It is a well-known fact that most startups tend to fail within a few years of inception. Yet, there is a clarion call to give a push to startups because they bring in new ideas as well as have the potential to become what are called unicorn (companies valued at over $1 billion). There have been several instances of such unicorns spurting in India, which houses one of the largest numbers in recent years.
This is what is explored by Aditya Arora and Surya Pasricha in their book Startups of Bharat. They take the reader through different success stories and have certain lessons for those who wish to get into such ventures. There has been a tendency for several engineering and management graduates to get into something new; and with the spread of technology, has become easier. These startups have chosen the online route often to deliver new products and services to customers. In fact, as the authors show, most of these ideas germinate when they are studying in college and fructify as they end their courses and opt for this unconventional route rather than try for the placements. This is reflective of a very advanced level of intellect where students are already in this entrepreneurial role, albeit in the mind, from an early age.
Lessons from the field: Why storytelling replaces preaching
The authors claim that this is not a book that teaches or preaches. It is more a collection of various ideas that have gone into creating startups that have worked. Hence, one cannot ask about those that have not worked. Each story covered in the book gives a gist of what the enterprise does and then traces how these ideas came up and were implemented. At the end of each chapter there are key takeaways. This would closely resemble a brief playbook that could be adopted by anyone thinking of such ventures.
Some of the questions that are posed relate to the business, while others are more behavioural, which will vary across persons. Hence when they talk of being resilient or dreaming big and being bold, the concept may look fairly nebulous. But talking on systems and not the product or focusing on communities and not just customers will be more specific thoughts that need to be pursued.
These stories of entrepreneurs have resulted into considerable amounts of money being raised in the market, with some achieving unicorn status. These startups have not just brought in new ideas but also created jobs. This is one way to go for the economy as conventional jobs become repetitive and probably scarce as technology-driven AI can create a certain modicum of redundancy of labour.
Three prerequisites: Decoding the formula for unicorn success
Trying to trace patterns in these enterprises, the authors conclude that there are essentially three prerequisites that have to be met for a successful venture. The first is the product or service (which they term as problem) should be one with a large potential market. This sounds logical because scale is important when bringing in any technology as otherwise there would be a levelling of demand. Along with size of the market, there must be what they call a ‘problem which is repetitive’ so that the venture can garner an income on a regular basis. This too sounds fair, because for the market size to be maintained over the years, there must be high growth registered continuously or else the idea will wane. Last, the product must be considered an essential and not of discretionary value. This is important because as economies progress there are business cycles. If products are not a necessity, then there will be reduction in demand in the natural course. However, if it is essential, then it would work well.
In this book, Arora and Pasricha provide several case studies to drive home this point. The first thought that comes to us would be education, which is something that is large given the demography of India. Several startups have focused on this field and derived fair returns over time.
Providing a platform for cattle is another rather novel idea. We are aware of a second-hand automobile market which is conducted online by several such enterprises. But trading of cattle is different which eschews the bother of going to cattle fairs. Besides the platform and other technical issues that have to be in place, there is a need to give wide scale publicity to these ideas so that a market is created.
They talk of another venture that created India’s largest student community where one can come and learn new skills and network with peers. Another example provided is of a property management app that helps landlords and property managers automate rent collection and streamlining tenant onboarding.
They also provide some guidance on how one finds mentors as this is something that is useful for sure. Similarly, they pose and answer questions on the funding aspect of such ventures as well as on where to register the company. Raising money is always a challenge for any individual, especially if the idea that is being worked on is new and not tested. These are useful tips where the suggestions are not based on any theoretical basis, but practical experience of how various entrepreneurs did the same.
The 15 chapters that are included here are what the authors quite appropriately call the 15 levels of simulation as each level has advice based on a specific company’s experience. This book will surely be of interest to anyone who is looking to do something new as it does do some hand holding from the stage of ideation to making the project work. For those who are not of this variety, the book provides interesting reading as it talks of how things got done for all these companies (the names have not been mentioned in this review as it would take the fizz out from reading the book).
Madan Sabnavis is chief economist, Bank of Baroda
ends
Startups of Bharat: Stories of India’s Million-Dollar Founders Under Thirty
Aditya Arora,
Surya Pasricha
Penguin Random House
Pp 240, Rs 399
