Innovation or Imitation

Good artists copy, great artists steal, said Pablo Picasso

The below information talks about the present Indian start up scenario and this also covers our class room topics like what is a start-up, Is start up means creating a new business or Innovative Business and who is an entrepreneur?

Start-up Definition (As defined by DIPP)

Working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation

Indian Start up Scenario

90% of Indian start-ups fail within the first five years.And the most common reason for failure is lack of innovation — 77% of venture capitalists surveyed believe that Indian start-ups lack new technologies or unique business models.

Other reasons cited for failure include lack of skilled workforce and funding, inadequate formal mentoring and poor business ethics, according to the study.

It’s well known that most Indian start-ups are prone to emulate successful global ideas, by and large fine-tuning an existing model to serve local needs. There’s Ola for Uber, Gaana for Spotify, OYO Rooms for Airbnb and Flipkart for Amazon.

India doesn’t have meta-level start-ups such as Google, Facebook or Twitter. On the other hand, China, with which India often compares itself, built its own Google named Baidu and Alibaba displaced Amazon.

“Since 2015, as many as 1,503 start-ups have closed down in India. And the major reason is due to the replication of Western business models, and not lack of subsequent funding from the investors.

The highest numbers of failures were in logistics, e-commerce and food technology.

So, Indian entrepreneurs can call them as entrepreneurs or copy cats?

But creating a start up need not necessarily means innovating a product or business, we can develop the existing product or business, that’s how the world will work because sometime developing the existing idea and executing the idea needs a lot of innovation and we need to be more careful because in this, we already had a competitor in this but are we replicating the same business?

The answer is No, we have just taken the part of idea and we are developing it based on our market conditions

In my view no one can copy; one needs to look at market conditions and innovate. He gives the example of Ritesh Agarwal of Oyo Rooms. “Ritesh wanted to start the Airbnb of India with Oravel Stays. But, he realized the bigger opportunity lay in aggregating hotels rather than concentrating on homestays,” so he developed his idea and executed well and now it is a big success.

Entrepreneurs can be classified into three types. One is where the entrepreneur finds an opportunity to solve a problem and starts work without being swayed by trends. “The best entrepreneurs don’t copy. They are driven by their own inspiration and that is validated by VC funding,”. Second, is when VCs start funding and a number of young people start ventures in the same space. These early movers have the best chance of success. Third, are the likes of Ola and Flipkart, who scaled and executed their business model after recognizing the problems peculiar to India.

“You cannot copy without localization. Indian consumers are different, and entrepreneurs should be able to understand consumers. That is the nature of business. As the number of start-ups increase, a lot more will be successful. Till then, we should welcome start-ups and not worry about them copying or shutting down. We should celebrate it.”