There are versions of me in every stage of my life that almost started a business of some type. As a kid, it was trading Pokemon Tazos that came free with Cheetos. Remember those things? Then for a while, I wanted to start a peanut company called Nuts N Bolts with a friend from college. Then it was a SaaS company with my then-work colleague and flatmate. Later I made a ripoff website of Urban Dictionary called Why the Fluff and convinced an incubator to throw me some chump change. And most recently I wanted to sell soda with my friends. So I have always been interested in people who started something of their own and the world they live in.
Last week, there was a lot of discourse and discussion on the Indian startup scene. It all started with Piyush Goyal, the minister for commerce and industries saying that the startups of India are not startups, but rather businesses andentrepreneurs at an event called “Startup Mahakumbh”. The name of the event in itself raises a lot of questions about the politics of business in India. What ideologies are being pushed and where they are being targeted.
But this particular comment, about how companies are not startups but shopkeepers, raised a ton of responses from every corner of the media. SubReddits like r/startupindia were full of people sharing their experiences trying to start up. All the hurdles, all the red tape and a general rant of frustration of starting up in India. Founders of the startups that were being accused of not being startups, wrote long LinkedIn posts. The whole thing even reached prime-time TV news debates. Thankfully, in an effort to not go insane, I avoid these TV news debates like the plague.
Let’s take a step back. If the startups in India are not startups, then what exactly are they? That was a mouthful.
Before we move ahead, this is not an analysis of the current Indian startup systems. Tons of analysis have been alreadydone by people with better knowledge than me. There were three takes that I really liked. One by Vivek Kaul on Newslaudry, the other by Faye D’Souza and finally Sugandha B’s comment on the now-famous post by the CEO of Zepto. Faye’s take was more data-focused while Vivek had a macro perspective to it and Sugandha’s was a slap on the wrist reality check.
Back to my effort into understanding what a startup is.
The Merriam-Webster dictionary says; Startup (noun): “the act or an instance of setting in operation or motion” or “a fledgling business enterprise”. And Oxford English Dictionary calls it just, ‘A newly established business’
Wait. That’s it?
The word startup has its origin in 1510. Startups were essentially a kind of half boots. Huh.
Some, almost all the articles on the internet about the history of startups, say that the first use of the phrase startup in the context of businesses was in a Forbes magazine article that referred to "the unfashionable business of investing in startups in the electronic data processing field”. I scoured the internet for this Forbes piece and couldn’t find it anywhere. There is one article in Harvard University’s student magazine, The Crimson, from way back in November 2011 that says this and tons of other blogs, articles and thought pieces have just re-quoted them. A year later Paul Graham founder of this blog’s arch nemesis, Y Combinator wrote this in his now famous article on what a startup is, titled ‘Startup = Growth’
[A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth.]
He goes on to compare Google and a barbershop, which sounds a bit off, to be honest, but the core point still being the pure focus on hyper-growth. So, by these definitions, startups don’t necessarily have to be technology-based, neither do they have to be extremely innovative, they don’t need to be poor, and they don’t need a garage even. First needs to be a new and fledgling business and then it needs to grow at a massive pace.
Is Mr.Beast, or any viral YouTube channel for that matter, a startup? Checks all the boxes. Is Liquid Death, a canned water company, a startup? One of the best I have seen till now. Was my Pokemon Tazo trading a startup? Was my ripoff of Urban Dictionary a startup?
The whole concept of startup, even in all its vague form, perfectly fits into the tiny corner of the massive unsolvable puzzle of capitalism called “the American dream”.
But back here in India things were different. We were a new country, slowly opening up to the world, struggling with basic social services, along with all the discrimination, poverty, disasters, on-and-off conflicts and a ton of other similar stuff.
Starting a business was still a trade-forward practice and since it was a trade-forward practice, only certain casts, regions, groups and communities had, in many instances continued to have, access to it.
I asked my father a few years ago if he ever wanted to start something of his own. His answer was that business is not meant for people like us. I asked him the same question again quite recently and his answer didn’t change.
On August 15, 2015, during the Independence Day speech, Prime Minister Modi announced a new initiative called “Start-Up India” and in January of the next year, the government officially launched it. Nine years later we have the minister of the same government saying that there are no, quote-on-quote, startups in India.
If we go with the OG definitions from the likes of Y Combinator, these companies have grown massively and should be the capital S startups. They have innovated in product, process, technology and design. It gets a bit sad once the international boundaries fade and we see what others are doing. When we compare India with cultures and society with a far progressive mindset, years of scientific and technological research, social, cultural and personal freedom. When we get a glimpse of what they there are creating. When we get to see people of our age getting to be part of that magic. That’s a sadness we can’t discount. Take autonomous vehicles for instance. If I google self-driving cars, I am hit with results from all the app-based companies from whom I can rent cars that I can drive myself. But when my friend in Texas googles the same thing, he sees Waymo, autonomous trucks and other cool stuff. Both are companies that are experimenting and solving problems of the context they are in all the while growing exponentially. So both should be startups, right?
Words have meanings and they evolve over time and context. The word that probably started to define a type of boot is now being used to define world-changing companies.
So in our current context, what exactly is a startup?
I asked Ram, a venture designer and a close friend. Ram is someone who got their hands dirty in the world of startups a few years ago and for some odd reason continues to be still passionate about the whole ecosystem. One thing that I really like about Ram is that he forces himself to look at the system through multiple perspectives and that’s something difficult to come by these days.
Ram: I don't know more time you spend on this, I think you'd realize that definitions don't really matter end of the day it's all outcome I don't know if there is a need to define startups but there is this classification within investors of what kind of a business it is. Is it a m trading business? Is it a lifestyle business? Is it a scalable startup? So, their main focus is being a scalable startup that they can probably exit in like 5 to 7 years and make like 100x money of what they have put in.Ideally something that scales with less money.
Ram also mentioned how the phrase Startup has changed people’s perspective on starting a business. It’s more okay to start a start-up because of the phrase being attached to successful and cool things. Shows like shark Tank and all these government and non-government events and programs definitely did help in that. Parents and neighbours from non-business backgrounds have become more open to their kids starting a start-up, which would which would not have been the case 10 years ago if they were starting a business.
I started with the question, what is a startup? But I think the real question here is, Is there a point in defining what a startup is? Or for that matter what a business is?
Maybe we should just stop attaching labels to what people are doing and look down on them based on these labels or even the lack of them.
You can find Ram’s work by going to Ram’s portfolio ‘ramp.myportfolio.com’. He has some really interesting case studies there. I really liked one called ‘Future of Autonomous Vehicles in India’. Do check it out. You can find him on LinkedIn as Ram Prakash.
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