While most of us worry about the future of the world economy and the reluctance of our government to take decisions, I remain highly optimistic.
This is why: I get to spend most of my time with entrepreneurs, the most energizing people on earth. I can't help but get energized around this group of people who are so passionate about what they do, and their tremendous enthusiasm to make a mark for themselves.
Going forward I think it is very important to help create the right environment to develop successful entrepreneurs. To achieve this India must focus on the following areas:1.Access to capital:
Entrepreneurs should ideally find it easy to start a new business. Traditionally Indian entrepreneurs have faced a very tough time finding seed / angel capital to get started. In 2006, me and Prashant Choksey co-founded the Mumbai Angels Network as we were both startled to see a lack of early stage money available to entrepreneurs. Today we have made small progress. We have the India Angel Network, Chennai Angels and the Hyderabad Angels. There are also early stage seed funds like Seedfund, Ojas Ventures, Blume Ventures and Kae Capital - which I have recently kick-started - which have corpuses of between 15 and 50 million. Additionally there is a lot of early stage venture money available with firms like Nexus, Helion, Sequoia India, and IDG India who are putting money in companies once proof of concept is established. However the big gap still remains in the angel seed category. Data tells that approx. 50,000 deals get done in the US in this category which amounts to around 20 billion USD. However in India there are barely 100 deals done which work out to a few million USD. This is clearly a huge bottleneck for entrepreneurs which we need to fill as soon as possible.2.Supporting new entrepreneurs:
A Mckinsey & Co. - Nasscom Report estimates that in the next 10 years 110 million Indians will be looking for their first jobs. Since traditional employers including the government will find it hard to sustain this level of employment, it is entrepreneurship that will create most of the new jobs in the decade ahead. However India has a huge percentage of its population which is unemployable. This is a serious gap which if it is not addressed properly will be catastrophic and will affect the GDP growth that we are targeting in the years going forward. This is where both the private and public sector need to come together to find a solution. A Harvard paper "spatial determinants of entrepreneurship in India" shows how education levels and physical infrastructure play a large part in people starting companies.
The two most consistent factors that predict overall entrepreneurship for a district are:
b) The quality of local physical infrastructure.
The paper also links strict labour regulations in India to slower economic growth and development. This pattern is especially apparent for the organised manufacturing sector where these laws are most binding.3. Have entrepreneurs as role models:
I was lucky to grow up in a house-hold with my father, Gulu Mirchandani, Co-founder of Onida which he started in 1981. He has been a role model for me as I have seen him build a half a billion business from scratch with very limited options for capital. I feel the most effective tool for young people is to have access to and hear successful stories of people such as Dhirubhai Ambani, Anil Agarwal, Narayan Murthy, Subhash Chandra, Naresh Goyal, Sunil Mittal, Kiran Majumdar Shaw and others. These are people who come from humble beginnings and have risen against all odds to build businesses of substantial size. We have a new set of rising stars like Deep Kalra from Makemytrip, the Bansals of Flipkart, Naveen Tewari of Inmobi, Vishal Gondal from India Games who are quickly becoming role models for their generation.
Today when I speak to young students in India's premier institutions, I ask for a show of hands on how many want to start their own business and become entrepreneurs. An overwhelming amount of them put their hands up. Needless to say most of the students now settle back in India unlike my father's 1965 graduating class in BITS Pilani where a majority of the students emigrated overseas. If I have to look ahead to the next decade I see an explosion in Indian entrepreneurship. Companies that are today mid-sized globally like Tata and Reliance will be global giants ranked in the Fortune top 50. We would also see Indian brands truly become global brands going forward.
In conclusion this is the best time in the last 50 years to start a company. The eco-system is quickly falling into place and people who are looking to become entrepreneurs now have far better opportunities in front of them. Those people who are willing to go through the ups and downs of being an entrepreneur but who truly believe in what they do should now step up to the plate. Your time is now, all the very best!The author is Managing Partner, Kae Capital and Co-founder, Mumbai Angels
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