Question on Quora: Why do most of the Indian entrepreneurs fail to come up with new ideas?

(This post was my response to a question on Quora in August 2013)

In my view there are two main reasons for paucity of new ideas in India (though I see a big, big change in the past couple of years and am seeing a lot of new and innovative concepts being presented and attempt).

The entrepreneurship eco-system needs time to mature: Organized entrepreneurship in India is is a fairly recent phenomenon. Only in the past 10 – 15 years have young professionals and students started thinking of entrepreneurship as a career option (before that it was usually people from established business families that got into business.).

Entrepreneurship needs an enabling environment to flourish – availability of early stage capital, infrastructure that allows startup to start up more efficiently, a society that is respectful of failures (as many startups will fail), customers who figure out a way of buying from startups, employees who aspire to work for startups,  and  government policies that support new ventures (For example, the time it takes to start a startup and shut down a startup is inordinately long in India. Making it easier to shut down a failed startup will make it possible for more people to attempt more concepts.)

Availability of capital is an important factor that impacts entrepreneurship, and entrepreneurial ambitions. The angel investor community, and other forms of capital that support concept stage startups has started getting organized in India only in the past 7-8 years. As more angel investors start understanding the game, they will be willing to take bets on higher risk concepts rather than the safer, risk-free ones. This take time as investors, naturally so, experiment with investing in what they consider safer ventures before investing in newer concepts where the market opportunity may not be obvious, or where the risk-reward ratio is of a different magnitude.

Availability of low hanging fruits: There are many opportunities in India to fix what is currently broken (healthcare, education, etc.) and to replicate concepts that have already been proven elsewhere. Entrepreneurs are grabbing these opportunities and perhaps rightly so.

However, at these existing ideas dry up, and as more people venture into entrepreneurship they will start exploring newer ideas and concepts.

Again, this takes time. But it is happening. Anyone who has been active in the startups space (and I have been) will see that aspiring entrepreneurs are exploring very innovative and new ideas. In fact, the percentage of concepts that were a replica of what has worked in the West has reduced significantly. (Its been a while since I saw a pitch presentation on “LinkedIn (or whatever else) for India”.

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

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