Nowadays, the startup dream is dreamt by many youngsters but not everyone ends up with their dream job.
I happen to know a youngster, who passed out in 2015 from a prominent southern private engineering college. Let’s call this youngster Pranav. He has been active in college fests, organising activities for “societies” and getting “tech-apps” made from his juniors. Highly connected with students, professors and evangelists from other colleges in the area, he had a dream to commence with his own start-up and even had firmed-up his ideas on technology and domain to venture into.
While on campus placements, he rejected four such offers, including from big Indian IT companies and consulting MNCs. He knew, for sure, the challenges he was likely to face while starting up. The usual ones are finding a team with same zeal and passion as he had, funding it, getting the product ready, competing with others, sustaining the various ups-and-downs of a startup and then making it big to succeed. He graduated and was ready for all of these challenges.
He was ready but his family was not. He had discussed these options with his parents before rejecting his campus placement offers, but his parents were under pressure from “society”. A few relatives were skeptical of his choice in life and were not seeing the vision and life he was seeing for himself. Anyone Pranav or his parents discussed the idea with, brought the rejection of the startup idea in favour of a more established option of higher studies (post-graduation) or taking up a job.
Pranav isn’t alone. There are numerous graduates, hailing from the middle-class, who are facing challenges even before starting their own venture. The society in India is yet to reconcile to what’s-the-big-deal-with-failure mentality. Is it a big blow if someone fails in an experiment? What about the learning from such a failure?
I did a simple calculation of the options that are available for a to-be engineering graduate, soon after college. Please allow me to exclude the outliers from IIT and IIM.
Employment Facts And Figures
Based on the latest figures, an engineering graduate gets about INR3 –3.50 lakhs per annum, as his starting salary. Assuming everyone, who gets into a job gets an increment of 25% in year 2 and 3 appraisals, 20% for the next two and 15% subsequently, as the base salary is growing and this percentage reflects the general 60% of the candidates who fit in the middle of the bell-curve.
An engineering graduate gets about 11 Lakhs after year nine, unless he reskills himself or switches jobs too frequently, with cumulative earnings of INR 61 Lakhs after nine years of service.
Consider the same graduate going for higher post-graduation studies within India. He invests about INR 10 Lakhs paying fees and for hostel accommodation and will start at about INR 7 Lakhs, per annum. Assuming the same increment percentages as earlier, his CTC at year nine is at 16 Lakhs, with cumulative earnings of 71 Lakhs over nine years of service.
If the same graduate had gone for higher studies abroad, he had to invest about INR 40 Lakhs an would have been much better taking CTC of INR 23 Lakhs (cumulative earnings of INR 76 Lakhs) after the same period.
What Happens With A Startup
Now consider the same graduate founds a startup. What does it take for founders to start a venture and take it to a level recognised in the industry?
He needs to build product (tech-savvy), understand market dynamics including competition (marketing plan with branding), define go-to-market strategy (lead sales), arrange funds (CFO role), hire and retain people (CHR role), manage organisation growth, address regulatory compliances, etc. If this venture has made its presence known, the founders have learnt that which no other course in the world can teach them!
Innovative and modern outlook companies are constantly looking for such people who are not only all-rounders, but also possess a fighting spirit and attitude to solve problems as they come. It makes these founders invaluable, whether they lose out on their venture or make a success out of it. Anyone who fails still has a better market value and is conservatively valued at INR 15 Lakhs as starting salary, if he had to take up a job after venture failure. Not to mention, he is better off than any of the earlier discussed cases, even if he has burned about INR 20 Lakhs of his own.
What if he succeeds? There is no looking back. What one earns then is incomparable to any job taken. Pranav has been able to convince his parents to travel this path.
If one argues higher education in India or abroad provides a connection with fellow batch-mates and this can be leveraged for better opportunities in life, this is no-doubt a take away. However, the learning is much more explicit had one started a business venture.
It is also pertinent to mention that business is not for everyone. Only some have the aptitude and attitude to take the risk and have the endurance to undergo the hard work physically and emotionally. So, for all those we are appropriate for it, a startup venture is the right way to go.
It is time that as parents we support our wards to take the path less travelled and enable them to be the torch bearers for generations to come, without compromising self-interest.