I have been following the Indian startup ecosystem since my college years. I have attended all the startup meets and events possible around India, have seen hundreds of startups, met hundreds of founders, have started a startup (actually two), have been part of a startup accelerator, have met many VCs and partners and have seen the Indian ecosystem as closely as anyone can see.
I have been thinking of writing this post since 2012 but I have always kept it in the drafts as I wasn’t sure I have enough material or I should even publish it (too much negative and opinionated content) but I know there are a lot of people who know a lot but “in trying to look good” don’t share their experience and knowledge. 9 out of 10 startups in India get shut down in the first 3 years (the number is probably 19 out of 20, just look at the coverage of startups in 2010 and see how many are still functioning). So I thought let me be “that” guy who will share without trying to look good.
I have kept the post as honest as I can as well as tried to keep it opinionated as I feel it’s not worth writing another generic post spending 3 hours.
Alright so here is the real truth about the Indian startup ecosystem:
1. India has no startup ecosystem – Startups makes no sense in Indian context, people reading Mark Suster, PG and Andrew Chen are just wasting their time. As a startup founder, you are better of having that “marwadi/gujrati” mentality while building a business, specially when bootstrapping.
2. There are trolls in Indian startups ecosystem, people are just there for the kicks, greed, ego or entertainment. These people are doing a lot of damage and I hope they just go away. These trolls are VC associates/analysts, some startup mentors or people offering startup services including “I will help you in raising funding or growing your startup”. Most of these people bring nothing to the table, take no risk and are just there to use you. Be careful.
3. Startup Accelerators and Mentors are Scams – Barring 3-4 startup accelerators, all are scams. You don’t need them to build businesses and I hope they go away. Mentors are even bigger scams, to build a business you don’t need mentors but need some friends who are there with you. In Bangalore, every guy with a failed startup has the potential to become a mentor. I of course don’t hate the player, just the game. I know there are good people too, it is just that there are too many people who are goofing around.
4. There is no such thing as a product based business in India – I had met a very nice guy who is running a funded startup with 5 lakh revenue with 50 people who proudly said that they are a product company and they will soon double their headcount. I am sure they have a great product but if you have 80% people in sales, marketing, support, demo presentation, accounting and HR, you are really not a product company. If you are targeting the Indian market, every business becomes an operations business. There is no such thing as product or service business from Indian POV. It is good if you stay grounded and don’t chase around.
I hope this post helps a few startups and founders, give them some clarity about where they really are, keep them focussed in just building their business and stop them from making bad decisions. If you have any questions, feel free to ask in comments.
