Thursday, October 8, 2015

Are startups in India all about funding?

Thank god I am not running after the startup frenzy aka showing prototypes & raising millions. A business is not just about how much you can raise from VCs and be billionaire on paper but keep burning cash. I believe it's about doing something you are passionate about but makes economic sense. I can sell a 1000 buck product at 500 and show a billion dollar sales in 1 year as long as I ve $500 million funding in my bank and get a 10 times sales valuation of $10 billion making myself notional billionaire. What's that?

I think in India we are repeating of what happened in U.S in 2000 and could cost India dearly. ( documentary filmed in 1999 is an eye opener. There is nothing like doing something on your own but being a Marwari I understand the importance of starting small, scaling gradually and not do something that requires huge amount of incremental capital to start. I am an old school guy but I like to take home my profits even it's very small and use that to grow the business gradually with small doses of fresh capital. That helps me not go bust even if I do a blunder, which is bound to happen in your early stages of starting a business.
There are lot of things to be done in India but here we have the habit of overdoing everything and kill the opportunity. Software sector is a recent example. There was huge opportunity in early 2000 for budding engineers and being an engineer used to be proud thing for us when we graduated in 2005. In 2014 we produced more than 2 times more engineers than India can absorb leading to huge un-employments at such qualification level, and I don't feel great either about my qualification today as there are engineers in probably every home in India. Media should stop publishing how much a startup has raised on several rounds of funding but instead publish more on the changes these startups have brought about and created value for all stakeholders.

Recommended Reading: Softbank's Nikesh Arora Warning to Startups in India

No comments:

Post a Comment

15 Stock Investment Tips from Rakesh Jhunjhunwala

1. Always go against tide. Buy when others are selling and sell when others are buying.  2. If you believe in the growth prospects o...