{"id":5292,"date":"2016-06-23T09:54:24","date_gmt":"2016-06-23T09:54:24","guid":{"rendered":"https:\/\/www.welingkar.org\/blogs\/?p=5292"},"modified":"2026-02-18T06:30:42","modified_gmt":"2026-02-18T06:30:42","slug":"supporting-startups-the-first-step-to-a-vibrant-flourishing-india","status":"publish","type":"post","link":"https:\/\/www.welingkar.org\/blogs\/supporting-startups-the-first-step-to-a-vibrant-flourishing-india\/","title":{"rendered":"Supporting startups, the first step to a vibrant, flourishing India"},"content":{"rendered":"<p><strong>Brilliant ideas by first-time entrepreneurs need adequate government help and financial backing<\/strong><\/p>\n<p style=\"text-align: left;\"><a href=\"https:\/\/www.welingkar.org\/blogs\/\/wp-content\/uploads\/2016\/06\/topimg_31147_startup_big_600x400.jpg\"><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter size-medium wp-image-5294\" title=\"topimg_31147_startup_big_600x400\" src=\"https:\/\/www.welingkar.org\/blogs\/\/wp-content\/uploads\/2016\/06\/topimg_31147_startup_big_600x400-300x200.jpg\" alt=\"\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.welingkar.org\/blogs\/wp-content\/uploads\/2016\/06\/topimg_31147_startup_big_600x400-300x200.jpg 300w, https:\/\/www.welingkar.org\/blogs\/wp-content\/uploads\/2016\/06\/topimg_31147_startup_big_600x400.jpg 600w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><strong> <\/strong><\/p>\n<p>Small businesses are the backbone of our economy creating employment, experimenting with new and innovative business models.\u00a0 The same is also true about all start ups \u2013 they have been instrumental in creating exciting and groundbreaking innovations in almost all verticals like technology, food and catering, e commerce, consulting, health and wellness etc. \u00a0To give an example most of the apps being used or seen have started out as a basic idea put into motion by eager entrepreneurs.<\/p>\n<p style=\"text-align: left;\">This phenomenon certainly goes to prove that there is no dearth of brilliant ideas and opportunity in our country. Perhaps this is what led the new government to set out an agenda for the creation of a dynamic start-up ecosystem that will transform the lives of India&#8217;s youth. Last year we have seen several &#8216;big announcements&#8217; on Start Up India and a plethora of related schemes, concessions and benefits. There has also been a lot of talk about start up funding. The schemes have been announced and definitely exist on paper, however, the new breed of entrepreneurs and CEOs opine that there is lot to be done in the area of permissions and compliances. The compliances related to the \u2018ease of setting up the business\u2019 are far from being satisfactory, and this is what the government must work on to encourage the start up culture.<\/p>\n<p style=\"text-align: left;\">For the\u00a0first generation\u00a0young founders, running companies for the first time and scaling it, there is not enough support that comes their way. The support that a mentor can provide at this stage could be in the form of identifying some critical factors like:<\/p>\n<ul style=\"text-align: left;\">\n<li>Acquiring customers<\/li>\n<li>Changes in regulation or legislation that can impact the business<\/li>\n<li>Growing too fast \u2013 more orders, demands that the business can\u2019t      meet<\/li>\n<li>Growing too slow \u2013 stagnating leading to cycle hiring or firing<\/li>\n<li>Advances in technology or processes that make businesses obsolete      and stale and many more<\/li>\n<\/ul>\n<p style=\"text-align: left;\">Young and first generation entrepreneurs are so excited about their business that they presume it will be easy to acquire customers. They build an interesting product, service and an interactive and interesting website and hope that the customers will walk in. That may happen with the first few customers, but after that, it rapidly becomes an expensive task to attract and win customers, and in many cases the cost of acquiring the customer (CAC) is actually higher than the lifetime value of that customer (LTV). In order to have a capital efficient business it is important to recover the CAC in less than 12 months. However, there isn\u2019t much mentoring support for the new businesses that can act as a support system and also help the first time entrepreneurs to identify these crucial aspects.<\/p>\n<p style=\"text-align: left;\">The other major reason for startups to fail is because they run out of cash. It is imperative to understand how much cash is required and also what will be left and whether that can carry the company to a milestone that can lead to a successful financing. One round of funding a year ago does not imply that the valuations would be up and the Series B comes in automatically. To achieve an increase in valuation the firm must reach key milestones, as valuations don\u2019t grow in a linear fashion. Different situations that the entrepreneur ends up with is that the firm is unable to achieve the next milestone before cash ran out or that it was able to raise cash but the valuation is significantly lower. These are the growing up pains that the company must experience. However the financers and funds that have flooded the market are in a hurry to capture market segments and be part of the next\u00a0boom to the extent that they set big expectations of accelerated success stories of start ups. In turn the new ventures are being pushed toward short-term solutions and unreasonable scale early formats.<\/p>\n<p style=\"text-align: left;\">The entrepreneur\u2019s tact lies in knowing how to regulate the accelerator pedal. In the early stages, while the firm is just growing the accelerate mode needs to be set very lightly to conserve cash. A fast track growth plan does not assure success, on the contrary will create a \u2018no cash\u2019 situation leading to a quick exit. When it is proven that the business plan has positive outcomes indicated by upward sales and a CAC recoverable less than 12 months the accelerator pedal can be pressed down hard, as hard as the capital resources permit. The journey can be a roller coaster ride moving slow at times and throwing in jerks. For the first time entrepreneurs, knowing how to react when they reach this point can be tough. With the help of a good support system that the start ups may be able to navigate well and start investing aggressively ahead of revenue.<\/p>\n<p><a href=\"https:\/\/www.welingkar.org\/blogs\/wp-content\/uploads\/2016\/06\/DSC_6014.jpg\"><img decoding=\"async\" class=\"alignleft size-medium wp-image-5293\" title=\"DSC_6014\" src=\"https:\/\/www.welingkar.org\/blogs\/wp-content\/uploads\/2016\/06\/DSC_6014-300x199.jpg\" alt=\"\" width=\"210\" height=\"139\" \/><\/a><strong> <\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Madhavi Lokhande is Senior Associate Dean &#8211; Academics, Finance and Organisation ecosystem, Prin LN Welingkar Institute of Management Development and Research (WeSchool), Bangalore. She teaches subjects in the area of Finance and Costing.<\/strong><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Brilliant ideas by first-time entrepreneurs need adequate government help and financial backing Small businesses are the backbone of our economy creating employment, experimenting with new and innovative business models.\u00a0 The same is also true about all start ups \u2013 they have been instrumental in creating exciting and groundbreaking innovations in almost all verticals like technology, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":5294,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[1401,3],"tags":[],"class_list":["post-5292","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-post","category-faculty-talk"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.9 - 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