The start-up companies in India has become a new trend, innovative students are more willing to get in to this rat race after getting bitten up by entrepreneurial bug in their childhood days or after getting into the college. Some gets to survive in the league and some fails but they never gives up, rather comes up again with a different Idea having a different essence.
There are different kinds of start-ups that are growing up in India, such as IT products & services, Web based portals & services, Cleantech, Agro related, FMCG, Companies with new IP, Healthcare or Biotech based, Social Enterprise, etc.
But over the years the whole buzz is up for opening software start-ups, though India is lagging behind in this league and has its position around 173 out of 185 countries. But still it is noticeable that investors are ready to risk on tech start-up ecosystem emerging in India.
The prime reason is that the scenario in India is pretty attractive. It is still a country where Entrepreneurs are looking for investors to buy stakes in their ventures. The investors believe that Indian Entrepreneurs and Technocrats have the capability to get into a business and take it to a level beyond which they need to tap the capital markets for growth. Investors are generally attracted to those new companies distinguished by their risk/reward profile scalability. Also the firms setting up in India, seeking venture financing have typically been middle to late stage companies, not true start-ups like those, that sets up in US. So it is of a better proposition and a comparatively quite less risky.
A lot of innovations comes up from start-ups, specially tech start-ups more often than not, new technologies and business models have came up from start-ups only. US by being a magnet for intelligence and talent around the globe, has made the most out of the innovative nature of the immigrant populace. US is offering better funding and infrastructures to students having an urge to set up a firm to process their own skillful ideas. Now, the big interrogation lies on the part, If India could make a stand in this sort of Entrepreneurial activity, after all it has been 16 years of incremental reforms in Indian Economy, a lot of shackles on business have been lifted.
The particular fact which is done for the growth of tech start-up ecosystem in India is that young minds are more interested in getting themselves indulged in uncertain life of an Entrepreneur rather than stable environs of MNC or study in Foreign Universities.
It has been around a decade since the trend has got into India among the young minds to showcase their product capabilities, networking platform and activity in the Venture Capital space. But the system consisting Entrepreneurial and Innovation leaves a lot to be desired and factually that is the reason why India failed to come up with any sort of breakthrough innovation in the system software space. Mainly Indian software start-ups are revolving around application software or SaaS firms. One of the reason for this could be the proportion of success is higher in all aspect compared to that of system software firms. Also there exists a gap in early stage funding ecosystem in India which is restraining innovative or risk taking capabilities of start-ups in India. And another fact to be taken into account is that about 90% of incubation centers in India are either controlled by academic institutions or government, where the time required to get the required capital and infrastructure support for a start-up is much higher.
Since 2001 number of software start-ups has increased to a great extent to 371 at the end of 2007 to 500 now. Only two third of it has been formed in the past few years. This depreciation could be due to the global recession. The recession has had a huge impact on the start-ups across the world as venture capital were cautious while risking their money in start-ups around the globe and in India as well.
In this scenario of start-ups in India there are few recommendations from the end of some successful Entrepreneurs which could be helpful to set up a start-up firm in India as per the market segments and as per the interest of the investors.
Start-ups such as Mobile Payment Gateways, SaaS model, Micro-financing, mobile ad-networks are quite a few startup ideas which didnt get faded and could keep hold of a cool market.