7 Lessons To Be An Entrepreneur

'Before you work on your business plan, before you build your team, you should have a clear idea about what your product is, who your customer is, how valuable the product is, and whether the market is deep and wide.'

Though the legendary start-up Infosys began its journey more than four decades ago, the start-up scene in India was taking only baby steps till recently.

Undoubtedly, the Start-up India programme launched in 2016 gave a major boost to the start-up scene in India.

As per the data released by the government on June 30, 2024, the Department for Promotion of Industry and Internal Trade (DPIIT) has recognised 140,000 start-ups in India, up from 300 start-ups in 2016.

Twenty years ago when IIT Bombay set up the Society for Innovation and Entrepreneurship (SINE), one of the earliest incubators in the country, the scene was very different from what it is today.

"We will see an explosion of start-ups in Tier 2 and Tier 3 cities. It can be in the agri-tech area, or logistics area or climate linked solutions. We may see more start-ups focusing on solving local issues," Shaji Varghese CEO, SINE, IIT Bombay, tells Rediff.com's Shobha Warrier.

The concluding segment of a two-part must read interview:

• Part 1 of the Interview: A Formula For Start Up Success

All start-ups start with a lot of passion but some succeed and some fail. What makes the difference?

There are 3-4 major factors that make an idea successful.

One: To have a good team is the first major factor. What we have seen is, even if an idea fails, if you have a good team, you can look at other opportunities.

Two: The readiness of the market. It means, the timing has to be correct. If you are pushing something ahead of the times, the market acceptance will not be there. This is where your interaction with the corporates help you.

You may have a fantastic idea or a fantastic product but if the market is not ready to accept the idea, it is bound to fail.

Three: The third major factor is access to capital. Most of the start-ups run out of capital and it is a big challenge. You need capital not just to develop a product but to attract the right kind of team members.

So, if you are not able to attract the right resources from a technical point of view, operational point of view and business development level point of view, your challenges will be significant.

Four: The founders need to be coachable. When I use the term coachable, what I mean is, they should be open to criticism, and open to a review of what they are doing. Most of the time, they are too involved in the tech part of their idea without realising that tech is only a part of the start-up.

SINE is planning to launch a Rs.100 crore VC fund to support future start-ups.
As an incubator, where do you see the growth in the future tech start-up scene in India?

AI is definitely going to be the major disruptor. But then we are still in a very early stage.

I could say that AI is more on the hype stage without really understanding how it will pan out from a business point of view or from a product point of view or from a service point of view as AI can be used in multiple layers.

The future is going to be widespread with a lot of ideas coming in the field of AI, energy space, sustainability and climate, data analytics, EV, Robotics, sensors, semiconductors, space, defence, etc.

With access to information all-pervasive, we will see an explosion of start-ups in both Tier 2 and Tier 3 cities. It can be in the agri-tech area, or logistics area or climate linked solutions.

We may see more start-ups focusing on solving local issues.

We are the third largest start up ecosystem in India but we don't have many start-ups in the deeptech areas. I expect IITs playing a major role in deep tech in the near future.

As the CEO of SINE, what will you tell young entrepreneurs who want to come to you with ideas?

One: What we say is, before plunging into entrepreneurship, they should have a good understanding of what their product is.

Two: As entrepreneurship is about addressing a problem, they have to have a problem statement. They should first know whether a problem statement exists or not. If it is a small problem for a retail or corporate customer, then it will be difficult to convince your potential customer to buy your product.

So, understanding of the problem is very important. They have to figure out how deep the problem is, and how wide the problem is.

Three: A lot of entrepreneurs come with an idea which they think is workable after talking to 2 or 3 people. That's not enough. They have to understand the large market. They should at least speak to 50 to 60 potential customers to know whether there really is a market for their product. So, a market survey is a must.

Four: Once you understand the market, the delivery of the product becomes important. You should know how to deliver it to the customers.

Five: Now comes the features of the product. Is it high on tech and low on value, or high on value and low on tech? They have to be very clear about these aspects.

Six: Next is, how to build a sustainable business model out of an idea. They need to figure out a revenue model, the various aspects of the business, the logistics and value chain to build the product.

Seven: As the entrepreneurial journey is very long and challenging, it is always better to have a co-founder so that you are able to brainstorm and debate. But to get a co-founder is mostly very difficult.

So, before you work on your business plan, before you build your team, you should have a clear idea about what your product is, who your customer is, how valuable the product is, and whether the market is deep and wide.

Feature Presentation: Aslam Hunani/Rediff.com