‘It is usually an idea that fails, never the entrepreneur’ | Hyderabad News
A six-member panel of experts answer queries from TOI readers about developing a startup idea, opportunities that T incubators offer to fledgling enterprises and various schemes available to entrepreneurs seeking funds.
Q. I am a finance professional with a zeal for entrepreneurship. What are the factors that one needs to keep in mind while developing a startup idea? How do you decide the commercial viability of a product? — Mihir D Shah
Ravi N: Begin with the assessment of the market. It is very important to thoroughly understand the market before you can go further. So, spend time talking to people – at least five people who can be potential customers. Once that’s done, go back and see what it is that you bring to the table to provide a solution that caters to the demand in the market. Thirdly, understand if the solution is something that makes for a large enough market-base (you wouldn’t be selling it to only five people). Once that’s checked, you can start with building a startup around it.
Q. I am interested in launching a market research provider. I have tried this on a small-scale and it’s been successful. My start up would give employment and livelihood to many, mainly women. Kindly guide me. — Kavitha Rani G
Deepthi R: You have multiple options. First, you can come to WE-Hub, or approach any other incubator for that matter, to leverage its partnership with the local startup ecosystem, to scale up your enterprise. Second, depending on the product, you can use the help of the incubator to connect with customers that you are trying to reach. Third, if you want to grow internationally, incubators like the WE-Hub can help with cross-border collaborations. In fact, if you approach us, we can connect you to the right incubator too, in case We-Hub is not the place. In terms of financial support too, we can help in connecting with female-focused venture capitalist funds or female venture capitalists (VCs), looking to put their money in women-driven enterprises.
Q. I have an idea and we are already building an app around it. But our MVP is not ready yet. Do we qualify for funding? What will VCs look for in us? The idea, the team that’s building it, or past experience? — Bhuvanesh P
Ravi N: It mostly depends on the idea/product. Sometimes, VCs bet on the team if they have strong past credentials. Otherwise, they are usually asked to test the product on a certain number of people first, and be assessed based on its strengths etc.
Ajit R: Some of the important things to bear in mind before approaching for funding are: Where is the product market? What have you identified that nobody else has stumbled upon? What is your unique capability to solve that problem?
Deepthi R: Incubators get a lot of grants that they disburse to many just-out-of-college startups — at the idea to prototype stage. You can apply to that. Secondly, Startup India has several new schemes that you can explore. Thirdly, many banks these days are investing in startups, you can look at that option. And finally, you can also avail of loans that many are offering without any collateral.
Q. I have an idea for a start up on electric vehicles. What are the government policies that can help me? — Sai Prashanth
Sujai K: The electric vehicle (EV) phenomenon is here to stay and will get bigger in the next 10 to 20 years. Hence, it is the right time for one to step into this space. Further, there are various scheme and incentives that are on offer for those exploring startups around EVs. They can get a slew of tax exemptions. For instance, the central government rolls out a subsidy to manufacturers when they intend to sell their vehicles — this varies in limit from three-wheelers to four-wheelers to buses. Then Telangana has two sets of incentives. First is a tax benefit. There is no road, registration or lifetime tax imposed on these products. This allows the manufacturer to make the product available at a cheaper rate to the consumer. Secondly, somebody willing to set up a manufacturing unit – small or big doesn’t matter – in Telangana can avail up to 20% of their capital investment as subsidy. There are other incentives like 100% reimbursement on GST and transport subsidy on parts/units that are imported. Discount on land and leasing space is another benefit extended by the state.
Ajit R: While funding is crucial, those entering this space must be mindful of the large number of startups that are already competing in this space. So, they should ideally go to an incubator to get a sense of the competition. They should also be aware of rules, regulations and risks involved in this space. And apart from EVs, the other area that people can look into is – waste disposal. We are creating so many batteries that in the next 20-30 years there will be a huge problem of disposal. If someone can come up with a solution around this, they will have tremendous competitive advantage over others.
