Having spent close to 10 years working in several organisations in sectors such as IT, manufacturing, sales and marketing, 33-year-old Abhishek Kumar decided to set up his own venture. With a B-Tech from IIT Roorkee and an MBA from ISB, Hyderabad, Abhishek, a first-generation entrepreneur, set up IT solutions company SoftDive Technologies in 2012, before launching Madpiggy Solutions, a mobile app to connect traditional retailers with users.
“The IT solutions company earned revenues of ₹1.3 crore in the first year and ₹2.4 crore in the second year. We then invested all our savings into conceptualising and launching Madpiggy,” says Abhishek
“We have launched it in NCR but hope to take it to Mumbai, Bangalore, Chennai, Pune, Kolkata and Hyderabad within the first year of operation,” he adds.
Last-mile connectivity
Subramanian Gurumurthy, who spent almost two decades working in the IT industry, quit his job and enrolled with the six-month entrepreneurship management programme at XLRI, to chase his dream of setting up his own venture. He set up a rural BPO and is working closely with the State and Central governments as well as private organisations to help achieve last-mile connectivity for various services to the rural audience.
Startup craze
Abhishek and Gurumurthy are not alone. Entrepreneurship, as an option, is fast catching up across campuses in the country. Industry experts say two-to-three per cent of the students from engineering and management schools opt out of placements and explore the possibility of setting up their own ventures.
An ecosystem comprising supporting institutions, angel investors and mentors is helping in a big way, supporting the creation of a gamut of start-ups in various industries and verticals.
Fewer success stories
While a significant number of young people in India aspire to be entrepreneurs — especially of the first-generation kind — success stories are still few.
According to Prabal K Sen, Chairperson of the Entrepreneurship Development Centre, XLRI, the number of students opting for entrepreneurship increases whenever the placement outlook looks bleak. “If you look at the 2007-09 batch, we had to make a great deal of effort to get them placed; that was the year when students started showing greater interest in entrepreneurship.”
Family businesses
Students who typically come from business families and have seen their parents’ or grandparents’ success stories are the ones who usually prefer to go in for entrepreneurship ventures. In the case of first-generation entrepreneurs, only a handful who are keen on doing something highly innovative or those wanting to do something for society usually opt for entrepreneurship as a career option. “This calls for a big opportunity cost as one has to let go of the security and social status that come along with a job,” Sen pointed out.
Hurdles for startups
Some of the recent reports on the ease of doing business in India indicate that despite two decades of economic reforms, the country still falters on various parameters, such as starting a business, dealing with construction permits, getting electricity, registering property, paying taxes, trading across borders, enforcing contracts or resolving insolvency.
The other major hurdles are approvals-related to environment clearances, land procurement, construction permits, industrial safety permits and power connection.
According to Sanjay Aggarwal, Partner and Head, Enterprise and Family Business, KPMG, in India, entrepreneurship is currently not considered the preferred career option. As a result, there are only a handful of institutions offering the programme.
“The lack of an appropriate ecosystem for start-up funding, high cost of debt, and complex regulatory and business environment, among others, are some of the factors oreventing people from opting for a career as an entrepreneur.
As the ease of doing business in India improves, we will see more fresh-out-of-school youngsters taking up entrepreneurship and positively impacting the demand and supply for B-schools offering such programmes as well,” he said.