Entrepreneurship and India

India today, is a land of opportunities like the US of mid 30s they say. In this blog, I try to take a practical look at what is the scene of entrepreneurship in India.
I am privileged to attend networking meetings consistently in the last 5 years. It is amazing to see the trend of Entrepreneurship change in this short span. Majority of the people attending such networking sessions used to be IT based startups during the first two or three years. I now find that the attendance has consistently increased and more significantly, newer areas have been mushrooming such as EWaste recycling, Signage solutions to name a few.

I recently met someone who had attempted to start on his own, struggled for more than a year and was forced to withdraw amidst mounting debts, family responsibilities and harsh market conditions. I am sure there are many such, who must be feeling defeated, though I believe they are among a brave few. I tell you why…
A start up (what ever field it may be in) faces the following challenges (not in the least bit exhaustive).
1. Extremely low availability of cash, unless funded by an Angel investor who is a close relative, friend or an associate, who usually takes away lions share of equity, eroding the passion away from the entrepreneur.
2. Good partners who will walk the distance. Distance often means, indefinite duration of time with unpredictable and unimaginable challenges. The trick is, you start with partners believing they will go with you through the most difficult of times. Time decides the tensile strength here. If the strength isn’t good enough, all partners pay dearly.
3. Un-trusting customers. Your idea may be great. The proof of concept may be great and attractive. But customer wants stability of their vendor. As a start up, there is not much you can do to prove your stability sufficiently for him to place his cash on the table.
4. Difficulty in retaining good staff against MNCs who can afford big packages, AC work environment, Gym, regular outings etc.
5. Unpaying customers. When you are a start up, one of the main reasons a customer is interested in you is that you are willing to do the job at a throw away price. Many start ups I know have folded up due to poor collections. Often startups end up being treated like use and throw coffee cups by unprofessional customers.
While most of the above can and to some extent, should be addressed by the entrepreneurs by themselves, the first point (about cash) requires a wider infrastructural support. Availability of cash at disposal or not should not determine if someone can dream of a venture. As a beginner you are bound to make mistakes. If you want to learn from mistakes and go ahead, you need the monetary support to “go ahead” rather than bundle up after the learning.
I understand that in the US, venture funds, universities incubate startups for more than 18 months by taking minority stakes and even letting go the entrepreneur if the start up fails. The argument is, if one start up out of 6 grows to its potential, the investment in all the 6 startups can be recovered and more. Music to my ears.
Indian venture funds are interested in mid size companies which have stood the test of time and are looking to grow further. Even that market is crowded with many companies looking for takers.
Infrastructure to incubate startups is hardly available in India. A few top business schools do this with reasonable success. But the number of start ups craving for cash, far out number what is available.
While entrepreneurship is a word which creates a lot of awe, many capable men and women are discouraged to take this path for one more reasons.
The Security, Comfort, luxury and social respect of working as a senior staff in an MNC.
When your name is followed by a “VP – Marketing” or “CTO” at an MNC supported by a salary which can compete with your counterpart in US or Europe, quitting that to call yourself a Director of x company with no salary for unimaginable number of months (may be years) is a choice which makes a stupid out of you instantly, until you prove the world wrong at the end of it all.
But in spite of all this, there is a definite surge in the number of people taking this path.
It is only a decade since India has seen the power of entrepreneurship. It is just a matter of time before infrastructure support is sufficiently available for more people to try their entrepreneurship skills without having to worry about their kids school fees. When this happens, we will see another wave of prosperity in the country. Successful start ups of yester years have already started venture capitals of their own. They are bound to take a hard look at start ups soon.
If anyone thinks, India lacks entrepreneurial skills, take this. My milk man sells vegetables during the day, cleans cars in the evening and does gardening over weekends. This is enterprise purely driven by need.
My friend lives in an apartment in Bangalore. His gardener started as a watchman there. He has now formed a “company” which handles all domestic requirements (cleaning&washing, car cleaning, plumbing, electric work, gardening and so on..) of 4 such apartments in his colony.
We may well see these people growing into billionaires one day and sow the seeds for many more after them.