Indian Start-ups -Issues , Challenges and Opportunities (Road map for starting a successful venture)�

The presentation covers, Profile of Start-ups, Start-up Ecosystem, Issues and Challenges faced by Start-ups,Opportunities available for Start-ups, Government Initiatives,Valuations of few Start-ups,Reasons for failure of Start-ups etc.

1. Indian Start-ups -Issues , Challenges and Opportunities (Road map for starting a successful venture) Dr. Gopaldas Pawan Kumar BE(Mech.), MSc(EBM), MBA , PhD. Associate Professor [email protected]

2. Entrepreneur(ship) Doing something new or something different is a necessary condition for a person to be called as an entrepreneur. Entrepreneurship is defined differently by different authors. Comprehensive definition : It is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks and receiving the resulting rewards of monetary and personal satisfaction and independence” (Robert D. Hisrich and Michael P. Peters ,1998) 10-10-2020 Dr. G.D Pawan Kumar 2

3. Profile of a Start-up It is a new business that is in the initial stages of operation, typically financed by an individual or small group. T he objectives of a start-up are to be one’s own boss and create employment It is a scalable business model built on technology and innovation. Develops a product/service through disruption. Focused on entrepreneurs in IT and ITeS segment working towards innovation and development of products or services. 10-10-2020 Dr. G.D Pawan Kumar 3

4. Definition of Start-up Enterprise A start-up is defined as a ‘temporary organization with scalable business model ’. According to the Ministry of Commerce and Industry, GoI , it is: ii) A registered entity not more than 7 years old. iii) Has never crossed an annual turnover of Rs25Crs in any preceding financial year. iv) A company working towards innovation and development of products or services that have high potential of wealth creation or employment generation. 10-10-2020 Dr. G.D Pawan Kumar 4

5. Attributes o f Start-up Venture Grant Thornton (2016) define start-up business as an organization which is a) Incorporated for three years or less. b) Is at a funding stage of Series B or less. c) Is an entrepreneurial venture/a partnership. d) Development , production or distribution of new products or processes. e) Has a revenue of up to INR 25 Cr. f) Is not formed through splitting or restructuring. g) Employs 50 people or less. 10-10-2020 Dr. G.D Pawan Kumar 5

6. The Start-up Ecosystem Till 2019, there were around 9000 Start-ups. Cumulative valuation of start-ups was $ 95-101Bn. Direct employment - 390k and Indirect around 14-16 lakh. 21% of Indian start-ups were primarily focusing on global markets. The ecosystem has become a launch pad for a larger number of start-ups. 10-10-2020 Dr. G.D Pawan Kumar 6 (Source: NASSCOM- Zinnov Report,2019)

7. The Start-up Ecosystem (As of 2019) 1300 Start-ups were established in India Total Unicorns grew to 24. (7 Unicorns in 2019) Direct employment created crossed 60,000. Total funding received is over $ 4.4bn. Active institutional investors - 390 in numbers. Active incubators and accelerators amounted to 335 numbers. Number of industrial verticals with active start-ups-20+ 10-10-2020 Dr. G.D Pawan Kumar 7 (Source: NASSCOM- Zinnov Report,2019)

8. Various Start-up Verticals Enterprise-19% Healthtech-14% FinTech-10% HRTech-6% Edtech-6% Retail & Retail Tech-5% Travel and Hospitality-4% SCM & Logistics-4% Real Estate and Construction-4% Automotive-4% Industrial & Manufacturing-3% Food & Foodtech-3% Mobility-3% AgriTech-2% Others-13% 10-10-2020 Dr. G.D Pawan Kumar 8 ( Source: NASSCOM- Zinnov Report,2019)

9. Government of India Initiatives Make-in-India : to attract foreign investments in the manufacturing sector. I ncreased the foreign direct investment (FDI) limits and strengthened intellectual property rights (IPRs). Start-up India : to build a strong eco-system for nurturing innovation and Start-ups. Stand-up India : promoting entrepreneurship among women and SC/STs. 10-10-2020 Dr. G.D Pawan Kumar 9

10. GoI Initiatives (Continued) Digital India : to ensure government services are made available to every citizen through online platform. Atmanirbhar Bharat Abhiyan : to make India "a bigger and more important part of the global economy", pursuing policies that are efficient, competitive and resilient, and being self-sustaining and self-generating. The five pillars of ‘ Atmanirbhar Bharat: economy , infrastructure, technology-driven systems, vibrant demography and demand. 10-10-2020 Dr. G.D Pawan Kumar 10

11. Issues and Challenges of Entrepreneurs Financial Resources. Revenue Generation. Team Members. Supporting Infrastructure. Creating Awareness in Markets. Exceed Customer Expectation. 10-10-2020 Dr. G.D Pawan Kumar 11

12. Issues and Challenges of Entrepreneurs (Continued) Tenacity of Founders. Cumbersome regulations. Growth Decelerators. Lack of Mentorship. Lack of a Good Branding Strategy. Replicating Silicon Valley. 10-10-2020 Dr. G.D Pawan Kumar 12

