Best Time Ever To Be An Entrepreneur In India

By Anirudh Suri WG’12, founder and CEO of Findable.in

If you read my last post, “Why Is It So Hard To Start A Business in India?” then you know that there are some big challenges to starting a business, especially a tech business, in India. But as I keep saying, this is actually the best time ever to be an entrepreneur in India.

Here’s why:

  1.  The cool factor. It’s cool to be an entrepreneur in India today; “startups” have become a buzzword on most top college campuses across the country as well as among the top employers in the country. Parents (and even more importantly in the Indian context, potential wives and husbands!) are beginning to consider “startups” as a good way to begin or further a career. Three years ago, when I moved back to India, my father wasn’t exactly thrilled with the idea of “startups” but today, with all the major newspapers covering new startups every day, he’s excited too! It bodes well for the future of entrepreneurship in India.
  2.  Rapidly evolving ecosystem. The startup ecosystem is really evolving rapidly in India. When I moved back in 2011 to launch India Internet Group, an early stage venture capital fund focused on internet and mobile startups, we were amongst the first early stage funds in India, along with Blume Ventures (run by Karthik Reddy, WG’01) and Kae Capital. Today, I can’t even count the number of early stage funds, accelerators, incubators and other such programs that really help seed startups in India.
  3.  Opportunities for efficiency. India continues to offer many opportunities for successful startups to solve basic problems and make markets more efficient. Often, successful startups have managed to organize unorganized markets in India (e.g., RedBus organized the bus travel tickets market; Ola Cabs has organized the unorganized cab market; JustDial has organized the unorganized services market; MakeMyTrip has organized the air travel and hotel market). Several of these companies have also provided handsome returns to their early investors through either IPOs (Makemytrip, JustDial, Infoedge) or acquisitions (RedBus). Similarly, my own startup, Findable.in, is trying to organize the offline retail market by aggregating and bringing online the retail inventory of offline retailers.
  4.  E-commerce. Besides organizing unorganized markets, other startups (e-commerce companies, for example) are bringing greater efficiencies to the Indian market and facilitating commerce and delivery of services. E-commerce companies such as Flipkart.com and Snapdeal.com have been a boon to the Indian middle class, especially in smaller towns that haven’t seen their offline retail markets evolve in the same way that their purchasing capacity has evolved. The very Indian model of “Cash-on-Delivery” driven e-commerce in India (which Flipkart in India has become synonymous with) has brought great convenience to the consumers, albeit at sometimes a very high cost to the retailer.
  5. Mobile. India already has the second largest number of mobile phone users in the world (second only to China) with over 900 million mobile phones. At the same time, mobile internet users are increasing in India at a pace unmatched in the rest of the world. The number of mobile internet users is going to reach 185 million by June 2014. Customers who have been deprived of quality entertainment for so long (besides cricket and Bollywood, of course) are taking to mobile-based games and entertainment like fish to water. Still others are starting to search and buy everything on the go. I wouldn’t be surprised at all if more global mobile startups come out of India in the next 2-3 years.

Despite all the hurdles to success, this is a great time to be an entrepreneur in India. With huge open opportunities in travel, Software as a Service (SaaS), mobile payments, gaming, entertainment, marketplaces, and just easier and better access to information and products, the potential for impact is immense. By leveraging mobile and internet technology, entrepreneurs in India have the opportunity to transform the way Indians will lead their lives. And that’s why so many Wharton alumni, including myself, are deep in the Internet trenches of India today.

Anirudh SuriBio: Anirudh Suri WG’12, is currently the CEO of Findable.in, a location-based product search platform based in India. He is also the Founding Partner of India Internet Group, an early stage venture capital fund based in Mumbai, Delhi and New York. Previously, Anirudh worked at McKinsey& Company, Goldman Sachs, and as a policy advisor to fellow Wharton alumnus and the Hon’ble Minister of State for Communications and Technology in the Government of India, Mr. Sachin Pilot. At Wharton, Anirudh was a member of the Venture Initiation Program and the Entrepreneurship Club; organized the BizTech Conference and the Wharton India Economic Forum; and also partied a lot in Center City Philadelphia.

Why Is It So Hard To Start A Business in India?

