‘Entrepreneurship will succeed. India will succeed’
Sanjeev Bikhchandani of Naukri.com talks about the startup ecosystem in India. As someone who was at the forefront of embracing the digital revolution, Bhikchandani was at a unique-vantage point. He offers Hardnews some interesting insights
Hardnews Bureau Delhi
After promising so much and attracting billions in venture funds, it seems that the startup bubble is bursting. Why?
The bubble isn’t bursting. There is still plenty of funding available. It is just that investors have got a lot more discerning and a bit more cautious. The emphasis has shifted from fundraising to performance. In any market valuations go up and down and sometimes valuations do get ahead of business fundamentals – that is the nature of markets. And in a start up world all performance is in the future. Companies get funded on a promise. The time has come to deliver on past promises made. You have to remember that startup entrepreneurship is Darwinian – only the fittest survive and the mortality rate is high. The good thing is that the quality of entrepreneurs who are doing start ups today is very high. I am hopeful that several will deliver on their promises.
The Indian government started it ’Digital India’ and ‘Startup India‘ programmes and gave the impression that the new round of growth will take place through these programmes. How do you see the government’s programme? Do you think they were too optimistic?
I think it is great that the government understands the importance of startups and of entrepreneurship. Remember that Infosys and HCL were startups twenty-five years ago. Most of the industries that have created jobs in the last ten years did not exist thirty years ago – IT services, IT-enabled services, private sector banking, private sector insurance, private sector telecom – none of these existed, or if they did they were very small, in the early nineties. Companies that are startups today will be the engines of growth tomorrow. The government has made several initiatives that should yield great results in the years and decades to come – the move to seed the Indian venture capital industry through the Indian Aspiration Fund and the Fund For Startups, the incentive package for start-ups, and the Atal Innovation programme under the NitiAayog, which envisages the creation of a large number of tinkering labs and incubators, are some of these. I am optimistic.
The ecosystem in India is against enterprise. Do you think that some of the blame for the failure of the digital to take flight has anything to do with Indian bureaucracy, the tax system etc.?
India is fundamentally an entrepreneurial country. And this has been so for centuries. The difference is that earlier you had entrepreneurs by inheritance (entrepreneurs because the family was in business) and entrepreneurs by caste (some communities were business communities). Today you also have a new kind of entrepreneur – educated people who are entrepreneurs by choice, from middle-class families where there is no businessperson in the family prior to them. Is bureaucracy a challenge for entrepreneurs? Yes, it is. We are glad that the government iscommitted to change this.
Is the problem deeper than just ideas? Do we have the necessary educational infrastructure to support our digital revolution? We also learn that the quality of our software design lags far behind when it is compared with that happening in Silicon Valley or even in East European countries like Estonia and Latvia.
Yes, all these are challenges. However, things will change. They have changed in the past as well. For instance, fifteen years ago it was really hard for Naukri to attract technical talent. Everyone wanted to work for an IT Services company and not for a product company – you got to work on multiple projects with a variety of platforms and solve diverse problems; you went overseas and saw the world. A product company like ours simply could not compete with this. There was no product culture, only a services culture. Today things have changed – the best talent often prefers to work for product companies, and so a product culture has evolved, somewhat. We are still not where Silicon Valley is, but we are making progress. Design is the next frontier.
What sectors, according to you, are going to boom in the next couple of quarters? What will really survive this meltdown?
This is not a meltdown; merely a correction. Will some companies fail? Possibly so. But it is equally true that some will succeed. This is the natural course of evolution of industries and companies. What is certain is that the Internet will succeed, mobile will succeed, and the app will succeed. Entrepreneurship will succeed. India will succeed.