Creating Entrepreneurs to Generate Job Opportunities – Start-up India Scheme
Funding If the entrepreneur has a good idea that can be validated or developed, they can look for...
Funding
If the entrepreneur has a good idea that can be validated or developed, they can look for ample sources for funding their projects, like bank loans, bootstrapping, angel funding, venture capital, private equity, etc. Right from the beginning, they need to take the help of Mentors and Advisors.
The eligible greenfield enterprises can apply for bank loans under this scheme through www.standupmitra.in or directly with any bank branch. Banks can provide financial assistance upto Rs.1 crore.
Challenges
It is understood from various sources that nearly 75-80% of Start-ups fail in the post-product development stage. It is said that nearly 40% of the Start-ups fail even before 18 months of their coming up.
Arvind Thyagarajan, Founder and Chairman of HD Medical Group in Silicon Valley, USA said that the Start-ups in India failed because their investors did not believe in fundamentals. “Now it is getting matured in India. In USA, only 10% of the Start-ups fail. They believe in the fundamentals of business. In India, even a mobile app gets hyped, without understanding the usage and revenue model”, he added.
When asked about the reasons for failure in the post product development stage, he said, “In Silicon Valley, importance is given to ‘problems’ to develop the ‘solutions’. On the other hand in India, the entrepreneurs first develop their ‘technological solution’ and then look for the market and problems to employ them. Products or services should be relevant to the market. I am strong in technology. When I moved to Silicon Valley, I found a Mentor for Business Strategy. In India, the entrepreneurs do not go to good ‘Mentors’ for the areas they are not competent. They assume that they have the expertise for every aspect. Technical entrepreneurs do not plan and budget for good marketing strategies. Indians are highly conservative. Money spent on Branding, Public Relations and Marketing Strategies are investments. Americans succeed because of their proper planning. In India, our people do not ‘plan’ to fail. But they ‘fail’ to plan”.
Vikram Kharvi, Marketing Communication Strategist, Adfactors PR, Mumbai agreed with Arvind Thygarajan. He added, “Many entrepreneurs think marketing means burning money in advertising for customer acquisition. Very few have the long-term vision on how they should be looking at their brand and how they would build it brick by brick. They want quick solutions to everything; everyone wants to jump onto the digital bandwagon, without evaluating what the right strategy is for them. Not every start-up entrepreneur values professional advice as they start assuming that their products are the only right thing to happen to mankind.”
Suggestions:
While preparing for this cover story, we had discussions with many bankers. While the Government of India is monitoring the progress of the Stand-up India with the management of the Banks on a weekly basis, the Scheme has not percolated down to the bank branch level. Many Branch Managers are not aware of this loan scheme.
Many entrepreneurs are also not aware that they could apply for loans through www.standupmitra.in. While the target for the banking industry for FY 2016-17 is 2.50 lakh greenfield enterprises, only around 8000 entrepreneurs have applied through this portal.
Much confusion prevails over the incubation, though the Government has authorised some incubation centres for certification purposes. There can be innovation in the non-technical areas like management, education, communication, etc. The Government should recognise such innovations too. Business incubation centres and Technology incubation centres may be set up at various educational institutions to provide for and handhold potential entrepreneurs.
During the course of discussions with various entrepreneurs, we observed that while they were highly competent in their respective technology skills, they did not have sufficient knowledge about business and marketing strategies. Hundreds of successful Indian entrepreneurs like Arvind Thyagarajan of Silicon Valley offer their services to support Indian entrepreneurs in all aspects. The Government of India should connect with these groups and take it forward.
While PreSense appreciates the laudable efforts of the Prime Minister to achieve the goal that was also the vision of Dr Abdul Kalam, PreSense suggests that sustained efforts and campaign be taken up immediately to make this Scheme a great success.
