Today, enterprise is everything to the Indian economy. Product and marketing innovations coupled with changes in consumer preferences have only fuelled its importance. The entrepreneurial ambition of a few daring individuals has changed the way the world looks at the Indian economy. From being perceived as overtly agrarian, today, it serves as a backbone to several product and service oriented industries globally. The names of those who changed India’s economic landscape runs into an exhaustive list. If Jamsetji Tata’s legacy lives on through diverse enterprises, there are living legends such as N.R. Narayana Murthy who proved that the thinking Indian mind is well attuned to building an enterprise. And the new-age entrepreneur continues to prove that India is not short of dreams or dream makers.
What begs to be asked is this – is ambition the only driving force of entrepreneurship? Does educational guidance help in taking one closer to success? Does the experience of studying the subtleties of business dynamics help an entrepreneur to run a business better? Yes. Atleast, the few entrepreneurs who have sought such guidance agree. These entrepreneurs have either taken up specialised programmes in entrepreneurship from select education institutions or sought mentoring through the process of their incubation cells.
But, campus entrepreneurship is still at a nascent stage in India. Across several technology and management institutions, the focus at large remains job placements at multi-national corporations. While entrepreneurship may not be on the average student’s mind, a few are trending towards being their own boss. And educational institutions are faced with the challenge of keeping pace with the rate of ideation on their own campuses. This story aims at understanding the role an institution can play in honing a student’s entrepreneurial skills so that the process of early stage business management is easier.
An entrepreneur appreciates guidance in any form. And that is exactly what the institutes aim to offer – guide each one on what they want. For some, the challenges could be in raising capital while it could be finding the right team for many others. But, the most important thing for a business is to have a strong foundation. This will happen if an entrepreneur has in place the processes that his business demands. Pranay Gupta, joint-chief executive, Centre for Innovation Incubation and Entrepreneurship (CIIE), Indian Institute of Management (IIM) – Ahmedabad agrees. “It is important to have the right process in place so growth takes the right direction, as opposed to happening in a haphazard manner.”
It is important to have the right process in place so growth takes the right direction, as opposed to happening in a haphazard manner- Pranay Gupta
To help streamline ideas, plans and processes is the primary function of academics and industrial experts involved with an incubation cell. “We identify a problem and help solve it,” adds Gupta. L.S. Ganesh, professor-in-charge, Cell for Technology Innovation, Development and Entrepreneurship Support (C-TIDES), Indian Institute of Technology (IIT) – Madras, concurs, while adding that brutal honesty is required at the initial stage of discussion to truly iron out chinks.
Limited business exposure could be another issue for first generation entrepreneurs. Agreeing, Sushanto Mitra, chief executive, Society for Innovation and Entrepreneurship (SINE), IIT – Bombay, says, “This makes it difficult for startup entrepreneurs to be in sync with market requirements. We encourage them to focus on gathering customer feedback which could be used to modify their product or service offering.”
M.S. Rao, chairperson, Center for Entrepreneurship, S.P. Jain Institute of Management and Research (SPJIMR), brings to light a challenge that most entrepreneurs fail to factor in. “It is important to reflect and confirm that a person would like the entrepreneurial lifestyle and our programme addresses this fact,” he says. With more than one challenge to meet, first generation entrepreneurs look up to the expertise provided to them by educational institutes to help create a sustainable business model. The institutes that foster entrepreneurship do it either by way of a management programme or by offering incubation. Specialised programmes focus on modules such as understanding an entrepreneurial mindset, developing a business idea into an opportunity, developing a business plan and executing the same. Incubators, on the other hand, focus more on providing an enabling environment where entrepreneurs can garner experience, while being shielded from harsh market realities.
Teaching vs. Incubating
At each educational institute, the structure of support systems helping entrepreneurs is different. While some prefer to offer students specialised programmes in entrepreneurship, many others look to rope in illustrious alumnus and experts from industry by way of an incubation cell.
