The Indian Startup Ecosystem is Broke(n) – Let’s Fix it!
[I have been thinking about the Indian startup ecosystem for quite sometime and the more I dig deeper into it, the more I realize the shallowness of the current state. The good news is that I am not the only one who feels ecosystem is broken.
Here is a guest post from Sameer Shishodia, (ex co-founder of Zook) who shares some very candid thoughts and few call-to-actions.]
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During the course of a conversation-over-chai after a meeting with fellow entrepreneurs, we eventually got to the usual analysis of what’s happening in the startup and entrepreneurial space around here.
Surely enough, the echo-chamber that resonates its own thoughts, and has little connection with those outside, soon came up.
So what’s paining/failing early startups/small companies/first time entrepreneurs ?
What does a business need to make it ? You’ve got the idea, you might get to the product, or some version of it, but then you sometimes kinda get stuck.
For lack of decent, honest, precise advice, information, knowhow, or even plain awareness.
Distribution, the right pricing, what should your outbound communication be ? Are the buyers interested ? Why not ? Is it technology, or support, or something else ? Do we even know what’s really happening in the spaces we’re trying to connect to ? Is there any form of market intelligence at all ? (I do not include a critical analysis of launches, PR statements and quarterly results in this – that often does not help a startup too much). What’s the government’s take on issues ? What are the infrastructural changes in the offing and their likely impact ? How do you engage in a dialogue – you’re already drowning in work.
Feels like Echo Chamber?
An early entrepreneur would surely love an ecosystem into which inputs that cover the above aspects are drawn in. An ecosystem, again, is not the creation or sole preserve of this forum or that, or some or the other online publication. Its the coming together of all of these, with dialogue flowing between the various stakeholders.
That ecosystem is quite inadequate in India, as of now.
As I see it now – be it major startup events (both structured and otherwise), or online coverage of entrepreneurial activity – there are two major problems:
There’s no EcoSystem (but only a part of it)
Sure there’s a bunch of enthusiastic VCs who participate. There’s a few industry people who even mentor folks. There’s a lot of aspirants who want to get going, and then there’s a bunch of people who’ve seen and done a little, and pass off a lot as knowledge.
There’s a lot of hype, jargon and very little honest learn-as-we-participate happening inside this echo-chmaber.
More importantly, where are the people who’re connected to the real world ?
Are there any top sales folks from FMCGs, Financial Services, Retail, etc, who’re telling it how it is ? Do we get real info on what directions business development is taking in healthcare, telecom, energy, real estate, etc ? Yes, you sure pick up bits and pieces of info as you run into these industries, but you’re on your own, and its a very incomplete ecosystem without these inputs.
Things are being built, reviewed, validated in isolation from these realities, and only a rude jolt much much later in the process forces a rethink. By such time, some have lost too much money, or people, or enthu, or time. People seem to go through entire entrepreneurship lifecycles with little connection to their real markets – and with a very fuzzy understanding of its behavioural traits. User personas are tough, but even worse, they’re probably non-existent in our startups!
A few honest tips from people who’ve sold stuff “out there”, figured out causes and relationships on the ground, would go a long way. Having access to thoughts from a senior bureaucrat who might be able to analyze government policy and directions better than techie-turned-analyst/VC/blogger would give the ecosystem a serious leg up. And so on – for media and communication, for figuring out pricing, and a whole lot more.
We need “more-360″. Its a very very small world right now with few connects into reality. Gotta change.
There’s no co-operation
This is true for both the players that help create the current ecosystem, as well as for co-operation amongst startups. Everyone is trying to do everything, be everyone, and seems a little fearful of opening up to inviting folks with other competencies. The expansion of the ecosystem needs an honest appraisal of whats available today, and whats missing. There needs to be a concerted effort to expand it, collectively. Each resource, each forum is so small and ineffective at this point that talking about competition is plain short-sighted.
Some gaps that I think exist:
- Experts for many aspects of entrepreneurship are missing from the discussions/fora.
- The entire focus is on “how to start” and “how to get funded”. Even the words mention otherwise, the actions focus on these two. What about the startup which has been around for a while ? What about those who need a redo, or are about to pack up ?
- Exploration of new models. Right now – pretty much everything is a lift-and-fit from the Valley, and there’s a tonne of traditional business knowhow thats ignored. The Nano was not created by adopting and stripping down an existing design. Need models for small ticket M&As, newer funding models that may not work like the current fund-of-risks model we see today (and that may have different investors from the essentially financial players one sees now), newer kinds of VCs, different models for hiring/organizational structure.
