For those of you who have watched The Social Network, it is hard not to miss the camaraderie among the tech geeks as they punch out codes grouped up in a small room, before Facebook goes the whole hog. “The atmosphere at iAccelerator is just the same, but with no alcohol or women,” smiles Pranay Gupta, joint CEO, Centre for Innovation, Incubation and Entrepreneurship (CIIE) at the Indian Institute of Management, Ahmedabad (IIM-A), the institution that oversees many such incubation cells including iAccelerator.
“We basically look for awesome hackers, who are hell-bent on their ideas and understand their technology.”
iAccelerator helps entrepreneurs who focus on the Internet and mobile domain. Inspired by California-based Y Combinator, it is now into its third year of functioning holding one session a year. “We basically look for awesome hackers, who are hell-bent on their ideas and understand their technology,” says Gupta. The idea is to develop a unique scalable product that solves a pain point and not another ‘me too’ creation. Tanvi Rangwala, director, ICT (Information and Communication Technologies) Initiatives at CIIE and who directly oversees the iAccelerator programme says, “We receive applications at different growth stages – idea, prototype and product level. When we started iAccelerator, we received more startups that were at the idea level but it has now progressed. In fact, most of them who enrolled for the 2011 session are at the alpha or beta stage of their product.”
The programme for 2011 started in November and will continue till the end of this January. Being a technology incubator, most of those who join the programme come from outside the campus, with not many IIM-A graduates getting incubated. This year, a total of 10 companies have been chosen to attend the boot camp that will help them achieve substantial growth in those three months. The residential boot camp offers support to entrepreneurs in three crucial areas – infrastructure support, business support and investment support. The initial 10 days is dedicated to infrastructure support such as intellectual property rights, patent registration, providing office space, server hosting and getting the company incorporated.
Founded: Centre for Innovation, Incubation and Entrepreneurship – IIM-A
USP: Incubates startups that focus on Internet and mobile technology
A major part of the camp is then focussed on business support to help them get their business model right, working on refining the product, bringing in technical experts/mentors to scale up the product, putting the entrepreneurs onto the right network to market their product and helping with the sales, customer-metrics and marketing. The last month is dedicated to investment support. “We show them how to get their financial model and accounting in place, introduce them to the right investors from our network and teach how to pitch and close a deal. It gives them a chance to see things from a venture capitalist perspective,” says Rangwala. The incubator/angel investors also invest Rs. 5 lakh as seed funding for a stake in the company that ranges between 3 – 12 per cent.
“There are many first generation technology entrepreneurs and they often tend to be too focussed on developing the technology. That’s where we come in – to help them choose a viable business model, work on it and learn when to iterate it. We teach them the other aspects of the business,” adds Rangwala. It is during this course that industry experts, angel investors, and IIM faculty and alumni offer active mentoring to the startups. For instance, alumni of the prestigious institute, Deep Kalra of Makemytrip.com and Sanjeev Bikhchandani of Naukri.com have offered their advice in the past.
The current batch has also found sponsorship from Tata Communications, whose senior executives will mentor the entrepreneurs. In addition, the company will also offer technology support in terms of cloud connectivity and other connectivity requirements. Sponsors for earlier batches were Microsoft and Nokia. At the end of three months, the product gains considerable momentum with investors showing interest in it. The programme culminates into the final Demo Day, where the participants are given the opportunity to showcase their products to investors, other entrepreneurs and the media.
A vital link
“Of the 17 startups that joined iAccelerator in the past two years, 15 are still up and running,” says Gupta. It has incubated companies such as Innoz Technologies, whose product SMSGyan has won numerous awards including MIT-Technology Review’s outstanding innovators under 35 in 2011 for its founder, and RecruiterBox that helps manage resumes. Besides the equity factor, many of the earlier startups continue to keep in touch with the incubator and often turn to them for advice. “Incubators are often the base of a tree in the startup ecosystem. It offers insulation in the initial days, which are risky and give entrepreneurs the time to experiment,” explains Gupta, on the role of incubators. He also feels incubators help entrepreneurs and investors find a common ground.
iAccelerator also collaborates with other technology institute-based incubators. Tapping into this vast resource, relying on its alumni and the collaboration of various investors, angel networks or individuals has helped such incubators to mushroom. Though it is under the aegis of IIM-A, Gupta is confident that iAccelerator is making a name for itself.
Gupta believes that over the years the Indian investor scenario has snowballed. “Earlier, we found it hard to get the attention of angel investors and corporate companies. Now, they are constantly in touch with us and show interest in the growth of the startups. But what I find missing in this ecosystem is the number of mergers and acquisitions in India. There are very few exits happening. We hope that changes soon,” he says, on a concluding note.