5 Challenges Faced By Budding Start-Ups

One of the main topics discussed was the challenges faced by start ups in India. We describe some of the germane challenges raised by the speakers at the forum.

Not trusting our own products

Most customers in India only feel comfortable using foreign products. As Achuta Jois (MD, Acliv Technologies) pointed out, "Acceptance of products are low in India when those products are made in India. Customers mostly go for products which are made in Japan or USA. Even for services, clients want to go only with big names. How will start ups survive in such environment?". He implied that customers feel Indian products are of an inferior quality compared to foreign product.

Copy-Paste mentality

Advith Dhuddu (CEO, Alive Now) noted that "most Indian start ups are a copy-paste of American companies. When something is successful abroad, they mimic the idea in India. For example, flip kart copied the model of amazon and catered it to the Indian market." He noted that we have to generate innovative ideas that can solve problems we have in India to build a good start up ecosystem in India. Jois added “All the problems of the world are present in India, and all the opportunities are around us, so there is not better place to innovate and implement ideas”.

Identifying the target market

Before an idea takes shape, the customer community needs to be defined for it to be successful. “Look for the right customer community, as the customer is the one who pays you the first check” said Rams Barathy(Sr Manager,New Business Ventures,Nokia Siemens). He emphasized that a lot of fresh ideas don’t do well because the right customer community is not identified. “The very first thing you need to do is look for your customer, as many start-ups have a fair idea of what they want to do, but can’t identify their customer” added Barathy.

Getting The Funding

Slamming the attitude of banks towards budding entrepreneurs, Dhuddu said “Bank cannot see your passion. The type of questions a bank asks you when you start off are completely different from the questions an angel investor or venture capitalist ask. “. He added that “if your business is more brick-and-mortar, then you should approach a bank, but if your idea is innovative or path-breaking, don’t even bother going to a bank”. He gave Twitter as an example of an idea which was thrown out by banks, but funded by venture capitalists , to reinforce his point.

Where’s The Incentive?

Jois and Dhuddu both agreed that there is insufficient amount of incentive from the Indian government to encourage start-ups. Dhuddu gave the example of how the government of Chile had a “program to give a prize award of US$40,000 to invite start-ups to set up their companies in Chile, with the condition of staying for at least a year”. “It gave a positive and vibrant message about the ecosystem. “ he added. He emphasized that such an incentive needs to be pushed forward again for a city like Bangalore to regain its title as the IT hub of Asia, which has now faded in the face of rise of other IT powerhouses.