Start-ups breeding ground for new bunch of risk takers

Written by Anand J | Bangalore | Updated: Aug 26 2013, 17:21pm hrs
EntrepreneursA new bunch of ?breakaway? entrepreneurs are taking the path less trodden by venturing out on their own.
Taking a cue from the success stories of their parent companies all of which started from a scratch a new bunch of breakaway entrepreneurs are taking the path less trodden by venturing out on their own and giving birth to a favourable ecosystem for start-ups in the country.

Just consider these figures: From a little over 300 start-ups in 2006-07, the figure now stands at 1,500. There were just about 38 early-stage and venture investors then, now there are 83. The value of investments has gone up from $600 million to $2.3 billion. The start-up ecosystem in the country has matured and the exposure to the risk-taking culture has inspired many techies to take the unusual path to entrepreneurship. The turnaround tales of companies like Flipkart, MakeMyTrip, InMobi and Zoho have only boosted their confidence levels.

This is not to say that IT biggies like Microsoft, Google or Yahoo! have ceased to be the hotbeds. While Microsoft India has spawned some 20 companies, Yahoo! India has spun off about four to five start-ups. Many of these firms have good entrepreneurial cultures. But experts feel that the country has also seen tier-I investors coming in to fund good ideas and have a mentoring landscape that is evolving rapidly. Also, the technology adoption at a consumer level mobile and mobile internet, e-commerce is helping entrepreneurs conceptualise business ideas that can scale across geographies, they say.

Naveen Tewari, founder and CEO of InMobi, says working in a start-up helps budding entrepreneurs imbibe vital values like risk-taking, speed of execution and meaning of failure, as well as inspiration from people who are living by it. This, he feels, is very different from that of large organisations. Paradoxically, the invisible safety cushion in large organisations often inhibits people from realising their true potential. But in a start-up, failure is often celebrated as it leads to learning and encourages people to take on bigger challenges, Tewari says.

Prashanth Prakash, partner, Accel Partners India, feels that working as a part of the core team at a successful start-up will give the ringside view of operations to people, who will also have the opportunity to witness a non-linear growth.

This is more common in technology start-ups because the amount of capital required to bootstrap is small as people can build them by using open source and cloud on the net as well as by leveraging the tools available, which may cost them as less as $1,00,000, he says.

Karthik Reddy, managing partner of the R100-crore seed fund Blume Ventures, adds, From an entrepreneurial perspective, people who come out of start-ups are better placed compared to organisations like Yahoo! or Google where employees tend to be too structured despite being good engineers. He adds that he is expecting more and more companies to come out of start-ups when the first lot of companies becomes successful.

Kunal Bahl, CEO and founder of e-commerce platform Snapdeal, feels that the next generation of entrepreneurs will largely come from either the IITs/IIMs or out of these start-ups.

Being part of the beginning team of a successful start-up will mean that they have seen what it takes to build companies from a scratch. That gives the confidence of taking a risk once you have an idea, Bahl says.

Raghu Ramanujam, founder of startup PoolCircle, a technology platform for peer-to-peer sharing, says that he has learnt to get the basics right from Zoho as well as the ability to think big as a global company from InMobi. Being part of the founding team and working closely with them is a huge influence in the way you think. We think big because of Naveens (one of the founders of InMobi) and (Sridhar) Vembus (one of the founders of Zoho) of the world, he says.

Entrepreneurs feel that there are enough start-ups and mentors who have done that in the ecosystem now. But Ramanujam adds that, ultimately, entrepreneurs cannot put the onus on the ecosystem and, for a good idea, market will naturally provide that to them. Customers are willing to experiment and investors are willing to put faith on such entrepreneurs, he says.

It is not always the money which is inspiring people to launch their startups. According to Mukund Mohan, director of Microsoft Ventures, startups enhance the skills of a person much faster than any other workplace. It also remains a motivation for many people to go and work/start a new one. Many entrepreneurs are still trying to make their startups work despite knowing well that if they leave the place, they will be paid five to seven times more at a big company, one that is always on the lookout for good talent, he says. Krish Subramanian, founder of ChargeBee, adds that one tends to learn how each product comes and evolves while working with start-ups.

While it is disappointing for these firms to lose talent, the first generation of entrepreneurs are encouraging the trend. It is heartening to see that we make a difference to people's aspirations and lives, by inspiring them to set out on their own, Tewari says. Bahl of Snapdeal agrees, If someone comes to me and says that he or she has an idea, I will be the first one to encourage him or her. If I am not the one encouraging people to become entrepreneurs, who else would