There are many reasons why the startup ecosystem is booming in India.
The Indian government is pushing the idea of entrepreneurship as being the answer to creating new jobs to kick-start the economy; and because of all the adulation which the media lavishes on successful founders, the new generation of entrepreneurs (the Bansals, Vijay Shekhar Sharma and Bhavesh Agarwal) have become the new role models for students. The startup space is hot and happening, and everyone wants to become an entrepreneur!
Another contributing factor is that the jobs in the IT companies have dried up. Engineering graduates are finding it hard to find employment, which means that they need to create jobs for themselves by creating startups. Since there is so much interest in entrepreneurship, lots of accelerators and incubators have now sprung up, which are helping students to create a business, by teaching them how to craft business plans and to pitch to investors. Finally, to complete the virtuous cycle, lots of investors are joining the bandwagon as angels, because they think this is a great way of getting rich quick.
A very important catalyst is the fact that the barriers to entry to starting up have become extremely low. It’s become quite inexpensive to start a startup these days. Thus, when you need an office, you no longer need to spend hours negotiating with brokers and landlords to find space you can afford. You can walk into a coworking space which provides you all the amenities you need, and you are ready to go! IT infrastructure has become a cheap commodity, and you can get reliable server space from Amazon or Microsoft for a few thousand rupees per month. Finally, it’s possible to get freelancers to build the technology you want, which means you only need a very lean and mean team to create a minimum viable product.
Also, as the system is maturing, the successful entrepreneurs who have made money are happy to encourage the next generation of students from their college, because they have a soft corner for their alumni. When they go back to give lectures at their colleges, they inspire a lot of students to follow in their footsteps. They are happy to fund the bright ones and provide them with mentoring as well, and this support can be priceless.
However, a big problem is that we end up glamorizing entrepreneurship, as a result of which young entrepreneurs have a very unrealistic expectation of what is involved in running a startup. They think it’s all fun and games, and that all you need to do is find someone to sign a cheque, and you’re in business! They all think of themselves as being the next Steve Jobs and believe their idea and passion will help to disrupt the world.
However, the reality is that running a startup is a hard grind. It’s a lot of work which involves sleepless nights; and having to deal with cash crunches, unhappy customers, and angry investors. It’s not something which should be taken lightly, and we need to bring some sanity and reality back into the system. The truth is that most people are not cut out to be entrepreneurs, and they will just be miserable trying to run a startup. They will end up wasting a lot of their time and energy and will end up being unhappy and disillusioned.
[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]