Adding wings to entrepreneurs

Youngsters must understand that the true essence of entrepreneurship lies not in technology but on their entrepreneurial intent — understanding problems and offering solutions

India is on the cross roads of exciting times. With demographic dividend on its side, it is set to become the youngest nation in the world by 2020 with an average age of 29. Although the demographic potential offers the country an unprecedented edge, which could further contribute to the gross domestic product (GDP) growth rate, it is a challenge for the Government to meaningfully employ its youth.

Boosting entrepreneurship and innovation has to be the mainstay of our economy, and although India stands next to only the US and Britain in terms of number of startups, the sheer volume of population requires high entrepreneurial intent and hugely supportive ecosystem. The Indian Government has pro-actively taken several positive measures to step-up support for entrepreneurial ecosystem, and has launched more than 50 schemes in the last few years for the benefit of an entire gamut of startups, SMEs, MSMEs, research organisations, incubators, accelerators and so on to encourage innovations in IT services, hardware, analytics; aeronautics, aerospace and defence; automotive; non-renewable and renewable energy, green technology; nanotechnology; agritech; fintech; social impact; and healthcare and life sciences to name a few.

With a fertile ecosystem provided by the Government, the onus is on the youth of the country to take advantage of the same and the golden question that young entrepreneurs wish to find an answer for is: How to find a business opportunity that is right for them?  With a myriad of choices available, this can be confusing, like should the focus be on introducing a new product or service to gratify an unmet need? Or should the entrepreneur select an existing product or service from one market and offer it in another where it may not be available? Or should they just rely on a tried and tested formula that has worked elsewhere, such as a franchise operation? Well, the choice could be based on individual resources and capabilities.

In this age of Internet and high connectivity, there are several businesses that have come up, based on perceived need. Virtual marketplaces like eBay, the largest auction site in the world, with over 150 million active registered users and Amazon, one of the most popular e-commerce stores with almost a hundred million unique visits every month, saw the opportunity to connect the buyers and sellers directly and offered platform to do the same. Both these websites provide sellers with the opportunity of increased sales without the need for expensive website development and unpredictable marketing costs.

PayPal, a company co-founded by Elon Musk, provided an opportunity to the people to pay online. Back home in India, RedBus provided an easier way to passengers to book their tickets on bus journeys and were acquired by Ibibo group for an estimated value of Rs 600-700 crore.

All of these companies have one thing in common. They addressed an unmet need in the marketplace. New generation entrepreneurs have to be sensitive to the inefficiencies in the market. An idea as to how to correct those inefficiencies, with an ability to bring together resources and capabilities needed, could lead to very interesting business ideas. With a number of inefficiencies in areas of education, health, sanitation and environment in emerging economies, there can be a huge scope by marrying technology to these social issues.

Indian companies like Flipkart and Snapdeal have successfully brought the e-commerce industry to India. Flipkart’s cash-on-delivery model has been copied by almost every other e-commerce company in the country and now accounts for a majority of transactions across all online retail sites. Flipkart’s success has come not just from online retail, but also from its focus on building technology services at the back end. It has set up a logistics arm that has ensured quick deliveries to the customers. Franchise operations can also be successful business operations for young entrepreneurs.

Subway and Baskin-Robbins are successful franchises in food and beverage areas; Aloha in education and training; and Kidzee in pre-school segment. Although choosing any one of the option depends on the calibre and resources an entrepreneur can bring together, one must remember that returns are generally matched by the risk-taking ability and there would be potentially higher returns for any venture with higher risk.

The young generation also needs to train themselves to think out-of-the-box and innovatively to understand the society’s needs, problems, and wants to create new products and processes. An example of an invention in Sweden is an eye-opener for all entrepreneurs where two graduates Anna Haupt and Terese Alstin brought together two basic needs of bikers — safety and need for style. Bikers avoid wearing helmets as they are bulky, cumbersome and could mess up expensive hairstyles. At the same time, they are absolutely imperative for the well-being of the cyclists. 

After years of studying bike accidents and various movements that involved, the duo created an invisible helmet named Hovding  which doesn’'t sit on the head and is a fabric-collar that a biker wraps around the neck. During an accident, the Hovding’s sensor detects abnormal movements and triggers an airbag inside the collar in 0.1 second and it covers the biker’s head. It is an airbag helmet for bikers.

What can we learn from this invention? Let’s take a closer look at this helmet again. This invention is a result of mixture of two existing products — helmet and airbag. The first commercially available bicycle helmet was designed in 1975. And the first commercial airbag was introduced for vehicles around 1970. After 40 years, two inventors mixed these two products and created a new product. That’s the beauty of entrepreneurship. Entrepreneurs can be creative by mixing existing products, technologies, processes and adding their own innovation to create new products and services.

After deciding which way to move, an entrepreneur has to be aware of all risks involved. First is the company risk, meaning, whether the founders have the wherewithal to not only start a business but to also grow it. The prevalence of able leaders, like Bill Gates or Steve Jobs who can also manage the growth of companies is fairly limited. The second biggest source of risk is being imitated by competitors and how imaginatively can a company create barriers to imitation. Entrepreneurs also need to be careful of industry and financial risks.

Young entrepreneurs need to be mindful that the true essence of entrepreneurship is providing solutions to the problem and needs, which need not necessarily be embedded with technology. Customers may not always buy technology. Customers buy products that add value. Lessons could be learnt from India’s own billion-dollar club like Flipkart, Snapdeal, Ola, InMobi, Hike, MuSigma, Paytm, Zomato and Quikr. With a friendly ecosystem given by the Government, Indian entrepreneurs should make theirs dreams come true and India proud.

(The writer is Assistant Professor, Amity University)