alone exceed $126 billion. In 2018, technology contributed 5 percent of India’s $2.5 trillion Gross Domestic Product. Last year, India‐based companies received over $25 billion of investments from venture capitalists and private equity firms. Today, as a result of our educated labor force (three million graduates with one million engineers annually) over 1,200 global corporations have operations in India to leverage the depth and breadth of our technical talent. The investments in technology and substantial employment opportunities with global corporations have provided Indian entrepreneurs experience and exposure to global markets.
The milestones that mark 2018 are ones that I would not have predicted 10 years ago. When I returned to India after working in technology in the United States in 2007, I created a startup. At that time, you could probably fit all the startup founders in a large hall. Being an entrepreneur was something I had to explain to puzzled family members and friends. With no brand name or track record to rely on, it was close to impossible to attract customers. Getting funding or attracting employees for any startup was just as difficult. But from that humble beginning in 2007, the Indian startup ecosystem has blossomed and in the past decade has become one of the top entrepreneurial ecosystems in the world.
While India is quickly becoming a leader in entrepreneurial startups, significant challenges lie ahead. The domestic market is populous, diverse in language, culture, and religion, and largely agricultural. India is home to 1.3 billion people. Our population doubled in a span of 40 years and India added 180 million people, or more than half the US population, in the past 20 years. The scale of this population growth is unmatched everywhere except in China. While the sheer numbers are staggering, the demographic diversity is even more so. India is home to numerous religions, ethnicities, languages, and cultures; 67 percent of India is still rural; 52 percent of the total workforce still relies on agriculture for their livelihood.
Although health outcomes, such as infant mortality and communicable diseases, have improved significantly for Indians, we still have challenges ranging from limited access to healthcare to poor sanitation, and we have an estimated 100 million people at risk of diseases like diabetes. Education also faces significant challenges. Given such a large young population, high dropout rates from high schools rob the potential of millions of students from contributing to society and creating an independent life. Basic necessities, such as access to quality education and good employment opportunities, are critical concerns for local and regional governments. All sectors of India’s economy—energy, agriculture, infrastructure, transportation, manufacturing, finance—face significant scale and structural challenges.
However, these challenges present immense opportunities for entrepreneurs. Until recently the domestic market was beyond the reach of entrepreneurs. The solutions that work in less constrained and simpler markets didn’t work in India. The large population, high rural density, incredible language and cultural diversity, and the vast migration patterns prevent solutions from the United States or Western Europe from being effective in India. But Indian entrepreneurs have one advantage that entrepreneurs in the United States and Europe do not have: the desire by over a billion Indians to seek information and conduct transactions on their smartphones.
The advent of smartphones, with ubiquitous data connectivity and low cost, allows over 500 million Indians to access the Internet. As a result, India is leapfrogging many generations of technology infrastructure. Today India is not just a mobile‐first market but is a mobile‐only market with over a billion mobile subscribers compared to a mere 25 million landline subscribers. While a large percentage of Indian customers may never own a computer or landline, they are connected and accessible. This makes the previously prohibitive and hard‐to‐reach market suddenly open for entrepreneurs to innovate.
India is clearly at an inflection point.
With such a fast‐evolving landscape, building business models that are repeatable and robust is challenging for emerging entrepreneurs. Entrepreneurs comfortable in serving global and urban customers often fail to understand the reality, motivations, and behaviors of customers beyond urban centers. For example, a typical daily wage farmer in a village might have to give up a day’s work and travel over two hours just to reach a bank to deposit money that he would need the very next week. His wife, who makes money weaving clothes in their house, cannot give up a day’s work to go to the nearby town to get her eyes checked. This couple wants to send their kids to school, but good‐quality education and financial means pose big challenges.
Since the bank is not physically accessible, the farmer and weaver are not part of the formal financial sector, which means they don’t have credit history and they can’t get access to cheaper credit. They are forced to take usurious loans, further straining their ability to create financial stability. This situation presents a vicious cycle the family can’t easily overcome. Unfortunately, this scenario is a sad reality for hundreds of millions of people in India. The conventional solutions we have today for an urban context assume a certain level of access and knowledge that is far removed from the reality of over half a billion people.
Entrepreneurs need to develop solutions that work for less sophisticated and rural customers at a price and quality that is superior to the current solutions. We can’t expect a farmer to give up wages just to go to a bank; the bank needs to come to the farmer. We can’t expect a weaver to give up wages to receive medical care; the medical care provider needs to reach the weaver in her house. The solution for the farmer and the weaver needs to be cheaper, easier, resilient, and high quality, otherwise they will continue forgoing banking, medical care, and other needed services.
To create and sustain an entrepreneurial ecosystem requires a radical shift in the mindset of everyone in India, including consumers, governments, and entrepreneurs. The next wave of Indian entrepreneurs will need more than the desire to reach the majority of India consumers, as they will need the support of local and regional governments to help create entrepreneurial ecosystems. Most importantly, entrepreneurs will need the tools, mentorship, and communities that are the core of Techstars.
Techstars is the worldwide network that helps entrepreneurs succeed. Techstars accelerators have funded more than 1,700 companies in more than 30 locations in 13 countries. Techstars brings to India what we need: grassroots innovation and founders to think bold. We need world‐class mentorship to help shape the right mindset and bring their experience to help grow Indian entrepreneurial ecosystems.
Techstars provides the necessary ingredients for entrepreneurs to succeed in grassroots innovation: deep experience in helping entrepreneurs take an idea and develop it, and in pairing startup entrepreneurs with experienced mentors to help entrepreneurs avoid obstacles and overcome hurdles.
I am excited about the opportunity Techstars will have to participate in the next wave of innovation in India. Techstars will help usher in new innovation models and contribute to India’s growth as well as learn from it. Extending Techstars’ global network to India makes the commitment even stronger and India’s entrepreneurial ecosystem more robust.
Namaste India!
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Mentor‐Backed Entrepreneurship in India
Sravish Sridhar
Sravish was the founder and CEO of Kinvey, a company that participated in the Techstars Boston 2011 accelerator. He is currently an active angel investor and mentor to numerous founders all over the world.
Founders who believe that they are building companies in massive markets with a potential to grow very quickly often aspire to become “venture‐backed startups.” Although venture capital could be an important tool to facilitate growth, I believe that it is far more impactful if founders successfully surround themselves with mentors who can help and support them in other ways. What startups really need is a mentor
