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30 OUTLOOK MONEYl7 september 2011lwww.oloomoy.com
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Bus30
EasY aUTOHarisHBaLasUB-raMaNi (L)aNdPadMasrEEHarisHbuine
decrition:Prepaidmeteredauto-rickshawservice
Date of launch:
September2010
start-u caital:
`8 lakh
performance:
150 trips/daybroken even inJune 2011
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p://l.oloomoy.com l7 september 2011lOUTLOOK MONEY31
nessesunder10
Cover story
scial ro Eepise banking Inuanc Inving ral ea Financial planning Fliid
AGoogle search or inspirational quotes
or entrepreneurs throws up many lists,
but one that fnds its way into every
compilation is that by a student in entre-
preneur Warren G. Tracys class,
Entrepreneurship is living a ew years
o your lie like most people wont so you
can spend the rest o your lie like most people cant.
There are perhaps no better words to embody the spirit o
an entrepreneur. Entrepreneurship is about reedom, about
leading your lie the way you want, but, at the same time, it
is a lot o hard work. And yes, it requires money.
Fortunately, however, it doesnt take a ortune to start a
business. With an entrepreneurship ecosystem that is ast
developing and availability o low-cost technology, starting
a business is more about passion and skills that you bring to
the table than having a at bank balance. In this story we
bring you 30 businesses that have been started or an initial
investment o less than `10 lakh. The capital ceiling has a
lkhBYaNagH PaL
Poo: jagadeesh n.v.
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ew implications. It has thrown up certain categories o
start-ups which require a low investment up-ront, with ser-
vice and technology start-ups orming a majority. We have
discussed these in broader detail in the ollowing paragraph.
A low start-up capital also implies that, more oten than not,
the entrepreneur brings certain skills to the table, the intel-
lectual capital, which complements the money that is put
into the business. Finally, it means that these entrepreneurs
almost always do not depend on any external source o und-
ing and use their savings to get their business o the ground.
How muCH do you nEEd to Start?
This is a question that all entrepreneurs need to answer.
Broadly, it consists o these three componentsdevelopment
costs (or the developing the product or service), inrastruc-
ture costs (the cost or all business inrastructureofce
space, computers and so on) and customer acquisition cost
(cost incurred in reaching out to the customers.)
This fgure is what you need to get your business started,
assuming that you pump revenues back into it. But there
should be a contingency und in case the business takes lon-
ger than expected to take o, or does not take o at all.
Ideally, this should be six months to a year o operatingexpenses. When an entrepreneur is not depending on an
external source o unding to start o with, or 'bootstrap-
ping' in startup parlance, it becomes important to keep start-
up costs under control. We take a look at some o the promi-
nent trends we have observed in our list o businesses.
Student start-ups. It is not a coincidence that we have a
large proportion o student start-ups. Passionate, vibrant
and eager, these entrepreneurs have decided to take the
plunge even as they are studying.
Laura Parkin, co-ounder and chie executive ofcer,
National Entrepreneurship Network, a community o entre-
preneurs, says that a number o student start-ups havegrown rapidly over the last ew years among its member
institutes. I have got nothing to lose! say students who are
not burdened with amily responsibilities and EMIs. They are,
thus, ree to ollow their passions. Laksheeta Govil, a ashion
student, New Delhi; and Abhinav Mehra, a management
graduate, teamed up to launch Fizzy Goblet, which makes
designer hand-crated shoes. Says Mehra, We are experi-
menting with new material and technology to scale up.
Dorai Thodla o The Start-up Center, an early-stage start-
up accelerator with an initial ocus in the mobile, Web and
sotware technology space, says: As a student one is not
contaminated by the knowledge o how things are done; so
they can explore novel ways o doing things rom building
products to creating a business model. Technology does not
scare students, so they can come up with innovative uses
more easily. They learn ast.
There are cases in which students have
solved a problem in their own campuses and
then scaled up. Ashwin Yogesh R started
Fluid, a campus milkshake kiosk, when he
was a student at Saveetha Engineering
College, Chennai. Having passed out and in
a job, he is working on a business model
that will let him take it to shopping malls and
other locations.
Says Ashish Sinha, ounder, start-ups.in, a portal or Indian
start-ups, Students need not waste time building a business
plan, or running ater VC unding. The ocus should be on
creating a very good product. Successul examples are that
o Mark Zuckerberg o Facebook or Michael Dell o his epon-
ymons computer company. They started solving a problem
within their campus and fgured out a business plan and an
expansion model when they had proo o execution.
