What should the Government’s role in #Startups be?

There is a reason why advanced nations keep the government out of the space of business and business execution. If they are not good for business, aren’t startups also the same?


Good governments stay out of the business of running and growing businesses. They leave the experts — business-people, in charge of that. And there’s a simple reason to do so: they are good at things that a business doesn’t really need on a day-to-day basis.

source: cartoonstock.com

I am always wary of businesses (new or established) that take the government’s help to get their sh*t done. Every time, I read or hear about a company using the government to advance itself, I can’t stop but imagine the world of The Fountainhead and Atlas Shrugged. Government intervention slows down everything, burdens the companies and generally kills innovation and competition while fostering bureaucracy and political agendas within organizations and without.

The government is good at one thing, or it should be good at it, and that is: laying down the paths, fields and fences that allow businesses to nurture and grow. They should make things easier for businesses to do business while at the same time making sure that the rules of engagement are drawn (but not rigidly or irrationally) for people to follow.


In the past few years I have seen and read of more initiatives by the government to foster startups and entrepreneurship in the country (specifically talking about India). Setting up councils and committees that consist of bureaucrats that have spent their entire life in public service without being exposed to the risks of business or starting one.

source: cartoonstock.com

Yes, they do include business-people in these committees and councils, but I doubt that the mindset of a CEO of a multi-billion dollar multinational is tuned to think like a young startup founder. We all have been 16 once, but how many of us at our age, can think like one or even begin to comprehend what’s going through the minds of one.

So, I really can’t understand what are bunch of paper-pushers and old tycoons going to do that’s really going to help startups!


Instead, here’s what I think they must do because it’s in their power and right to do so:

  • Allow autonomous improvements of education systems: Let schools and colleges, like the businesses they are, work to improve their standards, include vital subjects in their curriculum and nurture creativity, innovation, risk-taking and leadership.
  • Create a social change to accept failure without prejudice: The reason why Silicon Valley is the way it is, is because the people there do not fear or ridicule failure. They accept the fact that to achieve great things failure is imminent and even necessary. It’s time to educate the support system of entrepreneurs and innovators.
  • Create a governance structure that makes it easier to do business: 30–60 days to get papers for your business is ridiculous. 60–180 days to process closure is even more so. Eliminate corruption and tedious paperwork, and implement transparency in the processes. (Note: These are durations in India.)
  • Allow free movement across the country: People need to go where there is talent and markets. Simplify home and office rentals, utilities’ subscription, even cross-border vehicle movement and other processes that hinder free movement.
  • Continue taking some burden off the shoulders of doers: Give tax cuts, subsidized resources, spaces, etc. Make it easier to file taxes and returns without the need for professional help.
  • Make it easier for investors to invest and disburse funds.
  • And finally, stay out and away from mentoring, guiding and involving itself in the business operations. And stay away from incentivizing anyone to start, guide or fund a startup; let the market forces prevail.

Do you agree with the list about and the viewpoint? If not, I’d like to hear your views in the comments below. If yes, did I miss out on anything that the government should or shouldn’t do? Let me know.

Take care. Cheers.

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