TECH STARTUP

WHY BUILDING A TECH STARTUP CAN BE TOUGHER IN DELHI THAN IN BANGALORE

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it was during the early pre-funded days of his Delhi-based startup – Wigzo – that Umair Mohammad went to the CEO of a well known healthcare startup to seek advice and potential partnership. Due to Delhi’s high traffic, Umair got delayed by about 20 minutes.

“He talked to me very rudely and gave just 15 minutes of the allotted one hour time,” Umair recounts to Tech in Asia in Bangalore.

It’s this lack of cooperation that is peeving Delhi’s young entrepreneurs who seek support to grow their baby into a big venture.

When Umair asked if both entrepreneurs (of almost the same age) could talk on the phone to share ideas which can be beneficial to both, the CEO refused to even share his mobile number and directed him to his personal secretary.

THE CAPITAL CITY’S HISTORY OF POWER STRUGGLE

India’s capital city Delhi is almost 5,000 years old. And in the last 1,200 years, it has seen lot of power struggle – first between the Hindu rulers and Muslim invaders, then between the Mughals and the British. Post independence, the city has been in the thick of the tussle between various political parties of India.

 

“It’s natural to get insecure when someone invades into your territory. Even I would get insecure if an employee quits to startup something in the cab business. With Delhi’s history of power struggles, competition is ingrained in our culture,” says Ashok Vashishth, CEO and founder of WTi Cabs.

Ashok belongs to the old crop of brick and mortar entrepreneurs while Umair is the new generation which is tinkering with technology to build software products.

Perhaps, it’s this sense of territorial control and power that makes even the seasoned businessmen fear young 20-somethings, starting in the same or related space.

“A 20-something competitor if allowed to grow big will have much more energy than me who is an ageing entrepreneur,” admits Ashok candidly.

We have seen umpteen cases in the past of lobbying by big business houses. For example, Reliance and Future Group have been lobbying get laws altered to check the growing threat from ecommerce startups. The big taxi owners such as Meru and Mega Cabs have been lobbying against Ola and Uber. Remember, MakeMyTrip ousting Oyo Rooms from its platform? Or the court battles between Oyo and its smaller rival Zo Rooms, which got later acquired by the former?

WHY STARTUPS LEAVE DELHI

Delhi Chief Minister Arvind Kejriwal is looking for ways to make Delhi a hub for startups.

But the biggest problem an entrepreneur faces in Delhi is from his or her own neighbors. It’s not legal to start a commercial establishment in a residential area, and neighbors are most likely to tip the local municipal inspector, who sees it as a chance to bag a quick bribe.

“The reason Bangalore thrives is because it is fairly legitimate to open a software company in a residential place. Why is that not possible in Delhi?” asks Sharad Sharma, co-founder of Ispirt here.

Residential areas in Delhi lack parking spaces – that leads to the other big problem: where can employees park their vehicles?

The city also lacks big commercial spaces which are needed if a startup becomes big. Okhla-based Snapdeal migrated its corporate headquarters to Gurgaon for the same reason.

HelpChat migrated to Bangalore for want of tech resources. Other companies such as One97 (now Paytm) and Zomato which started out of Delhi also moved to Gurgaon.

TRAITS OF AN AVERAGE DELHI ENTREPRENEUR

Subinder Khurana, an angel investor and advisor to startups such as Druva Software, Power2SME, AuthBridge, and also WTi Cabs, says that the city’s entrepreneurs are true to their heart.

Subinder, Umair, and Ashok enlist a few common traits they spot in a Delhi entrepreneur:

  •  They wear emotions on their sleeves: Delhi’s entrepreneurs unlike their counterparts in other cities tend to wear their emotions on their sleeves. This helps them sell their product better even if it’s a shoddy one.

“If a Delhi entrepreneur is stating something with passion it means he or she genuinely believes in the idea. However, sometimes it’s better to shield emotions in while doing business,” says Subinder.

  • Money gives them wings: Umair says that just after a series A funding round, he has seen the city’s entrepreneurs change their lifestyle. “They hire personal secretaries. Some stop being friends with other fellow entrepreneurs who are yet to raise any money,” he says. Often startup entrepreneurs have been seen buying flashy and expensive cars once they get series B or C funding, unlike in a Bangalore, where it’s considered uncouth to show-off.
  • Yet to flourish tech-wise: Barring a few exceptions such as Paytm or Zomato, Delhi’s tech prowess is limited, says Umair. “You can not build an online commerce store and say that you’re a pure play tech product company,” says Umair. The city’s capability in software-as-a-service (SaaS) or platform-as-a-service (PaaS) based technologies is limited, adds Umair, who is building a machine learning-based marketing platform.

Despite being perceived as low on tech, Delhi has built some great product companies such as Wingify, Kartrocket, Adpushup, and Airwoot.

  • Speed is important here: While the speed of execution is important in this city often strategy planning, which needs a big gestation cycle, is overlooked by startups.

The lack of patience – either of entrepreneurs or investors – impedes the growth of software product startups which need at least years to break-even. In the process, the city’s startups fail to build a Freshdesk or a Zoho.

  • Angel investors ask scale: Many seed investors ask for scale prior to committing any dollar. Funding just an idea is difficult. Several entrepreneurs in Delhi find themselves in this predicament.

Many angel Investors in the city often have not built startups themselves or come from a brick and mortar business background. “Not even one out of at least two dozen investors that I met have asked me about my technology stack,” says Umair.

 

Some who don’t understand the startup investing game go to the extent of asking for a majority stake, when an entrepreneur approaches for angel money.

  • Seasoned businessmen become insecure of the young: Even if it’s a teenager or a 20-year-old entering a business, the old sometimes gets insecure about it. “It’s natural. The young person will have the energy to build the business. He will have more access to capital. Whilst, an older businessman like me will have his energy dwindling,” Ashok of WTi says.
  • Platforms to share are fewer: In Silicon Valley or Bangalore, entrepreneurs often talk of how their friends rally around to help and even work for free. “I have had some experiences where in friends joined to build on a dream,” says Romil Mittal, co-founder of Noida based Siftr, an app that aims to clean junk images from your smartphone.

“However, it’s true the city lacks local neighborhood platforms where I could share my thoughts in the evening with fellow entrepreneurs. Perhaps that’s needed more,” Romil says.

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