The last two years have seen a slew of initiatives and agendas announced by the government—starting with the National Digital Literacy Mission with its worthwhile agenda of enabling one person in each Indian family to have digital skills, we have seen Swacch Bharat Abhiyan, Make in India, Start-up India and the more recent demonetisation drive and the ‘Cash Mukht India’ opportunity capturing the imagination of the country. But if one were to look forward to 2017 and beyond, it is probably a new agenda and horizon for start-ups and the fostering of a true entrepreneurial eco-system in the country that will get India to the sustained 10% growth that is imperative to meet the collective aspirations of a billion Indians.
The start-up movement in the country was given a tremendous boost a year ago with Prime Minister Narendra Modi’s ‘Start-Up India, Stand Up India’ call. In the first flush of success, it was the much talked about unicorns—some with business models that were simply a “lift and shift” from US success stories—that attracted funding and applause. The emergence of incubators all over the country, both within academic institutions and through entrepreneurial initiatives, helped to boost visibility of the start-up eco-system. Cases in point have been the 10000 Start-ups initiative of Nasscom, Kerala’s Start-up Village with its ambition to create a 1000 start-ups in ten years and the unique partnership between government, academia and industry that led to the creation of T-Hub in Hyderabad. Recent initiatives like the 1Crowd Fund and the continuing success of Indian Angel Network have also kept the appetite for start-up investing high in the country.
However, hundreds of start-ups have spluttered after the initial enthusiasm and many well-funded start-ups of the first wave are in danger of running out of cash or entering a dreaded “down round” phase. The absence of significant success stories and defensible start-up value propositions has sent tremors through the market and questions are being raised about the sustainability of the entire start-up movement. But it’s way too soon to panic and what is needed in the new year is a clinical assessment of the state of play and the case studies of other eco-systems elsewhere which we can emulate or even exceed in our own entrepreneurial journey and make the start-up movement bloom again!
Global research by McKinsey & Co points to several such cases of cities creating momentum which could provide a wealth of learning for smart city start-up hub creation in creative cities such as Pune, Jaipur, Bhubaneswar, Nagpur and many others in the country.
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How can 2017 become a watershed year for the start-up movement in our country? It’s not going to be an easy year, with the triple whammy of a slowing global economy, the uncertainties of policies and actions of the Trump administration in the US and the short term economic impact of India’s demonetisation experiment—all likely to have an impact on the adoption of new ideas from start-ups in industry and government.
However, the period of relative sluggishness in opportunities could well be the time for thoughtful approaches to the future and systematic go-to-market strategies for existing and new entrepreneurs. One would advocate three vectors for the players in this eco-system.
The governments of the day, in cities such as Pune, aggressive states such as Telengana and Maharashtra and supportive agencies such as Niti Aayog and the ministry of IT should create supportive hubs which build confidence and careful design thinking in new entrepreneurs, create start-ups events that educate and enlighten and build a collaborative group of corporate partners, mentors and funding agencies. The funding agencies themselves will have to provide patient capital to ideas that can have long term and differentiated impact on the business models of enterprises and national initiatives like the Smart City Mission.
And finally, a word of advice to the entrepreneurs. There is clearly no place in the 2017 sun for copy-cat business-to-consumer (B2C) models, but there are multiple discontinuities and new opportunities that can be exploited in a fast digitalising India. New models that reduce cost and enhance stakeholder satisfaction—for customers, business partners, employees and citizens are all long-term business and wealth creating opportunities. In this land of opportunity does the future lie for Start-up India!