Just as news trickled in of India ranking a grim 97 of 118 countries on Global Hunger Index (GHI), one couldn’t help but reminisce about the seven unicorns that we boast of now. Necessity is the mother of innovation and entrepreneurship, the facilitator. While it might seem like a lot is happening on the entrepreneurship front, evidently there is little to show at the grassroots.
Barring a few like RedBus, most of the e-commerce successes out of India, have been ‘me-too’ replicas of the US unicorns. While there is nothing wrong with replication, the bigger question is whether these have really benefited and in-turn tapped into the 1.3 billion people economy. An economy that is perpetually short on change where one almost always never walks out of a pharmacy without a mint for a rupee coin.
It’s tormenting that the real needs of the 1.3 billion have not been identified. Some of the most successful startups out of India have been the ones around process efficiencies. Call them e-commerece, food-tech or what have you. Have they been risk takers? To an extent, Yes. Innovative? No.
Ninety per cent of the funding has come in from outside India, largely US, China and Japan (Source: Prequin Fund Managers). The startups themselves are registered in Singapore, mostly. Upwards of 60% of the funding raised is used toward advertising their services. The company’s advertising, in-turn have been funded by the same financiers. So what is the value coming into the economy then? Little. Probably, a few thousand jobs, and 20 to 30% overall savings for the consumers, for buying the cheap Chinese products, in the near-term.
Should these types of risk-takers be discouraged? Definitely not! We need to find a better eco-system that promotes the true spirit of entrepreneurship, invention and innovation; a system that encourages failure, for learning. It’s a little wonder that the ecosystem, despite producing seven unicorns, none original, has yet to produce a Microsoft, Intel, Facebook or a Google ‘me too’.
The total value of the unicorns is $ 35.5 billion and ranks India comfortably after the US and China (Source: Economic Times, Aug 31, 2016). None of them, Angel or Series A funded from within India. China is far ahead in this regard. While Facebook likes to boast of parameters on which it has banned India and other countries, China has banned Facebook itself. Globalization and universality of technology has little appeal when the whole world is on Whatsapp while China is on WeChat.
We are yet to innovate in the automotive industry. The one car that India did boast of, the iconic Ambassador, perished for lack of innovation. Reva was far ahead of its times, and definitely ahead of Tesla. Why then couldn’t it achieve the global scale and publicity that Tesla did are important points to ponder on.
The founder of Reva, Chetan Maini, says, “I would say Government policy, timing and funding. A few months before we launched in 2001, the government doubled taxes on electric cars, reduced taxes on regular cars and removed a Rs 75,000 subsidy on electric cars. Today they have done a 180-degree and now are supporting the industry. Funding was important, India focus was on services business and businesses that were successful in US in their IT space and could be replicated in India. Funding in product space was very less but slowly getting better. Reflecting back, I think that timing is also important. We were a bit too early in 2001...”
Incidentally in 2013, a magazine ranked both Tesla and Mahindra Reva as number 22 on the 50 most innovative companies in the world.
Rakesh Jhunjhunwala wants to buy a stake in Flipkart that boasts of a multibillion-dollar valuation, at $ 100 million. Kishore Biyani thinks 90% of the startups are useless. Why didn’t these successful businessmen invest in similar startups? Or do they understand the market of 1.3 billion people, and the risks associated, better? When will we have a 100% equity funded, Facebook type platform, where the earnings are purely based on valuations, from within the country? When will a SBI fund truly entrepreneurial, grassroots ventures? These and more questions beg to be answered before we can truly call ourselves an innovative, startup nation.
India leads in tertiary healthcare yet lags almost on all parameters in Primary healthcare, including Infant Mortality, Maternal Mortality and Growth Rates, even behind Bangladesh and China. The real need at the grassroots is access to primary healthcare, yet no innovations, process or technology that can cater to this need, yet.
Philosophically speaking, “KarmanyeVadhikaraste, Ma phaleshoukadachana,
Ma Karma PhalaHeturBhurmateySangostvaAkarmani”
Do your deed and leave the outcome to the almighty. The deed needs to be in tune with the need and one’s passion. We can’t force fit into the predominant narratives of sustainability and entrepreneurship. If one wants to create value on the grassroots, several outcomes might result in ‘Women Empowerment’, ‘Poverty Alleviation’, etc. But the moment one starts working for ‘Women Empowerment’, then the outcomes change. It’s almost impossible to control the deed and the outcomes, simultaneously.
So, chase problems for solutions, not solutions for valuations.
The narrative in India has to highlight the importance of creating a uniquely Indian eco-system to support the creation of 10 million new technology mediated enterprises with $10 million in annual cash flows, over the next three decades, solving local problems with local solutions. That is the real economy think. That should be the goal of Start-Up India. Inevitably quite a few "global unicorns" will also emerge. The bigger need for us to identify though is, how close are the resources to the source of the problems identified.