Tuesday, June 24, 2008

Entrepreneurship: The new 20's Syndrome

It's no longer about fat salaries and foreign trips. Today's young guns get their adrenalin rush from entrepreneurship

With a great job at Infosys that offered a long-term relocation to the UK, life couldn't have gotten rosier for my colleague Manish Garg. But Manish (29) gave it all for the startup - to offer mobility and banking solutions to clients in US and UK. He quit infosys in January 2005 to join the fellow batchmate Avinash Misra and myself. Today we have a 3 floor office in Bangalore with over 100 employees and offering nitch services in mobile and banking consulting and application development.

"This doesn't seem like work to me anymore. This is what we enjoy doing," says the IIT grad.

Like Manish there are an increasing number of young professionals - mostly in their 20s - who're quitting cushy jobs for the challenge of entrepreneurship. "There is no official record of the number of entrepreneurs in the country, so there is no way one can get exact figures on the increase of entrepreneurs. However, there are many indicators that one can look at to see the increase in entrepreneurs," says Laura Parkin, executive director of National Entrepreneurship Network, a body that seeks to promote entrepreneurship by bringing together students and entrepreneurs. "For one, there has been a heightened participation of students in NEN - from 500 five years ago to 55,000 today. Another is the number of entrepreneurship societies that have been formed."

Clubs like Kickstart, Mobile Mondays, Proto.in and Open Coffee Club have opened in the past five years across the country and the membership numbers in each city run into hundreds.

Venture capital companies too have noticed a marked increase in projects that flow in. "From about 10 projects a month, we now look at around 50 every month. And although there has been a marked interest in entrepreneurship across board, there is certainly much more buzz across board, there is certainly much more buzz from the age group of people in their early 30s," says Kanwaljit Singh, MD of Helion Venture Partners.

Delhi, Mumbai and Bangalore are leading the entrepreneur brat pack, with Pune and Hyderabad catching up. In Bangalore, most of the entrepreneurs are in the technology, internet, mobile and telecom space, while Chennai sees more action in the service and software product segment. Mumbai's entrepreneurs gravitate towards internet companies and non-technology ventures like retail, particularly F&B retail.

"At least 40% of today's entrepreneurs in the mobile and internet space is dominated by people in their late 20s and early 30s. Mobile related applications se huge interest in India because of the enormous market size," says TC Meenakshisundaram, MD of venture capital firm IDG Ventures India. "The quality of deals have gone up. We now see more organized projects, greater products and better business models."

Yet to Mature
However, entrepreneurship and the venture capital (VC) community in India is not mature segment. "Most start ups lack organizational and managerial skills. They want to start their business but lack professional management. When a VC comes in, the young guns find it hard to share their space with someone senior from the industry," says Harish Gandhi, executive director of Canaan Partners. "Along with our funding we bring in professional management, which the startups can't always handle."

VCs feel that most startup teams are either an all-techie bunch without much business acumen or are a marketing team without much knowledge or understanding of technology.

I would like to quote the observations my colleague, Manish Garg here. "Most of the venture capital firms are US-based. Their mindset is different so while funding they think in terms of the US business environment. They need to understand that the way business functions here is totally different. Entrepreneurs who have only lived in India and not in the US, display cultural differences in their estimation of money required for a venture and utilisation of funds. Getting angle funding is not difficult in the US but in India it's not easy at all."

At the end, nothing succeeds like success. The concept of entrepreneurship has been romantised a lot. A lot of people jump in thinking it's 'cool'. But it's lot of hard work and it takes a strong team to stick to it.

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