Fearless Warriors
Unfettered by memories of failure or downturns, a new breed of
twenty-something entrepreneurs are unleashing a wave of startup activity marked
by swagger and confidence associated more with the Silicon Valley
When Bhavish Aggarwal was looking to finalise a new round of
funding two years ago for his taxi aggregation company Ola, the odds were
stacked against him. Global giant Uber was about to launch in India. And Ola
had run into a regulatory hurdle in Mumbai for operating a cab service without
permit, which put Aggarwal's business model in a jam.
The then 27-year-old was quick to respond, moving Ola from Mumbai
to startup capital Bengaluru, where the authorities at the time weren't as hung
up on enforcing outdated rules.He was also audacious enough to set up base near
Flipkart's office in Koramangala, which proved to be a good catchment area for
top talent.
“It took us nine months to close the investment as these issues
kept coming up,“ said Avnish Bajaj, managing director at Matrix Partners India
that finally led a $20 million (Rs 128 crore now) investment in Ola, convinced
by Aggarwal's perseverance. “Bhavish was determined that he will be able to
resolve the issues and make the model work.“
Since that deal in 2013, Ola's cab network has increased by over
10 times towering over Uber in India and its valuation has surged nearly 50
times to about $2.5 billion.
Aggarwal represents a new breed of Indian internet entrepreneurs
younger, superaggressive and ambitious, without much of a corporate baggage,
unafraid to chase big markets and challenge established firms or authority.
“The new breed is in their mid-20s, fearless, trying to work on
innovative business ideas and may not have any work experience that clutters their
thinking,“ said Bajaj, 44, a Harvard MBA who worked at Goldman Sachs and Apple
for a combined five years before starting online auction website Baazee in
2000.“This set of entrepreneurs I would put up against the Silicon Valley peers
at any time.“
Which means these young founders, untouched by memories of
downturns, are the kind looking to build robust global solutions with
innovations in both technology and business models, as opposed to relatively
smaller and tamer markets chased by earlier generations. Investors may find
that admirable, but the test will lie in how equipped these entrepreneurs are
to navigate downtimes as well as success.
While idols of the previous generation such as MakeMyTrip's Deep
Kalra (46, ex-GE Capital) and Naukri's Sanjeev Bikhchandani (52,
ex-GlaxoSmithKline) had corporate careers stretching nearly a decade before
they turned entrepreneurs, Ola's Aggarwal and Zomato's Deepinder Goyal, 31, had
only a couple of years of work experience before starting up.
If that's seen as an advantage, an even younger tribe of
entrepreneurs is in a bigger hurry, starting up right after college, or even
before Housing.com's Rahul Yadav, 26; TinyOwl's Harshvardhan Mandad, 25; News
In Shorts' Azhar Iqubal, 22; Grabhouse's Prateek Shukla, 25; and OYO Rooms'
Ritesh Agarwal, 21.
Unlike a decade earlier, for this lot, trading the safety of a
high-paying job for the chance to launch a business right out of campus is no
longer a life-deciding debate. “It was an abrupt decision. I did not want to
start up since my IIT days, but after seeing the environment and successful
entrepreneurs out of IIT Bombay, I got inspired,“ said Mandad, chief executive
and cofounder of 18-month-old food delivery app TinyOwl.
Fuelling the ambitions of this new wave of entrepreneurs are
venture capital investors betting big money on them. Around 80% of the 15-20
startup teams SAIF Partners has funded as part of its seed program in the past
15 months are in the 20-30 age group.
With money pouring in, many of these entrepreneurs are braving
global aspirations, not content with domestic success. Goyal has expanded his
restaurant discovery business Zomato to 22 countries through acquisitions and
is gearing up to take on established players such as US-based Yelp in their
home markets.
“Founders are now ambitious at a global level...when we were
starting out we were ambitious at a national level,“ said Sanjeev Bikhchandani,
52, who founded Info Edge, the parent company of Naukri, about two decades ago.
“Today, entrepreneurs don't think twice about taking a company global from
India.“ Probably as a way to make up, Bikhchandani owns more than half the
stake in Zomato.
Part of the explanation for the swagger could lie in the fact that
India's startup industry is on an up-cycle where opportunities are
ever-increasing. “The current crop has not seen recession, got the best jobs
out of college and raised funding quickly after setting up their startups,“
said Mukul Singhal of venture capital firm SAIF Partners. Obviously, then,
“they are more aggressive in nature and nothing is impossible for them.“
These characteristics become evident in the strategic decisions
the young entrepreneurs make for instance, Zomato's $52 million (Rs 332
crore) acquisition of US-based Urbanspoon in January. “We spent most of our
last round of funding on this acquisition but we've always believed that the
edge of our comfort zone is where the magic happens,“ Goyal blogged after the
deal.
That's the kind of self-belief and risktaking typical of
entrepreneurs in more mature ecosystems. Silicon Valley's legend is built on
college dropouts-turned-entrepreneurs such as Apple's Steve Jobs and Facebook's
Mark Zuckerberg, with tales of their arrogance becoming part of the folklore.
For India's young founders to reach that level, though, their scale of
innovation and business acumen has to magnify multiple levels.
“At this point of time, China has more younger, fresh
out-of-college technology entrepreneurs as compared to India. There are many
billiondollar companies already in China that have been started by
entrepreneurs below 30 years,“ said Anand Prasanna, Shanghai-based director of
private markets at Morgan Creek Capital Management.
Silicon Valley venture capitalist Bill Gurley's caution that young
entrepreneurs securing millions of dollars from investors have no `muscle
memory' of a scarcity, downturn or previous tech bubbles holds true for
India's young startup founders as well. The biggest ask of them is to mature
quickly, build a sustainable culture, and be prepared for tough times.
“The expectations are highly unrealistic,“ said K Ganesh, a serial
entrepreneur who has built and sold four businesses since 1990. “When a
correction happens, I think there will be a reality check of the new-age entrepreneur
in terms of what it takes to build a company and raise funding, and why to build a company and raise funding, and why $100 million is
a phenomenal valuation.
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Madhav Chanchani
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ET29MAY15
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