Economic Times 16th April 2009
Slowdown not a hurdle for the enterprising
B-School, Tech Grads Start Small Ventures by Peerzada Abrar, BANGALORE
GRADUATES from many of India’s top technology and management institutes are turning to entrepreneurship in large numbers, unfazed by the lack of funding in a slowing economy and seeing that the opportunity cost of foregoing regular employment in a tepid job market is not too great.
Many of the new ventures, such as online education portal btechguru.com, do not require large amounts of money to be set up and can get by with support from family, friends or incubation centres of educational bodies.
Btechguru, aimed mainly at engineering graduates, was started by Balaraju Kondaveeti, 26, a student of the Indian Institute of Technology, Madras who is graduating this year. The portal, which will tap remote engineering colleges in Andhra Pradesh and Tamil Nadu by providing technical and soft skills to students, was incubated at IITMadras and is set to be launched as a commercial venture. “Both these states have some 700 engineering colleges out of the total 1,400 in India. We will seek help from our network and friends in these states to provide the service,” says Mr Kondaveeti.
Btechguru has trained some 2,000 students so far and has set itself a target of reaching 1 lakh students in the next five years.” Mr Kondaveeti expects the portal to achieve revenue of Rs 30 lakh by the end of this year and plans to invest Rs 50 lakh in the venture over the next two years, mainly through internal accruals. A top official of the NS Raghavan Centre for Entrepreneurial Learning (NSRCEL) — the incubation unit of the Indian Institute of Management, Bangalore — says there has been a growing interest in setting up businesses despite the economic downturn. While NSRCEL received 14 proposals between April-November 2008, the number has doubled in the three months since November, says its chief operating officer A Suryanarayan. Among the proposals with NSRCEL is one by Vishal Goel, 24, and Umesh Gandhi, 26, for a venture to desalinate water using a special membrane and solar energy.
Mr Goel says he hit upon the idea when he saw people buying water containers around Chennai even to take bath. He left his job at Infosys and joined hands with Mr Gandhi, a former TCS employee, and they plan to have their service up and running in about two years.
Both of them are now studying at the National Institute of Industrial Engineering in Mumbai. Mr Gandhi says he will spend Rs 15 lakh on the business to begin with, investing 40% of the amount on his own and the rest from banks. IIM-B’s NSCREL is already incubating firms such as Wondergrass, an enterprise which offers end-toend solutions for bamboo-based building systems, 8k miles, an online ecosystem of verified professionals and firms to enable cost-effective and secure outsourcing of software and other knowledge services completely over the internet and Amagi, which provides targeted local advertisement syndication for TV.
At IIM-B alone, seven students opted out of placements this year to become entrepreneurs compared to just two last year. Slump, credit crunch are main factors
NEXTGEN, another start-up at NSCREL, wants to implement clean technology, while Radiffinity wants to use Radio Frequency Identification for asset management in large corporations.
“Despite the economic downturn and the paucity of funding, more graduates are turning entrepreneurs because the job market is down and they don’t want to do jobs that they don’t like. In the master’s course in entrepreneurship at IIT-Madras, this year seven graduates are turning entrepreneurs compared to two a couple of years ago,” says btechguru’s Mr Kondaveeti.
IIT-Madras’ Arul Sekar, 25, who loves mountaineering and hiking along with Sridhar L, is starting an adventure tourism firm called ecologin.org which enables people visit unexplored regions and provide jobs to local people.
“We have been explaining our business model to village panchayats and the fishing community. We are talking to investors for funding of Rs 30-50 lakh,” he says.
According to Sudhir Sethi, chairman and MD, IDG Ventures India, there are 1,000 technology-based start-ups in India. IDG Ventures is investing some Rs 300 crore in early-stage start-ups with varied interests in the next three years.
“Technology students are interested in new areas like Web 2.0, cloud computing and clean technology,” says S Sadagopan, founder director of the International Institute of Information Technology, Bangalore (IIIT-B). At IIITB, some 12 students are starting their own ventures this year.
“The kind of innovation that bigger firms have failed to do are being done by small companies and thus major players are tying up with these firms,” observes Prof Sadagopan. Among those is Rajat Kathpalia, 25, an IIM-Kozhikode graduate, who observed small models of wind mills being used to power bulbs in remote locations to start a firm which will provide end-to-end green solutions to small and medium businesses in India. “We will be raising funds to import sophisticated technology from the US. My family is supporting me with funding of Rs 10 lakh which will be used for running initial operations,” he says.
Some other start-ups are more prosaic. Apoorva Kumar, a 24-year-old who graduated from IIM-Calcutta this year, has started a firm Instant Pest Control to control ants, rodents, termites, honey bees and other pests in hotels, office buildings, homes, buses and godowns.
“We have taken 19 personnel who will travel door-to-door on cars and motorcycles to control pests. We also have people who have specialised knowledge of pesticides. I am putting my own money along with my friends, as this venture does not require much investment,” said Mr Kumar.
Education service provider Career Launcher’s Indus World School of Business (IWSB), which focuses on entrepreneurship, has about a dozen start-ups incubating at its labs. Jaydeep Mandal, 23, a student of IWSB, aims to be the entrepreneur’s entrepreneur by tapping grass root innovations in rural India as a market by connecting these innovators to venture capitalists, government and private companies.
“Official records show that there are more than 1 lakh grass root level innovations and some 50,000 innovators in rural India. Our revenue will be based on some fee from these grass root organisations or we may take some stake in future,” said Mr Mandal.