Mumbai: Nine of 10 entrepreneurs in the country are in their 20s or 30s. Four out of five have worked somewhere before starting their first venture. And just one in 10 can boast of angel or venture capital backing.
These are some of the key findings from a quick study of the nominees at the Tata-NEN Hottest Startups competition run by a not-for-profit organization, National Entrepreneurship Network (NEN), set up to spur entrepreneurship.
Nominations at the competition, of which Mint is a print partner, closed last week with entries from 588 firms, all of them based in India and none older than five years. NEN officials say it is the largest such competition to be held in the country.
New idea: Hariharan Krishnamoorthy of Lord of Odds, an online gaming site which is participating in the competition.
Bangalore, long considered a start-up hub, led the pack with 147, or 25% of all nominations, followed by Mumbai and Delhi with 19% each. But while an overwhelming 94% of the start-ups are located in so-called tier I or large Indian cities, one in three was launched by an entrepreneur who moved from a town such as Jodhpur, Meerut or Raichur, NEN data show.
There were lessons for some participants. Ujwal Makhija, chief executive of Phonon.in, a proprietorship providing automated telecom solutions, says reviews on the firm’s entry on the competition website had made it clear that his firm cannot follow its product-plus-services business model for long. “It’s a realization that has come to us,” he says.
In spite of a popular perception that serial entrepreneurs are few and far between in India, the NEN start-ups competition entry was not the first venture for 35% or 207 start-ups. Only 8% of the companies have raised angel or venture capital funds, while more than 70% continue to depend on personal savings, family and friends for money to run the business. One participant received a call from a venture capital firm after being spotted by Sequoia Capital on the NEN face-off website.
“Though, at this stage of our growth we are not seriously looking for funding, it’s always a good feeling that, if there be need of money, there are companies like Sequoia, who would be willing to look at us seriously,” Sanjeev S., managing director of Medsphere Technologies Pvt. Ltd, told NEN in a testimonial.
Consumer-facing companies such as Lord of Odds, a Pune-based online gaming site, counts feedback on products from people chancing upon its website through the NEN face-off. “People gave us a lot of insights into how they felt a game should be,” says founder Hariharan Krishnamoorthy. User feedback such as “you can make it simpler this way” or “that is too complicated for me to figure out,” added more value than experts, he adds.
One criticism of the event was, ironically, its size. “If all 550 are lined together, only the first 20-30 get visibility and votes. More segregation into categories would ensure better visibility,” says Vikas Sharma, co-founder of Parichay, a Jamshedpur-based college start-up that sources handicraft from tribal villages in Jharkhand. Parichay entered the competition late.
Voting to shortlist the top 30 start-ups from the 588 entered continues until 5 November.
Krish Raghav and Deepti Chaudhary contributed to this story.