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In the mid-late 90s, Indian Institute of Technology (IIT) Bombay started thinking about setting up a school to encourage entrepreneurship. An infotech incubator, KReSIT, was created and funded by eminent alumni Nandan Nilekani and Kanwal Rekhi. What was the culture of entrepreneurship in India at the time? Professor Deepak Phatak, professor emeritus at IIT Bombay, recently shared an interesting anecdote about his interaction with an entrepreneur looking for incubation at KReSIT. During the selection interview, the person mentioned that his father wanted to meet Professor Phatak, who agreed without knowing what it was about and then found the father had a worry to express: If the startup were to fail and his son was saddled with debt, how would he find a suitable bride? In a society where stable jobs were the norm, the idea of an IIT graduate from a middle-class family opting for entrepreneurship, risking debt and societal judgement, was unthinkable.
In the mid-late 90s, Indian Institute of Technology (IIT) Bombay started thinking about setting up a school to encourage entrepreneurship. An infotech incubator, KReSIT, was created and funded by eminent alumni Nandan Nilekani and Kanwal Rekhi. What was the culture of entrepreneurship in India at the time? Professor Deepak Phatak, professor emeritus at IIT Bombay, recently shared an interesting anecdote about his interaction with an entrepreneur looking for incubation at KReSIT. During the selection interview, the person mentioned that his father wanted to meet Professor Phatak, who agreed without knowing what it was about and then found the father had a worry to express: If the startup were to fail and his son was saddled with debt, how would he find a suitable bride? In a society where stable jobs were the norm, the idea of an IIT graduate from a middle-class family opting for entrepreneurship, risking debt and societal judgement, was unthinkable.
The anecdote points to a key but often under-appreciated barrier to entrepreneurship: social opinion. Usually, discussions on entry barriers revolve around topics like large established competitors and the difficulty of acquiring crucial resources. However, almost everyone has an opinion on how individuals and communities should make their living. Experts often have well-developed mental models that address questions like whether everyone should pursue entrepreneurship, who is likely to succeed and how one should go about it. Non-experts also have opinions on these matters, often held with stronger conviction than experts. Family concerns of marriage prospects, for example, can impact entrepreneurial choices.
The anecdote points to a key but often under-appreciated barrier to entrepreneurship: social opinion. Usually, discussions on entry barriers revolve around topics like large established competitors and the difficulty of acquiring crucial resources. However, almost everyone has an opinion on how individuals and communities should make their living. Experts often have well-developed mental models that address questions like whether everyone should pursue entrepreneurship, who is likely to succeed and how one should go about it. Non-experts also have opinions on these matters, often held with stronger conviction than experts. Family concerns of marriage prospects, for example, can impact entrepreneurial choices.
Social opinion that paints entrepreneurship as unattractive, “just too risky", “not for you" or “not to be done like this," creates a dilemma for aspiring startup founders: they must conform or go rogue. Should they abide by social opinion and get a safe job or dare to a take a shot at setting up a business by forging their own path? A recent paper published in the journal Entrepreneurship Theory and Practice titled ‘Rogue Entrepreneurship’ mentions that an unfavourable consensus can stop would-be entrepreneurs from starting ventures. Thus, social opinion is often the first entry barrier faced by an aspiring entrepreneur. Only after this leap is taken do other barriers come into the picture. Social opinion not only shapes individual choices, but also influences the strength of the entrepreneurial support ecosystem. This collective mindset can either foster or impede the growth of nascent entrepreneurial ventures.
Is India better on this aspect in 2024 than it was in the late 90s? The answer is an unequivocal ‘yes.’ If an aspiring student entrepreneur at IIT Bombay in the late 90s time-travels to the campus today, the person will not be able to recognize it. It has a vibrant incubator, a school of entrepreneurship offering a variety of courses, innovation centres, tinkering labs and a large number of role models. There are also government and private-sector funding opportunities. All this in a country buzzing with aspirations of hosting the world’s most valuable startup ecosystem. An expert consensus at the highest levels of government, academia and industry seems to be largely pro-entrepreneurship today. Leaders are incentivizing entrepreneurial explorations and trying to make them less risky. For example, Birla Institute of Technology and Science (BITS), Pilani, announced that it will allow students and faculty members who want to launch their own ventures to take a break of up to a year. If their ventures fail, students can resume their education and faculty members can return to their academic positions. Social-opinion-driven barriers for entrepreneurship have been significantly lowered in several places and the results are visible. India has created the world’s third largest startup ecosystem in a relatively short span of time.
The evolution of this ecosystem must continue. Barriers need to be lowered further and positive social opinion about entrepreneurship should pervade all geographies, socio-economic classes and organizations. Statistics reveal disparities. Only 18% of India’s unicorns are founded by women, for example, and about 42% of unicorn founders are IITians. A significant portion of venture capital funding still goes into consumer technology startups, with deep-tech startups surviving largely on other forms and sources of capital. Unique barriers persist for aspiring entrepreneurs from tier-2 and tier-3 cities, villages, less advantaged socio-economic classes and conservative communities. Negative, narrow or biased opinions held by various stakeholders—investors, families, communities, educational institutes and bureaucrats—contribute to these challenges. Pragmatic optimism can go a long way in building confidence and resilience among budding entrepreneurs.
Entrepreneurs should navigate rather than ignore societal opinions. These embody a mix of traditional wisdom and ingrained biases. Going rogue does not mean throwing out the baby with the bathwater. In this entrepreneurial journey, success lies in striking a delicate balance between established wisdom and breakthrough innovation.
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