Be a doctor or engineer.
Get a good job.
We as Indians are only too familiar with these words. India’s approach to choosing a career has been largely based on this 3-step formula. This was the expected path to success for young Indians in the 1990s and 2000s. Society as a whole not only encouraged this path, but actively discouraged others. It’s tried and tested and it works, why veer? Why take a risk?
However, around 10 years ago, a few risk takers decided to break cultural bounds and build something that had the ability to create national impact. It would leverage their technical background, provide the opportunity to make multiples on their salary, and allow them to be independent and make their own rules. And so, the Indian startup founder was born. However, the growth of this species was gradual, almost slow.
Today, the Indian startup ecosystem has gone from incubation to growth stage. While VC funding from around the world – the US, Japan, China, Korea, Israel etc. – has started flowing in with increasing confidence in the local market and entrepreneurs, the number of startups in India (currently ~5,000) is lower than New York, Beijing, or London. What will it take for us to grow as quickly as global expectations? What role does Indian culture play?
The Impact of Culture on Startups
One often underrated yet powerful factor for growth is India’s culture. The role of family, societal norms, and inherent risk appetite can either propel or hold back people from joining the startup ecosystem.
While much data is available on VC funding, startup incubation, ecosystem support etc., culture remains the overlooked X factor. This is surprising given how this has an overreaching influence on the growth and success of founders. The Organisation for Economic Co-operation and Development’s (OECD) Global Entrepreneurship Monitor reports that India has higher-than-global-average rates of fear of failure and lower-than-average intent to be an entrepreneur. Why is this? How can we change it?
Here’s what seems to be causing the problem:
- Societal preconditioning: Indian families have traditionally been advocating a safe path - first a ‘sarkari naukri’, then medicine/engineering, and finally, the family business. Familial pressures and a healthy dose of guilt weigh heavy on a young person entering the workforce. For those who decide to join the family business and upgrade it, their decisions are often overridden by the older generation.
- High fear of failure: We have all seen the numbers - India hasn’t seen its share of largescale startup success yet, evidenced through exits and unicorns. This has caused latent founders to be afraid they won’t be able to secure financial stability, and has caused VCs to be risk averse and only invest in safe bets with near-term returns.
- Limited mentorship and positive affirmation: After talking to several founders and VCs, it is evident that since India has not gone through a full cycle of experiences, less-than-the-best advice is making its way to first-time founders. Later-stage founders are hesitant to be transparent with first timers, VCs with limited industry/operational experience must provide “gyan” to entrepreneurs seeking support, and not all founders are spending enough effort on creating a positive culture that encourages growth and autonomy for their early hires.
While cultural inhibition towards being a startup founder are relatively easy to narrow down, the solution requires time and patience.
If we are to move forward, there are a few steps founders could take:
- Take the F word out of your vocabulary. Even the most successful entrepreneurs (Steve Jobs, Bill Gates, Elon Musk) will admit to fear of ‘Failure’. They chose not to give into that fear. Your first idea failing is very common. In fact, it will be an integral part of your future success.While a Silicon Valley figure, the insight stands true - startups that pivot once or twice raise 2.5x more money, have 3.6x better user growth, and are 52 percent less likely to scale prematurely than startups that pivot more than 2 times or not at all (Startup Genome Report).
- Follow your gut. It is very important to get advice from experts as you build and scale your business. However, having spoken to several successful founders in India and abroad, they all point to moments where they were made to doubt their decisions. They all advise that a founder do what she/he believes is right for their business. At the end of the day, this is YOUR startup and your vision. People can provide advice but you call the shots.
- Do unto others. For the relatively later-stage founders…remember those times you needed someone you could be honest with, but struggled to get candid advice? Break the cycle. Be transparent with first-time and early-stage founders of the perils you faced and how you overcame them.Now do this for your employees too. Providing a productive, enjoyable working environment that provides trust and autonomy will reduce attrition and increase motivation.
Two cents to Investors:
- Share the founders’ vision. Founders are seeking investors who have a shared sense of passion for their business. If you are going to invest in a startup, ensure that you understand the pain they are solving, why they are doing it, and the sacrifices they are making along the way. This instils a trusting relationship, where a founder won’t hesitate to be candid with you about their business and plans.
- Add value through experiences and network. First-time and early-stage founders require mentorship in various areas. Share historical references to similar problems; if they hit roadblocks, finding them the right mentor for the job. Then let them make their own decisions. Chances are, providing a founder the freedom to make their own decisions (even if every now and then they fall), will lead to net-benefit.
As global excitement grows for the Indian market and more success stories like Flipkart, Ola, and Freshworks pop up, there is no doubt startups will continue to grow. However, cultural change must occur concurrently to create a culture that embraces entrepreneurship and healthy risk taking. This happens when parents, investors, founders, and mentors look inward and decide to take responsibility for thinking differently and accepting the new 3-step formula for success – create a vision for a better world, take some risk, and succeed after failing.
Lastly, a quote to inspire you - "I knew that if I failed I wouldn't regret that, but I knew the one thing I might regret is not trying." --Jeff Bezos, founder and CEO of Amazon