New age Start-ups are making waves. Flipkart has redefined retail. Ola is changing the way we travel. Paytm is the new payment system. Pick any sector, even a traditional one like agriculture, and you will find a new age start up like FrontalRain trying to usher in change. In the recent years, the Indian economy has seen a huge increase in the number of start-ups driven by factors such as massive funding, evolving technology, government policies and a booming domestic market. A recent report from NASSCOM claims that the number of Indian start-ups is the fourth highest in the world, at over 3,100 start-ups. The report also makes the prediction that the number would increase to 11,500 by 2020.
On January 16, 2016, Finance Minister Arun Jaitley launched the ambitious ‘Start-Up India Mission’ which envisages technology business incubators and research parks. The Union HRD Ministry and the Department of Science and Technology are partners in an initiative to set up over 75 startup support hubs in the National Institutes of Technology (NITs), the Indian Institutes of Information Technology (IIITs), the Indian Institutes of Science Education and Research (IISERs), and National Institutes of Pharmaceutical Education and Research (NIPERs).
The new age start-ups are very different from our traditional businesses. They do not believe in playing safe and take on companies much bigger than them. They attract considerable global capital and challenge the traditional ways of doing business. Based on the latest technology and easy accessibility, these start-ups are transforming India from within.
Joining a startup as a career choice has to be a careful and well-thought-out decision. The biggest advantage of joining a start-up is personal growth and the experience that you would gain. Start-ups work at a fast pace and present the opportunity to learn not just about your department but other departments as well. Start-ups value people who are creative and innovative so one can expect a lot of freedom in work. Being among the initial employees of a startup can also be financially rewarding as companies in India are beginning to offer equity and stock options to its core employees. This can translate into a sizeable profit if the startup company gets a successful initial public offering (IPO) or is bought out by a large company later.
The other side of the coin, however, also needs to be considered. More than 85% start-ups fail because of lack of funds, fall-out between co-founders or simply because the product does not take off. This is a high-risk factor in terms of job stability. The unstructured work environment also means that one is expected to take care of work that is not included in his official responsibilities. This can be difficult but it is a necessity of the work environment of a startup. Long hours, constant work pressure, lesser days of leave and running on strict cash-flows are also some of the issues that start-ups face on a regular basis. However, the thrill of being a part of a fast-growing entrepreneurial venture instils a sense of pride and accomplishment which is unparalleled.
Unlike the Indian IT companies that mushroomed in the 1980s to cater to the outsourcing needs of the Western countries, the new start-ups in India are tapping the consumer potential of the country’s huge middle-class population. While online retail is in the forefront, technology start-ups are attracting customers in a host of other areas such as renting textbooks, selling used goods, booking tickets and price comparison portals. Although many online ventures have a long road to cover before they start making profits, they have definitely grabbed the attention of domestic and global financiers. Hedge funds and venture capitalists are reported to have poured in about $5 billion in Indian e-commerce industries last year. Global investors eyeing the growth of Indian technology firms are helping these young entrepreneurs’ fund their businesses.
Meanwhile, there is something about this boom that needs to be looked closely at by the government. India’s high-tech industry and start-ups tend to concentrate in hubs of prosperity like Hyderabad and Bangalore. India has the world’s highest illiteracy rate and the country is still battling with the problems of malnourishment, sanitation, and extreme poverty. The country is ranked 142nd in the world in ease of doing business. Infrastructure like roads, schools, hospitals and transport and basic needs like healthcare, education, water and electricity need drastic improvement. Resources need to reach the remote corners of the country for growth and sustenance of the domestic sector.
The government has taken various initiatives to encourage start-ups in India, but what needs to be seen is whether we can bring about the changes required in the country’s education system and encourage boldness of thinking to let these ideas develop. An idea can be born anywhere, but for it to bloom into a full-fledged business and contribute to the growth of the nation, India needs to overcome its cultural and social challenges.