Something About Startups

Indian high school students wake up early on weekends to slog over textbooks at IIT coaching classes, right? Well, not all high school students. Over the next two months, 50 teens from schools in Delhi’s NCR region will spend their Sundays at a young entrepreneurs program organized by The Indus Entrepreneurs (TiE), the largest global network of Indian entrepreneurs. They will learn about marketing, finance, intellectual property and business law; their ‘teachers’ will be established entrepreneurs; and there won’t be any textbooks around. Indian parents are not exactly famous for nurturing the entrepreneurial dreams of their offspring.

Their well-meaning and well-known mantra: study hard and find a good job. But young India seems to be making other plans. For every Mark Zuckerberg, Kevin Systorm or Larry Page in the US, India now has a Naveen Tewari of inMobi, Sachin Bansal of Flipkart and Dhiraj Ram of Mu Sigma. Okay, they are not exactly comparable in size but the new businessmen on the block have quickly become the poster boys for entrepreneurship. Ballsy and brazen, they are confident enough to take on global players. “Even first generation entrepreneurs without a legacy are aiming and dreaming big,” says Sateesh Andra, venture partner at VC firm Draper Fisher Jurveston India (DFJI).

 “Some of them are going after India but it’s also good to see them reaching for the global market. They are not afraid to create a product and sell it in the US, Europe or South East Asia — it could be anything from mobility to enterprise software.” Within five years of its launch, inMobi has become one of the largest independent ad networks in the world — and it has gotten there by daring to take on Google and Apple in the mobile advertising space and raising $200 million from Softbank Japan to fuel its expansion plans.

In the same five years, Flipkart has become India’s largest e-commerce company (likely revenues of Rs.2,500 crore in FY13), raising almost $150 million in its fourth round of funding at the start of this year. Is this kind of growth too aggressive?

We can debate away but there can be no denying the ingenuity of this new breed of entrepreneurs — they have built formidable businesses in a short span of time and, what’s more, they have been raking up valuations yet to be seen by brick-and-mortar companies that have been around for decades. 

So, what’s driving entrepreneurship in India like never before? First off, there’s now a thriving ecosystem of early stage investors who are scouting for good ideas. “Two years ago, it was very hard to get time with an angel [investor],” says Pranay Gupta, CEO, Centre for Innovation Incubation and Entrepreneurship, IIM Ahmedabad. “But entrepreneurs with a good business model or product can now choose from a line-up of angels. They can decide how much money they want and from where they want it.” 

  

That was not always the case. “There is far more risk capital available for entrepreneurs today,” agrees Sanjeev Bikhchandani, one of the earliest dotcom entrepreneurs in India and CEO of Info Edge, the company that owns Naukri.com. “They also have success stories and role models to follow. So the ecosystem is better developed than what was available when we started.” Back then, start-ups had to grapple with the lack of capital and infrastructure, and they had a tough time in recruiting talent. Now, though, not only do investors put money in pre-revenue start-ups, they are willing to help strengthen the team and sharpen the business model.