It is my pleasure to introduce Indranil Deb, investment banker, founder of Mobius Strip Capital Advisors. I have always known Indranil to be very helpful to investors and entrepreneurs alike. He is a visionary who has often predicted outcomes that others could not see coming. He gets interested in a startup when it has gone past the “prototype” stage and is either already post-revenue or rolled-out. Here are his thoughts:
In the Words of Indranil Deb
“My experience with early stage entrepreneurship has been mixed. The ecosystem is not one that is conducive to entrepreneurship. As a society, we do not empathize with failures. This artificial pressure to succeed (right from your family-members, friends and peers) compels early stage entrepreneurs to adopt “any” means to succeed.
The Wrong Role Models
Another “contagion” in the eco-system is the existence of the wrong kind of role models. Nine out of ten entrepreneurs want to be like some crony businessmen who have achieved financial success (or appeared on the cover of Business India) with little contribution to real innovation, expanding body-of-work or presenting “real” solutions to deep and serious problems faced by consumers — but succeeded largely by “fixing” and “bribing” policy-makers.
The Focus on “Get Rich Quick” Has Distracted Many Entrepreneurs
A serious problem with early stage entrepreneurship is that most entrepreneurs here today want to get rich quickly! While, I have nothing against the aspiration in itself, what troubles me is the fact that they lose sight of the more serious tasks at hand — building IP, building and retaining the right team, providing superlative solutions for problems with their products and services — leaving the world a little better than how they found it.
Despite Angels and VCs, Financing Is Not Easy to Come By
The ecosystem, too, is unfavorable. The most common means of financing is still bank financing — which is available to only a few entrepreneurs who can offer collateral security as a mortgage. Linked with the earlier points, in reality, very often, projects with cooked books get the money — and honest entrepreneurs fail to procure funding.
The angel investor networks that exist are spoilt for choice. The angel investing practices prevailing in India today are a “localized” version of investing. Investors that back projects often do not have the domain expertise and/or the passion for backing new ideas that are risky — they cherry-pick and structure investments that are reasonably “safe-bets” with little downside risk.
Entrepreneurs Need to Focus on Common Sense Basics
Our advise would be as follows: Apart from a strong cash-reserve, make sure that you have a large ammunition of passion, conviction and ability to endure – be humble to listen to criticism objectively, talk to entrepreneurs who have either failed or gone through very serious difficulties — there is lot to learn from their mistakes.
The Startup Space Is Proving Darwinian Evolution Theory Right
Heating up in the startup space helps in a Darwinian evolution theory kind of way — only the best and fittest survive. Competition helps separate the men from the boys. And it brings out the best in the creators, innovators and thought-leaders that push the frontiers of human knowledge and technology.
In the recent past, there have been far too many startups in the areas of online discount-retailing, travel-and-ticketing and general e-commerce — than what the demand side can support.
One Space I Am Presently Excited About Is…
I’d love to back a company that would provide a comprehensive solution to young women and men across the world looking for jobs – a business that would offer skill-assessments, counseling, training and placement services. I believe there is a huge gap there.
India Needs to Shape Up and Catch Up
We have a lot of catching up to do. At the policy-making level, actions are sporadic. Budget speeches have largesses of corpuses of Rs. 1,000 crs here and there being announced for setting up venture capital funds — and so on. We need more focus and attention to operationalize them and streamline the operations of the existing schemes and programs.
For building global ventures, it’s useful to have start-ups teams that are global – founders from across the world living in India (where the best minds from across the world converge) and building their ventures ground-up. For that, a friendly, safe and secure environment needs to be in place first. Foreigners and (especially) women still don’t feel safe to be seen walking home after work.
Interesting Trends in the Entrepreneurship Ecosystem in India
- Apart from the IIT campuses, start-ups are emerging from the hinterland and smaller engineering and B school campuses as well.
- The early successes of a culture of business incubation
- Mid-career executives dropping out of their jobs and venturing into entrepreneurship
- Middle-aged and elderly first-time entrepreneurs teaming up with their children to start-up new ventures
- The role of a Mentoring being more widely acknowledged and accepted