The past 12 months or so have not been the best of times for start-ups in India. Easy funding had dried up while competition in the popular e-commerce categories increased burn rates. New regulations on the discounts that could be given by e-commerce players, and the demonetisation of high currency notes at the fag end of 2016 created its own set of problems. A number of food and grocery commerce start-ups closed down in the second half of 2016. In other areas as well, reality was creeping in. Mergers and takeovers increased in pace as many players realised that there could only be one winner in each market segment - and that player would inevitably be the one with the deepest pockets or the biggest scale of operations.
The Business Today special issue on best start-ups in India has been an annual feature since we conducted the first such exercise in 2007. Whether times are good or bad, we carry out the survey and our jurors pick the best ideas and the best potential start-ups every year. Previous winners of our efforts to identify best start-ups have included Flipkart, ShopClues, Oyo Rooms, Droom and Hike. Of course, a number of start-ups that have been chosen by the jury over the years have also failed, sometimes because the idea was ahead of its time, sometimes because of management mistakes or other reasons.
At the risk of generalisation, I would say that the applicants in relatively tough years tend to be more realistic about their prospects, and more gritty - and less prone to burning cash as if it were going out of fashion.
This year, our esteemed jurors - Shekhar Kirani, Partner, Accel; Srikrishna Ramamoorthy, Partner, Unitus Seed Fund; Sharad Sharma, Co-founder, iSPIRT; Bala Girisaballa, CEO, Microsoft Accelerator in India; and Sreedhar Prasad, start-ups lead at KPMG India - picked winners from a diverse array of business areas, and most of the winners were not traditional sellers of goods and services. So, we have one winner who is trying to solve the problem of poor farmers not being able to afford mechanisation by matching them with rich farmers who have equipment lying idle, another winner who is renting furniture, home appliances and two-wheelers to bachelors and young families, and a third which hopes to be the dominant three-wheeler aggregator in the country. We also have winners who are in areas of HR outsourcing, legal documentation, logistics, energy efficiency and renting of homes. Each of them is trying to solve a real world problem, and while a few have found investors, several are also bootstrapping their operations.
As always, I expect some of them to fail because they would not have got the execution proper or some competitor has an even better idea. But they are all worthy of being recognised and encouraged.