INVESTOR DIARIES

INVESTOR DIARIES

Saileja Dash | Mar 22, 2016

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In the 3-day long National Entrepreneurship Summit organized by Entrepreneurship Cell, NIT Rourkela, Mr Ravi Ranjan, Senior Associate, Nasscom and Mr Saumyajit Guha, COO, Calcutta Angels Network, pitched in to share their ideas along with a fair bit of interaction with the participants of the Summit. Monday Morning managed to get some face-to-face time with the duo and here are excerpts from the discussion. 

MM: Tell us about your journey so far.

SG: I was born and brought up in Kolkata. I come from a typical Bengali family where I am advised from the very beginning to go for a job rather than any other avenue. But fortunately, my father was an exception. I started my career as a businessman with a traditional business start-up. But then, I failed in 3 different start-ups before I started working with my uncle in his business. At one point of time, I ran a hospital of my own. In 2007, I decided to go for further studies and went to UK and did my MBA there. I came back in 2012 and joined STEP in IIT-Kharagpur and that was when I was introduced into this ecosystem. And this ecosystem is so vast, every day is a new learning curve. I then joined Calcutta Innovation Park and was one of the core team members to have helped form it. Then, I joined Calcutta Angels on the investor’s side of the fence.

RR: I am from Jharkhand and typically, when we are from small places like Jharkhand, Odisha, we are expected to take up a conventional career like engineering or medical. But I had this wish to do something different. Till my 12th, I was a pretty normal student and I had no idea what I had to do until I went to Chandigarh to visit a relative and met a few people- a DJ and I saw that they used this profession as their bread and butter. I realised I wanted to do something similar myself. So, I then decided to prepare for Mass Communication courses. I studied journalism and film-making and worked in mainstream media houses and after 3 years, I was selected for a course at Indian Institute of Mass Communication and realised there that if I wanted to change the world, journalism wasn’t the right path because it was getting increasingly commercialised. I left that programme thereafter and entered the event management business and again after 2 years, I didn’t find it interesting anymore and wanted to do something else. I then got an opportunity to work at Indian Angels Network in New Delhi as an event manager but eventually got to work as part of their incubation cell. That was the turning point in my career. Then I worked for various angel networks in various countries. Then I joined cross-border angels and in 2014, I was contacted by a senior employee at Nasscom who asked if I wanted to take an opportunity to start the ecosystem in Eastern India and I was interested since I wanted to do something for my state.

MM: How far do you think a person’s educational career impacts their future work-wise?

SG: I don’t think it has any relevance but education always pays off. I think people should complete their education because education helps but it doesn’t necessarily help in their career. Look at my background- I studied sericulture and I was working at a company involved in civil engineering and construction. There was absolutely no co-relation.

RR: There are 90% people in the world who need formal education to do something good in life. But for people who are great or for leaders, most of the times they have not had a formal education. It is because they are not bound by conventional restrictions and rules. In the case of entrepreneurs too, you will notice that very few of them work within their core domain. Rather, they look at a challenge and look at it as a market opportunity. It is more important that you learn rather than just be educated.

MM: What do you think are the common mistakes that start-ups make?

SG: Normally, people think that start-ups fail due to lack of funding from investors. I found a survey done by Business Insider about the reasons why start-ups fail and you would be surprised by it. Most of the start-ups fail due to the fact that their products have no market fit- they did no research on whether their product would find a consumer base. Second reason is a poor team. Third reason was trying to chase investor rather than chasing consumer. Fourth was poor delivery and fifth was poor money management. Also, the first thing an investor would look for is scalability and valuation. No matter how much research they do, funding will always depend on the investor’s comfort.

RR: Start-ups that have been started to raise funds fail and those that are started to solve a problem survive. Today’s start-ups, primarily from college, is about some people looking up an idea on the internet without doing research and have no idea who the nearest competition is. This is another reason start-ups fail. Lack of a good team is also one of the biggest reasons start-ups fail. Also, 80% of start-ups that do not get incubated fail.

MM: What all could incubation cells in institutes like ours do to provide a better platform for native start-ups?

SG: First thing is to remove the red tapes; give the incubator autonomous power and it should behave like an organization where only the deserving would get to utilise the facility, not everyone. The government is currently pumping a lot of money into loaning capital to emerging start-ups and projects. Institutes must be more proactive in getting projects such as this and also to have industry liaisons.