Internet and mobile start-ups. The Internet and mobile as
platorms are opening up opportunities or many areas
education, gaming, entertainment, media, advertisement,
enterprise and personal productivity, commerce, and much
more, says Tanvi Shah Rangwala, director, ICT initiatives,
paionate,virant and
eagertudenttart-u are fat
riing in India
32 OUTLOOK MONEYl7 september 2011lwww.oloomoy.com
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scial ro Eepise banking Inuanc Inving ral ea Financial planning Fliid
1Validate the idea first; dont start develop-
ment till you can do some inormal research
and talk to a ew potential customers.
2Build a simple version o the product, get
potential customers to try it out and revise it
based on their eedback
3Make a list o expenses. Find out the ones
which are immediate and those o which can
be postponed
4 I you need to buy stocks, look or bulk
purchase discounts. Negotiating with your
suppliers or deerred payment also helps
5 I possible, work rom home. Rent urni-
ture and equipment, or buy used ones.I an
expense can be deerred, deer it
6Use open source sotware to cut down on
licensing costs or sotware. When buying
computers and peripherals, look or deals
7Leverage social media marketing to the
hilt. Build a social network. Be on Facebook,
Twitter and blog about your product
8Cut down on utility bills by preventing any
wastage. Reuse and recycle to bring down
stationery and printing costs to a minimum
HOw TO cHEcKsTarT-UP cOsTs
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iAccelerator, a program we designed to equip technology
entrepreneurs in the Internet and mobile domains to estab-
lish well run and proftable companies in India.
Games, mobile applications, Web- and cloud-based applica-
tions are also areas o opportunity. Rangawala adds, The
scalability o the business model, the sustainable competitive
advantage and the agility o development and operation are
the most crucial success actors or technology start-ups.
Vinayak Joshi, o LearningConcepts.in, a mobile and Web-
enabled desktop applications developer ocused on the educa-
tion industry, says, The biggest challenge was to convince
potential clients that we are as good as the big names.
Sinha advises those in the mobile application business. He
says, They should come out o the developer mindset and
build an application as i they are building a product business
with proper marketing, positioning and a business plan.
Solving a problem. A certain brand o entrepreneurs is into
the businesses o solving customer problems, but in a smart-
er way than what is currently available. For that they usually
leverage a technology platorm. How many times have you
planned to dine out with a riend but were not sure where to
go? Zomato.com aims to solve this problem. Founded by
Gurgaon-based Deepinder Goyal and Pankaj Chaddah, it pro-
vides a list, based on location and cuisine, o eating out and
nightlie options in 10 cities in India. along with scanned
menus, directions and reviews. Says Chaddah, There was
no one-stop place to get all the inormation required to
decide on a restaurant when we wanted to dine out, order in
ood or go or a drink. We wanted to bridge this gap in the
market in the best way possible. Now they have 800,000
monthly users on their website.
Sinha says that such businesses should ideally solve an
India related, or local problem, and not copy a global model.
The entrepreneur should have a deep understanding o the
consumer mindset and existing solutions to the problems
against which he has to compete. The bigger the problem,
the more money people would be willing to pay or it.
Another set o people leverage their skills to leave their job
and start up on their own. People see others making more
money and they ask themselves, Why not me?. So, instead
o doing a 9-5 job, they decide to go it alone, providing a ser-
vice in which they have some expertise.
Social entrepreneurs. These businesses work on a model
that not only makes money, but also creates a sustainable
social impact. Molly Alexander, business manager, Acumen
Fund, India, a non-proft global venture und, says: Many o
the challenges aced by India have not been solved at
scale by government or private sector
approaches. We believe the opportunity or
social entrepreneurs is growing in India
with Indian innovation leading the way
with strong examples globally.
Sweetly Designs, creates a sustainable
livelihood or rural artisans by providing
them access to global markets or handicrats
and empowering them with training, raw materi-
als, knowledge resources and other support.
AutomotionAds, a transit advertising company that pro-
vides customised solutions on autorickshaws, empowers
low-income drivers and their amilies with benefts such as
micropension, insurance, ree education and so on.
Social entrepreneurs, says Dolly, needs to know their capi-
tal needs, measure social and fnancial returns and look or
appropriate partnerships to be successul. Starting on the
entrepreneurial journey is a leap o aith. Go right ahead!r
34 OUTLOOK MONEYl7 september 2011lwww.oloomoy.com
Up nextxBnkin: securin your cheque pg 42
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cftll.om
(L-r) TiraTHKaMdar, BHaviK
JHavEri,MONica gUPTa &MaNOJ gUPTa
buine decrition:Online luxuryhandicrafts branddedicated to socialupliftment
Date of launch:January 2011
startu caital:
`10 lakh
performance:3,000 productsand over 10,000customers
Game,moile, We-
and cloud-aeda are area of
coe for techtart-u
sanjit kundu
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