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Entrepreneurship and Start-ups: Pillars of New India

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A start-up is different from entrepreneurship. What creates the difference between the two? Both an entrepreneur and a start-up founder are investing in a company, but does one have more responsibility than the other? In a time where both start-ups and entrepreneurs are considered as job creators and change makers of the future, let us find out how they are unlike each other, contributing towards solving un-employability with the help of government and external resources.


Who is an Entrepreneur and a Start-up Founder?

An entrepreneur is an individual who perceives a business opportunity and converts it into a viable business plan culminating into a business venture ultimately. Entrepreneurs often invest without the major responsibilities of running the companies as they focus more on earning money from them. Entrepreneurs try hard to create a viable business, not one that has a vague hope of succeeding. On the other hand, a start-up founder is distinct from an entrepreneur as they found a new company. They create a business that will someday become successful. While both of them sound similar, the goals of a start-up are quite different. Unlike an entrepreneur, a start-up founder does not have a major financial motive. They create a product or a service to change the world.

Difference in Objectives

Both individuals need to have a strong personal drive to run a firm, lack of discipline and hard work, could lead to hardship.With entrepreneurship, it is vital to creating a product and be paid for it. Start-up founders often do not worry about the selling process at first as they want to generate larger profits in the future. There are advantages and hindrances in both areas. An entrepreneur may find himself/herself out of money quickly if the sales are not coming in. They need to have appropriate financial backing for the first year or longer as they need to invest money into equipment, employees, and others to start generating products to sell. Whereas, a start-up founder usually does not need to deal with all the financial day-to-day ongoing of the business. However, a start-up founder takes a major risk by tying themselves to the company. Their reputation is at stake as they approach others and start marketing the business.

Another noticeable difference is the purpose. Entrepreneurship always has a financial motive. For start-up founders, though, that motive is often secondary. They usually want to change the world, build and trendy products. The even bigger difference comes when considering the concept of closing the loop. A business is not viable until the loop between creating value, delivering it to customers, and being paid for it, is closed.

Roles of Entrepreneurship

• Effective Utilization of Resources
Entrepreneurship is all about putting to better use the resources which are considered to be of low value. An entrepreneur comes up with ideas of how to use what others may consider waste. This improves the economy of a country through taxes and the creation of jobs which improves the standard of living of the beneficiaries. For example, the Kenyan Sisal plant is being used by small scale entrepreneurs to weave quality bags such as table mats, lampshades etc. and sell these items globally.

• Increase in Per Capita Income and Employment
Economic growth is measured in terms of a sustained increase in real income. It is the entrepreneurial communities who complement and supplement the economic growth increase per capita income by identifying and establishing profitable business ventures. Creation of micro, small and medium enterprises by the entrepreneurs can lead to the creation of both self-employment and wage-employment opportunities, thereby solving the problem of unemployment in the economy.

• Improved Quality of Life and Infrastructure
Entrepreneurs supplement economic growth by improving the quality of life. Establishment of enterprises leads to an increase in employment avenues both directly and indirectly. Consequently, poverty is alleviated as per capita income grows. This results in a better quality of life which is an indicator of economic growth. Establishment of factories and industries in a particular region is always associated with the growth of infrastructural facilities.

• Promotion of Technology and Export
Entrepreneurs produce high-quality products that attract an unusually wide market. Some of their goods are sold in the international markets, hence the main aim of entrepreneurs is usually creating a product virtual or tangible, which is unique and has the potential of reaching out globally.

• Conservation of Resources
The entrepreneur should realize that his business will go a long way in getting public approval if it seems to be doing something positive for the local community. Use of indigenous renewable resources in product manufacturing and regular contributions to community projects will put the business in the goodwill of the community.

There are over 14,600 Startups recognized under Startup India that are spread across 479 districts, covering all 29 States and six Union Territories. In order to provide growth stage funding to Startups, a Fund of Funds (FFS) of INR 10,000 Crore has been set-up. This is supporting innovators and risk takers in their path towards the creation of a New India.

Why Start-ups Fail?

Market Problems
A major reason why companies fail is they run into the problem of there being little or no market for the product that they have built.

Business Model Failure
One of the most common causes of failure in the start-up world is that entrepreneurs are too confident about how easy it will be to acquire customers. They assume that because they will build an interesting web site, product, or service, customers will beat a path to their door. That may occur with the first few customers, but after that, it quickly becomes a costly affair to attract and win customers.

