Startup Symphony, Breaking The Cacophony
We have all probably heard high schoolers say, "I want to grow up and become an entrepreneur and have a startup." Quite obviously, our Indian parents' typical reaction will be something like, "Choose a stable career and become a doctor, lawyer or engineer. This startup industry is very fickle-minded." Well, technically, they are not wrong, the startup industry is very fickle-minded. We often only talk about building a startup from scratch by just finding an idea and problem to work on. Unfortunately, we are all not lucky to have the apple fall directly on our heads, scintillating an idea.
There are so many facets when it comes to building your brand and getting funding inventiveness, innovation, founder's personality, Unique Selling Proposition (USP), financial targets, pre-revenue strategy, annual and monthly revenue targets, gross margin, net profit etc.
India is regarded as the third largest startup ecosystem in the world, expecting to have a Year-over-Year growth of 12.5 per cent. Approximately 1,300 nascent tech startups are emerging every year, which accounts for the founding of two to three startups every single day, making it an extremely competitive industry. The Department for Promotion of Industry and Internal Trade (DPIIT) has recognised a gross total of 19,000 startups in 2022. According to India Venture Capital report 2021, the number of cumulative startups has grown at a compound annual growth rate (CAGR) of 17 per cent since 2012 and crossed 1,12,000.
Now, let's talk about some more numbers and stats. There are only 13.76 per cent of female entrepreneurs in India as of 2022, which although an increase from the previous ten per cent, is still not enough. The startup industry needs to have more inclusive representation concerning females.
According to the World Intellectual Property Organisation, both men and women are equally productive in innovative activities. However, even though women have fewer patents than men, the quality and impact of women's patents are statistically higher than their male counterparts. This should especially apply to startups, a field that particularly requires innovative, on-the-spot thinking.
India, as of 3 October 2023, has yielded 111 unicorns with a total valuation of USD 349.67 billion. Startups in India have raised over USD 131 billion between 2014 and 2022. Amongst the USA, China and other nations, India has the highest funding CAGR (49 per cent from 2014 to 2021) but also a significantly lower internet penetration.
The top sectors of startups in India include fintech, healthtech, edtech and ecommerce. 'Blockbuster' startups in these industries are Paytm, PhonePe, BharatPe, Boat, Ajio, Nykaa, Myntra, PharmEasy, HealthifyMe, Unacademy and Byju's amongst many others.
From the face of it, the startup industry seems to be all glitz-and-glam. However, founders and co-founders face myriad challenges. These include having an emotionally connected product/service that impacts people and is culturally sensitive, and understanding local nuances of society to effectively reach their target audience.
Their product must have a USP, a certain je ne sais quoi about them so that they can garner maximum investors and attraction. However, founders also need to ensure that their product does not only serve a niche clientele but is also serviceable to a larger audience. Initially, they often work towards maximising their target audience to increase profitability and have sufficient capital and adequate cash flow. Founders also need to choose their business model well, be it B2B, B2C, subscription-based or an on-demand business model.
Furthermore, the number of red-tape founders have to endure is extremely strenuous and there are several complex regulatory processes involved in having a startup. Next, hiring a highly skilled, well-trained core team is a common challenge. Understanding a market as diverse, dynamic and unique as the Indian market is crucial but also difficult. The exit environment for several startups in India, be it mergers, acquisitions or initial public offerings (IPOs), is challenging to choose from.
Next, let's talk funding. It is crucial to have funding for any startup. This funding can come from several sources. The investor landscape in India is very vast. Venture Capitalists, angel investors, angel networks, accelerators, corporates and CVCs, crowdfunding, Private Equity Funding and IPOs are just to name a few. However, some entrepreneurs may choose to have their startup 'bootstrapped' till they reach a certain revenue level, which means that they fund their startups through personal savings or re-generate the revenue earned by their business. The main reason would be to maintain total control of the company and retain complete equity.
The future of startups should focus on sustainability. It is not just from the environmental aspect but also from the long-lasting aspect. Startups can create up to one million direct job opportunities for different skill sets; this will increase by over 64 per cent in 2022.
Startups should be such that they can last in the Indian environment and attract a smart customer base like the Indian one. The involvement of artificial intelligence in practically every major and minor field is inevitable. Increased innovation in the healthcare and medicine industry, with startups focusing on revolutionising telemedicine, health analytics, and wearable devices with technology and AI is a must. As the consumer market grows more conscious of their choices, startups should also focus on social initiatives such as increased women employment, redefining societal norms and combatting pre-conceived orthodox notions, and also environment-friendly options such as sustainable infrastructure, renewable energy and e-waste management.
Startups have and will continue to play a pivotal role in challenging the youth and shaping India's economic and technological landscape. These dynamic ventures are not just about creating businesses and making profits; they represent the spirit of risk-taking, resilience and innovation. Startups embody the spirit of redefining a problem as a challenge and overcoming the obstacles and hurdles with teamwork and adaptive thinking.
Startups are not a hoax, they are an opportunity for people to express themselves and play an active role in combatting real-world problems and changing societal norms.
