Opportunities yet Challenges for Startups

By Safir Adeni, President, TiE Hyderabad

Safir Adeni, President, TiE Hyderabad

The year 2015 started with a bang for start ups in India. Flipkart got more than $10 billion in valuation, start-ups like Taxiforsure got acquired for $200 million and Snapdeal is said to be in talks with Alibaba that would value them for more than $5 billion. The bold risks taken by local VCs like Helion Venture, Nexus Venture partners or Kalaari Capital have been quickly rewarded by subsequent investments or acquisitions from the likes of Tiger Global and Softbank. However, all is not rosy for the average start-up in Koramangla in Bangalore, Okhla in Dehi, Powai in Mumbai or Hitec city in Hyderabad. A typical start-up journey is a roller coaster ride and in India, at the moment, there are as many challenges as opportunities to succeed. While the macro economics indicate favourable market for consumer products and services, enterprise and business solutions are a hard sell in the relatively slow moving and conservative businesses. Hence, even VCs favour consumer, retail and B2C e-Commerce start ups. B2B is best left for more mature western markets. Besides the inherent macro advantages, there is definitely availability of a large talent pool; however, the quality in the talent pool is severely lacking.

I feel that below are some of the challenges which start ups come across during their journey.

Attracting Talent

Furthermore, attracting any above average techie or business analyst to a start up is next to impossible unless you have raised Series A and can afford top dollar (a high price) along with have garnered enough market hype. Not that no students are coming out with a passion for entrepreneurship from the likes of IIT, IIM or ISB. There are dozens of them and in lot more numbers than ever before. However, some are most often fixated to their own ideas and business plans that they don’t venture to join someone else’s dream. The others lack any sense of ownership and accountably, if at all they do have capability. It suffices to say that the biggest challenge is the “Lack of suitable talent that can be attracted to an early-stage start up”.

Lack of Mentoring

The second big challenge is the lack of suitable advisors, guides or mentors who can guide these nascent start ups through this tumultuous journey while pointing them in the right direction with their inherent vision and strategy advice. Another challenge is the lack of efficient networks and platforms where start-ups can engage with peers, complementary partners, and potential investors.

Changing Regulatory

Last, but by no means the least, is the ever-changing regulatory environment and tax regime in India. There is both a real and perceived fear of the penal and retroactive tax burdens suddenly being imposed on unsuspecting start-ups and investors.

Funds... But Not Such a Challenge for Right Idea
The most commonly anticipated challenge of lack of funding is no longer true. There are millions of dollars waiting on the sidelines waiting for the right idea, the right team and the right vision. The rest of the above challenges can best be overcome.

These days, organizations are coming forward to extend an arm to these budding entrepreneurs. Like TiE (The Indus Entrepreneurs) provide a platform for start ups and entrepreneurs to network with other peers, solution providers, potential customers and prospective investors. But the most important value add is the seasoned mentors who are themselves serial entrepreneurs in most cases. These mentors are available to mentor and guide the budding entrepreneurs. This self-less act can go a long way in ensuring the start up follows the right strategy, stays focussed and executes according to plan.  TiE has the largest set of trained mentors who typically operate in a structured and selfless manner under the auspices of TiE management to deliver the much required mentorship. There are not many other organizations that specifically provide mentorship the way TiE does. TiE has both structured Mentorshops which are daylong workshops for early stage start-up that include 1x1 mentoring by serial entrepreneurs and investor as well as more informal mentoring sessions.

The outlook for start-ups in India, however, is very positive. The sheer passion of young budding entrepreneurs, clubbed with the investor enthusiasm and positive consumer sentiment bodes well for the overall entrepreneurial ecosystem in India. Start ups can focus on the tremendous opportunities and potential to scale their businesses in India. Their focus should not be limited to technology and ecommerce solutions but to the many diverse opportunities that exist in healthcare, clean-tech, smart cities development, education, media and entertainment, and more.


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