India is currently the 3rd largest start-up community in the world. According to a report by NASSCOM, start-ups have created over 80,000 jobs in the country so far. By the end of 2015, they are on a target to get a whopping $5 billion (32,558 crores) funding by private equity, venture capitalists and angel investors.
With our population projected to overtake that of China by 2028, getting a job – be it private or government – is poised to become a Herculean task. But, as they say, with challenges comes opportunities. With a large pool of both skilled and unskilled workforce; and a huge consumer base, India provides a unique opportunity for start-ups. Realising this, PM Modi launched a new initiative ’Start-Up India, Stand-Up India’ on the last Independence Day. To be executed under the aegis of Department of Industrial Policy and Promotion (DIPP), the initiative aims to create the next wave of growth by accelerating the development of start-up ecosystem in the country.
With a vision to take India on the forefront of global entrepreneurship spectrum, a comprehensive to-do-list is being drawn up by the PMO based on inputs received from various ministries and departments. The initiative is currently in a nascent stage and following features have been proposed till now:
i) Skill Development: Govt. aims to set-up specialised Skill Development Centres to provide mentorship on skill development.
ii) Tax Breaks: Learning from the recent success stories of start-up booms in San Diego and Denver (ranked 1 and 2 respectively in Forbes’ ranking of World’s best places to kick-start new start-ups in 2014), government has proposed to exempt new start-ups and small scale businesses from paying excise duties and service taxes.
iii) Incubation Centre: Govt. is looking forward to partner with premier engineering and management institutes like IITs, IIMs and NITs to set-up incubation centres for providing plug and play model for start-ups.
iv) Easy approval of Loans: There are about 1.5 lacs of bank-branches in India and the Govt. has proposed that each bank will fund at least one start-up. One can only imagine the mega-boom it is going to create if executed correctly!
Fascinating Enough? There’s much more to it
Every giant leap begins with a small step. For budding entrepreneurs, taking first few steps are probably the toughest. This is where the mentorship of an experienced person comes in handy.
Recently,IIT Heartbeat was in touch with one such person, R-Land’s own product Deepanshu Saini. Deepanshu, a fresh graduate in Mechanical Engineering, had been active in institute start-up scene since college days and is looking forward to launch his own idea very soon.
1. Hello Deepanshu, Tell us about your start-up.
I am building an app-based platform to make group payments easy and seamless. This platform will help users avoid ‘I-Owe-You’ situations and provide options to plan and pay for group events such as parties, movies, trips and bill payments. We have named it ‘Contree’. The development is well on course and I expect to launch a beta version by mid-December.
2. Is it necessary to have a completely new idea for a start-up?
No.
Firstly, there is hardly an idea which is absolutely new these days, the reason being ideas are basically solutions to existing problems and the problems are faced by plenty. I remember when Contree came to my mind; I thought I was the first to think of such an idea. But when I googled for just 15 seconds, I found that there are people who are doing it already.
Secondly, it is actually good to have ideas on which a little bit of work have already been done. It validates your idea and gives you more confidence on building a business around it. If you do manage to find an absolutely new idea, it can be hard to predict how people will respond to it. Though, that should not stop one-self from looking for such ideas.
3. Tell us about your journey-your first start-up-the mistakes you made and how you corrected them.
‘Solarwaale’ was the first start-up I worked in. It was not my start-up, but I worked in it from day zero. So, I got to know things inside out. We have discussed the mistakes that we made many times. Some of them are:
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An unplanned approach – Lack of planning results in under-utilisation of resources and wastage of time. There should be a written plan that includes work needed to be done, how and who will do it, deadline, approximate cost etc. When you are starting-up, you come across hundreds of things which you think can be included in your product. If you keep chasing them, your product launch may be delayed. Here comes the role of a plan – keeping you on track.
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Lack of good research – We started product development from day zero, which was wrong. Three types of research are must for a product development: industry research, competitor research and product & business development research. What happened frequently was that we later got to know about a feature our competitor was providing and we tried to incorporate it in our product. It led to several design and product changes which can frustrate designers and coders. If you do the research, you know how the concerned market is performing/will perform, and what you can do to add value. A good research equals half the work done.
4. How much time did you invest in thinking of an idea for a start-up and how much time did it take for its implementation?
One need not invest time exclusively for thinking of an idea. It never happens like that. Ideas are solutions to existing problems. Just keep your eyes and ears open, and observe the problems you and people around you are facing. Sooner or later, you will find a solution that can be scaled and turned into a business – a start-up idea is born!
Regarding time, my product is currently under development stage, it will take about 2 months in development, 15-20 days of launch-cum-buzz campaign, and when users start using it, we will start pitching to investors.
5. For a beginner, probably collecting funds would be most difficult task. Is it true as per you and how and what did you do while collecting funds?
No, it is not true. If your product is web-based, you don’t need that much money to begin with. Around 3-3.5 lakhs will suffice you for initial 4-6 months. It includes operational costs (internet, food, travelling, rent etc.), incorporation cost and initial marketing cost. According to me, the most difficult task was to build the right team especially when you are not from coding background. Your contacts help you in building the right team.
6. Do you believe in boss-employee culture? Should the final decisions be taken collectively or individually?
I won’t call it a boss-employee relationship, but there has to be someone who takes the responsibility of making final decisions. A business is not a democracy. There has to be a leader. And by leader, I mean a ‘leader’, not merely a manager. A leader motivates his team, a manager need not. Generally, verticals are defined in a company – one person takes a final call on his vertical – product design, business development, investment and so on.
7. If it’s been over say, 6 months, and the idea is not working, then will you stick to the idea, make changes in it or start thinking on a new idea?
Sticking to an idea is a myth. Remember how Facebook started as a photo-sharing platform. Every start-up modifies the idea as it proceeds, the reason being that at the time of beginning you are not that much aware of the market, competitors etc. As you learn about things, you have to make changes to keep your product relevant and competitive. That is where a good research can take you miles ahead in the beginning itself.
Regarding dropping the idea, this decision is taken when your continuous efforts are not generating the desired revenue over considerable time. There can be plenty of reasons for this – an immature market, a product too ahead of time, lack of funds to scale etc. Mentor or advisors play a crucial role here. They are the people who have ‘been there, done that’. They can better predict whether to change the boot or the foot.
IIT Heartbeat thanks Mr. Deepanshu for taking out time from his busy schedule and sharing his invaluable experience with us. We wish him all the success in future.