On an unusually warm winter day last December, inside the iconic Bombay Stock Exchange auditorium, a slim and groomed pony-tailed man was being mobbed. The bell rang for the networking lunch, but the crowd wanted to talk to only one man — Rahul Sood, serial Silicon Valley entrepreneur and current head of the entrepreneurship accelerator arm of Microsoft.
The exuberance at the event — Tech-Stock , organized by Microsoft and two other partners, where 10 entrepreneurs presented their ideas to 10 angel investors — was palpable. Sood's first venture was gaming PC company VoodooPC that he later sold to Hewlett-Packard .
Sood was being grabbed by the arm and made to listen to mini-pitches of business ideas, even as he tried to figure an escape route. This was like Shah Rukh Khan visiting an acting school. A not-so-young man explained his business idea — car entry with the help of an iPhone. Sood felt it was an innovation that did not solve a problem or meet a need, and the man argued back: "But the idea came from Harvard... " and so on till Sood was pulled away — this time by a lady for another pitch.
The fans had no inkling what Sood really thought about these ideas. "Mostly half-baked , with no customer validation," he said later, and even told ET Magazine in an interview that India is probably seeing an entrepreneurship bubble that may collapse even if it doesn't go completely bust.
In India, today there is an event like TechStock almost every week where entrepreneurs are presenting their ideas to prospective investors or are brainstorming together in code-writing jam sessions — hackathons. Two high-profile events were held yesterday, Saturday, January 18, one in Kolkata and one in Chennai. More than half a dozen are happening this month.
Another such start-up jamboree is Pluggd .in, a platform for tech entrepreneurs and emerging digital media platforms that has grown from 220 people in 2009 to over 1,500 in 2013, with another 5,000 logged on virtually. Elsewhere, thousands of business ideas are clogging the inboxes of angel funding units such as Mumbai Angels and Indian Angel Network as well as of high net worth individuals with some cash to burn on the next big idea from India.
In 2013 almost 50 accelerators/incubators operated in India; these are organizations that help early start-ups along the way. Two years back there would have been barely 10.
Indian start-ups — their entire top team — today can actually 'go to college' to fine-tune their business model. That is what accelerators are essentially — a step-up from incubators that help start up an idea. And then there are accelerators like the one led by Sood's Microsoft Ventures that take in the best start-ups emerging from other accelerators for an advanced module.
"If only the economy was a little stronger this would have been the best time to start up in India," says Nidhi Saxena, founder chairman and CEO of Karmic Lifesciences, a Mumbai-based clinical research start-up .
Entrepreneurship porn
Morra Aarons-Mele , founder of Woman Online , a digital marketing firm, coined the term 'entrepreneurship porn' to describe the airbrushed media coverage of the lifestyle of an entrepreneur . In her blog on Harvard Business Review she laments this distorted portrayal in the US and how 2014 (declared year of the entrepreneur by Richard Branson) will see more of it — even though the reality is different.
And in India, there are parallels — beneath the glamour are always the sadder stories and reality checks. After all most startups are supposed to fail — and failure is messier than success.
Take for example Speakwell Enterprises, a popular chain of spoken English and personality development training centres in Mumbai. In the past few months, Aslam Moosa, co-founder of Speakwell , has discovered how difficult life can be as a startup. While he has trained more than 80,000 students in four years he has floundered on cash flows. Today his angel investor appears to have given up on him. A couple of years ago, Moosa was doing well — and got funded by Praveen Chakravarty, a former investment banker-turned-angel investor. Chakravarty had done well with other deals like inMobi, ZipDial and Mswipe. But Moosa has not been able to net venture capital funding to help him expand outside Mumbai.
"The Indian VC market seems to be quite pessimistic on growth prospects in overall terms," says Moosa. Even as Chakravarty has written Speakwell off his books, Moosa insists that Speakwell is a flourishing company in Mumbai and funds are needed only for growth. "It is not that we have run out of gas. Just that we do not have the funds required to explore other territories."
Moosa may yet be able to keep his business on the road but not everyone else has been so fortunate. The founders of other ventures such as Koolkart.com, an e-commerce portal, the Rocket Internet-backed 21 Diamonds India, Rupeestreet, a personal finance venture funded by Blume Ventures, and Giftology, a social gifting venture have not been so lucky, shutting shop when their funds tap ran dry. Then some saw founders and co-founders being eased out of their own ventures — Fashionandyou.com, Dealsandyou.com and Hushbabies.com. iStream, the online video aggregator that raised $5 million in 2011 from SAIF Partners, was forced to shut down last year — with the founders leaving a bitter message on the website that is still there for everyone to read.
So for every Flipkart and Bookmyshow and Zomato, there are many more stories of failures, of bitterness and backbiting and betrayal when one scratches the surface. "Fund-raising is a brutal business," says angel investor Chakravarty. "A small percentage of the starry-eyed entrepreneurs will actually go from concept to seed and angel funding to making the big jump to attracting VC money."
The attendance at Nasscom events is perhaps a sign of building up of a critical mass in the last nine months; 10,000 Startups has organized about 200 events in more than 15 cities and over 10,000 participants have attended these events.
Some companies have made the most of this burst of interest in entrepreneurship and the funds they have raised during the boom. For example Cloud Nine, a provider of premium mother and child care services, plans to double the number of centres to 10 and expand from a predominately Bangalore-centric presence to locations across south and west India.