A startup organization is an alliance newly created to search for a repeatable and scalable business model. It can come up in any form and sizes. It is generally a new initiative taken up with a fresh and innovative idea. The idea of startups became popular across the globe during late 90s.This is regarded as the era of dot-com boom or Internet bubble i.e. the period of commercial growth of internet with the advent of www. By this time, the innovative and creative masses of the country started dreaming of Silicon Valley styled business models.1999-2002 was the period in which foundation of this new ecosystem was laid down in India.

India, with 63% young population i.e. below 30 years, offered a huge pool of potential talent that could be tapped and channeled to give fruitful results. First Mover Advantage became the new challenge among the new potential entrants. The major concern was Capital to be invested. The money flowed in from US, Europe and Australia resulted in more in 100 Venture Capitals. Angel groups and seed funding were the other modes of fund raising.

Starting a new venture is always tedious task which needs a lot of planning and creativity. There are several roadblocks that any entrepreneur faces while initiating a startup. The major challenges being,

• Lack of Capital
• Market Problems
• Business Model Failure
• Poor Team management
• Product problems

Though India has proven to be a land of great business minds, as it is already seeing large successful businesses such as Flipkart, Just Dial, MakeMyTrip that are catering to this customer base. Many more are still in league like Myntra, Snapdeal. These ecommerce giants have contributed to the growth of Indian ecommerce ecosystem and now India is being regarded as the fastest growing market for e-commerce. Still, there are several other concerns which are particularly affecting Indian entrepreneurs. India being a culture driven country has several barricades for aspiring entrepreneurs.

“Playing it Safe” Approach

Working as an employee of a well known organization is considered secure job than taking risk to join a startup no matter how impressive is the idea behind. The Indians lacks in risk taking abilities which results in poor entrepreneurial skills.

Academic Institutions are designed for jobs

Academic institutes in India make the students well prepared to adapt corporate culture and unfortunately they lay little emphasis on enhancing entrepreneurial skills. When it comes to mentorship and guidance to budding entrepreneurs, India has fewer options.

Social Mindset

The common Indian mindset says that getting a job with a big brand improves career growth more than a startup. Working at larger organizations is more socially valuable than working with startups. It is quite common to see people working in startups being pressured from home to take up better jobs with larger organizations.

Limited income

India, being a developing country has majority of citizens lying in Middle Income Group. Most of the families do not have surplus disposable income at their end and thus they are not in state to make investments in
starting up a new venture. This makes chance to join a startup, a liability rather than an opportunity.

Funding

Taking into consideration the high interest rates and lengthy processes involved in getting funded, debt as a source of funding is also not a viable option. Unlike the scenario in the US, personal funding becomes difficult as people are not financially stable here and have family responsibilities to take on.
Although in years past the investment focus in India was on infrastructure and real estate, early stage venture capital is arriving. Many of the top Silicon Valley venture capitalists have offices across India, and there’s a vibrant new community of angel investors, including groups such as the Indian Angel Network and the Mumbai Angels.

Patience

India is often described as “beautiful chaos.” Traffic, time, and even commitments have a different flexibility in India, so the most unexpected needs to be expected. One should have enough patience and courage to understand, adjust and execute according to various cultural differences existing at every few miles in the country.

Selling is hard

Indian market is highly price sensitive and competent. Thus, selling premium products here becomes a challenge. Especially for startups, as they have to compete with other giants already existing in the market. Trust building becomes the essential concern.

Regulations

India is fraught with complex rules and regulations. Enforcement can be uneven and unpredictable. According to the latest tax policy, startup firms are mandated to pay income tax on the premium they have charged over their fair market, while selling shares to unregistered investors, including private equity and venture funds. Thus, navigating bureaucracy becomes another barricade for budding entrepreneurs.

Raise capital

Although in years past the investment focus in India was on infrastructure and real estate, early stage venture capital is arriving. Many of the top Silicon Valley venture capitalists have offices across India, and there’s a vibrant new community of angel investors, including groups such as the Indian Angel Network and the Mumbai Angels.

Sonika Singhal
MBA IT, IIIT Allahabad