Start-up Innovation & building Start-up Ecosystem in India

Dr. Vikram Choudhary,

B. Pharm, M. Pharm, MBA – IEV, Ph.D*

Founder & Director

Operant Scientific Private Limited & Operant Pharmacy Federation

Disclaimer

• This presentation is for educational purposes only. Opinions or points of view expressed in this presentation represent the view of the presenter. Nothing in this presentation constitutes legal advice. The individuals appearing in this presentation, if any, are depicted for illustrative purposes only and are presumed innocent until proven guilty in a court of law.

• All are my personal opinion and does not have any connection with my company, my incubator, other employer/ entrepreneurs or others.

• Slides contains content / pictures / videos taken from web, articles, lectures, tutorials, and its respective authors own their copyrights, I have cited them on internet.

Start-up Innovation

Innovation

Idea

Application

Invention

Problem

Execution

Benefit

+

+

+

+

=

Application of new idea to solve problems resulting in benefits to users

Challenge

Novelty

Utility

Start-up Innovation Could Be-

New to the Company

New to the Industry

New to the Country

New to the World

India - Youngest Start-up Nation in the World

11/14/23

Source: Zinnov Product/Digital Start-up Database

Global Entrepreneurship: S & T Innovation Clusters

Source: Global Innovation Index Database, WIPO, 2021.

India – Emerging as a Start-up Nation

11/14/23

Source: Zinnov CoNXT Research & Analysis

21% of Indian start-ups are primarily focusing on global markets

18% CAGR increase in no. of Indian start-ups focusing primarily on global markets since 2014

Innovative Minds are Accelerating Growth of Indian Economy & Start-ups are Contributing to Indian Economy

11/14/23

Steady Growth of Indian Start-up Ecosystem Despite of Covid19 Crisis

11/14/23

70% of inactive start-ups were B2C

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2-3 Avg. age in years of start-ups that became inactive

Growth Trend (Post Covid19 Crisis) in Indian Startup Ecosystem

11/14/23

India Added 3^rd Highest Number of Unicorns in 2020

11/14/23

(1) CBInsights – the complete list of unicorns (2) Hurun Global Unicorn List 2020 (3) Data as on 31st Dec 2020 (4) Cities have been bundled into clusters.

India in Global Innovation Index 2021

11/14/23

Source: Global Innovation Index Database, WIPO, 2021

Global Innovation Index 2021

India: 46^th Position

11/14/23

Global Startup Ecosystem Ranking 2021

Source: Startup Genome 2021

Global Start-up Landscape

• India positioned 3^rd and competing with Israel

Start-up Activity Index = f[Landscape (Total Start-ups, Start-ups Per Capita, Acquisitions), Unicorns Analysis, Investors Ecosystem & Funding, Advanced Tech Focus]

Govt. Focus & Country Specific Indices = f[Government Initiatives (Govt. Polices, Govt. Funding), Country Specific Indices (Global Innovation Index, Ease of Doing Business)]

Atmanirbhar Bharat (Self-Reliant India) - Fundamentally Strengthen the Innovation & Start-up Ecosystem

• Strengthen Support Ecosystem A contemporary enabling environment is critical for innovation. Key infrastructure investments, accessible to all, can
• accelerate growth.
• Enable Revenue Generation Valuations, investments, and jobs are all linked to customer traction. Structural approach can help reduce market access.
• cost for (young) start-ups.

• Accelerate Corporate Participation With each year, corporate participation in India is increasing. However, it is abysmally low compared to global ecosystems and critical for orbit shift.

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• Increase Seed-stage Investments
• Seed-stage investments in India are less than 10% of the total investment received each year. It has stagnated in the range of $400-500Mn per annum.
• Increase Share of Domestic Capital Current highly volatile and geopolitical climate is a high-risk exposure. At 70-75% of the share, our dependence on foreign capital is uncomfortably high.
• Expand Experienced Talent Base. We are amid a global talent war. As a country, we need to leverage the shift to remote work to attract international talent to contribute to the ecosystem.

