At this year’s Independence Day speech, Prime Minister Mr.Narendra Modi came up with a new call to action: ‘Start Up India, Stand Up India’. Just like Make in India, which he first announced at last year’s speech, this new slogan is laudable for both its intent and aspiration.
There are no two ways about the fact that an entrepreneurial India is an essential requirement for the country to achieve the benefits of the demographic dividend that it enjoys. There is a pressing need for the creation of sustainable, employment-generating enterprises at significantly higher rates than they are now.
While as a country we have been touting the size of our large and growing middle class, the truth is that economically, India is still quite poor. In fact a recent study by the Pew Research Centre shows that while India has made significant strides in moving people out of poverty, it has a very long way to go to move people into the true “middle class” (according to global standards). This article by Rohan Venkataramakrishnan debunks the myths around our ‘booming middle class’.
I bring up the above because I believe that successful start-ups have a very important role to play in addressing India’s enormous challenge: of moving large numbers of our people from just above the poor line to as close as possible to the middle class line. So, this push to encourage more start-ups excites me. Will it succeed? Time will tell; in the meantime let’s have a look at three key success factors for start-ups to flourish.
Problems to solve
As anyone involved in business will tell you, sustainable businesses are founded on their ability to solve a large problem or fulfill a huge need. On that basis, India presents a very fertile ground for start-ups as there are innumerable problems to solve- each one an opportunity for the entrepreneur willing to take on that challenge.
People & mindset
While we do not have a shortage of people in numbers, we might certainly have a few challenges when it comes to competence readiness and more importantly, the mindset. Among the many attributes that entrepreneurship requires, I believe that one of the most important is the willingness to fail and accept failure as a part of the game. It takes a completely different mindset to be prepared to be ridiculed, but that is precisely what globally-recognised venture capitalist Ben Horowitz advocates for founders of start-ups. I am not sure if our society is ready with such a mindset. No doubt, we are a lot more accepting of failure than we were a few years ago; yet we do have some way to go before we whole-heartedly embrace a culture of acceptance of failure. To a great extent, this can happen only if we inculcate that spirit of calculated risk-taking from a very early age. I hope we do so quickly.
The entrepreneurship eco-system
Lastly, an eco-system that nurtures entrepreneurs is critical. This includes government support with entrepreneurship-friendly policies and regulations as well as access to funding and other resources. Despite all the progress we have made since the economic liberalization of the 1990s, India still ranks very low when it comes to ease of doing business. The maze of regulations and complex tax policies present a host of challenges that often drive many away from setting up their own businesses or in several cases, resort to short cuts and unethical means of doing business. Either way, I think the country stands to lose.
By coining the slogan and goading wannabe entrepreneurs to start up, the government seems to be adopting a top-down approach to fuel entrepreneurship in the country. That is good; now I hope it will take the necessary steps to create an environment that will truly light this flame and keep it going.