TN Hari is the co-author of Winning Middle India: The Story of India’s New-Age Entrepreneurs. This compelling 185-page book profiles a new generation of founders who are unlocking huge opportunities by leveraging platform business models, smartphones, and changes in consumers’ digital behavior of India (see my book review here).
Hari is an angel investor, advisor to VCs and founders, and advisor to startup accelerators. He is an alumnus of IIT Madras and IIM Calcutta, and has been part of five successful high-growth startups and exits, including one that launched its IPO on NASDAQ. He is the co-founder of the Artha School of Entrepreneurship, and the co-author of Saying No to Jugaad: The Making of Bigbasket (see my book review here).
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In this in-depth interview, Hari shares insights into success in entrepreneurship education, the startup ecosystem, and success tips for founders.
Edited excerpts from the interview:
YourStory [YS]: What trends do you see in the rise of startups targeting markets beyond central India to the bottom of the pyramid, for individuals with incomes below Rs 3 lakh per annum? How to overcome the challenges here?
TN King [TNH]: I think we are only now seeing startups seriously targeting central India. It will be a while before new-age tech entrepreneurs try to solve problems for those at the bottom of the pyramid.
The starting point for this is to involve those at the bottom of the pyramid in providing services to those at the middle or top of the pyramid, thereby putting money in their hands.
[YS]: How was your book received?
[TNH]: Good response so far. People loved the storytelling style, data and insights, and real-life stories of central India and developing entrepreneurs for central India.
[YS]: How can founders build empathy for customers in central India? Can disciplines like design thinking help map customer journeys and solution opportunities?
[TNH]: In my opinion, empathy for middle Indian customers is very important for developing products for middle India. And from what we’ve seen, this empathy only comes from growing up in central India and experiencing all their problems. There are no shortcuts.
[YS]: Many MNCs and large companies are courting startups through accelerators. What are the opportunities and challenges with this approach?
[TNH]: As companies become large and mature, they generally tend to get caught up in their own bureaucracy and lose the ability to innovate. To stay relevant and thrive at this stage, they need to find ways of structuring and empowering teams to cut through bureaucracy and take some calculated risks and move quickly and with urgency.
Courting startups through accelerators is one way of doing this. The downside of this is that the innovation that a startup develops from the accelerator may also be available to their competitors. But, from a larger industry perspective, there is no downside.
[YS]: Some colleges and universities are also launching incubators for startups. What are the success factors for faculty to move beyond research and teaching and launch spin-offs or faculty founders?
[TNH]: Some very good startups have been incubated in colleges and universities in India. This is the trend all over the world. It is not without reason that innovation hubs in the US are all clustered around universities that do innovative work like MIT, Stanford, etc. It is common at these universities for faculty to test their ideas by working closely with startups.
India still has a long way to go. Critical success factors for this model are for faculty to produce some original high-quality work in innovative domains, and a strong industry-academia partnership. It is still very weak in India.
Academia and industry in India do not work well together and the two do not have enough respect for each other and their capabilities.
[YS]: How seriously are startups taking environmental and social responsibility in addition to business goals?
[TNH]: Startups, unless they are ESG focused, do not necessarily take environmental and social responsibility seriously. This is not surprising. If there is a business opportunity and money to be made through ESG, they take it seriously.
We have all seen that getting countries to agree on what needs to be done to address climate change is not easy. However, we are making good progress, and funds are slowly being made available to entrepreneurs for solving ESG challenges.
That is when ESG is taken seriously, where entrepreneurs see business opportunities by addressing ESG challenges.
[YS]: How important is it for tech founders to achieve massive scale, or is there value in sticking to niche markets?
[TNH]: We have a very warped sense of ‘scale’ and sometimes it forces us to do the wrong things. Every idea and every business doesn’t have to aspire to exponential scale.
While every business needs to solve a real problem, the definition of scale for a business depends on many factors such as market size, being part of a megatrend, founder mindset, having a network effect, and availability of cheap capital. Therefore, there cannot be only one way of looking at the scale.
[YS]: What will it take for India to become a hardware powerhouse, and export affordable smartphones, laptops and accessories to the global market? Did the bus miss us here?
[TNH]: There are people smarter than me who have shared their views on this. I think we missed the bus. We are on the path to becoming a service powerhouse.
The two (manufacturing and services) require different skills altogether. Y2K killed any capacity we might have had for manufacturing excellence.
Manufacturing has been starved of talent for the past 25 years and recovering for it will not be easy. Creating manufacturing excellence is a slow process. Having said that, we have somehow managed to improve in some pockets like our defense and space programs, but not across the board.
[YS]: Do you see the need for creating a ‘Startups Association’ for Indian founders, like NASSCOM for the IT services sector?
[TNH]: Industry associations are groups of entities with common interests that come together to lobby governments or provide support to member organizations.
Therefore, startups that merge make no sense. It should be associations for healthtech, edtech, ecommerce, and others. NASSCOM also did not embrace all startups at that time; it is formed to represent software and services of startups/companies only.
[YS]: We are also seeing the ‘dark side’ of tech through the rise of fraud, hate speech, security risks, etc. How should founders combat such threats, and develop the moral conviction to move away from inappropriate use of technology?
[TNH]: Where there is money to be made or influence/power, good and bad people will inevitably be attracted.
Founders must operate with the right moral compass and be deeply committed to doing the right things, and influencing others to do the same. They should also support and advise regulators in shaping regulation on these topics.
[YS]: You rightly point out the importance of having social reformers as well, in addition to entrepreneurs. What are some areas where we still need social reform, eg, less caste discrimination, and more harmony between religions?
[TNH]: Capitalism solves problems but always creates wars, conflicts, shortages, power struggles, inequality, and so on. Therefore, the world will always need social reformers.
The nature of reform is constantly changing. Reformers will play a role in creating a level playing field and returning the world to peace and equilibrium.
[YS]: Would you say that the startup movement has reached a tipping point in India, or is there still a way for mainstream acceptance and support for startups?
[TNH]: In my opinion, startups have reached a tipping point and are mainstream. The start-up energy even in India’s hinterland and in Tier II and III towns is palpable.
[YS]: How well is entrepreneurship being taught in India these days? How can it be measured?
[TNH]: Let me keep it short by saying that it has a long way to go. Our education system has not kept pace with changing skill requirements and as a result is inferior.
However, the New Education Policy (NEP) is expected to address many of the gaps. Time will tell how effective the NEP will be.
[YS]: Tell us about some of your activities in the startup space these days.
[TNH]: I am currently focused on developing the Artha School of Entrepreneurship. The vision is for Artha to become the world’s leading institution for creating large and sustainable businesses. I am also able to pursue my investment interest through the Fundamentum Partnership.
[YS]: What advice or tips do you have for the aspiring entrepreneurs in our audience?
[TNH]: Do whatever you love with intensity and passion.
[YS]: Any other feedback or comments?
[TNH]: Futile. So, enjoy the ride!