Space set for 1,000 startups to mushroom
By Deepshikha Punj
30th July 2012 12:00 AM
Co-founded by Sijo Kuruvilla George, 28, and Sanjay Vijaykumar, 27, Startup Village is India’s first telecom incubator. Located in Kochi, the village is the brainchild of two young entrepreneurs, who in 2006 co-founded MobME, a value-added services company that’s listed on NASSCOM. “MobME has been promoting the dream of a Silicon coast from 2007. It’s born out of our experience of starting a company in college, undertaking the path less trodden to finally becoming one of India’s top 10 emerging IT companies in a span of six years,” says Vijaykumar. “At Startup Village, we are leveraging on the foundation laid by Technopark Incubator six years ago to accelerate the tech startup ecosystem in Kerala. We want to achieve a mission of 1,000 product startups.”
The PPP (private-public partnership) venture — India’s Department of Science and Technology and MobME invested `2.5 crore each — will focus primarily on student startups from the state’s 164 engineering colleges. It will form an ecosystem for startups to create breakthrough technologies for the global telecommunications industry. “Cumulatively, this would translate to over 25,000 in employment, over `100 crore in investments and `2,000 crore in revenue,” says George. The Village was launched on April 15 along with the Kerala chapter of IEEE Communication Society (ComSoc).
George and Vijaykumar chose to establish the Startup Village in their home state to not only stop brain drain from the state to Karnataka and Tamil Nadu but also because it offered the biggest opportunity for a telecom incubator. “Kerala is 100 per cent literate, has near 100 per cent teledensity, high IT literacy and access to broadband, making it an apt state to setup a telecom incubator. The state also has a very high talent pool and one of the highest densities of engineering colleges when compared to any other state in India,” says George. SM Pasi, spokesperson, ComSoc adds, “There has been a feeling that the entrepreneurial capability of Kerala is low when compared to other states like Gujarat and Maharashtra. Such an initiative is a small beginning in improving this situation.”
In the beginning
Born out of brainstorming sessions with HK Mittal, Head of National Science and Technology Development Board in April 2009, Startup Village underwent a long journey through various technical and financial committees before it got the final approval from the Union government in 2011. Construction began at Kinfra Hi-Tech Park, Kochi, in January and the facility was inaugurated by Kris Gopalakrishnan, executive co-chairman, Infosys, in April. “To me, the most important aspect is that this is driven by youth. I believe it has a high probability of achieving its goals given that majority of the 1,000 startups will be set up by youth,” says Gopalakrishnan, who will act as chief mentor.
While the innovators will be selected on the basis of merits of the idea, execution competence of the team and the growth potential of the company, mentors from a wide range of background will help students. Mentors include Rajan Mathews, director general of COAI, Kiran Karnik of NASSCOM, Ganesh Lekshminarayan, chief executive officer of Dell India, KK, CEO of Mindtree, Sasha Mirchandani, investor, InMobi, and Abhishek Goyal, investor, Flipkart, along with a host of successful entrepreneurs from Kerala like NK, CEO of Suntec, Navas Meeran of Eastern Group, Jose Thomas of Choice Group and Murali Gopalan of US Technology. “The startups can also look for support from angel investor associations such as TiE Kerala, Indian Angel Network and Mumbai Angels,” says Vijaykumar.
Interested students can access state-of-the-art Blackberry devices and services to test their project design and applications. Blackberry has opened an innovation zone called Rubus Labs at Startup Village to promote application development in the BB10 platform. Annie Mathew, Head of Alliances, RIM, India, says, “It will serve as an experiential zone for school children to experience the possibilities of mobile technology. Rubus Labs would help students translate their ideas into products/solutions by providing adequate resources such as training programmes, BlackBerry devices and technical support. BlackBerry would also help students with a head start as they would have access to BlackBerry devices and software before it is launched in India.” Rubus Labs would regularly conduct BlackBerry Hackathons (participants would develop applications that may prove highly useful for the masses) and Bar Camps, which are meant to help student developers.
With 164 engineering colleges participating in the Startup Village, the scope of innovations is expected to increase manifold. B Anil, principal, Wayanad Engineering College, one of the participating colleges, tells us why. “The Startup Village will change the attitude of students from‘jobseekers’ to ‘job providers’. This is a change that the state really needs. In any system we need a critical mass to get the action started. Startup Village is aiming for acquiring that mass,” says Anil. He adds that such a level of mentorship will not only help students gain confidence in their idea, but also provide professional help. “Since the Startup Village has experts from all areas it will provide a good ecosystem to nurture entrepreneurs. In addition, the peer group will also be very supportive. This will definitely boost the confidence of startups,” he says.
