Challenges & Growing Trends In The Indian Startup Ecosystem

there is one perception amongst most Indian startup founders, which is that funding a startup is much harder in India than in more mature startup ecosystems (for example, the US).

I believe that the problem India is facing is that of a conceptual gap, a gap that exists between ‘great ideas’ and ‘fundable ideas’. I also firmly believe that while this gap is not unique to India, it appears to be relatively large in India. Sooner or later it will become necessary to understand and decode this gap to be able to bridge it.

• The Startup Scaling Gap: Entrepreneurial ideas can build from a hobby or a passion with no business model to huge businesses with massive return potential. There is a mismatch between bringing the idea alive from concept to competition, and actually implementing it in the market to scale up. Many ideas are great on paper, but the unit of economics does not work well when you’re trying to implement it in reality.

• The Technological Gap: There is a huge need for innovative technological solutions, particularly those that alleviate poverty and benefit a large number of people. Given the scale of India and its resource constraints, low-cost, high-impact solutions are required. Technology startups play a crucial role in accomplishing this, because of their potential for scalability and exponential growth. There is a dire need for the government to enable policies and initiatives that will imbibe and support the entrepreneurial spirit of IIT graduates.

• The Diversity Divide: In general, a gap exists between those who provide solutions and those who are supposed to actually use them. In order to build successful home grown products, startups need to bridge this gap and develop an in-depth understanding of the customers and their needs. This is extremely difficult in the Indian context: India is a highly diverse country with a plethora of cultures, languages, ethnicities and religions.

• Employing Experienced Employees: For many job-seekers, joining a startup as an employee is not an attractive career option, due to the inherent risk that the startup might fail, besides, a startup is not able to provide as many benefits as a MNC usually provides. Instead, the majority of Indian millennial generation will prefer to work for large brands, which promise more stable jobs. In addition, startups can rarely compete with big company’s in terms of salaries or reputation.