Earlier this month, I was invited to speak at the internationally renowned India Institute of Technology conference at the Entrepreneurship Cell summit (E-Cell, IIT-Bombay).
I spoke about strategy, business development, and HR for startups, and more importantly, I networked with many founders, and C-levels of various India-based companies. You can view my slides here.
Most of the startups I met were in tech, but others were working across manufacturing, energy, SaaS, healthcare, and education technology. I must have met at least 500 Indian founders who are building companies in the ecosystem, and heard some reoccurring beliefs that scared me.
Here are 5 beliefs that may hinder Indian startups. Funnily enough, some of these startup beliefs exist in Silicon Valley too!
1. We can’t do anything unless a VC invests in us
This is a common statement I heard while meeting with startups.
I met with an ed-tech company out of Mumbai, and mentioned to them that to increase their lead generation tactics; they need to invest in digital marketing of some form. They agreed, but then said they are in the “middle of disruption” and don’t want “competitors to know.”
Guess what? If your business is online, and you are doing business, competitors will know. In business, you have no option but to be all in. Why should you wait, or let an investor make that decision for you?
Most entrepreneurs think that once a venture capitalist invests in them, they have all the authority in the world. What is not known to most founders is the amount of businesses that fail after getting VC funding. Don’t wait for a VC to write your destiny. Make it for yourself.
2. I need to follow an existing model of success
One question I was constantly asked was, “Which model should I use for building an e-commerce company in India? Amazon? Etsy? Etc.”
Let me redirect the question: What model did Larry Page use to make Google? What model did Vinod Khosla use to create Sun Microsystems? What model did Travis Kalniick use to make Uber?
The answer is, no model. They took what they saw and made is significantly better. Sure, you could say that Yahoo was the first to introduce search, but as of now, Google is at 70 percent market share but innovating on the model.
My answer is that you should use the model that:
- Solves the problem you are addressing
- Makes your customers happy
Any other model won’t do your idea justice. Amazon, McDonalds, Subway, etc. all had to refine their own models. Copy-and-paste businesses (as I like to call them) do not last. India is a totally different market than the American or European markets, with different needs for consumers. Copy-and-paste businesses will eventually die in an emerging market.
3. We can’t build a successful company, unless we move to Silicon Valley
To this day, this could not be further from the truth. I am a resident of Boston, which has a thriving ecosystem. I see plenty of successful startups.
Furthermore, Alibaba did not take the approach of moving to the Valley to start. Neither did FlipKart, or SnapDeal. The Valley is a happening space with strong tech talent, but it is not the epitome of business globally.
What most companies in India don’t realize is that most Silicon Valley startups are dying to have an office in India (some of the reasons are mentioned here). At the E-Cell summit, I heard Kunal Shah of FreeCharge mention that the best part of India is the number of people! You don’t need to do extremely unique things to find users. You need to be relevant and provide value. FreeCharge is another company that adapted to the Indian market, not the U.S. market.
4. Screw marketing, business development, culture, and anything other than engineering, sales, and operations
When you build any company, the first thing you should be focusing on is building traction. Without traction, the hypothesis that you set out to discover cannot be validated. From there, you should continue driving revenues.
One thing I learned early on is that you can have plenty of revenues and still pay people quite a bit of money, but if you want to retain the best and attract the best, you have to develop culture.
One of the biggest reasons I see companies in India fail is because they don’t care about creating a business just on making sales. Companies in India are thinking short term instead of long term with regard to this.
5. We don’t have the potential to be a billion dollar company
An entrepreneur from Mumbai told me that because he lives in India, and the rupee is getting weaker, the chances of him building a billion dollar company are less.
This cannot be further from the truth. Businesses thrive on solving problems, and they don’t discriminate based on age, opportunity, or location.
The bottom line is that you can build a billion dollar company anywhere, but more importantly, companies are betting on India more than ever.
Entrepreneurs have a lot against them. However, the chances of succeeding are greater than before. India has a strong support group through initiatives that Ravi Gururaj is heading at HBS Angels, and NassComm 10,000, and even incubators at the university level such as SINE.
But even with this entire infrastructure in place, an entrepreneur’s mindset can still get in the way of success.
What are your thoughts regarding the Indian startup ecosystem? What differences do you see between Indian entrepreneurs and Silicon Valley entrepreneurs?
Chirag Kulkarni is a serial entrepreneur and advisor. He is currently the CEO of C&M Group, an entrepreneurial strategy consulting firm focused on growth and new product innovation for startups to Fortune 500s. Previously, he cofounded STR, a B2C and B2B racquet-stringing company, and sold it in 2013.