RR: Remove bureaucracy out of the incubation process. There has to be a professional who understands the system at the helm of affairs rather than a faculty who has been teaching for most of his career without any experience in this business.

MM: You have mentioned favourable government programs more than once during the summit? How do you think the policy has evolved in the past few years?

SG: They have put in a lot of money. When I was in IIT-Kharagpur, I was involved in four different projects and I oversaw a total funding of over seven crore. That is not, by any means, a small amount. The incubator in IIM Calcutta has received a funding of 7 crores from DST just as Capex and Opex (which is basically for the running of the infrastructure). This is different from what it used to be earlier. Earlier, the department (DST, in this case) used to be the incubator. Now, even they realise that start-ups need to be separated from the red tapism. Some of the start-ups got 25 lakhs, some even got 1 crore, some got 50-60 lakhs and yes, some didn’t get any. And a lot more money is coming in. The government has understood that no investor will put in money to help create a prototype, it is only when the prototypes are ready that investors generally come into picture and so government is helping build prototypes for start-ups so that they can test it out on and create a customer base before the investors come in. 

RR: The government now understands and we are very lucky to have a prime minister like Mr Modi who understands the importance of technology, innovation and entrepreneurship. So, we got contacted by PMO last year and we hosted him in San Francisco, the first event where an Indian Prime Minister visited to understand start-ups and how they work. This event was very important because we discussed start-up policy and we worked with government of India and launched Start-up Policy on 16th January 2016. Fundamentally, our government is looking towards making the process of starting up very easy. They already have a single window closure for all their documents. Few years ago, India was ranked 127 in terms of ease of growing a business, one where Pakistan was ranked 121. In fact, we have received a gazette notification that any start-up working from an incubator under the government will not have to pay any taxes for the next 3 years. There is 80% rebate on patent-filing. There is a lot of support in terms of grants from DST. Most importantly, Government has made it mandatory that 20% of all purchase of a government organization must come from an MSME (Ministry of Micro Small and Medium Enterprises). The government wants to be an enabler rather than be part of the process. The whole point is to minimize bureaucracy at the operations level.

MM: How effective are Entrepreneurship Cells in non-business oriented institutes like NITs and IITs?

SG: E-Cells are always effective in every institute irrespective of domain but a lot depends on how the E-cell functions. If it is for, of and by the students, E-cells tend to function better. Having said that, there is a tendency among E-Cells to become event-cells rather than remain entrepreneurship cells. Ideally, an E-Cell member should be the flag-bearer of the entrepreneurship ecosystem in his/her institute. If a student is actually considering a start-up, they should approach an E-cell member first with the idea that he/she can be guided forward. E-Cell members need not know everything simply because it is impossible but they should be able to direct them to the right people. A proper E-Cell should promote the idea of entrepreneurship as a career choice among students.       

RR: For technical schools, E-Cells are very important because unlike B-Schools, there is nobody in the institute to support entrepreneurship. I have seen engineers with PhDs fail to present a proper business plan. So, E-Cells should focus on telling people about how to start-up, give ideas about financial projection, marketing etc. It is very important to transfer the legacy. I have seen final year people leave and the others contact the same sponsors and the same partners and that is not how it should be done. I think, it is a good idea to have a repository that is made available to forth-coming batches. There should be a committee that should be selected based on performance rather than on qualifications.

MM: What message do you have for the student body at NITR?

RR: It is very important to understand that entrepreneurship is not everyone’s cup of tea and if you have the capability in yourself, only then should you get up and do it. If you do not have the will, it is better if you stick to placements and formal education. Even if you are an employee at an organization, be an entrepreneur at heart- always be curious. Never do a start-up because everybody else is doing it.

SG: I have a slightly different view. The student community here mostly comprises of people in their early twenties and there is very little you have to lose at this age. Obviously, there will be some who will have the burden of supporting their family but for the majority, it is not so. This is your time to surface test even if you fail. To be very honest, now-a-days, you are more recruit-able if you are a failed entrepreneur than if you are a complete fresher. In a way, you are still adding to your CV. Right now is the time, both in terms of personal situation as well as the atmosphere in the country at large- government policy, taxation process etc, to start up on your own and I would urge everyone to try out. It is a gamble but it is a gamble worth taking.

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