13. Opportunities for Entrepreneurs With benefits and convenience of new products , viability of start-ups is not difficult. Demand and consumption of goods and services would drive innovation and creation ( Mittal, 2014). With right product, success could be high with opportunities for exports. With 130Cr population , high demographic dividend and 1.5 Cr joining the workforce annually would give fillip to Indian economy. High penetration of IT and internet. 10-10-2020 Dr. G.D Pawan Kumar 13

14. Opportunities for Entrepreneurs (Continued) Multicultural and multilingual regions need innovative solutions to health, education, infrastructure, sanitation etc. Each problem provides a unique opportunity to create a business around it. India's tele-density brings in convenience and reach to consumer segments(TRAI,2017 ). The reduction in data charges help start-ups disrupt traditional businesses. GoI’s digital push is going to improve connectivity. 10-10-2020 Dr. G.D Pawan Kumar 14

15. Reasons for Euphoria The bottom-of-the pyramid space in India is a potential market. Change of mind set of experienced executives from being salaried class to becoming risk takers. Huge investments of $ 14.5bn in start-ups and the success stories luring other enterprising people. Venture capitalists and angel investors are aggressive and gung-ho on Indian start-ups. Investments by business leaders is a strong reason for encouraging individuals. 10-10-2020 Dr. G.D Pawan Kumar 15

16. 10-10-2020 Dr. G.D Pawan Kumar 16 Popular Start-ups (Source: Adapted from “17 start-ups to Watch”, TOI, 2017 ) S.No . Area of Operation Name of the Start-up Firm 1 Online food delivery/Grocery SWIGGY, ZOMATO/BIGBASKET 2 Edutech BYJU's , UNACADEMY , UPGRAD , VEDANTU 3 Fancy OnlineGames DREAM11,MPL,FANFIGHT,FAU-G 4 Hospitality/Travel OYO/MAKEMYTRIP 5 Online beauty products NYKAA 6 Taxi Aggregators OLA 7 Online Furniture URBAN LADDER,PEPPERFRY 8 Insurance POLICYBAZAR,ACKO 9 Online fish, meat delivery FRESHTOHOME,LICIOUS 10 Big data analytics for trade PEELWORKS 11 Online pharmacy/Healthy Lifestyle PHARMEASY, NETMEDS, MEDLIFE/CURE.FIT 12 Platform to get local businesses online MEESHO,PAYTM MALL, DUNZO 13 Logistics management software FAREYE,CITTA,NISSI,TRIMBLE,ZEDEX 14 Lifestyle tracking platform HEALTHIFYME ,PEERBITS , GOQii 15 Payments solutions for credit/debit cards PINELABS,CASHFREE,RAZORPAY 16 AI-driven solutions for retailers STAQU, iLENZE , WAZZAT 17 Packaged ready-to-cook idli / dosa batter IDFOODS,RISHTA

17. 10-10-2020 Dr. G.D Pawan Kumar 17 Valuations of Indian Unicorns

18. Start-up Opportunities - Low-end Ventures Affordable s nacks and tiffin's Traditional health drinks Franchising of businesses Waste management in Tier -2 &3 cities Media support services Food Processing Washing and ironing Solar energy products (Lamps..) Support for retail businesses Supply of drinking water in small packets Training for employment Pharmacy& essential supplies Diagnostic Centers IT and ITES Local food d elivery 10-10-2020 Dr. G.D Pawan Kumar 18 ( Source: Author’s Perspectives)

19. S tart-up Opportunities - High-end Ventures (Export Oriented) 10-10-2020 Dr. G.D Pawan Kumar 19 (Source: Author’s Perspective) Auto-Components Organic Farming Engineering Goods Biotechnology Horticulture Ayurveda Products and Medicines Floriculture Software Exports

20. Reasons for Failure of New Ventures Based on analysis of 101 firms ,the reasons for failure are listed below: 42% failed as the product had no market . 29 % firms ran out of cash. 23 % did not have the right team. 18 % closed due to pricing issues. 17 % firms had poor product . 14 % failed due to poor marketing and 8% had no investor interest ( Griffith,2014 ). 10-10-2020 Dr. G.D Pawan Kumar 20

21. Conclusions The current economic scenario in India is on expansion mode. The Indian government has put a number of liberal policies and schemes in place. Contributions of start-ups will have cascading effect on economy and employment generation. Initiatives like ‘Make in India’, ‘Start-up India’, ‘ Atmanirbhar Bharat’ etc. will encourage entrepreneurs to join the band wagon. 10-10-2020 Dr. G.D Pawan Kumar 21

22. Conclusions (Continued) Entrepreneurs should avoid the pitfalls which could kill an enterprise. Being a country with large population, opportunities available are many for start-ups. Start-up ecosystem could arrest brain drain improving availability of local talent for Indian companies. Some of the start-ups may become unicorns. Public/private institutions cannot provide employment to every student coming out of college, as such, e ntrepreneurship is a viable alternative for Indian youth. 10-10-2020 Dr. G.D Pawan Kumar 22

23. Thank You Dr . Gopaldas Pawan Kumar @ [email protected] https://www.researchgate.net/profile/Dr_Gopaldas_Kumar/research 10-10-2020 Dr. G.D Pawan Kumar 23