Start-up Ecosystem Framework - A Micro Ecosystem at Academic Level

11/14/23

Higher Educational Institutions & Universities

Innovation

Start-up

Entrepreneurial Scientist/faculty + Entrepreneurial Student Base

Coherent Policy Guidance & Resource Support; Institute, University, Central & State Level

Real market Challenges & Problems through Industry Support; Corporate & Private Partnership & Linkage

Real Societal Challenges & problems of Local Society/Economy:

Innovation Development

Technology Commercialization

Entrepreneurship Exposure & Skill Development

Start-up Service

Support Facility

A Networked Ecosystem

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Inter-Institutional Partnership & Network with Regional and National Start-up Eco-System

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Innovative Enterprises

Innovation and Entrepreneurship Activities

11%

27%

3%

9%

8%

4%

23%

15%

Design Thinking & Critical Thinking Entrepreneurship

Incubation and Pre Incubation Innovation

IPR

Other

R&D and Innovation Startup

More than 1

Lakh activities

Avg. no of I&E Activities/Participant/Year – Increased from 1 ( 2018) to 9 ( 2021)

Themes & Emerging Areas

Pharmaceuticals

Themes & Emerging Areas

Themes & Emerging Areas

Adoption of National Innovation and Startup Policy in HEIs

11/14/23

2019

2020

2021

2022

2753+

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2571

​

1983

​

871

The Startup Realty

• The grim reality is that most startups fail
• There are five essential elements that lead to successful startups

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IDEA

TEAM & �Execution

BUSINESS MODEL

FUNDING

TIMING

What Makes Startups Succeed?

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​

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[Based on a study by IdeaLab]

Factors of success across more than 200 companies

Time

Team &

Execution

Idea

Business

Model

Funding

Why Startups Fail ?

• 21 % fail due to Team, Personal withdrawals
• 18 % Fail due to Funds/Money
• 61 % due to lack of leverage
• Created something no one wants
• Out completed/poor strategy /marketing
• Did not Pivot
• Constraints: Location/Legal

What is Startup Ecosystem ?

• People
• Support Mechanisms
• Funding & Finance
• Education & Training
• Government
• Culture
• Markets
• Startups

Success Factors

• FOUNDER
• Mindset and Ambition
• DNA
• Know-how
• Strategy

• TALENT
• Access
• Quality
• Costs

• STARTUP EXPERIENCE
• Giving Equity to Advisors
• Experience with Unicorns
• Exit Experience

• FUNDING
• Early Stage funding per startup
• Early Stage capital
• Experienced VC Firms

• LOCAL CONNECTEDNESS
• Sense of community
• Local relationship
• Collisions
• Density

• ORGANIZATIONS
• Quality and quality of events

• GLOBAL CONNECTEDNESS
• Global Reach
• Immigrant founders
• Offices in other countries

Ecosystem Lifecycle Model

11/14/23

Trends

Trends

• Top 4 Growing Sub-Sectors
• #1 Advanced Manufacturing & Robotics (189% 5 years increase in early stage funding deals)
• #2 Agtech & New Food (171% 5 Year increase)
• #3 Bloackchain (163% 5 Year increase)
• #4 Artificial Intelligence, Big Data & Analytics (77.% 5 Year increase)

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• Top 3 Declining Sub-Sectors
• #1 Adtech (35% 5 Year decline in early stage funding deals)
• #2 Gaming (27% 5 Year decline in early stage funding deals)
• #3 Digital Media ( 27% 5 Year decline in early stage funding deals)

Insights

• Build a Sense of Community
• Connect. Connect. Connect.
• Locally
• Other Ecosystem
• Internationally
• Fill relationship gaps
• Focus on vertical strengths and identify local hubs
• Build connections with Existing Industries Adjacent industries
• Bring Corporates and Students to startups
• Stronger technology education

Role of Incubation Centers in Startup Ecosystem

MAARG

MAARG (Mentorship, Advisory, Assistance, Resilience, and Growth), the National Mentorship Platform is a one-stop platform to facilitate mentorship for startups across diverse sectors, functions, stages, geographies, and domains.

