Startup India, Stand up India


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

The Prime Minister of India on 15th of August 2015 launched a new campaign Start-up India, Stand up India to promote bank financing for start-ups and offer incentives to boost entrepreneurship and job creation. The initiative is aimed at encouraging entrepreneurship and job creation among the youth of India.

As per the initiative, each of the 1.25 lakh bank branches should encourage at least one Dalit or tribal entrepreneur and at least one woman entrepreneur. Under this initiative, in addition to existing systems to facilitate start-ups, loans would also be given to help people. This initiative will give a new dimension to entrepreneurship and will help set up a network of start-ups in the country.

Startups from India are applying technology to transform healthcare, education, agriculture, clean energy, security, financial inclusion of the poor and access to clean water.  India now has the institutions, incentives and interest for new ventures. India’s own ecosystem of startups is evolving rapidly. It is driven by the energy, enterprise and innovation of youth.

India has  incubators, accelerators and investors willing to back an idea and assume risks. India has woken up to the potential of Startup Ventures with great enthusiasm and energy. In the past few years, they have grown exponentially. It would start a new revolution of employment, entrepreneurship and growth in India. These startups are representative of the changing India where apart from just creating solutions for the upper middle-class urban consumer of India, the innovators are leveraging technology and their experiences to create massive impact by solving some tougher problems.

Startup Defined

Startup is a company that is in the first stage of its operations. These companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand. Due to limited revenue or high costs, most of these small scale operations are not sustainable in the long term without additional funding from venture capitalists.

Steve Blank and Bob Dorf define a startup as an "organization formed to search for a repeatable and scalable business model." In this case, the verb "search" is intended to differentiate large, i.e. highly valued, startups from small businesses, such as a restaurant operating in a mature market. The latter implements a well-known existing business strategy whereas a startup explores an unknown or innovative business model in order to disrupt existing markets, as in the case of Amazon, Uber or Google. Blank and Dorf add that startups are not smaller versions of larger companies: a startup is a temporary organization designed to search for a product/market fit and a business model, while in contrast, a large company is a permanent organization that has already achieved a product/market fit and is designed to execute a well-defined, fully validated, well tested, proven, verified, stable, clear, un-ambiguous, repeatable and scalable business model. Blank and Dorf further say that a startup essentially goes from failure to failure in an effort to learn from each failure and discover what does not work in the process of searching for a repeatable, high growth business model.

Paul Graham says that "A startup is a company designed to grow fast. Aswath Damodaran stated that the value of a startup firm "rests entirely on its future growth potential." His definition emphasizes the stage of development rather than the structure of the company or its respective industry. Consequently, he attributes certain characteristics to a startup which include, but are not limited to, its lack of history and past financial statements, its dependency on private equity, and its statistically small rate of survival
Startups encounter several unique options for funding. Venture capital firms and angel investors may help startup companies begin operations, exchanging seed money for an equity stake. In practice though, many startups are initially funded by the founders themselves. Factoring is another option, though not unique to startups. Other funding opportunities include various forms of crowdfunding, for example equity crowdfunding.

In recent years, popular lexicon has begun equating startups with tech companies, as though the two are inherently intertwined. Is Uber, the car-hailing app which has raised a whopping $307 million in total funding for a reported valuation of $3.5 billion, really still a startup? Well, no – it’s a multinational logistics company which will generate a reported $213 million in revenue this year. Certainly, startups often adapt technology to solve problems and the ubiquity of that technology – 98% of Americans have access to the Internet, while more than half have smartphones – allows the critical growth. Though it often is, a startup does not, by definition, have to be tech-oriented. And when a tech startup has grown so big it’s generating multimillion dollar profits, we should acknowledge its status as a startup graduate.


Saturday, 16th Jan 2016, 08:19:05 PM

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