Tracking Start-up journeys to success

The start-up ecosystem in India is at an inflection point. Despite the challenges that start-ups continue to face, access to technology and capital, from primary markets and private equity, is driving meteoric growth in the sector. However, this growth is not homogeneous for all companies in the space; while some have charted journeys to success, others have fallen by the way-side.

To gain an overall perspective on building a start-up and fuelling success through innovation, CNBC TV-18, in partnership with NetApp Excellerator, hosted a special show, ‘Start up: Journey to Success’, featuring a panel discussion between sector stalwarts.

Moderated by CNBC TV-18’s Paromita Chatterjee, the panel comprising Madhurima Agarwal, Director – Engineering Programs & Leader, NetApp Excellerator; Vamsi Krishna, Co-founder & CEO, Vedantu; Gaurav Hinduja, Co-founder & MD, Capital Float and Prashant Tandon, Co-founder & CEO, 1MG, shared their views on opportunities and challenges faced by start-ups in building a brand and the role of enablers and investors in ensuring their road to success.

Having worked with numerous Indian start-ups on cutting edge technologies and taking them to the global map by providing access to NetApp’s customers, Madhurima Agarwal set the tone for the discussions ahead, by sharing her observations on key trends in the Indian start-up ecosystem. “We have seen a lot of traction in India’s B2B space, specifically over the past two years, as the pandemic triggered an acceleration in adoption of digital solutions. We have also seen a lot of new and innovative products and ideas come out of India,” she said.

She went on to explain how her company assigned two kinds of mentors to every start-up selected for the program – technical mentors and business mentors. While technical mentors offered guidance on issues related to access to digital infrastructure, optimizing tech spends, choice of cloud, cloud security, etc., business mentors helped with feedback that shapes the product, support in accessing finance, building markets, etc.

The other participants, being captains of successful start-ups, shared their experiences with respect to challenges and opportunities they faced and solutions they adopted on their journeys.

Vamsi Krishna of Vedantu narrated how his start-up was a story of friends turning into entrepreneurship partners, who began their journey with an off-line education set-up before making their mark as an edu-tech venture.

“Having a set of mentors is very critical so that you learn from other people’s experiences rather than trial and error. I was fortunate to get mentors in my network to who I can still go to as sounding boards,” he said, describing how he approaches some mentors for insights on marketing and branding and others for advice on fund raising or strategy. With respect to raising funds, he believed that it is important to know what type of partner you are bringing to the capital table, in terms of credibility and support in growing the business.

Acknowledging that the first couple of years can be difficult for a start-up, Gaurav Hinduja recounted, “We were apprehensive about whether our business model would work and whether it would be able to attract capital. But building a multi-disciplinary team helped us to cross that hurdle. My co-founder and I had very different skill sets and we found a team that could understand traditional finance as well as technology. This diversity in capabilities and experience attracted investors.”

His advice to budding entrepreneurs was to be open to the fact that things may not go your way and plans will have to keep changing accordingly. “Having a goal and a direction is crucial but you may need to reroute and revise the business plan or create a new one, based on learnings from the past; that’s the nature of start-up life.”  

Sharing his story, Prashant Tandon recalled, “Our first venture entailed creating the first digital database of medicines. It was intended to help doctors to write out prescriptions, etc. Although they never used it, people came to the platform to read about medicine. In fact, we got a very large amount of traffic.” He explained that his company’s journey was guided by its customers, who wanted access to better healthcare facilities – medicines, lab tests and consultations, in addition to information and content. “We started facilitating their needs through our platform,” he said.

He noted that one of the most important things in a start-up’s journey is finding the product-market fit. That may take a lot of time and experimentation and many start-ups cannot survive long enough to try out everything they could have. “Capital and fund raising are extremely important to give you a shot at everything you need to try,” he said.

The panellists discussed other issues that are relevant for start-ups, including how to cope with rapid scaling up, setting up processes and tools that can support longer term growth, riding cycles that are a natural part of evolution in the start-up ecosystem, etc.

They concluded that currently, the start-up ecosystem is headed for a phase of consolidation, stabilization and tightening, after exuberance and abundant availability of capital. This phase will benefit the ecosystem over the long term as it will enable businesses to become more resilient and focus on their bottom-line too. There are fresh opportunities and challenges for start-ups and the learning curve is likely to lead to a substantial improvement in the economics of start-ups and maturity in processes and systems.

Summing up, Madhurima Agarwal observed, “The quality of products coming out of India through start-ups has improved immensely and it’s just going to get better. There is also greater on-ground acceptance for using start-up products, not just in metros but in tier 2 and tier 3 cities as well. With all these developments, there’s a great future for the entire start-up ecosystem."

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