Road Blocks of Startups

• Right Talent Acquisition
• The Gap Between Burn Rate and Revenue
• Lack of Mentorship
• Lack of a Good Branding Strategy
• Fragmented Market
• Silicon Valley Replicas Topped by infrastructure Deficit
• Struggle to Reinvent Constantly

Future for Start-ups

• Acqui-Hiring, technology acquisition, market consolidation
• Innovative approaches to attract and retain top talent
• Mentorship through various channels
• Women entrepreneurs starting to become more prominent
• Market segments – Showing good prospects Online payment gateways
• SaaS Model
• Data analytics
• Internet of things
• New government is supportive

Startup India Initiative

Key Pillars of Support for Startups

11/14/23

• Under the Startup India Initiative

Why Startup India ?

• To Boost up / Promote startup / Entrepreneurship
• Core objective is to generate maximum Employment
• Encourage the people who have the potential to innovate the start their own business
• To boost up Banking & Finance sector
• Be a job creator (Then why remain a job seeker ? Become a job provider )

Key Points of Startup India Scheme

• Self Certification: Compliance under 9 environmental & labour laws
• Tax Exemption: Tax exemption for a period of 3 consecutive years and exemptions on gain & investments above FMV
• Startup patent Application and IPR protections: Fast track & up tp 80% rebate in filling patents.
• IPR Support: Government to bear facilitation cost & 50% rebate on trademark filing
• Public Procurement Norms: Exemption from requirement of Earnest Money Deposit in government tenders
• Easy winding up: within 90 days inder PMLA 2016
• 10,000 crore startup funding pool.
• Encourage entrepreneurship within the country.
• Promote India across the world as a start-up hub.

Startup Ecosystem

Facts and Figures: Startup India

Facts & Figures: Overview of Performance of States

Challenges faced by Startups:

• A recent study, “Entrepreneurial India” by the IBM Institute found that 90% of Indian Startups FAIL within the first five years and the most common reason for failure is lack of immovation – 77 % of venture capitalists surveyed believe that Indian Startups lack new technologies or unique business models
• Planning: As the saying goes, “If you fail to prepare to fail”. So don’t leave the details to later.
• Execution
• Lack of Innovation
• Funding
• Lack of Mentorship: You may have a great product or idea, but lack the necessary guidance, market experience, or knowledge to take it to the net level. That’s where a mentor comes in, with the wisdom and confidence to help you clear those roadblocks that are holding your startup startup back. According to Rhett Morris of Endeavor Insight – 33 % of tech firm founders who are mentored by successful entrepreneurs went on to become top performers.
• Human Resources & Poor business ethics:

“Since 2015, as many as 1503 startups have closed down in India and the major reason is due to the replication of Western business models, and not lack of subsequent funding from the investors. The highest number of failures were in logistics, e-commerce and food technology.

Here are the ways for Funding to a Startup

• Boostrapping: Self-funding is also known as bootstrapping, is an effective way startup financing, especially when you are starting your business. You can invest from your own saving or can get from family and friends.
• Crowd Funding: is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically over the internet. Some of the popular crowdfunding sites in india are Indiegogo, Wishberry, Ketto and Fundlined.
• Angel Investors: Angel investors are individuals with surplus cash and a keen interest to invest in upcoming startups. They can also offers mentoring or advice along with capital. Angel investor have helped many Indian startups (Unacademy, Crown-it, BookEventz, WittyFeed. Some of top Angel investors are Mr. Ratan Tata, Rajan Anandan, Vijay Shekhar Sharma, Sachin Bansal.

Here are the ways for Funding to a Startup

• Venture Capitalist: Venture capital are professionally managed funds invest in companies that have huge potential to grow. They usually invest in a business against equity and exit when there is an IPO or an acquisition, Some of the well known venture Capitalists in india are Helion Venture Partners, Accel Partners, Blume Ventures, Nexus Venture Partners.
• Funding From Business Incubators & Accelerators: Early stage businesses can consider Incubator and Accelerator programs as a funding option. Found in almost every major city, these programs assist hundreds of startup businesses every year.
• Incubators are like a parent to a child, who nurtures the business providing shelter tools and training and network to a business.
• Accelerators so more or less some thing, but an incubator helps/ assist/ nurtures a business to walk, while accelerator helps to run/take a giant leap.