Q. I have an idea to start a publication company/rooftop solar installation firm/ startup for mattress and comfort products that will improve living standards of lower income households. What government policies/avenues are available to me? — K Keerthi Reddy, Rushikesh Reddy, Ajay Prakash
Jayesh R: If you are a student who is towing with an idea, then the best thing to do is get incubation support. Many colleges have their own facilities – like colleges affiliated to JNTU can avail of the J-Hub – even as many others are in the process of doing so. If you are not a student, then there are other incubators outside – T-Hub, We-Hub, T-Works etc — that you can reach out to. Secondly, if you are at a stage where you have clarity about which direction you are taking for your startup and you want to start looking for funds – to bring it to MVP level – there are some seed funding facilities of the government that you can avail of that are there to support very early-stage startups. Incubators can also connect you to investors like Hyderabad Angels. In fact, we are in the process of setting up a T- fund wherein a portion of it – we haven’t decided on the finer details — can be reserved for very early-stage startup ideas. Finally, sometimes we assist startups by giving them an opportunity within the government — be it in the area of healthcare, education, agriculture etc — if there’s some relevance for the government in it.
Q. What is the technical support I can expect from government institutions while creating a product-based startup? Which is the right institution for me to approach? — Shekhar Rao
Ravi N: T-Hub is extremely specialised in building the underpinnings of technology to any startup that is building a solution. Most of it is software based; based on AI, data sciences and so on. We are beginning to see that more and more startups are using these almost like an operating system. In fact, some of it is taken as a basis upon which they build their solution. When it comes to hardware, T-Works is the place to look at as it can help you with prototyping, testing and so on.
Deepthi R: Research institutes and corporates often allow for their testing facilities to be used, for certain validation, depending upon what the product is. So, approaching T-Hub or We-Hub can help with gaining access to these testing labs. Leveraging our collaborations with corporates can also help startups get hands-on support from real world engineers and their testing labs.
Ajit R: RICH works in the areas of life sciences, agriculture and sustainability. In each of these spaces one has to first work on the ground – often hospitals in case of life sciences and fields for agriculture – to test the product. That’s where we step in. We help startups gain access to these ‘labs’ and prepare them for the particular market that they intend to enter – be it India or overseas.
Q. What is the time that one should give a startup for it to take off, before deciding it is a failure? — Karishma C
Jayesh R: When you start with an idea, you arrange for some funding – from friends, family or your own savings. When that starts coming to an end and you realise you have not made any progress, or your product has not achieved any visibility, that’s when you start to pick up the signals. But we still do not call it a failure, because every failed attempt also leaves behind some valuable learning with you, which you use in the next enterprise. I personally know hundreds of people whose first venture did not take off, but they had the mental ability and agility to pivot and make a new, successful, product. This is most important – to assess if you have the mind and ability to be an entrepreneur. To be so wedded to an idea that you are willing to take it all the way and find a solution. And if it doesn’t work, learn from it and move on.
Ajit R: If you run out of money, it’s not a failure. Sometimes it also happens that the idea you have is too ahead of its time (like what happened with e-learning many years ago). If you are not able to develop an MVP, go back and connect with other people who can help you take a fresh look at it. Understand why you are not able to make progress and see if you can find solutions to work around them.
Ravi N: Failure is not of an enterprise, it’s of an idea. One needs to separate the two things. In fact, investors often look for people who have failed since they are faster at eliminating the problems at an early stage.
Deepthi R: Give incubators, mentorship programmes a chance to help you understand where and why you are hitting a roadblock, before giving up on an idea.
Q. I am in the final stages of developing a mobile application that aims to create employment for workers in the unorganised segment. Do I need to register the app with any government agency? Also, since the app intends to collect Aadhar details, as a security measure, do I need to get any permissions? — Rohit Sanghi
Jayesh R: The Telangana government is coming with a policy for assisting migrant workers upskill and improve their current employment status. Once this policy is announced, we will be happy to look at this app and see if it can be useful for us. Secondly, you can also connect with NAAC (since a large section of workers in the unorganised section work in construction) to see what avenues are available.
Also, while there is no need to register with any government agency, permission is certainly required to collect Aadhar details. I suggest you refer to the IT Act and familiarise yourself with the new rules regarding this.
