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Published in Though Leadership Compendium: India Innovation Initiative by CII
Written by Kapil Mehta
There was a time when entrepreneurship was considered unconventional, offbeat even. It was for the dreamers, the outliers. It was for millennials who looked at life differently, who yearned to know the world better, for whom ordinary just wasn’t enough. Perhaps the spark within these souls had been dimmed by cloistered office cubicles and protracted, uneventful meetings; their dreams and creativity most likely trapped by four walls and a computer screen. And maybe, entrepreneurship was their form of rebellion.
Entrepreneurship has never been considered a practical route. How can it be, without the promise of the bank balance tinkling just a little louder at the end of every month? And yet, in recent years, this unlikely tribe has only grown. Today, India is considered the land of rising entrepreneurship, and has secured a place on the world map as a mighty harbourer of entrepreneurs. It boasts of over 48 million ventures while the United States has clocked a little more than 23 million, almost exactly half that count.
At SecureNow, we’ve been part of the incredible entrepreneurial wave that has washed over the country in recent years. And along the way, we’ve made myriad discoveries that have changed the way we perceive people, customers and businesses. For instance, we have established that small businesses are willing to buy insurance from someone who does not have a long standing personal relationship with them, provided the fare being offered is relevant.
We have found that these businesses are not price, but value driven. We have demonstrated that fresh graduates can sell relatively complex general insurance, provided they have strong technology support. We have determined that underwriting, which used to take weeks, can be done in minutes. We have observed that a healthy dose of technology can dramatically increase access to small businesses spread across geographies and industries. We don’t have all the answers just yet, but are working on it. It’s a journey of discovery, and there are many answers yet to be uncovered.
While entrepreneurship has changed the face of the Indian economy in the last few years, entrepreneurs face a host of challenges in the current economic landscape. India has long been touted as the labour capital of the world. With a population of 1.3 billion, manpower should hardly be a concern, right? Right. But though there is abundant labour, specialised skills are few and far between. Take web design skills, for instance.
Ironically, despite the internet business boom during the past couple of years, there has been a dearth of skill sets related to web design and UX amongst urban Indians. Even in the wake of digital India, these skills remain niche, and businesses struggle to find web architects who can deliver quality interfaces. It’s not impossible to address this problem; not at all. In fact, India already has the infrastructure; it’s just about tweaking it to suit the digital age. Institutions like NID and the IITs can be turned into digital centres of excellence. They can deliver comprehensive training modules on web design to empower aspiring designers. This will certainly help to fill the skill set gap that exists today.
Labour is a double-edged sword. While I’ve already spoken about how it can immensely impact a business, managing manpower is a concern for most businesses. Weak contractual agreements mean that employees are not legally bound or obliged to serve adequate notice in a company. The judicial process needs to be fortified to handle employee separations swiftly, and this can only be done if employer-employee relations are hived off from traditional courts. Appointing new employees can also end up being a cumbersome process for most companies. Background checks are often futile, because little information exists about the employee on any online or archival platforms. It is imperative, in my opinion, that a common database be created by industry associations, to store key background information about employees across sectors.
Entrepreneurs are often challenged with respect to employee welfare when it comes to monetary deductions. Employee provident funds and ESI requirements entail mandatory deductions and employees see little value in them. I believe that making the provident fund optional across all income brackets would be more useful, and would allow employees better control over their finances. What better way to impart financial consciousness?
2015 saw the advent of the consumer-facing internet business trend in India. From food technology companies to online marketplaces, e-jewellers to home management applications, the internet became a labyrinth of consumer utility services. India has an estimated 375 million internet users and is the second internet market in the world, so it was little wonder really.
Newspaper columns were reserved for which consumer services Internet Company snagged the latest round of funding, and who had been acquired by whom. In the process, businesses in commodities, financial services, consumer goods and healthcare, amongst others, were not spotlighted by the media. As 2016 sees these internet businesses consolidating, the hullabaloo that once surrounded them is dying down. It’s the ideal time for the media to highlight businesses in other sectors. Today belongs to the companies who flourished, but did not receive media attention by virtue of the industry that they belonged to. Today is their day.
Another concern for businesses in India is tax. Entrepreneurs are perpetually combating the implications of taxation on their business. Tax refunds usually take more than a year to get processed. It really makes you wonder why there is no automatic refund process in place. Wouldn’t it be easier to have an established auto-refund process which would refund the tax within 6 months in the absence of any queries? I think it’s time the government put one in place.
Some industries in India are regulated. Telecom, food safety, insurance, power and pension are just some of these. The good news is that regulations can be a boon, because they prevent market failure. The bad news? They can also be a bane. Because these industries are so tightly controlled by the government, approvals can take months. Businesses have to wait indefinitely, resulting in a loss of time and resources. So what’s the solution? Well, how about varying the degree of approvals required based on the size of the company?
Simplify the approval process for nascent companies, and then bolster it as these companies get larger.
It’s interesting that as entrepreneurship has become a buzzword in India, there has been an influx of foreign investment in the country. Foreign investors have grabbed headlines in the recent past for all the right reasons, while their Indian counterparts have shied away from investing in homegrown companies. Domestic investment is the need of the hour, particularly in FDI regulated sectors. By introducing incentives for angel investing, I am certain that domestic investment will see a rise.
It takes years of hard work for entrepreneurs to become overnight successes. Delve into the history of any entrepreneur and you will see failure, rejection and course correction in equal measure. It takes all three to make a great entrepreneur. J.R.R. Tolkien captured this best when he said “All that is gold does not glitter, not all those who wander are lost.” Couldn’t have been said better.