Are you planning your startup? With the entry of Flipkart and PayTM in the unicorn club and favourable conditions prevailing for businesses, the youth is inclined towards starting their venture. And now with Walmart buying a significant share of Flipkart, let’s see how the startup ecosystem in India is.

Unicorns, by the way, are privately held startups which are valued at $1billion, at least. A venture capitalist Aileen Lee coined the term in 2013.

Why a startup?

It’s not only the success of startups that motivate the youngsters to start their businesses but also the liberty they get. They have energy and want to experiment new things. In those early stages, they don’t have much to lose.

They are willing to take risks and work on something new which they can’t do while in a corporate job. They may not have the right resources, but they have the willpower and a feeling of ownership and responsibilities.

Job vs Startup

Well, you are responsible for your startup to be a success and for that, you work together with other team members. You don’t have to follow the rules, but you discuss and make your own rules. You decide what’s right for you, for your business. If anything fails you can start again (and not lose your only job).

And you are also helping the economy in a way by increasing the competition and lowering the prices. Startups are successful because they are able to cut down on overheads. How? There are only a handful of people who are working together to make their venture a successful one.

And to achieve that they need support from people. Startups are open to negotiation and are more flexible in pricing their products which is not possible in a multi-level corporation. Within a corporation, one can’t take a decision alone, and there is an array of things to consider.

And this takes me to the next benefit of a startup. Although the initial few weeks or months can be tiring, working in a startup is fun. Everyone takes an active part in the development of the company, and they all are equal and filled with energy.

Why invest in India?

Well, the first thing in favour of a successful startup is the low cost of doing business. Everything whether it is infrastructure, transportation, or communication – the Internet, is cheaper than other developed countries. Your needs are available at an affordable price.

And even the workforce is available in abundance. People are getting inclined towards new opportunities and no longer look forward to an office job. More and more youth is heading to urban areas, and the majority of the workforce is under 30 years of age. With such a massive workforce in India, a startup can find people to work with quite easily.

Not only the workforce but you can also find the customers for the goods and services you produce, nearby. The enormous population ensures that. Moreover, the presence of a favourable startup ecosystem is sure to be a major factor.

Startup Ecosystem in India

Introducing a new business idea can be difficult. Thus, for any startup to succeed, the business system of the country must be supportive. Luckily, India sees some rapid growth in certain sectors. The startups related to technology, online shopping (i.e. e-commerce) and various other online services including FinTech and FoodTech are gaining momentum.

India is a developing economy, and there is potential for new ideas to enter the system and flourish. Last year (2017) alone saw 1000+ technology startups getting added to the pool. And what do we have to help? Let’s check them out.

• Growth in incubators and accelerators –

There are about 150 incubators and accelerators in India, and with that number, it’s third in the list. There are lots of innovative ideas in India, and these young guys need funding and acceleration to grow. The Incubators and Accelerators are meant to provide them what they need.

Incubators are who teach you the basics. They provide the tools you need at an early stage – office space, training and mentors. They help you create a business model from your brainchild. Accelerators though, are for those who have their product developed and now need growth. They help you gain exposure to a network and thus, get investors and professionals who can help.

• Availability of technology –

India is a growing digital economy, and it has come a long way in the last three years. The growth in technology not only make the operations easier but also increases efficiency. The advancements made in robotics and artificial intelligence helps in automating various tasks. And the introduction of blockchain increases the security and transparency in the system.

These, along with other parallel developments pave the way for better business opportunities.

• Government Support –

Under the Startup India program, the government offers specific tax exemptions to the startups in their initial years. The government even offers a free four-week online entrepreneurship course under the learning module of the program. Introduction of GST also intends to make the tax system simpler; it introduced new challenges, however.

Some of the other initiatives like Make in India aids in their uplifting. And the government also plans to give priority to procure raw materials from the startups, providing them with additional support.

• Emergence of new markets –

While the metro cities – Bengaluru, Mumbai and Delhi – are leading in the number of startups, other cities are catching up. Availability of infrastructure and new talents are the primary reasons behind it. Investors and support groups are thus making their ways to the smaller cities.

Startup Success in India

Cities like Jaipur, Ahmedabad and Vizag are becoming hubs for logistics, AgriTech and SaaS while the larger ones like e-commerce and payment are in the metros. And the Tier-II cities are also providing them with new consumers for their products.

What’s missing in Indian Startup Ecosystem?

While India seems promising as a hub for Startup, there are certain things in which it still lacks. The first and foremost problem is that the ecosystem is developed only for a few kinds of startups like e-commerce and other online services. For most of the other startups, finding someone to guide through the journey is difficult.

Not only finding mentors is a problem but also getting funds. The Startup India program hasn’t been a great success. The funds disbursed is less than 25% even after two years of the program. And whatever the reasons, only about 100 Startups have availed the facility. Moreover, you can’t get help from someone unless you can make a promising growth (by yourself). Another barrier is the complicated tax system even after the implementation of GST.

While I think working with startups is an experience in itself, not others believe the same. Although working with startups has some benefits like friendly environment, people prefer to get a job in established firms. After all, not all startups succeed, isn’t it? So, hiring someone to work for you could be a daunting task.

Last but not the least, India lacks exits, startup exits. This is the situation when the startup goes for an IPO, or someone acquires the startup. While there are few startups like Infibeam and JustDial who went for IPO, there isn’t a lot even who got acquired by big corporates. SnapDeal buying FreeCharge for $400 million made some noise, and so did the acquisition of Jabong by Myntra for $70 million.

But with Walmart investing $16 billion in Flipkart, chances of exits and the global exposure is possible but these still are the early days. Indian startups still need to be varied in their work, and startups active in other areas except for online services still looks a dream.

Other areas where Startups can be successful

Although startups are making an entrance in various fields, there still are some which are largely untouched. And here are few of them where India needs some private initiatives –

• Healthcare –

While everything is available at a tap (or click), doctors still are inaccessible. Quick access to healthcare is the need of the hour. It will provide us with a better workforce. Also, patient records aren’t available online in most of the cases. The blockchain system, however, can help to make a centralised database of patients.

A startup should aim to make doctors available online and providing them quick access to the related records.

• Sanitation –

Lack of proper sanitation is another problem India faces. Government is spreading awareness, but the country could use some private initiatives to fast forward the process. A startup offering affordable sanitation products and services could be a boon, especially to the rural areas.

• Waste Management –

Waste management in India is something which isn’t yet given much importance. A significant amount of waste is found in open sites aiding to the health and environmental issues. While electronic and plastic wastes are known to harm the nature, not much progress is in the process to recycle them and lower their effects.

Along with the government-run Swacch Bharat Abhiyan, startups can help in finding solutions to recycle and reuse the generated waste, contributing to a cleaner India.

• Clean Drinking Water –

Some areas where India needs Startup

Access to clean drinking water is still a thing which not many enjoy in India. Forget clean water; even regular supply isn’t guaranteed. Drinking contaminated water contributes to health issues and many diseases. Startups thus can invest in plans to provide clean water to masses.


While the Indian startups are making a global presence and are getting known among the masses, the startup ecosystem still has to go a long way. As of now, there are things both in favour of setting up your startup and against. But the unfavourable ones are gradually diminishing. And in the near future, you can see India as one of the major startup hubs in the world.

You can be one of the contributors too. Start soon!


Submitted by: Abhijeet Kumar

Popular as the Lazy Writer, I am a post graduate in Computer Applications. My love for computers and the passion for writing led me to intertwine both and now, I freelance as a technical content writer. Catch up with me on LinkedIn.

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