While India’s Silicon Valley-inspired startup ecosystem is just brewing, there is no doubt about the fact that our country already bears a rich history in entrepreneurship; Remember how Marwari and Chettiars communities were synonymous with business ownership, albeit without the celebrity status that is given to entrepreneurs today.
If we look back at the entrepreneurship landscape over the last three decades, we can trace three major waves that have hit the country. The first one started with family-owned conglomerates like Tata Sons, Aditya Birla Group, Mahindra & Mahindra and others, that continued to scale post-liberalization. The second wave, quite obviously, came from the IT, BPO and telecom revolution, when the likes of Azim Premji and Sunil Mittal joined Kumar Birla, Mukesh Ambani and other leaders at the top. The latest wave, of course, is being ridden by Kunal Bahl, Sachin Bansal and many others, who are innovating and grabbing opportunities in an increasingly digital world.
In this whole scheme of things, business leaders like Ratan Tata have spearheaded and supported all three eras. Tata Group setup TCS, now India’s largest IT services company and now Mr. Tata is working towards uplifting the Indian entrepreneurship ecosystem with his angel investments.
As I was thinking about this, a question that came up was, what next for Indian entrepreneurship? I believe, if we play our cards right, there are two big opportunities waiting to be tapped.
Social Entrepreneurship that scales
Social entrepreneurship has been a buzzword for a while now. However, for-profit social ventures have not scaled enough to make meaningful impact on the overall ecosystem.
In fact, I would argue that the biggest social impact on India has come from the IT industry. No other industry has come close to the scale at which it has generated employment and enabled wealth creation among the Indian middle class. Yet, we hardly think of the IT Services entrepreneur as a social entrepreneur. But by sheer scale, it has positively impacted the people of our country. I believe, the next big thing for Indian entrepreneurship will come from ventures that scale tremendously, even while creating massive social impact.
This social impact could very well come from the likes of Snapdeal, Flipkart or Ola Cabs. Just like the IT industry impacted the middle class, the biggest social impact in e-commerce comes from empowering the online seller to create wealth and jobs. If a Snapdeal and Flipkart could enable over 10 lakh (say, within the next five years) MSMEs to sell online, the impact on jobs and wealth creation would be tremendous. However, the crucial aspect to fix here is this: The financial model of these companies must be tweaked to ensure that their own ventures are sustainable and profitable over the long run.
At the other end of the spectrum, India certainly has the talent and now even the capital to support hi-tech entrepreneurship. The question we must ask ourselves is – Can we build a Samsung out of India? Can we build a Tesla Motors out of India? There is no doubt that we have the talent to build such companies. One important missing element, I believe, is the mindset to take on technology risk. This mindset, combined with technology, marketing and financial prowess, can do wonders.
While Indian entrepreneurs are today comfortable in offering world-class services to enable a Samsung or Ferrari to succeed, it requires a change in approach to deal with the risk associated with research, development and experimentation. Obviously, all this is easier said than done; But if we can start with one or two companies that can take on technology risk and develop the wherewithal for research, the Indian startup landscape will look completely different. Imagine, if the world’s foremost personal robot company were to be built in India? Now, the impact something like that would have on our country’s startup world will be incredible.
Hope you enjoy reading this edition of The Smart CEO.