“Why essentially incubate
to outlast early-stage failure?”
DespiteIndia making itself the third
largest base for start-ups in the world with over 3,000 start-ups running
across the nation [1], and Mr. Barack Obama, President of United States Of America,
quite rightly quoting, “Our Information age is rooted in India’s innovation”,
is still fighting hard to make its place as a lucrative start-up ecosystem on a
global platform.
Over 50% tech start-ups are expected to
move overseas in 2015[2].About 600 start-ups are born every year here, out of
which half of them die in first year and the 30 % that are able to survive for
12-18 months eventually die within the next three years[3].
[4]
Reasons are many.
·
Misalignment of founders
·
Running out of capital and
infrastructure
·
Taxes and government regulations
·
Risk-averse culture
·
Lack of customer validation
Start-up failing is not abnormal
especially in the technology sector. But what is required is an adequate
assistance and aid. Business incubators provide technical assistance,
management guidance, consulting and administrative assistance, legitimacy and
credibility among both vendors and customersand an access to capital with
shared basic operating costs to young businesses in order to increase their
chances of survival in the competitive environment.
Incubation does not only lead to
development of a well-fortified sustainable start-up ecosystem but also helps
in developing a high-technology business in this era of globalization.
Funding is not just the ultimate benefit
of incubators. Talking about technology start-ups, it has been seen in India
that the major cause of their failure is lack of communication and clear ideas
among the entrepreneurs regarding their business plan and their inability to
bear the risks. If they have the right incubators, people who are really
experienced, who are not just present side by side but are in regular contact
talking through the business and ready to get their hands dirty, it would allow
them to structure and think and get their boat very early-on headed towards the
right direction.
Indian start-ups like Ezetap took upon a
proper incubation programme from day one andbrought experienced entrepreneurs
into their business to really be hands on. Resulting to which it has become one
of the most successful angel prime ventures in India. Abhijit Bose, Chief
Executive OfficerEzetap, defines start-up incubation as, “it’s not about a
space to do an activity or a space to sit but it’s about experienced
entrepreneurs basically cofounding the company with you”. This also eradicates
the problem of misalignment of co-founders which leads to failure of start-ups.
All start-ups running in India face the
common fear of making too many mistakes while trying to expatiate on their business.
Hiring high IQ entrepreneurswould help identify the big
picture and the small picture yet remain distant enough to have an outside
perspective on the business and helps them preparing for pitching.
When these businesses need an expansion,
while in incubation they can very quickly go about it without any fear for
their mentors will catch soon enough if anything goes wrong ,will brainstorm
through the problem, chuck out multiple ideas for you and with just a single discussion
can be down to what should be done about it without wasting time.
Incubator
itself is a dynamic model of a sustainable efficient business operation.
Many start-ups in India are not able to
achieve customer validation for they detest talking to customers. Benchmark
incubators help them to get reference customers, validate their product and
complete at least a minimum viable product.
India has a lot of grand opportunities
for bootstrap businesses to riseand reinvent their potential and their markets
is full of friction. Only what they require is a right kind of mentoring to
find the wood for the trees and win the battle.
