May 26, 2008

Myth-Web around Indian Startups

Whenever there is a discussion around startups, you would find all the jargons around it like:

1. Great Idea.
2. Great Team.
3. Bootstrapping / Venture Funding.
4. Time to market.
5. Potential customers.
6. Marketing and ...............

As I have mentioned in the previous article, IMHO execution would always be the key; whether you are a startup guy or work for a startup.Also,when we think about Startups, the first comparison that always comes to our mind is The Silicon Valley, but many times, we tend to forget that Indian Entrepreneurial Ecosystem is different from that in the US.May be it would still be many years when a college dropout like Mark Zuckerberg or a whiz-kid like Anshul Samar of Elementio would be accepted in our ecosystem.

In this article, I would like to focus on the Cobweb of Myths[termed Myth-Web] around Indian Startups , which when dusted off, may lead to a better ecosystem.

Note:
The views in this article are my personal views and it would be nice, if someone corrects me wherever required neutral.

1. Ecosystem = IIT(s) / IIM(s)
There is no point in mentioning how much impression premier institutions like Indian Institute Of Technology[IIT] or Indian Institute of Management[IIM] bring in our minds. For sure, they bring the best of the minds together under one roof, but Startups are not only restrained to them.In fact, an attempt should be made to take the IIT culture to the normal colleges(like mine) so, that there is an entrepreneurial ecosystem developed there as well.We need to get rid of the pre-made impression that "Entrepreneurs can only come from IIT's". IMHO, if we limit ourselves to only premier institutions, we won't be able to find our future Mark(s) or Anshul(s) sad

2. Venture Funding = Success
Funding always holds a major aspect for any startup but many times, people feel that - More the funding, more successful is the Startup.Dharmesh Shah of HubSpot has a very nice article on the same when His Startup raised $12 million in series B funding.
Money is always important in any business and each one of us understand the same but that alone does not materialize into success.This is an impression that is prevelant everywhere and hence, Hubspot[though not an Indian startup] was taken as an example.

3. Media = Success
With media not only restrained to mass media, so called Media Coverage has become somewhat simpler. Media may be coverage on blogs, websites ... But there is always a downside to the coverage in the media.Many startups(may not mention the name here) try to be in the news(in Magazines and other media) and this coverage is many times wrongly treated as Success .And it becomes difficult to digest this success.
With Web 2.0, media(except print media) has completely changed so, "Being in the media at the right time may lead to wonders else things may crumble" sad

4. Startups can be built in isolation
Why Bangalore is so famous in India is because it has a Brand Image attached to it and the Entrepreneurial Ecosystem is by far the best in India.But it is not the same elsewhere.Many of us forget that the Ecosystem is a crucial factor in any startup and to bring a change , we need to be a part of that ecosystem.
I have spoken to few entrepreneurs from other cities(apart from Mumbai / Chennai / other metros) and the importance of Ecosystem is not yet penetrated there....Startups need all the support they can and hence, they can be built in isolation for some period [after which they have to join the change to make the change].

5. Why should I attend Unconferences?
This is just from a small conversation which I had with a friend of mine who works in a startup.The founder of that startup was very active at Unconferences like BarCamp, BlogCamp, etc ..... until one day they got funded.I asked my friend that your CEO is no longer seen in unconferences and the answer was : "We got angel funded and hence, he does not feel a need to come to Unconferences".The answer was shocking
rolleyes
IMHO, Unconferences is the most prospective place where you can find your cofounder/prospective employees or even a new idea for a venture.Though this incident was personal, Unconference is one place which may work wonders for your startup since, it has been instrumental in shaping up my career wink.

Note:
If you can think of some more points , do leave them in the comments section and I would be grateful to add them with the article.

Reader's Contribution:
Alok Padhi - An inspiring story of a A waiter who would be an IAS Officer


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12 Comments:

At May 27, 2008, 10:23:00 AM , Blogger Manish Panchmatia said...

Himanshu

I think, I am not fully agreeing this time, with most of the points :)

1. IIT and IIM have brand value in mind of VCs. So their alumni have more chance to get fund.

2. Venture funding is required. However, theoretically VCs have many more responsibility in addition to fund the startup. Yes, funding is just starting point.

3. At each stage, a company needs different PR strategy. Yes, Social Media is emerging concepts. Yes media coverage is not success. But it is required to attract talent.

4. With ubiquitous broadband Internet, IT startup can be anywhere. We have many non-IT startups too.

5. Yes, to attend unconferance just to get fund, is shocking. However CEOs of startup have different priorities. They may need to attend different other such events, panel discussions etc.

The entrepreneur should correctly estimate customer need, the market and how the product/service will fit, when it will be ready. It is yet to be developed. So the team cannot visualize it. So the entrepreneur has to be confident and convincing about the success.

