‘Start-up ecosystem has allowed people to take risks’
Most successful start-ups were launched during recession and hence the current phase is perhaps the best for entrepreneurs to do so.
Participating in a lively debate on India’s Start-up Story: Where Do We Go From Here?, Mahesh Murthy, co-founder of Seedfund, said start-ups, which get launched when the markets are doing well, can sometimes lead to a false sense of security. Hence, when the markets are down, there is enough time to tweak the business model and make it stronger and when the situation gets better, start-ups will perform much better.
Rajiv Lochan, MD & CEO of Kasturi and Sons Ltd, who moderated the discussion, set the narrative for the debate pointing out how the newspaper headlines about start-ups, ranging from receiving mega funding to taps running dry, reflected their evolution in the country.
Co-founder & Chairman of Portea Medical K Ganesh said start-ups have seen multiple cycles. “Hence, to get worried about swinging from huge euphoria to complete depression is unwarranted. There is a lot of sanity which is coming in to the sector,” Ganesh pointed out.
Anu Acharya, the CEO of Mapmygenome, said it was important to build a good business and how much impact it has created. “It takes time to build a company. For me, building a company is not to follow the money trail, but to make an impact and not worry about whether the people are listening or not, but at some point they will.”
Ananth Narayanan, the CEO of Myntra and Jabong, said start-ups like theirs have created sustainable business based on a combination of India-specific innovation and technology which has resulted in an ecosystem for entrepreneurs to take risks.
Copy and paste
Murthy also referred to how the copy-and-paste culture has set in among the start-ups in India. “Take what is in the US and copy and paste it here. It has worked in China and Russia because of the environment there.” However, to replicate here may not always work. Ganesh, however, said taking good practices from the so-called copy-and-paste model and evolving one’s own unique model was one way out. For example, the cash-on-delivery model was an India-specific model which has worked very well for the Indian consumers. “There are good things to be learnt from what has worked in the US. There is nothing called copy-and-paste model. We should be slightly more generous with our start-ups before judging them.”
Mahesh countered it by pointing out that 15 to 20 years ago, the markets were lot more forgiving but today there are just two to three start-ups which dominate each sector and hence one should create a model for the market that the start-ups are playing in.
Agreeing with Ganesh, Myntra CEO Narayanan pointed out that the country’s fashion industry was mostly unbranded and hence their start-up came up with private label initiatives which has worked for them. Earlier, there were 10-15 start-ups in our space but one has seen a consolidation since then because those which survived came up with India-specific innovation, Narayanan said.
All the panelists agreed that some of the start-ups, which were critical about capital dumping by foreign-based ventures, were not being fair as those against the practice were also the ones which had received funds from overseas funds.
Answering a question from the audience about the reason for lack of funding for non-technology start-ups, Murthy said most investments are driven by tenure and it becomes necessary to find start-ups which can give returns within a span of eight to 10 years. Therefore, most tech start-ups are the ones who have a better chance of giving better returns with that time span.
