WANNA INNOVATE IN INDIA? STARTUPS ARE THE WAY TO GO: (Article written as Content Writer for IndiaFilings.com website's Learning section)

“Innovation distinguishes between a leader and a follower”

-      Steve Jobs

  Innovation is the way to go for the future generation and there is no better way to innovate than to try our own hand on a start-up. There are three key factors that have created the right conditions for a start-up boom in India:

           A)  There is huge, latent demand; an intensive need for disruptive, low cost solutions that can reach the masses, in order to meet challenges on many fronts - education, health care, water, and agriculture to name just a few. Start-ups are designed to create disruptive solutions.

           B)   With the success of start-ups like Flipkart, there is a large supply of eager entrepreneurs that want to make an impact and make it big. The millennials are not driven by getting a 'steady job'. They are more independent and willing to take risks.

          C)   The barriers to entry have never been lower with respect to and global reach. Large scale cell phone penetration can be tapped to provide innovative solutions to the masses.

            Most of the focus in the past has been on providing products and services needed in the West at a lower cost. For instance, the ITservices boom was triggered by cost arbitrage between the East and the West. What is needed now is to shift  focus to solving the problems faced by Indians. For instance, most Indians lack adequate health care. If      start-ups can use digital technologies to provide affordable good quality medical diagnosis, those solutions will have applicability not just in India but all over the world. This is the reverse innovation opportunity that Indian startups should target. By shifting the focus and solving local problems while at the same time keeping in mind reverse innovation possibilities, start-ups can serve as the catalyst to channel the energy in areas that will help take India global.

          For example, Amazon introduced  Easy Ship in India because sellers in India lacked the logistics capabilities. Amazon takes care of picking up from the seller's location. At the same time, customers get trackable shipments. Now, this is a service that is available in other countries.

          In particular, there are low hanging fruits in the areas of healthcare and education. If start-ups can create disruptive solutions here, there is a latent market of 3 billion people that can be served with these same solutions. In addition, many so-called advanced countries, are struggling to cope with out of control healthcare costs and an expensive education system that is out of reach for many, and are looking for solutions that will bend the cost performance curve in a disruptive way. On the other hand, start-ups by their very nature are very risky. It is therefore, important to build a strong and robust ecosystem.

          "It takes a village to raise a startup"

        says Tahir Hussain, CEO of Collide Village, an accelerator programme that is focused on data-driven approaches to make sure that start-ups in the programme are focusing on problems worth solving, and there is a good product-market  fit.

“It is not easy to start a company! It is positively difficult to be an entrepreneur.”

Most people don’t  want  to take the risk to start a new company because they are afraid of things like:

• What if I fail?

• What if it does not work?

• What if I go bankrupt? etc. etc.

People, who work past these initial fears and decide to go ahead and start a company, have to be prepared to really work for it. It is difficult to start a company and most people quit on the way. There will be many things that de-motivate you when you go about starting your company.

6 START-UP MISTAKES TO AVOID:

1)   Moving ahead on flawed assumptions

         Even thorough research can't guarantee success . There could still be a few bugs in your business model, often in the initial financial projections and the whole business math around it.

2)   Scaling up too early 

Nail it first and then scale it up—start small, have short-term goals, perfect the product and the revenue model, and then scale up. 

3)   Not keeping tabs on expenses 

         Keeping the overhead costs low is essential for a start-up . Whether it is on furnishing the office or buying machinery, you have to be as frugal as you can be. 

4)   Underestimating manpower needs 

The golden rule of entrepreneurship is not to waste time on something that can be done by someone in a faster, better and, perhaps, cheaper manner. If you are short on cash, or your monthly operations are not generating enough cash to sustain employees , it is advisable to start with consultants.

5)   Not maintaining a financial buffer

Many people hesitate to start a venture because they are the sole breadwinners for their families and the loss of a regular monthly income can pose problems. Since we are playing defensive, it is good to have some cash reserve in your PPF account, as it is the only investment that will not be attached even if you go bankrupt. 

6)   Not doing adequate research 

There is no dearth of ideas and types of ventures that you can pursue. However, the tough part is testing the hypothesis—converting your idea into a viable business model, which is not possible unless you have done sufficient market research.

If you seriously want to start a company be ready to work very very hard for it! More than anything else, we need a mindset change.Rather than,

 'Make in India',

       why not

'Innovate in India'?

         For more information or help regarding starting a      START-UP firm, talk to an IndiaFilings Business Advisor.