While Kerala is the starting point for Startup Village, the founders want to expand it to more cities with time. “The focus of the first year is to bring together all partners to one place and lay a strong foundation. Post that Startup Village will expand to Delhi, Mumbai, Chennai and Bangalore. The need would arise as we simply don’t have an ecosystem for scaling sales/marketing in Kerala as the headquarters of most IT companies are in these cities,” says Vijaykumar.
Let the stats talk
The co-founders believe that India needs many incubation centres and Startup Village could be laying the foundation for it. George says, “Today, over 35 per cent of our population is below the age of 20. By 2020, 325 million people in India are expected to reach the working age, which will be the largest in the world. This catapults us into one of the most powerful and leading economies of the world over the course of the next decade. For this to happen though, a country like India requires massive scale up in its incubation and entrepreneurial ecosystem.”
They say there is an urgent need to scale up infrastructures for innovations in the incubation models. “Successful completion of a business incubation programme increases the likelihood that a startup company will stay in business for the long term since older studies have found that 87 per cent of incubator graduates stayed in business, in contrast to 44 per cent of all firms,” says George.
Young innovators fresh out of college are being encouraged to be a part of Startup Village. There is a fundamental reason for such an insistence. Vijaykumar explains, “Fundamentally, there is no biological difference between a student and a graduate, which means that you have the same level of intelligence even in the first year of college. The cost of starting up in college is the least ever in your life, as you are not expecting a salary for yourself, which is typically the biggest cost for an IT product startup. The fear of failure is the next biggest deterrent in starting up but in college this really doesn’t matter because even if you fail in your attempt, life doesn’t change, as you are still in college.”
He also says that unlike the real world, in college there is no pressure to create a startup and become successful overnight. One can learn the ropes of being an entrepreneur at their own pace. “When you are young, you are creative, wild and ready to build, break and innovate. This ability has created some of the world’s biggest IT companies. It makes a lot of sense to attempt this especially when the country’s most successful IT entrepreneur, Kris, and the government of India are coming together to back you,” says Vijaykumar.
Startup Village plans to actively engage the student community by means of their campus outreach programme. This programme will have several components in the form of evangelisation workshops, sensitisation seminars and experiential sessions. “The key objective of all these initiatives would be to expose students to the digital (internet and mobile) economy and equip them with the right skill sets to harness the powers of the digital economy,” adds George.
Young entrepreneurs will also be given professional mentorship, physical and technology infrastructure. George says, “Financial support will be provided through programmes like the IEEE Student Project Programme, Startup Village Scholarships, Accelerator Programme and Angel Fund.”
Applications for the IEEE Student Project Programme can be done through the website, http://ieee.startupvillage.in/. Shortlisted applicants will then have to make a presentation to a panel of experts constituted by IEEE ComSoc.
The selection process for incubation starts when the student/entrepreneur fills out and submits a simple application form on www.startupvillage.in/apply-now/.
Startup Village has a selection committee, which comprises representative members from Department of Science and Technology, Technopark, industry along with key representatives of Startup Village and MobME.
The applications are reviewed on an ongoing basis and subsequently a personal interview with the applicants is conducted by George, who is the CEO of Startup Village. In instances where in-person meetings are not feasible, the interviews will be conducted over video conferences. Based on the details provided and insights from interviews, the committee evaluates the applications and grants provisional incubation status, which will be made permanent after six months. This, however, depends on traction and team performance.
In 2011, small and medium businesses accounted for 17 per cent of India’s GDP. This is expected to rise to 22 per cent by 2020. Innovation brings in efficiency in process and helps reduce wastage, gives shape to new business models and creates employment and wealth in the society. “Incubators are catalysts for creating innovation ecosystems. If you look at the Silicon Valley, the average age of the founders of Yahoo, Google, Apple, Microsoft and Facebook was around 24. The demographic dividend, where over 50 per cent of the population is below the age of 25 give countries like India a tremendous advantage to tap into innovation for employment and wealth creation,” says Vijaykumar.
At the Startup Village young innovators will be given several perks. Incubatee companies that are recognised by National Science and Technology Entrepreneurship Development Board of the Indian government’s department of science and technology will be eligible for service tax exemption for three years and up to `50 lakh of revenue. They are also by default selected to make a pitch presentation to Startup Village Angel Fund. This could fetch them an initial amount of `30 lakh for their venture. KPMG, which will provide high-level consulting services to the incubatees, will also help them in their initial tax support services.
As for the hosting, every Startup Village company will be given massive discount credits on hosting services, financial support and knowledge sharing. Companies will also be given an office space for `15 per sqft.
Startup Village is the beginning of a revolution for entrepreneurial incubation in the country. It can safely be said that the future belongs to innovators.
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