The entrepreneurship ecosystem in India needs to evolve beyond e-commerce and m-commerce and into areas such as education and healthcare, said Tarun Khanna, Jorge Paulo Lemann Professor at Harvard Business School.
Khanna is involved with the startup ecosystem in India as investor and entrepreneur and is also an advisor to the Niti Aayog. Khanna, who was recently in Mumbai, spoke to ET on the deeper structural issues facing entrepreneurs. Edited excerpts:
What are the main challenges for today’s entrepreneurs?
Two years ago, a team of us (Infosys co-founders Kris Gopalakrishnan and SD Shibulal and Infosys veterans Srinath Batni and V Ganapathy along with Khanna) started the incubator called Axilor. And both at Axilor as well as watching incubators around the country and through my role at Niti Aayog, one of the clear things that’s missing is mentoring of entrepreneurs. That’s what entrepreneurs lack and the reason they display inexperience is because all of us (start companies) when we are young and we have not seen something better. In Axilor, we are making enormous efforts in putting together a network of mentors.
Do you see a structural issue in the way the startup story has evolved in India, particularly at a time when we see a lot of layoffs, shutdowns, valuation and funding concerns?
These are episodic blips in an evolving story. They are playing out exactly how the dynamic market systems play out. Somebody tries something, it creates some value for a while and is then out-competed by somebody else. Some of these guys will turn things around and come up with a better gimmick or restructure their capital and have another shot at it. I have a concern about a bigger structural issue, which is the way the incentives are currently set up. We have a lot of money going into one or two sectors — m-commerce and e-commerce and things like that. It’s easy for kids to start any app — so I have an app for ordering this, an app for sending clothes to my dry cleaner, and everything. But these structural issues that we need to address also are education, agriculture, clean water, healthcare — there are plenty of profitable, clever business models that are being tried around the world. But our talented youth have limited visibility into these efforts.
Is this issue specific to India or do you see it in other parts of the world too?
In India and in some other places too, every little pocket is looking in their own little immediate ecosystem and copying others within it because that is the information set that they are accessing. We need to somehow broaden the experience base. So structurally I think the entrepreneurship system needs to evolve and it may not only be e-commerce or m-commerce but doing other stuff.
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