- Way more co-operation between startups. Trying to focus on what one does best, and keeping burn rates ridiculously low, will help get better success. There’s often failure induced by a lack of understanding of competencies that could easily be co-operated on, but that essentially smart folks fail at trying to understand and learn quickly enough. If you can get products out fast, marry someone who buys in and sells well. If you can network, help create and manage partnerships for others. More distributed ownership, higher stakes and commitment, lower “salary” costs.
Someone’s gotta to take the lead on some of this. A few success stories (to whatever extent – its not just $100 million exist that count) and we’ll see more entrepreneurial activity that’s built on newer models, for our own markets, at our price points, and stuff that sustains.
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Note from Ashish: At pluGGd.in, I strongly agree with what Sameer has mentioned, and we will take a lead on this – i.e build a ground based no-gyaan/all-hands-on movement.
_Soon_
Also read: What Indian Startup Ecosystem Needs to Learn from Bihari/Oriya Cooks
pic credit
How can one be an “ex” co-founder? you can be an ex employee but will always remain a co-founder ..
True. Good point
But anyway you frame that, it continues to read weirdly!
Guys rather than talking, see and appreciate people like
Proto.in
Headstart.in
and many others + bring your action.
Collaborate,somehow I find pluggd.in is very interested in self-promotion.
@Raghav – If you are running a startup – you would know the reality of why proto/headstart/and several other events have failed to bring in any help.
They are, as Sameer says ‘how to raise funds’ events and are of no help when running a business.
My 2 cents
Vinod,
You are being unfair to these events.
>> and are of no help when running a business.
I think entrepreneurs are on their own on this one, as it ought to be.
These events get the right people together in the right environment, thats all. They stop way short of direct depositing money in the company account.
Well that’s not the pt. I do not expect these events to deposit money. But their core mantra is built on ‘we will connect you to VCs’, which is flawed and is being discussed in the article.
The impact is short-term driven and is measured by how many tweets/blog posts/media coverage happened over a period of time, rather than something more useful.
True. Each of these fora are doing their best to foster entrepreneurship, and connect heads that matter. Yet, now that we’ve brought things to the current state, there’s a need for more. There are gaps, and after building up a fair bit of experience that we’ve already gleaned from the current crop, these gaps can be filled by rethinking the ecosystem for India.
Self-promotion ? Care to explain the path onto this conclusion ?
To share a bit of gyan on the new models of funding, recently I read about this site http://www.kickstarter.com and i very much liked the model.
I was thinking very hard why can’t this be replicated to Indian Web startup domain
Sameer, that is an excellent post. I think all the points were quite valid – and I think entrepreneurs should make it a point to connect with and share information with people outside their own small world.
As an entrepreneur, helping budding entrepreneurs is also being socially responsible.
I feel even now ( after 7 years ) if one shares his experience / expertise i could sense the value of it. Generally budding entrepreneurs are also young ( hence lacks the realworld experience). I dont think someone has to take a lead, rather let us make a beginning.
Let us ensure that every one of us start by mentoring or atleast counselling the young minds when ever we come across.
The article is an eye-opener.
True. i can’t agree more.
Regards
Vidhu
Hi,
I agree that this is an excellent post. Indian startups should be more liberal in sharing their ideas. Ok go have it copyrighted and have the IPR’s in place.
What i also feel that startups take a very ad hoc approach, in its operations, marketing and other functions ( my friend started one, so i guess i know) such as HR etc. A process centric approach is very valued by VC’s and stakeholders alike.
Apart from info. sharing, following processes the companies should keep innovating. Thinking out of the box is required.
Regards
vidhu
Vinod, get yourself aware of facts. Proto.in has an excellent Startup chat on every saturday and ~100’s of individual come and discuss.
That is excellent, don’t try to create same agenda here, better see what difference you can make. I am not associated with proto in any capacity, this is my personal opinion.
Headstart also has an evolving ecosystem + event showcase.
What India doesn’t need is having fragmented ecosystem. However if you folks are going to do excellent different stuff, all for it. My only ‘not-good-feeling’ abt Pluggd.in is – it is someway biased and showcases certain starups often. Hence I worry that big fish will beocme big here.
Your understanding of ecosystem clearly shows your immaturity. Startup Chat..100 ppl attending etc..is that something worthwhile to do?
It’s the same echo chamber.
Just to get your facts straight – We aren’t biased about any startup per se. If we are showing few startups very often, it’s because they are doing something worthwhile – very often.
As simple as that.
