the problem one might ask… You will find a lot of articles describing the challenges of getting the start-up culture, the difficulties of getting an investor and getting funding.
But I wanted to discuss the core problem, and that is the inability to implement and execute ideas.
Ideation is the first step behind every business venture. And with a sprawling population of 1.3 billion, there is sure to be a lot of worthwhile ideas in India. This nation, like every other developing economy comes with its specific sets of challenges and problems. And any entrepreneurial effort to solve these problems also has their sets of challenges. That’s what is wrong with the system.
Problem solving isn’t given any form of support. And due to this lack of any support system, a lot of great ideas never materialize to anything. You see every day on the news, a lot of intellectuals and politicians discuss the nation’s problem in the form of articles, editorials and TV debates. But are these ideas ever implemented.
SUCCESS OF STARTUPS
But that is not the only challenge in this startup crazy country of ours. As per me the problem lies much deeper, in the very mentality of us Indians. Being an outsider in a Delhi start-up, my main concern about this new trend is the lack of planning. Any entrepreneurial endeavor starts up when one identifies a couple of problems with the system or “Institutional Voids”. These voids are gaps which create difficulty for buyers, sellers and everyone else involved in the society. That’s when an entrepreneurial mind-set comes into play and fills up these voids by using innovative thinking and generates revenue out of it.
Sounds easy right….just list out the problems and spend some hours brain storming with your team…and viola you have an innovative idea!!!
“Let’s make a start-up out of it.” Your team member says and so it begins.
But what’s the success rate of such establishments?
As per a recent study by IBM, 90% of the total startups in India shut their operation in the first five years of their inception. More than 200 start-ups went off in year 2016 alone.
This is the scenario currently, the get-rich quick mentality with a lack of long term planning is exactly what is wrong with the startup system in India. This mentality creates the serious problem of concept mimicry, where your ideas get copied by a competitor. As per figures 77% venture capitalists believe that startups are more prone to mimicry. This only creates value in short term, a quick money making machine. Do we want our startup ecosystem to be like that?
A startup, or any other entrepreneurial effort should make sure that it fills a major institutional void, rather than being a quick money making machine. And our country does have the potential for it. India ranks third following US and China in terms of number of startup. You see the immense potential.
THE FINAL SOLUTION??
So what can be done…to make startups worthwhile and actually add up productively to the Indian economy. First and foremost, educate people about entrepreneurship. It should be inculcated as a serious career option from college itself.
Secondly, develop a culture of risk taking in our society. The likes of Jobs and Zuckerberg were talents who resided in college dormitories. They left college to pursue their calling. Only advantages they had over their peers were confidence over their idea and courage to follow that path. That confidence came from the culture of hard work and innovation that exists in USA. That is why it has the highest number of startups in the entire world. Because they aren’t afraid of failure.
Third, the system must be supportive enough. An Indian Facebook can only be a possibility when the government makes it easier for startups to operate. Also, there is need of public- private partnerships for skill development. The current efforts made by the government under the Skill India initiative and Startup India have brought a change.
And lastly, be crazy enough to bring a change in the world. A small change to the system. Be passionate enough to make a mark in the world.