In a nutshell, I would say one can’t judge the book by its cover. In fact, you need to delve deep into it to know the reality. In this case the book cover looked promising. The Government of India (GOI) is seriously thinking about associating themselves with the startup bandwagon and intending to play the role of an enabler. At least that is what I expected from the Startup India initiative. However, the deeper I looked into it the more disappointed I got.
When PM Narendra Modi at the Startup India event in Delhi started the conversation by saying “Aap hume bataye humme kya nehi karna hain, hum sunenge” (You tell us what we shouldn’t do and we will listen), the tempo of the rest of the speech was set. But the moment he started announcing the 19 pointers, while the crowd was applauding vigorously, my claps went milder as I was wondering how these pointers could be brought into action. I was thinking of less and less government intervention, thereby reducing the bottlenecks and wastage of time and money in the initial stages of the startup; but my logical mind was saying these policies will only increase corruption, bottlenecks, and lobbying for one’s favorite startup to avail most of these benefits.
- The first and most crucial problem is the eligibility criteria itself, whether a business idea is ‘innovative’ or not will be decided based on the following:The startup needs to be recommended by incubators established in a post-graduate college in India; or
- Startups needs to be supported by incubators funded by GOI to promote innovation; or
- Startups need to be supported by incubator recognised by GOI; or
- Startups needs to be funded by an incubation fund/angel fund/PE fund/accelerator/angel network duly registered with SEBI; or
- Startups needs to be funded by GOI; or
- Startups that has patent granted on their name.
Well, we all know that only about 0.9 per cent of all startups fall in this category because of various reasons. How many startups actually get a chance to pitch themselves to the incubators or investors? Leave alone being backed by them. There may be an increase in numbers in Tier I cities in the recent past, but the situation gets worse in Tier II and III cities. On the other hand, the incubators themselves need to get an approval from the GOI to encourage and nurture ‘innovative’ startups. This seems like a classic catch 22; one side the GOI is saying they support free economy and want to end ‘Licence Raj’ completely; on the other hand they are binding the entire startup ecosystem with the ‘approval from a government body’ rule.
How many startups actually raise funds from incubation fund/angel fund/PE fund/accelerator/angel network duly registered with SEBI or by GOI currently? As far as I know, one in 10 startups currently get funded through these channels. So is the government trying to say the remaining startups are completely worthless, just because they have not secured funding through VC funding route? Isn’t the government aware of other means of funding the startups? We have seen in the past that majority of these investors prefer to invest based on the trending industries of the year and not necessarily based on ‘innovative’ idea, so how worthy would this be to rely on them alone?
As per the Department of Electronics & Information technology (DeitY), it take around three to five years to get a patent granted in one’s name in India (without taking the backlogs into consideration). Thus, by the time the startup has a patent granted it’s already beyond the eligibility criteria.
By adding these eligibility criteria, the GOI is completely missing out on the gold mine of the externally non-funded startups. Imagine rejecting an entrepreneur like Kiran Mazumdar Shaw in her early days just because she didn’t meet any of the criteria when she set up Biocon in India. Although there may be many entrepreneurs like her in the future, the Startup India initiative will strive to be an epic failure, just because of this rule.
- Second problem is the Inter-Ministerial Board, which is supposed to evaluate the nature of businesses – whether they are ‘innovative’ enough or not. Well, it’s like asking farmers who produce grapes to taste and certify the quality of wine. I think the government should confine themself to play the role of an enabler well, and keep off the actual process of selecting and certifying a startup. This will be a futile and inefficient exercise, as they do not have the required skillsets, experience, or temperament to take this decision. This will only add to the woes of young entrepreneurs, who would want to avail the benefits.
- Thirdly, a couple of pointers that were announced during the 2014 budget were added to the agenda. Like the INR 10,000-crore startup fund was first launched in the budget of 2014, repackaged and launched once more now. Since the budget of 2014, I as an entrepreneur have been trying to find out how to access this fund. There has been no information available on the same. In fact even after the re-launch, it still remains pretty much inaccessible due to the way it will be distributed and delivered to the eligible entrepreneurs.
