Does India needs Start-Up's for real growth?
Creating opportunities for 65% of the 1.2 billion population is left to Startups in India. The prime question of how and why we would achievethis goal is unanswered. Most of the Startup mentors would agree we are no where close to the number of Unicorn Startups which can meet such goals.
We need to build these Unicorn Startups. The current ecosystem is competent enough to help the Entrepreneurs to learn from fellow Entrepreneurs which is okay for slow growth. We need faster and stable growth to meet out employment goals. The current Startup ecosystem need gear up and drive in different direction to achieve this.
Building a Start-Up is an exercise in institution building. For generations Indian traders have laws that govern the traded products and not the customer interests. Though the Indian Entrepreneur understands money very well, the startup is not all about money. If one needs to build a Unicorn, the focus needs to be on delivering value to the customer and the rest doesn’t matter.
The differentiation between success and failure is the ability of an Entrepreneur to understand what works and what fails in their plans and implement successful strategies for overcoming failures. No product should be build within the walls, its supposed to be build with customer inputs and validation of the inputs.
Sustainable growth is characterized by one simple rule:
New customer come from the actions of the past customer — Eric Ries- Author, The Lean Startup
When do cockroaches chirp:
Most of the startups get into the analysis paralysis of the idea which is nothing unique but kills the time. Execution is excellence.
Working in an industry where the cash burn ratio is higher for customer acquisition or inefficient utilisation of capital.
Business model focusing only on the Metro business (Most the funded start-up’s failed in Semi Urban and Rural markets)
How to become a hunting Unicorn:
Business model should have the natural alignment towards a good customer experience.
Should have a positive unit economics from the early stage.
Even if they are not able to raise to the next level of funding they should be able to self sustain with the revenue.
Its not the value or traction its all about revenue.
It’s only start-up’s that can resolve real world problems which will help overcome the early growth challenges.
The focus should be on originality rather than aping the western businesses.
The average valuation of an Indian start-up is half of its US counterpart.
The spread has to go beyond IT and into other domains like Education, Healthcare, Cleantech, etc.
More B2Bs has to built for start-ups to sustain and grow faster without behaviour changes or challenges.
The missing link:
Start-Up ecosystem exists only in few cities in India. The scenario needs to change. It has to be spread in the country wide and deep.
The number of Non-Premium Educational Institutions are aplenty in the country. The focus has to be on identifying the best ideas and groom them to become Start-up’s.
We need more seed fund and grants which can enable innovation and invention.
Early stage foundation is quite important for a start-up to become unicorn. This means we need strong support systems to validate at the early stages.
Finally, it’s the founder and the mentors make a big difference in building the startup fundamentals. If the early stage is planned and built solid the chances of success are much higher.
All this is provided by Accelerators and the challenge is copying American models doesnt work for Indian Startup founders. Unless we build an Indianised Acceleration model (Not another coworking space in the name of Incubator or Accelerator) we wouldnt be able to reach the goals which are created huge employment opportunity which inspires the current generation and wealth distribution (As similar to the that of what happened with IT Services sector).