Regards and Keep Smiling
Manish

 
At May 27, 2008, 11:14:00 AM , Anonymous Himanshu Sheth said...

Hey,
@Manish:
I expected a reply like this only (:
My points below:

IIT and IIM have brand value....
>>Why VC are kept in mind from the beginning? I also agree that IIT/IIM's are required but would you let go a good guy(if he is not an IIT/IIM),just because VCs won't fund you? On the lighter side, can we say an intelligent student in Class I would be the same great student in Class X? This was my point.

At each stage, a company needs different PR........
>>My idea about Media was related to success.It is always required but many Startups get carried away with the Media Coverage.

Yes, to attend unconferance just to get fund......
>>First of all,the post of CEO itself creates vibes in the minds of many people.Imagine an Engineer turned Entrepreneur(who is just in his 20's-30's).He can meet more like minded people in such places which would help his/her startup to be taken to the next level.Sure they all have priorities, but as many successful entrepreneurs say "CEO is an engineer first and than a CEO"...so till the time your company does not reach great heights, you are still an Engineer(turned CEO) and not only a CEO :)

Thanks for such great comment.

-Himanshu Sheth

 
At May 27, 2008, 3:15:00 PM , Blogger Rashmi Ranjan Padhy said...

Himanshu,

well said and even I am expecting the same thought from the VCs probably.

However, the concept of seed funding is yet to penetrate in India. VC are shying out from seed funding and often the seed funding is the first stage to implement the idea.

Over all I liked what you have pointed out. lets see

Thanks,
Rashmi Ranjan Padhy
www.rashmiranjanpadhy.com

 
At May 28, 2008, 2:57:00 AM , Anonymous Himanshu Sheth said...

Hey,
@Rashmi Ranjan:
Thanks for the comment.Before VC, we may talk about Angel funding which is only good in newspapers and Angels are risk averse when they have to fund typical Garage Type Startups.

PURE TECHNOLOGY COMPANIES are still not welcome here !!!

Let's hope that the situation becomes better in future :)

-Himanshu Sheth

 
At May 28, 2008, 9:46:00 AM , Anonymous Jessica said...

Hi,

Very truly stated......

Many of us forget that the Ecosystem is a crucial factor in any startup and to bring a change , we need to be a part of that ecosystem.

FACE TO FACE CONTACT is far better than VIRTUAL contact (through the high speed net or any other means)
Being in places like Mumbai, Chennai, Pune, Banglore etc. gives you a chance to encounter different people and make new contacts (which is very important for a startup)

Hence true ....we have to join the change to make a change.

Keep writing....

 
At May 28, 2008, 8:55:00 PM , Anonymous Himanshu Sheth said...

Hey,
@Jessica:
I am glad that you agreed with my points :) These cities are way forward as far as building an ecosystem is concerned and this pain can only be felt by startups who are not located in these Tier-I and II cities.

-Himanshu Sheth

 
At May 31, 2008, 1:48:00 AM , Blogger Alok said...

Truly these are myths; taking the example of IITs … no doubt it is a premier institute but that doesn’t mean people from other institute can’t grow their ideas and come up to the level of expectation … then how many of will be brand conscious ?

I found something really inspiring, it may not relevant to startups at this point of time but definitely will change the way we look at things …

http://www.rediff.com/getahead/2008/may/27ias.htm

 
At Jun 1, 2008, 4:08:00 PM , Anonymous Himanshu Sheth said...

Hey,
@Alok: BRAND is fine, but we cannot misjudge that every individual from so called BRAND would be himself/herself a BRAND.

I think you hot the hammer at the right place :) The article is really very inspiring , have added the same in my article.Thanks for sharing the link with us.

-Himanshu Sheth

 
At Jun 5, 2008, 1:31:00 PM , Anonymous Nithya said...

'but many times, we tend to forget that Indian Entrepreneurial Ecosystem is different from that in the US'

Thats very true. Mainly for the reason that our ecosystem is still incomplete for want of entrepreneurs who have had successful exits one can look up to. I think its the first crop in India and its gonna take sometime to mature.

 
At Jun 6, 2008, 5:02:00 PM , Anonymous Himanshu Sheth said...

Hey,
@Nithya:Thanks for the comment.In fact,what I have written here is from our personal experience.We always see people giving examples like Google,Apple etc etc but where is an Indian example? There are hardly any (: First, such examples should be built and than we can say "Things are building up" !!!

-Himanshu Sheth

 
At Jun 16, 2008, 2:35:00 PM , Blogger Curious MInd said...

Best post ever :)
i just loved it.

Regards
satpal

 
At Jun 18, 2008, 1:54:00 PM , Blogger Himanshu Sheth said...

Hey,
@Satpal:
Thanks for the comment and it is nice to see you back FINALLY on ThoughtsPrevail :)

-Himanshu Sheth

 

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