Looking at all the above, I would say, the intent is great, but the policies are way off the track. I think if the Modi Government really wants this initiative to be a success, they need to understand the problem of the startups before they can take pride in changing the entire startup eco-system in a positive way.
Should there be special attention given to the women entrepreneurs?
As an entrepreneur, I would not like to be called ‘women entrepreneur’ at any point in time. I personally believe women are equally talented to conquer the world based on their merit and capabilities alone, and they don’t need extra support from any walks of life to fulfill their dreams.
Unfortunately, our society is conditioned in a way to pull women down, whenever they try to fly higher than the set standards of the society. They are pulled down/mocked if they try to take the road less traveled, and defy the norms of the society. Sometimes their business ideas are looked down upon just because they are women. The problem is more in Tier II and III cities, where unmarried women are taunted with questions related to marriage and how would they manage their business in the future.
However, currently there is an increasing sensitivity among the startup fraternity while talking to the women who have started up. There is a sense of respect for them too. Thanks to some of the platforms out there, which not only popularises ‘innovative’ women-led startups but also brings out the exceptional stories from the eco-system. In these cases, the startup may not be ‘innovative’ by GOI standards, but the journey of the women is noteworthy and inspirational. These inspirational women not only earn their own living, but they also create employment opportunity to others. This is exactly what PM Narendra Modi was referring to during his speech at the Startup India launch. “Hume naukri mangne wale desh se naukri dene wala desh ban na hain” (We need to become the country of job givers from job seekers).
We are still lagging far behind in terms of funding. Although food-tech startups or hyper local delivery services get affluent funding, women trying to solve genuine and tough problems are still finding it difficult to raise funds. Even though they are able to provide healthy business plan and balance sheets, they are been discounted by giving lame excuses related to their business model. I think it’s high time that investors look at both men and women entrepreneurs through the same lenses while funding similar startups.
This is where GOI needs to play an important role. If the intention is to promote startups and celebrate job givers, then the policies needs to be tweaked in that manner. So that not only the so-called ‘innovative’ startups are benefitted but also the startups that may be trying to solve an inherent and nagging simple problem can avail these benefits. If they are able to solve this problem effectively, I don’t think women entrepreneurs will need any more support from the GOI to achieve their dreams.
It will only change, from a mindset point of view, if GOI takes conscious steps around showcasing and celebrating more number of women achievers, specifically from the startup community. Holding an all women entrepreneurs talk is not the answer. The system should be inclusive enough to have women in the regular panel. For instance, I would have been happier to see at least 20 per cent women in all the panels during each of the discussions in the Startup India launch. In fact, just as we started the session ‘Celebrating Women: stories of innovative women entrepreneurs’, I was sadly surprised to see almost half the hall empty even after repeated announcements. I do realise that it was around lunchtime, but consciously or unconsciously we cease to take women seriously in such situations. Had it been a session with men in the panel, I am sure the scene would have been completely different.
Not only GOI but the startup band wagon should consciously take a step ahead to make sure there are women in the panel during startup meets, discussions, and generally take women seriously when they are talking sense.
Only then can we expect the younger generation of women to be inspired by the current generation of women entrepreneurs, elevating them to be the role models for the next generations. This will not only help them find their true potential, it will also help them stand up for their own rights and be more assertive. It will help them believe in themselves completely.
I would like to end with a quote by Deborah Lindholm –
“If you empower a man, you empower one person. If you empower a woman, you empower her entire family. When women get together, miracles happen.”
About the Author – Srijata Bhatnagar is a person with various interests in life. People around her love her enthusiasm, positiveness and energy. She is a complete rebel who loves to question the societal norms. An entrepreneur by profession and a full time dreamer she is currently working on her dream of solving the fit and fashion individuality problem of women through Technology.
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- women entrepreneur
- Startup Ecosystem
- Information Technology
- Government of India
- Private equity
- Business incubators
- Modi government
- women-led startups
- Department of Electronics & Information
- fund/angel fund/PE fund
- Foodtech Startups