Startup founders with prior experience likely to succeed, says report
Entrepreneurs who have had prior work experience bring much more value to the world of entrepreneurship, and Bengaluru has emerged as a leading destination for such group of individuals. The Bengaluru Innovation Report 2019 highlights the immeasurable value of this quality.
The fairy tale story of entrepreneurship is of somebody who has just got out of college or dropped mid-way to start a venture in a garage and turns into a millionaire in their twenties.
With technology at their fingertips and a desire to innovate and bring change, we have seen stories of successful entrepreneurs with the likes of Bill Gates, Steve Jobs, and Mark Zuckerberg.
But these are exceptions to the rules of entrepreneurship. While a great idea and a lot of hard work are essential elements of every startup, it is prior work experience that becomes an important factor for any individual before they start up.
Bengaluru, regarded as the startup capital of the country, has not really seen a Zuckerberg or Gates, with majority of the entrepreneurs or founders having prior work experience before they actually started their own venture.
According to The Bengaluru Innovation Report 2019: “Fifty-two percent of founders in Bengaluru have more than 10 years of experience while starting up, pointing to a trend of increasing participation in the ecosystem of a more experienced workforce.”
The report, conducted by leading institutional investors – Accel, 3one4 Capital, Ideaspring Capital, and the Government of Karnataka, showcases the vibrancy and state of the startups in Karnataka, especially in its capital Bengaluru.
Bengaluru has enough number of examples of startup founders or entrepreneurs who did not jump into the world of entrepreneurship right out of college, but had prior work experience at leading global companies, especially in the technology segment.
Sachin Bansal and Binny Bansal, the founders of India’s leading ecommerce marketplace – Flipkart – are Indian Institute of Technology (IIT) graduates, who worked with Amazon before they stepped in to the world of entrepreneurship.
There are other examples like Phanindra Sama, the founder of redBus, who worked with a global semiconductor company before he started his online bus ticketing venture. Even Swiggy co-founder Sriharsha Majety worked at financial powerhouse Nomura before he moved into the entrepreneurial world.
This experience actually becomes a vital tool for entrepreneurs in building their business as they are better able to navigate their journey, and also puts them on a stronger pedestal while interacting with the investors.
Stressing on the importance of prior work experience, Naganand Doraswamy, Founder and Managing Director, Ideaspring Capital, says, “If one looks at product innovation, you need to go through a couple of cycles to understand what it takes to make the product. One needs the domain expertise and knowledge to build the products.”
According to Naganand, there are differences when one builds a product for a consumer market and those for enterprises, as in the case of the former there can be multiple iterations but not so in the case of the latter.
“Enterprises want stability and do not want changes every day. So it becomes important that founders have some prior experience,” he remarks.
According to the Bengaluru Innovation Report, the average work experience for startup founders in Bengaluru is 11.4 years, while it is 9.3 years in Delhi, and 8.6 years in Mumbai. Bengaluru also has most founders in the 30-40 year age bracket.
The experienced nature of the founders or entrepreneurs in Bengaluru has got to do with the heritage of the city with regard to technology. Bengaluru has close to two million people directly engaged with the technology industry with the presence of all the leading global and Indian companies.
This has created a very healthy ecosystem where many of the budding entrepreneurs have had the experience of working with a leading technology company, and there is also the presence of many seasoned professionals.
Hemant Mohapatra of Lightspeed Partners says, “Returning to India after 15 years in the US, much of it in the Silicon Valley at companies like Google and Andreessen Horowitz, it was a clear choice for me as a venture investor to settle in Bengaluru. Bengaluru has the best talent pool, entrepreneurial spirit, and the ecosystem of investors and senior technology leaders needed to guide founders.”
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The experienced nature of the founders and the presence of technology and business executives who have been through the various cycles in building an enterprise is a valuable asset for the startup ecosystem.
Some of the examples of such individuals are Infosys co-founders Nandan Nilekani and S Gopalakrishnan, who have rich experience of building large corporates, and have been closely engaged with the startup ecosystem. The list also includes others like former Infosys Board Member TV Mohandas Pai or Mindtree co-founder Krishnakumar Natarajan, who are actively investing in startups and also mentoring entrepreneurs.
Arvind Lakshmikumar, Founder and CEO, Tonbo Imaging, says, “Bengaluru has a fairly large number of technology professionals who have either been entrepreneurs or have led technology and engineering divisions in global corporations. Budding founders get to interact with experienced founders, helping them develop their ideas and crisply pitching their business propositions. This in turn has helped them raise capital and become successful entrepreneurs and give back to the ecosystem.”
The other aspect which is contributing to the growth of the startup ecosystem in Bengaluru has been the presence of accelerators and incubators.
According to the Bengaluru Innovation Report, the city is home to more than 75 incubators and accelerators, which includes corporates, government, academic, and private entities.
These incubators and accelerators support over 1,400 startups annually, with a focus on several areas such as initial customer traction, technology support, and growth acceleration working across multiple domains. Here, the experienced founders find a much stronger traction while participating the various programmes of the incubators and accelerators.
The other big contributor to the valuable experience for the future entrepreneurs or founders of startups in the city of Bengaluru is the presence of the Global Capability Centres (GCC).
The report notes, “The GCC-Startup engagement is becoming a mainstream operating model for global enterprises to advance their innovation agenda. This is evident in a large number of corporate accelerators being established by GCCs as they look for ‘startup’ solutions for enterprise problems.”
The GCCs are very keen to engage with the startups to co-partner for their innovative solutions, but they are also providing another important element. The report notes, “They are also creating a high-quality talent pool for startups to hire from. Many startups are being founded by GCC employees.”
Naganand notes that experienced founders also bring another important quality. “Prior work experience is useful not just from an entrepreneurial perspective but becomes a critical element when they are hiring their teams,” he says.
“Bengaluru is a big draw for somebody who wants to build products as there are people with experience available here,” he remarks.
This experienced professional’s ecosystem, which has created a vibrant startup culture in Bengaluru, has also led to the creation of various other bodies.
The classic example of this is the emergence of IndiaStack, which is creating the next generation technology infrastructure that has an impact on a wider section of the population.
IndiaStack comprises of people who are experienced technology professionals, startup founders, and deep domain technologists.
As Sharad Sharma, Co-founder, iSPIRT, says, “Bengaluru has been instrumental in creating a global public good-digital identity. The foundation that was laid in Bengaluru has now enabled over a billion UPI transactions a month. The city is also the center of drone and space revolutions in India. Another big challenge India is facing is healthcare. Bengaluru is again playing a key role in making quality healthcare affordable and accessible.”
(Edited by Megha Reddy)
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