On Startups and Success
The Innosphere – DST Prayas Centre, is a new innovation centre launched by PSG STEP in May 2019 as an incubation facility for emerging entrepreneurs. Shri Harkesh Kumar Mittal (Adviser and Member Secretary, NSTEDB), a prominent personality in the Indian Entrepreneurship movement joined the event as the chief guest. A graduate from IIM-A, Mr. Mittal has been instrumental in implementing famous projects like the SKILLS and in bootstrapping several incubation centres all over the country. With more than three decades of association with the National Science and Technology Entrepreneurship Development Board, Mr. H. K. Mittal has observed entrepreneurship in India closely. When we approached him, he graciously agreed to answer a few questions regarding the same.
Q: Despite being the third largest startup base in the world, majority of Indian startups fail within three to five years. According to you, why does this happen? What do you think can be done to improve this?
What you said applies to not just Indian startups but those all around the world. There are a few requisites for every startup to survive its first thousand days. The first is confidence; you need the right mentor and investor for this. From what I’ve seen, there are two kinds of mentors; the first kind is the one who encourages but can’t guide an entrepreneur to success, simply because they’ve never tried to run a business. The other kind is the one who has had some form of experience – even if failure. Startups need the second kind because they can point out what works and what doesn’t. Having a good investor is equally important because they provide the necessary capital and the contacts needed to sustain. We have been working on this aspect for a long time and we’re quite getting there. The internet boom has made it easier. People who have made money are now ready to guide the others and this is a good thing.
The second requisite for sustaining is an appetite for risk. Our people don’t have huge aspirations in general. We’re satisfied in being doctors or engineers. So when it comes to entrepreneurs taking calculated risks, they fail. This can change only if our mindset changes and if we’re encouraged to be different as children.The third is the willingness to delegate work. I’ve observed that most entrepreneurs feel discomfort in sharing their work. A good entrepreneur has to be an effective manager as well.
Q: India has a very small number of incubators for a country of its size. This must have a direct relationship with the number of successful startups…
I’d say that incubators are not the most cost efficient way of promoting startups. It’s quite expensive and only deep-tech and highly innovation oriented companies should be the focus of incubators. There was a time when incubation meant ‘providing physical spaces’ only but times have changed. A physical working space is indeed important but the services available are the ones that matter the most to startups. A coworking facility helps in developing a camaraderie among entrepreneurs who are facing similar problems. Currently, countries are trying to develop their cities into such ‘coworking’ ecosystems. Take Bangalore for instance; in a way, the city is an incubator by itself. We’re trying to promote such a culture in other cities as well and it would help us in reaching out to more aspirants.
Q: Majority of the startup incubators in our country are associated with academic institutions (backed by the government, of course). Is the situation ideal? What kind of stake do academic institutions have in nurturing the entrepreneurial spirit?
Basically, it is a convenient way of doing things as the government can fund only non profit organisations. An academic environment also nurtures a young person with new ideas and also has the facilities to test them. Also, every successful entrepreneur from an institution becomes a role model to all the people who study in it. But these pros come with a few disadvantages as well. Academic incubators are as rule bound, if not more so, than the government. Also, there is a huge gap between the commercial requirements and what the institutions provide. The environment is also not something that a startup always needs. For startups, time is money but for academic incubators, speed is not the most important consideration. Finally, academic institutions want to main their status quo and are not always the most enthusiastic advocates of change. But entrepreneurs want to bring change. So, these differences always exist. Despite them, they’ve done some good work and credits should go for that.
Q: Incubators are the support system of a startup in its initial stages. So when they lose them and enter the real world, won’t they feel lost after having had the support for some time?
On paper, incubation is a temporary arrangement. Startups are associated with them at their premature stage only. They cannot spend their whole life in it. (I think) It’s good to leave (even if they feel lost) because it helps them adapt to the market. This actually reminds me of one more thing for your previous question. In case of academic institutions, the professor managing the incubator might have a soft spot for a student and might let him stay in the incubator for as long as he wants. But business has to be devoid of such emotions. Incubation facilities already have limited space and one should make impartial decisions irrespective of such (student-teacher) relationships.
Q: How is the startup culture in Tier 3 and Tier 4 cities? What are the government’s future plans for them?
In my opinion, we are a capital scarce country. An entrepreneur’s aim is to promote their business and they’ll go wherever the environment is the most conducive for his growth. Yes, some Tier II and Tier III cities are shaping up very well; but the talent pool in such cities is hard to find. Entrepreneurial culture is still non-exist in many such cities and there are no investors. People need to realise that startups are not always IT or Biotechnology related. There are several other domains and we’ve got many programmes such as the NITI Aayog, Atal Innovation Mission to support aspirants.
Q: You’ve been with the ministry for nearly three decades now, in top positions. There’s obviously been a lot of change in the startup scene in India during this period. What’s the most important period or the biggest period in this time span?
At the time of the Y2K (Year 2000 Problem), hoards of Indian IT professionals migrated to different places to solve the alleged problem and returned once that was over. By then, they had bicontinental business knowledge and links that could be put in use to set up the IT companies in our country. Until then, the world saw India as a land of snake charmers, monkeys and beggars only. Y2K established not only the world’s but also our confidence in our ability to deliver. For me, that period always stands as a huge milestone for the start-up culture in our country.
Q: Where do you think entrepreneurship in India is headed?
There’s no doubt that as long as people want to make more money by legitimate means, entrepreneurship will flourish. But we should also remember that there is space for everyone to make money but not for greed. We’ve seen cities get destroyed when greed overpowered people’s sense of responsibility towards the environment/ social fabric. The threat is real. If it is given due attention and if we stay environmentally conscious, I see a promising future for entrepreneurship in India.
Sincere thanks from Team Bridge to Shri. H. K. Mittal for his time and Dr. K. Suresh Kumar, Executive Director, PSG – STEP who made this interview possible.