Setting up a start-up, straight out of college4 min read . Updated: 30 May 2018, 08:02 AM IST
Transforming an idea into a start-up business is the biggest challenge young entrepreneurs face
In 2012, when Sachin Gupta graduated from the Indian Institute of Technology (IIT), Roorkee with a job offer from Google India, he faced a conundrum. He and his college mate, Vivek Prakash, had been building a software system, HackerEarth, for engineer recruitment. They had an offer from GSF Accelerator, a Bengaluru seed-funder for technology start-ups. It came with a caveat: GSF wanted the two in Bengaluru, working full-time on the start-up, if they were to get the initial money. “That was our first challenge," recalls Gupta. “If we wanted to do this start-up, and we so did, Vivek had to miss a semester in his degree while I had to leave my job."
Prakash wanted to get his degree. The IIT-Roorkee management was persuaded to allow Prakash to complete his final semester out of Bengaluru. It worked, and the founders started whiteboarding their product. Within four months, they got $120,000 (around Rs81 lakh now) in angel funding from GSF.
Starting a business is just the first challenge for a founder. There are many more, as Anu Sridharan discovered. In 2011, while pursuing a master’s in civil engineering from Berkeley College, US, Sridharan presented a business plan on water supply distribution in a college competition, and, with half a million dollars worth of grants, moved to Hubbali-Dharwad, Karnataka, to begin NextDrop, a social enterprise in the field of water management. She was 24, and had no idea how to run a business.
“My first question was, how do I not die?" she says. “I googled things like profit and loss statement and HR management, took online courses on digital marketing, read five books a month. If the internet hadn’t been invented, I wouldn’t have been able to do this," says the 30-year-old. Constant upskilling, advice from mentors, and talking to people on the ground, helped. The team expanded, built a smart-grid application to track water supply, and the local government was supportive.
But then reality hit hard, as it did the founders of HackerEarth.
“We were kids, two 22-year-olds from middle-class, sheltered homes who had so far led a sheltered college life. Suddenly, we had to pitch to funders and they were giving us money and we needed to show traction and were liable, had to look at legal documents, buy shirts and ties for meetings and create PPTs. We felt overwhelmed," recalls Gupta. They also had to take care of accounts, foreign investments, Sebi regulations, reporting structures and taxes—while figuring out the product and writing codes.
For Sridharan, the problem was more severe. She wasn’t able to programme the product the way she had envisioned. Within 12 months, she had to face the hard truth: “We had to discontinue our product, shut our first company and start a new one because of the mistakes we made in the beginning."
In April 2017, she launched a new company, also called NextDrop, with a product that used IoT devices and data to connect water tankers with businesses and apartments. Alongside, she started helping the Bengaluru Water Supply and Sewerage Board (BWSSB) to plug leakages and analyse the groundwater level in different localities through sensors.
“One thing I’ve learnt is, there are very few decisions in life that are irreversible, so just take a decision, start a company, if it’s not working, have the courage to stop, take up a job. Everything is an experience and there’s no wrong decision," she says
Gaurav Mehta, COO of Quidich, a company involved in drone cinematography and videography, agrees. “Running a business is very different and the work is not just about loving what you’re building. It involves legal contracts, accounts, setting up an ecosystem and convincing clients." Mehta, 26, turned his passion for building all-terrain vehicles into a drone company in September 2014. He says you need to keep yourself constantly motivated. “The people in the same batch as me are buying cars, are settled in the US, while we’re still struggling," he says, adding constant evaluation, encouragement from people, and passion for his product has kept him going.
In 2017, HackerEarth raised $4.5 million in Series A funding. Today, the company is a community of 1.7 million developers from 57 countries, with 360 clients across platforms. But the ride isn’t any easier. “Till today, there are days I wake up and just cry," says Gupta, “Many a time, you just want to write code and not do things like read legal documents, or wear a suit for yet another meeting, but it’s all part of running a business," he adds.
Good mentors and advisers helped them get through the initial days, says Gupta. Sanjay Nath, managing partner in Mumbai-based venture capital firm Blume Ventures Advisors, says mentors and a committed initial team are two essentials for a young founder. “When you’re starting out from college and doing something that’s not been done before, what you need most is a good sounding board and a group of mentors and advisers who can ask the right questions."
The transformation of an idea into a business is the biggest challenge young founders face, says Rutvik Doshi, managing director, Inventus Capital, a Bengaluru-based early-stage venture capital firm. “One big advantage they have is that they are naïve. This allows them to think without any biases or preconceived notions of how the world works and come up with radically different and superior ways to build companies."
Naïve is the word Gupta also uses when he talks about what worked for HackerEarth. “We had nothing to lose, and the fear of losing, or of ‘what if this goes wrong’, hadn’t crept in."