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Growth of Startup Culture and Entrepreneurship in India

Introduction The past couple of years have seen India emerge as a “new kid on the block” in terms of the sudden growth of budding entrepreneurs in the country. However, 20 years ago it this phenomenon or its magnitude would have been difficult to foresee. India reportedly has the 4000+ Startups today. This makes India stand on number 3 on the world map right after US and UK. The sudden spurt in the number of Startups in the country is the reason that substantiates the introduction of government projects like Start-Up India and Digital India But then what made a country whose forefathers had an obsession with a 9 to 5, fixed salary, same company venture into uncharted territory.

Reasons for Growth

Population: As per the latest census report India has a population of over 1.2 billion people. That is almost close to 17% of the world’s population. Out of this huge population 50% are below the age of 25 and 65% below the age of 35. Again, almost 28% of this population lives in metros, cities and urban Agglomerates, which roughly translates to around 429,300,300. This is equivalent to the total population of many of developed nations around the world. Any startup that is successfully able to target a tenth of this urban population is deemed to be on its way up the growth trajectory. Employment and Pay Scale: Given the huge population and the number of graduates the country churns out every year, the vacancies in huge companies are relatively very less. This dismal number results in a man eat man scene for every vacancy created. The imbalance in the demand-supply graph in this causes the expected salary of an individual to fall drastically. However, startups which want to make a mark are willing to pay lucrative salaries to attract and sustain talent in order to grow.

Availability of labour: As spoken about earlier, India was always on the global IT map for the number of engineers it produces and affordability of technology in the country. So it is not surprising that most of the Startups are in the technological and digital space and most of these entrepreneurs are engineering graduates who know their product and its viability really well.

Growth of Incubation centres: Most of the entrepreneurs in the startup ecosystem are fresh out of college, some with a couple of years of experience but majority without any business family background. Now, given the number of Startups in India it is very difficult to attract seed investors without a proper revenue model in place. This means that most of the startups are bootstrapped working on a shoe-string budgets. The Government has stepped in this situation to set-up Incubation centres around the city. Budding Entrepreneurs can now approach these incubation centres and get mentorship, training and a proper environment to work in. Considering that companies like Amazon, Google have seen the future in the Indian startup environment and have come in as mentors in these Incubation centers says a lot about what they hold for the company.

Convenience: The startups work on a very simple equation. They look out for a simple existing problem in the society and find innovative ways to solve them. This can be something like looking for hotel rooms (MakeMyTrip, Yatra and Oyo Rooms), looking out for places to eat(Zomato,Swiggy), looking for tuition teachers (UrbanPro, Pedagoge). As a result most of them are able to tap into a potential market that has not been fully exploited. All they have to do here is market the problem well and show the Target group how they can help you sort it.

Venture Capitalists: The boom in the Startups in the country has not failed to attract Venture Capitalists. Most of the large Startups in the country like Flipkart, Swiggy, Oyo Rooms have the likes of big VC’s like SoftBank, Tiger Global, Nasper and Fosun International backing them. This gives them deep pockets to grow their business, expand their business and become a force to reckon with in the established market.

Despite the favourable environment in the country, many Startups die out within a couple of months of starting because of unviability of the idea or because of the absence of deep pockets and VC’s to back them. Inspite of this, the startup environment of the country has tremendous growth potential with a huge untapped market. The innovation of some ideas have managed to attract the likes the huge companies like Facebook, Google and Amazon who are willing to buy a huge stake in these companies.

Bibliography

http://www.indiaonlinepages.com/population/india-current- population.html https://timesofindia.indiatimes.com/home/education/news/60-of- engineering-graduates-unemployed/articleshow/57698133.cms http://startupindia.gov.in/incubation.php https://tech.economictimes.indiatimes.com/news/startups/oyo-secures- 250m-funding- led-by- softbank-vision-fund- and-hero- enterprise/60407458 https://tech.economictimes.indiatimes.com/news/startups/swiggy-raises- 80m-funding- led-by-naspers/58907460, https://www.vccircle.com/flipkart raises- funding-from- softbank-vision- fund/