Poor Management Team
A common problem that causes start-ups to fail is a weak management team. They are often vulnerable on strategy, product validation before and during development, and execution according to the market standards.

Financial Constraints
A fourth major reason is that they ran out of cash.

Product Problems
Another reason that companies fail is that they fail to develop a product that meets the market requirement.

Entrepreneurial Process Stages

• Idea Generation
An idea is always conceived from the loopholes and shortcomings of any sector. The entrepreneur begins to contemplate why there is the unavailability of a particular product or service, why not improve certain things, how to generate income to cover their expenses, how to modify the product, create new avenues etc. It is a pivotal point in the entrepreneurial process and it more or less decides the future of the market and the existing competition.

• Business Planning
A critical point in the entrepreneurial process is deciding to start the project. Be active and stay motivated are the main factors for the entrepreneur to start landing his/her idea. Asking what resources are needed and where he/she will get them, is essential to generate at least one way forward for the entrepreneur. The development of the business plan will mark only a guide that can be used as a reference.

• Project Creation and Management
The project is conducted when the entrepreneur decides to seek and obtain resources. Getting finances is tough, and perhaps one of the main obstacles to start a business. When the entrepreneur begins to invest the resources and start operating, it is a point release of stress, as the entrepreneur will see the first steps of his company.

Events Generated during the Process

• Innovation and Incubation
It is the time when innovative and path-breaking ideas are developed, identifying the market opportunity, and information. Also, it begins to see the feasibility of incubation and bootstrapping, the ability to get value from it and how to generate the development of the product or service.

• Implementation
This event includes the incorporation of resources and arms the project to launch their new business to the market. The strategy and business plan begin to develop day by day, and the use of resources are invested in favour of building a successful corporation.

• Growth
The ideal event for any entrepreneur is to see how their company is constantly growing. The activities of the previous event, ideally lead the business to a stage of maturity to maximize profitability for better benefits.

Success Mantra for Start-ups

  •  Never create something that nobody wants
  •  Hire resources with care
  •  Always be focussed
  •  Execute marketing and sales well
  •  Identify right co-founders to begin with
  • Customers are the one to be chased• Tap social media
  • Ensure funding requirements are met

Achievements of Startup India

There are over 14,600 Startups recognized under Startup India that are spread across 479 districts, covering all 29 States and six Union Territories. In order to provide growth stage funding to Startups, a Fund of Funds (FFS) of INR 10,000 Crore has been set-up. This is supporting innovators and risk takers in their path towards the creation of a New India.

Stages of Start-up Growth

Geographical Distribution of Startups

State Startups
Maharashtra 2587
Karnataka 1973
Delhi 1833
Uttar Pradesh 1129
Telangana 748
Gujarat 712
Haryana 710
Tamil Nadu 709
Kerala 461
West Bengal 417
Madhya Pradesh 384
Rajasthan 371
Andhra Pradesh 259
Orissa 251
Bihar 178
Chhattisgarh 168
Jharkhand 116
Uttarakhand 108
Assam 106
Punjab 102
Jammu and Kashmir 63
Goa 61
Chandigarh 52
Himachal Pradesh 27
Pondicherry 19
Manipur 11
Nagaland 7
Andaman and Nicobar Islands 4
Arunachal Pradesh 4
Tripura 4
Dadra and Nagar Haveli 3
Daman and Diu 2
Meghalaya 2
Mizoram 1
Sikkim 1

State-wise Incubation Support

An incubator is a key component of a Startup ecosystem and provides access to essential business resources to enable growth of the Startups. States have a major role in creating an infrastructure that promotes innovation and ensures their sustainability. Another important criteria is to ensure that incubators are accessible and affordable for Startups.

Based on the States’ Start-up Ranking 2018, the national average score of incubation pillar comes out to be 8.56 out of 20 marks. Few states have secured full marks, i.e. 20 marks in this pillar which highlights that they are actively setting up incubators. However, the challenge remains with the presence of such infrastructure across the country and not in a few states.

States with exemplary performance in the Incubation support have been recognized are:

  • Andhra Pradesh
  • Delhi
  • Gujarat
  • Haryana
  • Karnataka
  •  Kerala
  • Madhya Pradesh
  • Odisha
  • Telangana
  • Uttar Pradesh

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