Indian Startup Ecosystem - Dream or Disaster for People
Posted in Human Resources Articles, Total Reads: 284
, Published on 01 April 2017
This is probably the best time to live and be proud of India. India, the third largest start up eco system is on a ride, witnessed the highest investments ever. There could never be a better time to contribute to nation building. There could be no better time to be architects of our careers in a self-propelling India. With identifiable roots centuries ago, India is once again, metamorphosing to be a young energetic congregation of minds, riding the reigns of a galloping productivity machine.
However, this journey is going big but rudderless, gradually. The lack of proper steering crew and troubled waters pose a threat if not checked now. The momentum now is huge. Our startups have the hunger of doing something. But that something is mostly so poorly defined, that
Over $125 billion was invested in the Startups in 2015. But the startup ecosystem had to bear quite a premature mortality in more than 85% cases. While it discouraged quite a few, many were looking for alternative ways to pump in additional capital for various reasons like covering up losses, restructuring, expansion, and diversification. A race had begun. And it had become so important to run that there was not a moment to stand and stare. At own faults, at change points that demanded outright attention. The journey that had begun with so the dream of doing something on own talent, had been divided by percentage of returns of a PowerPoint pie-chart, cutting down own sustainable part to near zero or most of the time negative proportions. Out of nowhere, mushroom a dozen of stakeholders who take care of things no one ever knew would be required!
A random visit to say Bengaluru now versus one five years ago would clearly witness a startup idea or meeting brewing in each coffee shop. Every engineering grad, whether possessing the required aptitude, qualification or means dreams of being the next Ritesh Agarwal. There have been several welcome changes shifting the average startup age to early twenties. But in many cases, Pre-matured investments have died expensive deaths. The idea of being self-sustainable overtakes, many a times, the preparation one needs to make for it. Or example, how viable is the plan? What cash flows will I be expecting in a slightly game-changing scenario? Of course one may not foresee game changing abrupt shifts like demonetization. But one must surely have the readiness to be flexible enough to deal with changes. India after all is the home to the third largest startup hub on the basis of its dynamism.
Jugaad, or frugal innovation is an Indian core competency that has commanded respect throughout the world. It sure does make work a lot easier. Quicker too, may be. But there is a questionable amount of tradeoff with the standardization of practices happening. This is primarily leading to loopholes in the budding ecosystem that already lacks defined structure. Surely we can retain our Indian-ness of innovation with more regard to standards and procedures.
Booming jobs see several jobs created every other day. While it is pleasant to see the number of such employment opportunities, the insane pay inequality is bizzare. Though the risks taken, and the intangibility of creativeness is taken into account, the blatant disregard to the bottom line for remuneration of less than 5% of the employees is definitely eye-boggling and questionable. Only recently, a startup survey showed Flipkart showering floods of compensation to top 6 employees takes the company’s net remuneration to around INR 3 billion! I don’t see a scenario where there could possibly be complaining about abysmally low bottom lines, attributing only to competitive scenario or legislation! In contrast, the bottom strata seems to barely make ends meet. And sadly that is not the only complaint of the poor ones. The work culture, in most cases is insanely hectic, which doesn’t seem to be amply compensated. It’s high time, companies restructured their pay, aligning the compensation more to various aspects of performance at different levels.
Not even a month ago, the Indian startups, Ola & Flipkart pleaded with the government for restrictive policies intended to raise the entry barriers for foreign giant competitors, preventing them from sharing larger chunks of their profit pie. It was met with huge criticism of the firms being listed in foreign countries, for tax relaxations. This made a lot of people revisit their contribution of giving back to society, not to mention a lot of other inefficiencies that trimmed down their valuation for the third time in a single financial year! The times are demanding and challenging, yes. And they are coming forth to change the scenario, paving to many “firsts” in the country. However, firms must bear in mind such consequences before they cry foul!
The scenario in India is surely inspiring and transforming. Though I am a proud of the exceptional progress India has made, with the kind of propulsion to the youth, the inspiration, and supportive platforms, I sincerely hope that a bit more structure could be added to it. From my little experience during my summer internship at Bangalore, I happened to get myself enrolled for one of the pep talk sessions with Mr Punit Soni. I was amazed at the way the distances of connections and networking could be bridged for those who had it all there and needed a little more push. But I was also audience to a dozen people who knew they wanted to do something, something on their own, something related to a genre, something like the other start up; but the preparedness was not even half way through. This was a big learning for me on the importance of perfection in conceptualization and detailing.
The recent headlines for the startup eco system was a big buzz around the who owns your dreams-the founder or investors, on the management shuffle for Flipkart, one-of-the-torchbearers for everyone with the dream of a start up. When Kalyan Krishnamurthy took over the reins of control from Binny Bansal,there was a lot of smoke around the extent of control, the investing company is wanting to have, to ensure desired returns. I am not going to pick sides on this one. For every individual, dreaming to “own” something, this was a not a very gentle jerk in the control-hungry belly. But for every investor, it was a surgical strike on the laid-back attitude, waiting for returns; and actually doing something different to alter the results. After all, Einstein once said, "Insanity: doing the same thing over and over again and expecting different results." I would personally go ahead and applaud the bravery of the firm to overhaul a system and prioritizing overall gains over emotional rants. Going ahead, as a sign of approval, Richa Kar, the founder and CEO of Zivame, has allowed their COO to take her throne instead; thereby putting rationality in performance at the topmost rung of the priority ladder.
There are so many names, of people, of firms, of auxiliaries, that come up every day and most of them have shorter lifespan than the few lucky ones. While a lot of it is about creating money, an experience, getting a feel of ownership, it is also about responsibility- about utilizing the capital efficiently, about nurturing and enhancing skills, being continuously evolving apart from that one big idea, about inspiring and helping the related new firms mushroom! It would be the greatest day of my life when we have transitioned from the land- of-most- number- of- startups to the land- of- most- efficient- startups!
This article has been authored by Suman Mohapatra from XIMB
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