We encourage our students to focus on gathering customer feedback which could be used to modify their product or service offerinG – Sushanto Mitra
At SPJIMR, the eighth batch of students are benefiting from the knowledge imparted at the ‘Start Your Business’ (SYB) programme where the aim is to educate prospective entrepreneurs on creating and sustaining a business enterprise. “We began receiving queries from corporate executives, gen-next family business members, college students and women entrepreneurs-in-the-making for courses on new venture creation. This confirmed our feeling that there was a growing desire, more so among executives, for living their own dream,” says Rao. For 27-year-old entrepreneur Kulpreet Chadha, SYB gave him the courage to step out of his comfort zone and make his dream come true. Chadha, who passed out of SYB in the year 2006, started Bridge Accommodations, a hospitality provider that specialises in service apartments, the very same year. “SYB helped me look at all levels of management from a ‘boss’ perspective, instead of an ‘employee’ perspective,” shares Chadha. Bridge currently generates revenues of close to Rs. 2 crore and Chadha is confident that he and his team will be able to complete an initial public offering by 2012.
Entrepreneurship programmes also help entrepreneurs and investors interact on a regular basis. “The SYB programme receives offers from seed capital investors to consider financing entrepreneurs and creating a platform where students can interact with investors,” says Rao. Meeting with investors through the SYB network helped student entrepreneur Arvind Kumar learn an important lesson. “I met with seed capital investor Anand Lunia, who helped me realise that venture capitalists have more than just money to provide us, they have knowledge capital,” says the founder of AlchemyJob, a human resources solution provider.
India’s leading management institute, IIM-A, went the incubation route with CIIE. Amongst the several business proposals that CIIE receives, it shortlists chosen entries based on the parameters of innovation in idea, market feasibility, team capability and the incubator’s capacity to help take their business forward. CIIE extends help to entrepreneurs in the form of networking with investors to raise funds, interaction with domain experts to provide feedback on technology and connecting to prospective customers. “We have been sanctioned seed funds to scale up operations. Besides, we have been allowed use of the IIM-A brand name to reach out to people,” says Pulkit Gaur, founder and chief-executive, Gridbots Technologies (Gridbots) which focuses on robotics. Gridbots was established in 1997 and while their corporate office is still located at the IIM-A campus, their research and development unit is located elsewhere in Ahmedabad. The company has come into their own since their incubation with CIIE. “We have already developed a prototype of a robot for the hospitality industry and did a successful demonstration for hoteliers from Gujarat and wish to launch it on a commercial scale in the near future,” says Gaur, adding that this progress is in part due to the mentoring he received at CIIE.
CIIE’s mentoring initiative, MentorEdge, has close to 300 mentors across industries to help startups address problem areas. “We try to ensure that each mentoring session discusses deliverables as opposed to being a gyan session,” says Gupta. CIIE members usually hold observer status on the board of the company being mentored and prefer not to supervise day-to-day operations. Gupta explains this by saying, “We do not want any of the companies or entrepreneurs becoming dependent on us, we play the role of godfathers.”
While innovation in technology is viewed upon with great interest at CIIE, members are also excited about industries such as mobile Internet and healthcare. Of note, CIIE does not restrict itself to viewing business plans of its alumni or faculty alone, it invites entrepreneurs from all walks of life to come knock on its doors.
At IIM – Bangalore, the Nadathur S. Raghavan Center for Entrepreneurial Learning (NSRCEL) which was established in 2002, operates an incubator that nurtures startups, from idea to implementation. Its approach to incubation is much like that of CIIE where it provides startups with hard and soft infrastructure. At NSRCEL, external mentorship plays a big role in bringing startups on par with industry expectations. In addition to its incubator, NSRCEL also offers long-term and short term programmes in entrepreneurship, including one that is dedicated to women entrepreneurs.
The Wadhwani Centre for Entrepreneurship Development (WCED) at the Indian School of Business (ISB), Hyderabad conducts short-term training programmes such as the ‘Entrepreneurship Educator Development Course’ and ‘Venture Capital Development Programme’ alongside incubating startups at K-Hub. Of note, the Post-Graduate Programme in Management offered at ISB encompasses a popular elective titled Planning an Entrepreneurial Venture which educates students on setting up their own business.
