According to a recent
report by NASSCOM, the IT-BPO industry body, the last fiscal year saw 800
startups enter the Indian market ecosystem. Riding on the wave of globalization
and opened market access, several trained professionals are going the
entrepreneurial way. As per NASSCOM’s report, according to the current growth
patterns, India will house the second largest startup ecosystem after the US,
in the next two years.
For a few years now,
India has chosen to silently ignore the immense potential that the mushrooming
startups hold for the economy. But, all of that is changing now. The Union
Budget 2015 has acted as the first step by the Indian government to acknowledge
this new segment of the market, by creating a special mechanism called
SETU-Self Employment and Talent Utilization.
This mechanism is meant
to support and nurture the startup ecosystem in India. But, it is still a very
small step, given the size of the startup market and its current growth
trajectory. The biggest driver of growth in the startup scene is e-commerce.
2014 was the year, when the average Indian consumer was exposed to a new
frontier of shopping.
However, the story of
startups is not as rosy as it is portrayed. A startup is like any other company
and requires investment and funds to function; especially in the garage phase
of its existence. The US has a highly evolved and nurturing ecosystem for
startups in the form of incubators and angel investors. On the other hand,
India currently has just 80 angels and incubators combined. It is quite
apparent that the startup to incubator ratio is dangerously low in our country.
Unlike home businesses,
startups cannot run on family money for long. The Union Budget has allocated a
thousand crore rupees for the promotion of startups, but, it is still meager
compared to the requirement.
Some of the startups
which have served as the flag bearers of the startup growth story are companies
like Snapdeal, Ola cabs, CarTrade, PolicyBazar, etc. these companies have come
a long way to become successful startups that offer unique services to the
consumers. The rapid growth of these firms has been the driver for other
entrepreneurs to dream big.
The startup ecosystem is
thus divided among two categories- the haves and the have nots. On one hand, there are successful startups
like Flipkart, Snapdeal, and Ola which are managing to score multiple rounds of
multi-million dollar infusions; while on the other hand there are others who
are facing situations similar to a famine.
Also, the most notable
startups that have sprung up and are successfully running their businesses are
limited to the fields of Mobile and E-commerce. One may think that this is the
case because of the immense strides going on in this sector, but that is not
entirely true. The fact to blame here is that Indian startups are being funded
by foreign VCs, who are currently fixated at expansions in the technology
sector.
Such a scenario is very
disheartening for the hard working entrepreneur, with brilliant ideas and
innovations, but, no recognition and support.
SETU is a positive approach out of this mess. However, it is still a
pebble in a pond.
While the government
goes on calling to foreign conglomerates to Make in India, their first step
should rather have been to promote an internal growth ecosystem. The number of
new startups is going to keep on growing, as young graduates and professionals
ride the entrepreneurial wave to self employment. So, instead of creating new
sets of regulations to bog them down, the GoI should instead create support
groups and organizations which identify and aid potentially unique and valuable
startups.
The road ahead is quite long for
Indian startups. The coming year will see many more startups mushrooming all
over the country, with new and unique products and enthusiastic entrepreneurs
at their helm to guide them to glory. Several more steps are also expected from
the government which will help reduce the turbulent divide between the top 5
percent of startups and the rest of the 95 percent.