Popular names are Atal Innovation Mission, Startup Studio, i-Hub, AngelPrime, CIIE, IAN Business Incubator, Tie, Villgro Startup Village and Tlabs.

Here are the ways for Funding to a Startup

• Govt. Programs That Offer Startup Capital: Government has launched “Bank of Idea and Innovations” program. The Government of India has launched 10,000 Crore Startup Fund in Union budget 2014-15 Government backed “Pradhan Mantri Micro Units Development and Refinance Agency Limited (MUDRA)” starts with am initial corpus of Rs. 20,000 Crore to extend benefits to around 10 lakhs SME’s.
• Raise Money Through Bank Loand:

Normally, banks are the first place that entrepreneurs go when thinking about funding-

• The bank provides two kinds of financing for business. One is working capital loan and other is funding. Working Capital loan is the loan required to run one complete cycle of revenue generating operations and the limit Is usually decided by hypothecating stocks and debtors.
• Funding from bank would involve the usual process of sharing the business plan and the valuation details, along with the project report, based on which the loan is sanctioned.
• Almost every bank in India offers SME finance through various programs.

STARTUPS

• That are changing the face of Virtual Reality in India

Bhavish Aggarwal, Ola

• Co-Founder in 201o by tech graduate Bhavish Aggarwal, Ola Cabs is the biggest online taxi and car aggregator in India today, strongly rivalling Uber.
• The transportation startup was founded in Mumbai and raised angel funds from Snapdeal c0-founder Kunal Bahl and Shaadi.com founder Anupam Mittal.
• OLA Valued at over US $ 5 Billion now. Ola has about 250,000 cabs and auto rickshaws in its app, operational in about 85 Indian cities.

Vijay Shekhar Sharma, Paytm

• Born in a small town near Delhi, Vijay Shekhar Sharma was the first amongst his immediate family to graduate from a tech school and then travel overseas for a job.
• Vijay launched One97 as a telecoms software company in the early 2000s and later pivoted it to paytm, an online marketplace in 2009.
• Paytm Is now widely used for payments and mobile credit top-ups.
• The company last year raised about US$700 million in capital from Ant Financial, the affiliate e-payments division of Chinese ecommerce powerhouse Alibaba.

Ritesh Agarwal, Oyo Rooms�Deepinder Goyal, Zomato�Albinder Dhindsa, Grofers

Top Funded Startups in India of All Times

Conclusion:

• Building Startup Ecosystem is a flagship initiative of the government of india, intended to build a strong ecosystem for nurturing innovation and startups in the country that will drive sustainable economic growth and generate large scale employment opportunities.
• In order to meet the objectives of the initiatives, Government of India is announcing this action plan that addresses all aspects of the startup ecosystem
• This is a most effective compaign which will create more jobs opportunities to the Indian youth.
• This scheme will directly help people in their own successful entrepreneurship.
• It will help our country to show the talent of youths through their innovative business all across the world.

Connect Me @ Social Media

Vikram Choudhary director@opf.org.in

આભારشکریہ ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ நன்றிధన్యవాదాలు ಧನ್ಯವಾದനന്ദി धन्यवाद આભારشکریہ ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ நன்றி ధన్యవాదాలు ಧನ್ಯವಾದ നന്ദിઆભારشکریہ ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ நன்றிధన్యవాదాలు धन्यवाद ಧನ್ಯವಾದനന്ദിઆભારشکریہ ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ நன்றிధన్యవాదాలు ಧನ್ಯವಾದനന്ദി આભારشکریہ धन्यवाद ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ धन्यवाद நன்றிధన్యవాదాలు धन्यवाद ಧನ್ಯವಾದനന്ദി આભારشکریہ ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ நன்றிధన్యవాదాలు ಧನ್ಯವಾದനന്ദി धन्यवाद ಧನ್ಯವಾದനന്ദി આભારشکریہ ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ நன்றிధన్యవాదాలు ಧನ್ಯವಾದനന്ദി આભાર ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ நன்றிధన్యవాదాలు ধন্যবাদ ਤੁਹਾਡਾ ਧੰਨਵਾਦ நன்றிధన్యవాదాలు Thank you