At technology institutes, the attitude towards entrepreneurship differs slightly. At SINE, IIT-B, entrepreneurs whose business plans have been approved and absorbed by the incubation programme are monitored over three years. SINE provides subsidised infrastructure such as office space and furniture and certain other services such as human resources, legal guidance and accounting to these startups. “We hold equity in these companies, in lieu of commercial fees. At times, we charge royalties as well,” he says. The time frame of incubation is not strictly adhered to. “Not all those in incubation, graduate on time. If required, we do allow companies to stay on, but, we proportionately decrease the subsidies offered,” says Mitra. While this measure might seem unduly protective, Mitra feels it helps keep the mortality rate of startups in check. Vishal Gupta, founder and chief executive of Seclore Technology (Seclore) that was incubated at SINE compares this process to that of a new born incubator. “We are protected for three years in which time we learn to fend for ourselves. Incubation simply cushions the landing impact while going to markets, if the idea itself is weak to begin with, the consequent problems are beyond SINE,” he says. Seclore that specialises in information rights management has seen significant development post incubation. “We reached a million users last November and are looking at scaling growth further to reach consumers spread across South Asia,” says Gupta.
Advancing technology remains the main focus area for SINE. “For those companies which are services oriented, there are better places to go to than a technology institute,” opines Mitra. SINE is open only to alumnus and faculty members of IIT-B. At IIT-M, a similar incubation process is followed wherein chosen startups are provided with subsidised infrastructure. IIT-M has two dedicated incubation cells, C-TIDES and Rural Technlogy Business Incubator (RTBI). While C-TIDES incubates technology oriented companies, RTBI incubates companies with a rural business focus. Amrutash Misra, founder and chief-executive, iLoveReadin Library Solutions that was incubated at C-Tides is all praises for manner in which the cell provided guidance. “C-TIDES’s advise helped us fine tune our plans. But, more importantly, they gave us the freedom to work without breathing down our necks,” he says. This online book rental service is keen on changing the face of Indian libraries and making them on par with international counterparts.
Is this enough?
While educational institutes in India are taking strides forward to foster entrepreneurship, those closely involved with the process still feel India, as a whole, has a long way to go. While incubation cells are growing in number, the quality of the mentoring they provide must improve. As Mitra says, “There is no question that incubators need to evolve their process and become more and more business-oriented.”
For those institutes that offer academic programmes in entrepreneurship, the biggest challenge is to keep the course material dynamic. It is key to supplement knowledge with experience and in this case, a network of investors who can help turn ideas into reality. Indian educational institutions could perhaps borrow a leaf from the Stanford Technology Ventures Program (STVP) which has integrated academic research and entrepreneurial development in a manner that is most effective. STVP leverages its geographic advantage by roping in big names from companies such as Microsoft, Google, McKinsey & Company amongst others to mentor student entrepreneurs. India is one such nation where nearly every city holds examples of homegrown entrepreneurs that have been instrumental in shaping the nation’s new economy. By facilitating face-to-face interactions with these illustrious names, institutions can enhance quality, right from the stage of generating a fresh idea.
Another thing standing in the way of many students turning entrepreneurs is the system itself. Parents and teachers alike are yet to fully support a student’s innovative thinking. Ganesh holds strong views on professors who refuse to see the benefit in entrepreneurship. “Many think it is the duty of the students to study. But, they should reflect on the larger picture – what India could achieve with advancements in technology,” he says.
An inclusive change in attitude will help the cause of creating an Indian ecosystem where entrepreneurs can thrive. Initiatives such as the National Entrepreneurship Network and The Indus Entrepreneurs, India, are working on generating a shared resource pool for budding entrepreneurs. This is but the beginning and a sustained effort in this direction is what will drive entrepreneurship in the future. As Ganesh says, “I expect a sharp rise in entrepreneurship in the next ten years.” India does too.