Bharat Kumar Mohan, a former Google Finance employee, is one such entrepreneur who is riding this wave. Mohans venture Pugmarks, which was started only late last year, helps users identify articles based on their interests, websites they follow on social networks, or their own browsing history. The trick, for him, was to convince funds that the start-up was catering to a global audience. He feels that his primary market is the US since more people access the net there. The product was developed with a problem in mind, says Mohan, whose company is funded by a seed fund, Blume Ventures. Early stage funding is generally less than $20 million.
Rajan Anandan, vice-president and managing director of Google India, an angel investor for more than 20 start-ups in the country, including Capillary Technologies and WebEngage, feels that increasing number of incubators and accelerators across the country are striving to get business ideas to an investment-ready stage. Now we have a dozen private incubators and accelerators that have emerged in the past couple of years, making the big difference at the early stage, says Anandan.
Investors feel that while the first wave was largely services oriented, the new generation entrepreneurs are focusing on products. Services have now become a big boys game and hence everyone is focusing on developing products with usually a global market in sight. They are also helped by the fact that there is increased acceptance of entrepreneurship as a first-class citizen". Nasscom president Som Mittal feels the change as compared to a decade ago is that the new wave of tech entrepreneurs are ready to start a venture out of college, unlike in the past when entrepreneurs were born out of a mid-career crisis. These youngsters seem to be fearless and look certainly more confident about their talent and products, Mittal tells FE.
Deepak Ravindran, the 25-year-old founder of Innoz, a SMS search service provider, points out that earlier many companies were eventually forced to sell themselves to investors rather than being able to sell their products. Now, with the resurgence of angel investors and seed funds, the start-ups are breathing easy.
Among second-generation entrepreneurs, we see a strong belief about the products that they are building, which is for global SMEs. The feel of the product today is more global, while earlier the products were more functional," says Prashanth Prakash, partner, Accel Partners India. The early-stage VC fund has invested in Pune-based MindTickle, a social consumer interactive platform, which sells its products to one of the top three global retail and telecom majors. Accel has also invested in Chennai-based Freshdesk, a customer support tool provider that caters to global clients, including Stanford University and Pearson Education Group.
Aprameya, founder of Bangalore-based start-up Taxiforsure, says angel investors today bring in new ideas, which entrepreneurs can bounce off with them. They bring in more value than the money they invest," he said. Earlier this year, the online cab booking site attracted investments from Helion, Accel Partners and Blume.
Till three years back, there were just VCs in India that supported all start-ups. VCs are simply not set up to devote the time needed for seed stage, says Sanjay Swamy, managing partner, AngelPrime, a business incubator which focuses on start-ups in sectors like mobile payments, e-commerce and apps for smartphones and tablets. But this has posed a challenge of its own. The good news and the bad news is that we now have a glut of entrepreneurspeople dont want to work in a start-up; they want to start a start-up. Talent is the biggest challenge," says Swamy.
Cloud has become big enabler for the second generation to think global, as it has increased the maturity and scalability of start-ups. Internet helped to understand what is global best and what great looks like," adds Anandan. He adds that even the marketing, sales and product subscription are done out of Internet and cloud. He cites the example of WebEngage, which caters to 4,000 global clients with just five employees working in Mumbai. This, Anandan says, has lifted the barriers and inspired a lot of people to take up entrepreneurship.
(With inputs from Debojyoti Ghosh & Darlington Jose Hector)