Q. Is it advisable to do a course/training programme in entrepreneurship before taking the plunge? What are the avenues available? — Ankush Sikdar
Shrikant S: There are various programmes that we offer, which might benefit entrepreneurs. In December last year we started an Innovation and Entrepreneurship Mindset Development Programme where one is familisarised with the basics of this field — what qualities one needs to have to become an entrepreneur, etc. At TASK we also run an Entrepreneurship Development Programme, which is in collaboration with all eco-system partners – including T-Hub, We-Hub, RICH etc – which is also very helpful for people who want to start an enterprise. This apart, we run a Technology Entrepreneurship Prograrmme, with ISB, which is basically for tech entrepreneurs. Already over 2,000 people have benefitted from this. Since we work very closely with the entire startup community, we keep coming up with new notices on courses and programmes depending on the requirement and necessity. We have webinars/videos too that one can access. All of this is open to everyone.
Q. A lot of startups like mine (we work on developing LED products), suffered miserably due to the Covid-induced slowdown. Is the government doing anything to help such enterprises revive? — Prashanth Kumar
Jayesh R: There is a national scheme that any SME including a startup, which is going through difficult times, can avail of. It is under the ‘Atmanirbar Bharat’ package — the Prime Minister’s Rs 20 lakh crore Guaranteed Emergency Credit Line scheme. That apart, Telangana has also taken up some measures in a gradual and calibrated way. For instance, if a startup is into manufacturing something which can be used by some large company that’s within our ecosystem, we are helping them connect with each other for the former’s benefit.
Sujai K: If someone is already running something and there is a problem, we can also help and get them customers. But it is difficult to say how without knowing the details. This is done on a case-by-case basis. But startups can certainly approach us with their problems.
Q. Does the state only promote tech-driven startups? I have an idea to take art-based products and sell them through e-commerce. It can help build a platform for artists to showcase their art and earn from it too. Can I get help? — Vishal Khoshekay
Jaeysh R: Our incubators are not all about tech. We have an incubator dedicated for animation, gaming, visual effects – it’s called the Image incubator – which one can avail of, if the work pertains to these areas.
But if one’s startup has something to do with visual arts or performing arts, we have a Jawaharlal Nehru Architecture and Fine Arts University in Masab Tank which also has an incubator that you can take the help of. There is nothing to say that we only encourage tech startups. In fact, majority of the startups at We-Hub are non-tech.
Q. I have a lot of experience in HR processes like recruitment, third party payrolls, running in-house payrolls, HR compliances, HR engagement etc. What kind of enterprises can I think of floating? — J Karthik Rao
Ravi N: The pandemic has thrown up opportunities for people to manage work from home, digital ways of managing people, keeping them productive, upskilling them and workforce management – especially in scenarios where they are not physically meeting their managers, colleagues etc. To be able to employ digital technologies to make these things happen has huge possibilities that one can explore.
Ajit R: There are many startups in the HR space because it has multiple opportunities. It is, in fact, one of the most productive areas for automation.
Q. Would like to know how the government supports startups particularly in the IT sector. How can we attract funding or what funds are available and what would be the criteria for the same? — Savith Desiraju
Ravi N: Just to reiterate, there are different types of funding that one can avail of. First, there are grants that are available to very early-stage startups that have interesting ideas. Various government agencies — central and state — have these schemes. Second, there are non- collateral loans that are available for such work and third, is equity where one can give up a part of the company to get funding.
Q. We are from 360 DigiTMG that offers a data science certification course. It has strategised to focus on emerging trends and technologies and has special emphasis on corporate market. How we can partner with the Telangana Academy for Skill and Knowledge as we want to bring change in the digital space in Telangana. — Satish Kumar
Shrikant S: We have spoken to the startup and are in the process of evaluating their services. There are many other startups that are available in the same space, so we might end up using only some specific programmes. Also, currently we have partners who are offering these programmes pro bono, because of the pandemic. That’s not the case with this one and that’s a constraint. I would suggest, the founders take another look at their product and see if they can make it more affordable and accessible to youth from the districts and rural areas. We are focusing on programmes that empower such youth.