"Most investors/incubators focused on selecting winners" - The Hatch
This interview is part of the 'Investors on Student Entreprepeneurship' series.
Puneet is a serial entrepreneur, international business executive, and mentor. Puneet has been an entrepreneur in both India and US; an investor in India, US and Europe. Puneet is the Co-founder and Chairman of Hatch Incubators; Co-founder of the Angel Investors Consortium; and Board Member of Cosmos Hospitals. In addition, Puneet is actively involved as a member the CII (Confederation of Indian Industry) National Committee on IT / ITES and Ecommerce; the CII National Committee on MSME in Defense and Aerospace; as President of TiE Punjab and Chandigarh; and, till recently as a member of Global Board of Trustees of TiE Global. StudentStory.in had the opportunity to find out the perspective of The Hatch on Student Entrepreneurship
The Hatch on Student Entrepreneurship
The proportion of students abroad that startup while in college is considerably higher than in India. Do you see the scenario improving in India any time soon?
To put it in perspective, the number of students who are ‘aspiring entrepreneurs’ may not be significantly lower in India than in the US. However, the number of these aspiring entrepreneurs who are able to convert their ideas into startups is indeed significantly lower.
That’s because many student entrepreneurs in India are weak in their understanding of business, and hence their business plans appear weak or impractical. As a result they do not find support from the current eco-system of angel investors and incubators. Many entrepreneurs in India are also not very good in presenting their concepts and business plans well, and hence, even those ideas where the business plan is strong, often fail to get noticed.
Most investors, investor groups and incubators are focused on ‘selecting the winners’ from among the many aspiring entrepreneurs. Very, very few organizations have the capacity, or intent, of working with raw ideas and business plans and spend significant time in sharpening them.
However, we have to change the situation. We need to create platforms that can adopt raw ideas and work closely with aspiring entrepreneurs to help sharpen their business plans. We also need investors who can co-invest in small sums to fund many startups with seed capital of Rs. 10 lacs to Rs.20 lacs.
Organizations like ours (The Hatch) are working towards these goals by significantly increasing the pool of mentors and angel investors, and creating the awareness building & assistance programs to help more high-potential entrepreneurs convert their ideas into businesses.
Why would you choose to invest/not invest in student led ventures?
Investors invest in ventures that have a strong business case, and a team that is competent to implement the plan. Be it students or experienced professionals.
At The Hatch, we have a definite preference for young entrepreneurs because there is a large pool of raw talent and aspiration to be entrepreneurs among students, which we believe we can sharpen through our programs.
While creating ventures out of student entrepreneurs requires significant level of effort in terms of mentoring and guidance, students are also able to build businesses with very limited capital. This allows us to support a number of ventures with very limited capital.
India needs 1000s of new successful enterprises every year to be able to grow closer to 10% a year. We believe that by providing assistance to student startups, we have a much better chance of creating more successful startups in the country.
There is significant emphasis on research and development at colleges abroad. What do you think is the state of research in technology from Indian colleges/universities?
Research overall in India is an area that has significant room for growth and improvement. However, what we are particular weak in is the commercialization of technologies and providing support to convert existing inventions into great businesses.
There is a need to create platforms that universities can tap to help convert ideas into businesses. We need to create a few case studies, which can then become the role models to trigger a greater emphasis on research and commercialization of research.
In comparison between engineers and management graduates, who are likely to startup? What is the trend that you have noticed among the companies that you have seen so far?
In our view, engineers as well as management graduates have an equal opportunity to start up. Product and technology dependent businesses will probably be started more by engineers, while you probably will see more services businesses being driven by management graduates.
In recent times, because of availability of technology platforms and cloud PAAS/SAAS models, it is possible for non-engineers to also start technology dependent companies. E.g. with platforms like Martjack, it is possible for anyone to build an e-commerce portal.
It must be noted however that most engineers as well as management students require significant hand-holding, mentoring and advice in order to convert their ideas into successful ventures. The startup eco-system has to create the processes and capabilities to provide this support.
There is huge emphasis on technology – with engineers becoming entrepreneurs, what about the other kinds of businesses coming up? What is your take on it?
Most entrepreneurs focus on the existing need gaps and opportunities in India. Most concepts we see are around education, healthcare, energy, infrastructure, nutrition, convenience [e-commerce is one example of concepts addressing the ‘convenience’ opportunity], communications [e.g. social media], etc.
One big disappointment for us is that almost all startups limit themselves by thinking only of India as a market. Why should that be so? If entrepreneurs can start thinking of the world as their market, they may open themselves to a significantly larger number of possibilities.
What are your 3 pieces of advice for student entrepreneurs and students aspiring to be entrepreneurs?
- Think big. Think scale.
- An idea is not a business – a business has to be constructed around an idea
- Think deeply about how you will implement your concepts. Failing to plan is planning to fail.
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