Indian Prime Minister Narendra Modi is scheduled to unveil his “Startup India, Stand Up India” initiative on January 16. Ahead of that, the Wharton School held its India Startup Competition in Mumbai on January 5. The 20th Wharton India Economic Forum (WIEF) hosted the Startup Competition for the third year in a row to promote entrepreneurship in the country.
“The WIEF Startup Competition identifies India’s next set of up-and-coming companies. It allows startups in India to gain exposure to investors, customers, mentors and the media,” says Vikram Arumilli, one of the co-chairs of WIEF 2016 and a second-year MBA student at Wharton.
“The visibility, credibility and networking that come with being associated with such an event is a huge win for startups,” agrees Ravi Gururaj, chairman of the National Association of Software and Services Companies (NASSCOM) product council. The event also “gives an insight into what’s happening” in Indian entrepreneurship, he notes. Gururaj, who is the co-founder and chairman of Frictionless Ventures, a Bangalore-based startup incubator, was part of the jury that selected the winners of the WIEF competition.
The competition was open to anyone with a startup who has a product or service for the Indian market. It received over 750 applications from a wide range of industries — both for-profit and social ventures. Of these, 20 semifinalists were shortlisted, and from those, 10 finalists pitched at the meet in Mumbai.
According to Arumilli, the industries which this year’s applicants focused on “trend very closely to what is happening globally.” A large number of applications were from startups focusing on mobile applications and ecommerce, and also from companies with strong social venture components. The winners were selected on the “strength of their business ideas, the importance of the problem they are trying to solve, the traction they have gained to date, their potential for future growth and the quality of their team.”
The Ketto Story
The winner of the grand prize of $30,000 was Ketto, a crowdfunding platform for “social and creative” projects. It has so far raised Rs. 10 crore ($1.5 million) for 4,000-plus projects. Its founders include Varun Sheth, who left his job at multinational financial services firm ICAP to start Ketto; actor Kunal Kapoor; and Zaheer Adenwala, who earlier worked with Directi, Affinity and Media.net. “We are now looking forward to going to Philadelphia. It will give us a great platform to reach out to investors in America,” says Adenwala.
The second prize was won by Pratilipi – a self-publishing and reading platform in multiple Indian languages. The third prize went to Trebene, an ethical luxury label of Cashmere scarfs. They got prizes of $25,000 and $15,000, respectively.
Others in the fray included Kheyti, a social enterprise trying to help small farmers become smart farmers. Kheyti won in the “People’s Choice” category. The rest of the shortlist consisted of Acuity (a visual web analytics startup); Art & Found (a marketplace for artists where they can sell their art for free); Greensole (a startup that refurbishes discarded sports shoes and provides them to the poor); iFreedom v2 (an app that saves users’ Internet data); LoanMeet (a peer-to-peer lending marketplace); and FRS Labs (that helps organizations cut down on fraud losses).
The winners of earlier contests have been making their mark. They include Zostel (India’s first chain of backpackers’ hostels); Postergully (which sells posters online); Flintobox (a provider of educational subscription activity boxes for kids); and BabyChakra (a platform that connects parents to services and products). In December last year, BabyChakra introduced an android app which promises to make childcare less stressful for young parents. BabyChakra has raised $600,000 from Mumbai Angels, the Patni family office and the Singapore Angel Network. As an additional frill, BabyChakra has a list of child-friendly restaurants and a selection of “Momstars.”
“As more and more young entrepreneurs join the startup bandwagon, we are seeing a tempering of the frothiness that has existed for the past couple of years.” –Srivatsan Rajan
For Naiyya Saggi, co-founder of BabyChakra, apart from the exposure and funding that the competition helped garner, an important win was “connecting with peer startups.” Says Saggi: “We continue to be in touch and reach out to each other for advice very often. Entrepreneurship can be a lonely journey, and these relationships bring in healthy competition.”
Entrepreneurship Is the Future
Entrepreneurship is the future of India, says Gururaj. “The self-made, first-generation entrepreneur, of the kind we have not seen earlier, is going to be the new norm. It will bring in a new level playing field, freshness, new ideas and new segments to the landscape and also new levels of resilience, urgency and hunger. You are not going to see any slowdown on this.”
Not everybody is so enthusiastic, however. Some see a bubble — a repetition of the dotcom boom of the late 1990s. For instance, there are too many contenders struggling in the same space.
“As more and more young entrepreneurs join the startup bandwagon, we are seeing a tempering of the frothiness that has existed for the past couple of years,” says Srivatsan Rajan, chairman of Bain & Company India. “The potential winners will, therefore, need to have ideas that are really path breaking and innovative to garner financial support from investors. Ones with only incremental improvements and ideas who are unable to answer the ‘so-what’ question will find it increasingly difficult to get support from investors who are more and more discerning about backing new startups.”
“It is the startup season,” writes Ajit Balakrishnan in economic daily Business Standard. Balakrishnan is one of India’s first ecommerce entrepreneurs; his Rediff.com is listed on the Nasdaq.
“The innovation ecosystem has to be regenerative. People must not be afraid of failure and must have the confidence that they can start a second or third idea.” –Ravi Gururaj
“Is it one more season of hype, like the winter of 1999 which celebrated entrepreneurship — only to end in the famous dotcom crash of 2000?” continues Balakrishnan. “Unfortunately, the road to startup success is paved with the bodies of startups that either become becalmed or fail outright. And this is even more so in India…. Maybe the first place we need to start is to channel state funds to our universities and then establish a vibrant venture capital system to pick and choose the winners from among potential startups. That’s when we will see the true flowering of startups in India.”
But now the number of aspiring startups is increasing by the day. The Wharton competition has a limited number of entries and winners. Not so for Modi, who expects every Indian to stand up and be counted among the startups. NASSCOM has a 10,000 startup initiative which aims to mentor and angel-fund deserving ventures. Many multinational companies – such as Intel and Microsoft – have their own startup incubators.
Even as the WIEF Mumbai event was drawing to a close, the Mumbai chapter of The Indus Entrepreneurs (TiE) was kicking off TiEcon Mumbai 2016, an entrepreneurial conclave. People came not only for the conference but also to interact with former Tata Group chairman Ratan Tata who has taken up investing in startups in a big way since his retirement. Tata has put in money in more than 20 startups, including petcare portal DogSpot.in.
All eyes are now on Modi’s Startup India, Stand Up India initiative. Over 1,500 Indian startups and 40 global CEOs, including Travis Kalanick of Uber, are expected to attend the launch event on January 16 in New Delhi.
The program is being spearheaded by the department of industrial policy and promotion (DIPP). DIPP secretary Amitabh Kant told the Economic Times: “We want to be a country of job creators and not job seekers. We need to inculcate entrepreneurial talent in our country. This program seeks to achieve that.”
NASSCOM’s Gururaj lists “practical ease of doing business” as the top priority to fuel an entrepreneurial landscape in India. Pointing out that most startups may not even make it to their first anniversary, he says it is pointless to make them register themselves, file taxes and so on. Gururaj advocates a “frictionless and permissive environment” that allows the entrepreneurs to grow for three to four years on a self-reporting basis, as long as privacy, safety and security are not compromised, before bringing them into a regulatory environment. “The innovation ecosystem has to be regenerative. People must not be afraid of failure and must have the confidence that they can start a second or third idea.”