By Anirudh Suri WG’12, founder and CEO of Findable.in

I’ve been in the startup trenches in India for the last three years. I’m currently the CEO of Findable.in, a location-based product search platform based in India, and I’m also the Founding Partner of India Internet Group, an early stage venture capital fund based in Mumbai, Delhi and New York. I think this is the best time ever to be an entrepreneur in India. However, it’s also an incredibly difficult journey.

In this post, I explain what makes starting a business in India so hard. But don’t be discouraged! My next post will explain why this is actually such a great time to be an entrepreneur in India.

An Incredibly Difficult Journey…

  1. Poor labor market. It’s tough to hire great people in India to work at startups. This is changing, but many smart folks don’t want to join your startup for a low salary, especially since people worry that equity or options won’t pay off in the long run. As a result, the top layer in Indian startups is world-class, but then you see a big dip in the middle and lower levels. While some of the startup founders in India are as motivated and talented as their counterparts in the U.S., motivating employees is much harder in India than it is in the U.S. This hurts the startup’s productivity levels as well as its ability to innovate and scale.
  2. Red tape. India has an incredible way of bogging you down with procedural, compliance and other such issues. As a CEO, I am spending way more time dealing with accounting, legal, and corporate compliance-related issues than I expected. At least twice a week, I have to sit down with our Chartered Accountant or our lawyers or the Company Secretary to ensure that we have met the TDS (Tax Deducted at Source) requirements, completed our compliance with the RoC (Registrar of Companies), etc. Combine that with the time spent motivating un-motivated employees, and some weeks, you have no idea where your week went!
  3. Lack of quality mentors. The quantity and quality of mentors in India (with the possible exception of Bangalore) is not quite up to the level of what you would find in Silicon Valley or other startup hubs such as New York, Philly or Boston.  Not entire surprising, since tech entrepreneurship is still in its infancy in India. The oldest successful tech startup founders are probably 10 years old in the industry, but really the bulk of the companies have been founded since 2008. The founders of these companies will likely become, in a few years, the kind of investors and mentors that Silicon Valley boasts of. Already, some successful entrepreneurs – the likes of Naveen Tiwari (InMobi), Kunal Bahl (Snapdeal, WG’06), Amar Goel (Komli), K. Ganesh (Tutorvista), Sanjeev Bikchandani (Infoedge, Naukri.com) – are starting to become active investors and mentors. India could use a lot more such mentors and investors.
  4. Slow consumer traction. The Indian internet consumer is also just learning how to consume the internet, or mobile apps for that matter. This means that customer traction is often very slow, and requires a lot of customer education. For example, OLX and Quikr – two prominent classified sites in India – as well as eBay have had to spend a lot of time, effort and money in educating the Indian consumer on how to sell old products online. Similarly, for my first startup, EkSMS.com, it took us a long time to educate restaurants and bars on using the SMS or web platforms for their marketing. The Indian consumer hasn’t quite displayed the same kind of early adopter characteristics as users in California might have.
  5. Problems getting paid. Moreover, the Indian consumer (or the Indian small business) is not very willing to shell out cash quite yet, so recurring credit card subscription businesses (the likes of Netflix, etc.) as well as others that require consumers or small businesses to pay are very hard to build here. With EkSMS.com and Findable.in, we have often had to run after our customers to get longstanding bills cleared. This also requires Indian startups to be even more frugal in their initial stages than their Silicon Valley counterparts.

These challenges are very real, and any entrepreneur interested in starting a company in India should be aware of them. However, I can’t say enough times that this is truly the best time to be an entrepreneur in India. Stay tuned for my next post, when I explain exactly why.

Anirudh SuriBio: Anirudh Suri WG’12, is currently the CEO of Findable.in, a location-based product search platform based in India. He is also the Founding Partner of India Internet Group, an early stage venture capital fund based in Mumbai, Delhi and New York. Previously, Anirudh worked at McKinsey& Company, Goldman Sachs, and as a policy advisor to fellow Wharton alumnus and the Hon’ble Minister of State for Communications and Technology in the Government of India, Mr. Sachin Pilot. At Wharton, Anirudh was a member of the Venture Initiation Program and the Entrepreneurship Club; organized the BizTech Conference and the Wharton India Economic Forum; and also partied a lot in Center City Philadelphia.