India’s Startup Ecosystem-Evolution is before us -part 1

The Indian land is no alien to the concept of business and trade. From trading activities that erupted during the Kanishka Empire during the 1st Century to 80’s where the nation took a stand on commodities like Jute, cotton, and spices. The idea of owning a ‘business’ runs in the veins of every Indian.

Confined to cultural, religious, and social acerbity, entrepreneurship post-independence started to transform itself into a new shape. Lack of support from political parties, not so favourable laws, rigid policies, and lack of research initiatives hindered the growth of entrepreneurship during that era.

But then it was in mid-80s when the Prime Minister Rajeev Gandhi declared ‘Liberalization of Computer Industry’ followed by the commencement of NASSCOM in 1988. From thereon, there was no looking back as the Indian startup’s ecosystem progressed gradually.

The next few decades witnessed a significant growth in the entrepreneurial ventures across the economic and social sectors. The changing political and economic environment drove momentum towards entrepreneurship especially the last decade witnessed noteworthy improvement in the quality of startups in India. Institutions have started to take business and academic interest in startups. In the last few years, they have exhibited potential and proficiency, which has made the global investors to venture in the Indian startup ecosystem.

According to a 2017 report published by NASSCOM, more than 5000 startups got registered in the technology sector alone. And the figures include startups covering distinct sectors like Healthcare, Education Inclusion, Financial Inclusion, Clean Energy and Agriculture – where technology made a larger impact.

The Startup Boom in India

It is said, there is no wrong time to start a right thing; but then when it comes to tech startups, the time does matter. The time and era of a launch can significantly define or defy the success. In one of the research that Bill Gross carried out to study the success and failure of businesses, he concluded “The number one thing was timing. Timing accounted for 42% of the difference between success and failure.”  A few of the startup success examples of timings are well discussed in this video. And if we look at the timings of Indian startups, they emerged just when the data packs got affordable and speedier. Most of the startups were tech-focused as NASSCOM reports “…in 2015, every year more than 800 tech startups are being set up in India. By 2020, a projected 11,500 tech-startups are going to emerge and will employ around 250,000 people.”

The dotcom era in India saw the day of light in1995. This was when VSNL started its first commercial Internet service. It was this time when Indians (though in small numbers) were exposed to phenomena called ‘World Wide Web’. Then Zoho entered in 1996, started under the name of AdventNet as a Network Management company and it boosted the IT economy that was operating at a grass-root level. It stayed true to being a lean startup and consistent even after 20 years since its inception.

The time was an asset, and so gradually the companies explored market till mid-2000. But come 2007-2008 and India witnessed two its biggest ventures rising up. Flipkart marked its entry in 2007 as a first eCommerce startup and later in 2008, Zomato and Quikr came in to the picture. These startups are now over a decade old but still sailing on their first mover advantage. The economy was not ready back then, but the novelty of idea fetched them high revenues as they progressed.

And everything followed later on, from MakeMytrip, Ola, Paytm, to Freshdesk, etc. contributed heavily to gain traction. Looking at the contribution of startups in the economy, various programs were initiated by agencies and government to boost the economy.