Entrepreneur Population growing

Courtesy: TOI


With a great job at Infosys that offered a long-term relocation to the UK, life couldn’t have gotten rosier for Santosh Rao. But Rao (29) gave it all up for an idea that caught his fancy while at B-school — to offer cost effective web portals for educational institutions. He quit Infosys last October to set up Vrixx Education Solutions in February and was soon joined by fellow Infoscian Arvind Singh (27). Today, they have a basement office in Indiranagar with three employees — all in their 20s. “We’re not very cash rich and projects are trickling in by and by. But it doesn’t seem like work to Arvind or me. This is what we enjoy doing,” says the IIM-Kolkata grad. Like Rao, there are an increasing number of young professionals — mostly in their 20s — who’re quitting cushy jobs for the challenge of entrepreneurship. “There is no official record of the number of entrepreneurs in the country, so there is no way one can get exact figures on the increase of entrepreneurs. However, there are many indicators that one can look at to see the increase in entrepreneurs,” says Laura Parkin, executive director of National Entrepreneurship Network, a body that seeks to promote entrepreneurship by bringing together students and entrepreneurs. “For one, there has been a heightened participation of students in NEN — from 500 five years ago to 55,000 today. Another is the number of entrepreneurship societies that have been formed.” Clubs like Kickstart, Mobile Mondays, Proto.in and Open Coffee Club (OCC) have opened in the past five years across the country and the membership numbers in each city run into hundreds. “Out of the 50 core entrepreneurial members in our club, at least 40% are below or around 30,” says Amarinder Singh, co-ordinator of OCC Bangalore. “There is also great interest from students and professionals who come in wondering if they’re up to taking the plunge.” Venture capital companies too have noticed a marked increase in projects that flow in. “From about 10 projects in a month, we now look at around 50 every month. And although there has been a marked interest in entrepreneurship across board, there is certainly much more buzz from the age group of people in their early 30s,” says Kanwaljit Singh, MD of Helion Venture Partners. VC companies estimate that there has been almost 40% increase in young professionals who have quit their jobs to be their own bosses. “I met an IIT-Delhi grad a couple of weeks ago who came to me with a project. He told me that 80% of his batchmates are now entrepreneurs,” says Anjana Vivek, founder of VentureBean Consulting. Delhi, Mumbai and Bangalore are leading the entrepreneur brat pack, with Pune and Hyderabad catching up. In Bangalore, most of the entrepreneurs are in the technology, internet, mobile and telecom space, while Chennai sees more action in the service and software product segment. Mumbai’s entrepreneurs gravitate towards internet companies and non-technology ventures like retail, particularly F&B retail. “At least 40% of today’s entrepreneurs in the mobile and internet space is dominated by people in their late 20s and early 30s. Mobile related applications see huge interest in India because of the enormous market size,” says T C Meenakshisundaram, MD of venture capital firm IDG Ventures India. “The quality of deals has gone up. We now see more organized projects, greater products and better business models.” It’s mostly corporate executives — with average experience of eight to ten years — from IT services companies like Infosys, Wipro and TCS who are turning into entrepreneurs. “But I would like to see more people from companies like Google, Yahoo, Microsoft and Nokia. We need more product-based companies rather than service companies,” says Meenakshisundaram. Yet to mature However, entrepreneurship and the venture capital (VC) community in India is not a mature segment. “Most start ups lack organizational and managerial skills. They want to start their business but lack professional management. When a VC comes in, the young guys find it hard to share their space with someone senior from the industry,” says Harish Gandhi, executive director of Canaan Partners. “Along with our funding we bring in professional management, which the start ups can’t always handle.” Murugavel Janakiraman, CEO of Consim Info (formerly Bharat Matrimony), reminisces his initial days of VC participation in 2006 with a smile. “I was not used to answering anyone for the eight years that I ran the company alone. And suddenly you find yourself facing a board of directors,” he recalls. “It’s not easy. But you learn to appreciate their experience, which enables them to give you great advice in times of crisis.” The network and contact base of the more experienced members too is an advantage that young entrepreneurs take time to appreciate. VCs feel that most start up teams are either an all-techie bunch without much business acumen or are a marketing team without much knowledge or understanding of technology. “To find a complete team is the biggest challenge with new companies. I would rather fund a great team with a good idea than a good team with a great idea. A great team can quickly learn the market nuances that make a successful venture,” says Meenakshisundaram. When Sunil Maheshwari (33) and his partner Lekh Joshi (32) floated Mango Technologies two years ago, the biggest challenge was to get funds to start their venture. The company provides mobile applications platform for low cost devices targeting emerging markets. “Most of the venture capital firms are US-based. Their mindset is different so while funding they think in terms of the US business environment,” says Maheshwari. “They need to understand that the way business functions here is totally different. Entrepreneurs who have only lived in India and not in the US, display a cultural difference in their estimation of money required for a venture and utilisation of funds. Getting angel funding is not difficult in the US but in India it’s not easy to get even Rs 20 lakh to 30 lakh.” Maheshwari faced challenges in accessing seed money to start the company and do the initial setup. “The product market is a longterm game and you need to understand that every product may not be successful but returns are also very high for a successful product,” he says. “Seed money was a constraint, but all of us at Mango have really enjoyed going through this phase. It gave us the strength to save every rupee and give our best in a constrained environment.” At the end, nothing succeeds like success. “The concept of entrepreneurship has been romanticised a lot. A lot of people jump in thinking it’s ‘cool’. But it’s a lot of hard work and it takes a strong team to stick it out,” says Rao. MORE STORIES 1 Praveen Jain (29) quit KPMG to start E-Media Genie — a retail marketing firm to install LCD screens in pharmacies — in August 2007 with childhood friend Naresh Kothari (29) and already has 100 pharmacies as clients. 2 Anand (30) quit Amazon to join hands with Aparna Sharma (28) and Prashant Gyan (25), both of whom quit Oracle, to start Kuliza Technologies, an offshore product development firm in September 2006. Today, they have 40 people on payroll and generate profits. 3 Jay Gupta (33) plunged straight into retail after college and four years ago started discount store The Loot on banker support. Today he runs 30 stores in 15 cities. 4 Prodipto Ghosh (35) quit KPMG and started Math sQuotient, an operation consulting services firm, in 2004 and has Tata Tele Services and Siemens on his client list.