The posh locale of Diamond District in Bangalore is a hot bed for some of the brightest minds from industries ranging from education to health. How exactly are these startups building a viable product and a perfect team? Who is mentoring them to get access to customers and investors?
Gururaj has several roles to play right from being the Chairman of the NASSCOM Product Council and a serial entrepreneur and to being an angel investor. He has over 24 years of technology product development, management and marketing experience. He is the Charter Member of the Bangalore Chapter of TiE, lead mentor at the Microsoft Azure Accelerator, Co-founder and Co-chair of Harvard Business School Alumni Angels India, a mentor to numerous startup founders across all stages, and an active community member across a range of industry and community forums and associations.
Gururaj strongly believes that entrepreneurship has huge potential in India and it is important to nurture and grow future industries from the country. “The 10,000 Startups programme has taken a leap in fostering entrepreneurship in India. We are built to serve the founders. Our Startup Warehouse, which is currently in Bangalore, will be expanded to Kolkata, Hyderabad, Delhi, Pune, Chennai and other cities in the coming months to provide learning resources and connection opportunities to the budding talent,” he said.
In an exclusive conversation with e27, Gururaj discusses the hurdles Indian startups face in the funding process and the advancements in the smartphone market and e-commerce space. Read on…
Angel networks in India are nascent
It is tough to get funded in the early stage anywhere in the world because there are a lot of hurdles from an idea stage to creating a product that is fundable, especially when the funding is not coming from friends and family but unbiased external parties.
It is harder in India because the angel networks are nascent. There are fewer VCs and early-stage investors, but nevertheless great ideas are still getting funded in India.
If a company has the right product with an early traction then there is no question of not securing investment. If the good companies are still not raising monies, then it means they are not trying their best to get through to the right people with a refined pitch.
Exits should come at the right time
It’s a fact that we have had fewer exits in comparison to the West, but that is not going to be the case forever. Giants like Google and Microsoft haven’t started to do big acquisitions in India. The aggressive acquirers haven’t entered this market and viewed it as a place where they can buy talent, market share, revenues and IP.
The current scenario can be changed only when the local players get involved. We usually fixate on exits but an exit is an end to the journey. We are still in the process of walking through the journey and building the ecosystem. Exit is a natural consequence to building companies, but we can’t reach to an exit prematurely. The earlier the better, but it has to come at the right time.
Video is growing at a faster pace in Southeast Asia
There is a range in Southeast Asia (SEA) itself where some markets are way more advanced than others. There is a language barrier in many countries, hence products built for one market do not easily translate to any other market. These markets are more affluent, mobile-savvy and social than India. Video is growing at a very fast pace in the SEA markets because of better infrastructure facilitating last-mile connectivity.
But there are huge advancements in India with the meteoric rise in the adoption of smartphones and internet. There is a growing penetration of smartphones in India and in two years, India will be the largest smartphone market in the world outside China. There is no doubt that India is catching up to the developed markets in SEA.
Localisation is the key to succeed for e-commerce
People prefer to order online in countries that do not have a good infrastructure. E-commerce is the hottest destination for investors because of its enormous potential.
There are a lot of vertical categories and niche formats which will succeed. Localisation is the key in India and companies should look at solving problems and addressing the need for different sections of the diverse population of India.
Smaller companies to be benefitted through crowdfunding
With the growth of crowdfunding in India, we will see a bunch of smaller companies getting funded. There are some platforms doing well, but I really hope to see the companies getting mentoring and guidance to create a viable product with decent traction. There is much more than just getting funded and lack of proper advice can lead to failure. There is still a need to provide clarity on the regulations of crowdfunding.
Design and mobility are two very important aspects
Startups don’t think through the customer pain. They should first decide the target audience for the product and then address the pain-points through the product.
Design and mobility are two very important aspects that Indian startups should be focussing on.
Most of the startups fixate on funding. Chasing VCs prematurely instead of thinking about the product, monetisation plans, customers and traction is a wrong practice to follow. The funding race becomes a goal in itself, which leads to the death of many great ideas.
Need for more designers, product managers and data scientists to create good companies from India
We are seeing a number of enterprise SaaS, Big Data, gaming and e-commerce companies coming out of India. We still have not seen hard core companies that do networking and deep data storage emerging from the country.
The government should take steps to ease the guidelines of starting a business and raising funds from domestic and international investors, and facilitate a better payment economy through credit and debit cards. We need more designers, product managers, data scientists to help create the best of companies from India.