An IBM 2016 IBM Institute for Business Value India Business Survey says that Despite India’s entrepreneurial strength, as many as 90 percent of startups fail within the first five years. IBM survey identified that one of the top road blocks for India’s startups after surveying 100 venture capitalist (64% of them believe) is that India’s startups struggle to succeed because their executives do not receive adequate mentoring from experienced leaders of established companies, incubators, investors and the like. Although numerous startup accelerators have been formed in India as part of public-private partnerships, mentoring typically remains informal and voluntary. Hence these startups:
Education Institutions can play a very critical role in Indian Startup Ecosystem wherein they can nurture young minds with natural instinct of spotting the problems and finding solutions to initiate a startup. Educational Institution needs to get them off the ground by providing access to knowledge, initial funds, infrastructure and then connecting them to business/industry. However, these Education Institutions struggle to provide all that is needed and hence should engage an incubator/accelerator from outside of their faculty/academia. This would provide processes to build, manage, market & sell startups product and services. While the institutions have the ability to spot the talent, provide knowledge to solve the problems, they need external mentors and coaches for knowledge sharing, fostering innovation and hand-holding startups thru their journey to build a sustainable and scale-able business.
Need For Innovation : Innovation is the key idea that is shaping life by helping students conceive previously imagined strategic options. Innovation enables to see potential carrier option through a different lens, looking at them not just from an experiment or curriculum related project perspective, but also as a means of overall growth and enhancing capabilities at early stage of their life. By putting innovation at the centre of the curriculum, one will discover a much better way of doing things in their professional life— more productive, more responsive, more inclusive, even more fun. Young people want to be part of growth, not endless worry of finding the right carrier. All of this means that to thrive in today’s rapidly changing globally competitive environment, individuals have no option but to be innovative at early stage of their carrier, so what better place than a university!
Problem : Causal Thinking
One of the reasons for lack of Innovation is the way students are trained to think and work. Saras D. Sarasvathy, Associate Professor, The Darden Graduate School of Business Administration, University of Virginia brilliantly defined this as “Casual Thinking” in modern management. In general, in MBA programs across the world, students are taught causal or predictive reasoning. Although causal thinking and reasoning are among our most central cognitive competences, causal thinking is not good at spotting potential surprises. Causal rationality begins with a pee-determined goal and a given set of means, and seeks to identify the optimal – fastest, cheapest, most efficient, etc. – alternative to achieve the given Causal thinkers are also not good at exploring all the possibilities for a company. All this leads to lack of innovation when students are employed in a large organisation.
Solution : Effectual Thinking
Prof. Saras further explains “The word “effectual” is the inverse of “causal”. Effectual reasoning begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with. Effectual focus on given assets, talents and abilities, and they find ways to use those in the marketplace. They are open to unexpected developments and stand ready to marshal all their resources in pursuit of a new opportunity they didn't see coming. as effectual reasoning is inherently creative that makes it nimble and adaptable. Students thrive on effectual thinking and hence they are the bound to be more innovative when they are encouraged to create startups at university level”.
While both causal and effectual reasoning call for domain-specific skills and training, effectual reasoning demands something more – imagination, spontaneity, risk-taking, and salesmanship, which most that often desired, is lacking once students take employee and not entrepreneurial route, resulting in lack of innovation!
An Outside in Approach: Outsource Acceleration Program
If one internalised this entire process, in retrospect one must say that Prof. Saras have hit the nail on head. One could never understand the way students at University levels thought and not able to believe that a startup can be a game changer in their life. Hence, It makes sense for more and more Education Institutions in India to have an “outside-in” approach to their entrepreneurial efforts. OS now they are engaging knowledge firms like Padup Ventures to identify new opportunities, generate promising ideas, and develop ideas into working prototypes.
“PadUp Venture is a Knowledge Incubator for "Disruptive & Innovative” Pure Play Technology & Tech-Differentiated Consumer Facing Start-ups”. Padup’s vision is to be a key player in the start up Eco-system by actively supporting young people at various stages in their entrepreneurial journey and significantly impact survival rates positively, thus creating huge impact in the entrepreneurial space. Padup helps validate these innovation, build product & services around it, reach-out to the market through a well defined process and industry connect. Padup Ventures is a knowledge firm that has a preferred customised methodology for working with the Education Institutions such as user centric approach , lean Start-up philosophy, data driven analytical models for building innovative solution to real, emerging and futuristic problems. It also means looking at true entrepreneurs, to give them the autonomy but still have them be connected to the ecosystem.
Program intends to increase survival rates dramatically as the program is well-conceived as it is a unique combination all aspects of an incubator and an accelerator, PadUp Ventures is Re-Defining Incubation with it’s deep hands on long term mentoring program with well defined processes, followed with discipline. It will deliver higher success rates, with some relevant lessons for entrepreneurs such as 'No Idea is perfect, Getting Help is a must, Resources are valuable, Doing is more important than planning, Funding requires evidence!' The overall success rate can be astonishing, considering that most companies come with little more than a laptop and a dream.
A Properly designed and implemented incubator/accelerator program is also a good way to help the government plan to foster growth with the help of India’s startup community. It can be completely in sync with Indian government’s program ‘Startup India’ & ‘Atal Innovation Mission’ that includes a series of initiatives designed to encourage accelerated startup concepts, development and execution. Educational Institute can engage with startup & student entrepreneurs by providing physical or virtual environments or structures to make partnering more conducive. Currently most of the players in the startup ecosystem are either financial players like Seed Funds or VCs or Educational Institutes backed by Government. Some Corporate players are also in the startup space for captive innovation management needs. There is room for a Education Institutions to play an important role in the value chain in the start-up ecosystem by developing true innovation and deeper understanding of building sustainable & scale-able business. We also believe that in this ecosystem, scale will lead to a virtuous cycle and bring global connectivity and funds at a rapid pace to the scaled platform
Developing The Ecosystem
Additionally a Outsourced Incubator/Accelerator can help Avoid Failures by addressing all the issues identified by IBM by providing help to:
If you are an Educational Institution, don't hesitate to connect with me and I can walk you thru the process of setting up a world class Incubation or Acceleration program!