I am of the opinion that we as Indians are not innovators… we are great at impersonating and enhancing or retrofitting a model what is already out there. Our claim that we are innovators is a myth. I think we Indians have missed out a very important window of opportunity in the last 15 years. I am ashamed that we have not created on single product that we Indians can call as global. Most of these so called entrepreneurs, VC etc. are still engaged in IT, ITES and other rudimentary portal based services like Matrimonial, job sites etc. But the world for the VCs still revolve around their friends in the silicon valley. Another thing that I have observed is that the VCs are people who have achieved success in their ventures abroad and their mechanism for evaluation will not apply to access what is good for India. Also most of the VCs who head or are a part of the VC firms are from the working class (People who headed big MNCs firms for a salary) and not people with entrepreneurial experience.
Indians innovators to dominate the world should first discard the “Me too” attitude and focus on what the world needs and then try to localize the requirements… I was very upset that “Me too” portals like Guruji, Asklila etc are getting copious amount funding for doing something which already exist out there while companies like “Bling Media” get screwed. Not sure what to expect and how to correct this situation.
Well,I dont agree on the quote of “not a single global product”.
Heard about zoho.com? They are definetly global.
Disclaimer: I dont work for zoho.But,yes i am a happy paying member for some of their products.
Guruji is not a Me too kind of site.. It’s the innovator of local search…
don’t forget about Hotmail and the free e-mail concept they have given rise to (* I ofcourse agree it didn’t start in India)
What about RedBus???
The reason there ain’t many innovations is b’coz of the broken ecosystem .. its a cycle.. wen u get encouraged u innovate…
Just the right kind of collaboration among the various ecosystem entities can enhance its effectiveness. There is collaboration but its ad hoc and not aligned to a common outcome of “Promoting Entrepreneurship and facilitating entrepreneurs”
What a business needs first is a model then customer, then revenue, then scale…the ecosystem must focus on getting start ups the right mentoring, visibility to customers/users, alpha customers, help during gestation period…reaching out to VCs for funding is never an issue…But in a non cohesive ecosystem it can not be achieved…all this while we are increasing redundancy in the ecosystem and reducing effectiveness…
Sameer – Tie is attempting to fill some of these gaps through the Mentoring program that it runs. Any suggestions on how this progam can be made more effective for entrepreneurs, so that at least the gaps on Mentoring can be filled?
With regards,
Samir
Great! Would love to help out with whatever little insights I can scavenge from my experience. Coffee sometime, perhaps ?
Sameer – would be great to catch up. I’ve sent you an email at the ID of yours that I have. If you do not receive it, let me know.
With regards,
Samir
I think pluggd does a great job of consolidating the Indian startup-dom. Its just that the offline country is yet to awaken to the realm of creativity & start-ups
If we keep up with the pace and continue to report each other like this, I think in 2-3 years we will be right on track of powerful entrepreneurship.
Thats an awesome way of looking at things
But the challenge, in that case, would be to get the offline country to appreciate whats being done. Perhaps to re-purpose the offerings, and maybe even the channel itself, to ensure its at least taken to them.
But its not just the offline country – its also the powers that be in various domains. E.g. do the folks playing in the education space know/have access to info about what direction things are moving in ? What are the big players focused on for the coming year ? What’s paining the schools, students, colleges in your target segment ? Does the government have a policy change in the offing that presents opportunities ?
Guys, check out theindianstartup.com. We are dedicated to bring entrepreneurs together in a persistent online community so that they may create connections and help each other.
We also provide resources for startups like blogs, job boards, event listing etc. In a small way we are trying to help solve the problem that is described in the article above by Sameer.
Kunal, thats a good effort!
Like I mentioned, I think there are voices from outside the current set that need to be in here that will help a lot.
As a set, there’s a lot of disconnect from how various businesses work on-the-ground, what are the motivations people have (e.g. would most of us be able to imagine selling enterprise software as a status symbol?), what are deals hinged on, why traditional marketing or PR may not work and why pure online marketing isn’t enough for all. These, and many more such issues in the finance, resources, sales, marketing, communication, PR, and sometimes even the tech space, etc, need advice/information and insights rooted in reality. There are numerous myths so many of us accept as the truth that have reasons that can be worked upon (“Its tough/impossible to work with government departments ethically” to give you one).
The limited set of voices also provides access to a limited set of models to work with. [ I'll try doing a post on a whole lot, just in IT itself, thats been missing! ]
It would be cool if you and others could expand the participation to have a few folks who can both share their experience in these, as well as provide services so people can focus on what they do well without necessarily having to learn in depth all 28 facets of what it takes to run their business.
[...] It was an article by Ashish of Plugged in fame on what Indian startup eco system lacks ( http://www.pluggd.in/indian-startup-ecosystem-is-broken-297/ ). As all tweeple do, I also responded with my armchair opinion till it hit me that I can make an [...]