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India's Startup Education Needs Less Pitch, More Purpose

Social media articles, blogs, and television programs such as Shark Tank have created a startup buzz, which promises a lucrative career for the youth that was never an option in the past.

The startup wave in India has generated extensive interest among the youth. Indian startups such as Flipkart and Zomato have become role models for setting up a company and converting it into a successful financial venture. Social media articles, blogs, and television programs such as Shark Tank have created a startup buzz, which promises a lucrative career for the youth that was never an option in the past.

This interest has also spread into educational institutes where students, even at the higher secondary level, work on a startup idea or have even developed a prototype for converting it into a commercial business. Students in universities and higher education institutions (HEIs) are demanding startup management programs with the idea of setting up a startup as their future career option. This demand has seen active encouragement from the startup industry, investors, and even parents.

However, the enthusiasm has often been directed with a short-term focus: how to monetise the idea and attract investors to pour funds into the venture. Entrepreneurs have moved from building and nurturing the idea and creating a viable business to a focus on pitching it successfully to potential investors.

Pitching is one of the popular methods used to present the startup idea to either customers or investors. Generally, the pitch is made to several investors/venture capitalists before one of them agrees to fund a venture. The pitch made by founders at several stages of the company is focused on investments that will enable them to take it to the next level of growth. It is also a good platform to present the startup idea and get feedback on how the venture can be strengthened. The audience, consisting of successful investors and founders, provides the entrepreneur with possible changes or alterations in the original product/service or the strategies related to marketing and finance. Through pitching, the entrepreneur can anticipate issues or challenges that could arise during the growth phase. After several rounds of pitching, the original idea gets reinforced, and the feasibility of the venture improves from the feedback. While pitching is important at each stage, it should not be the principal motivation of the entrepreneur for setting up the venture.

This focus on pitching has created a demand in various edtech platforms and even in HEIs to provide short-term courses focused on formulating a business plan. The main motive here is to present projections that will attract venture capitalists and angel investors to invest in early-stage funding. This has led to lower emphasis on courses that are expected to train the entrepreneur in skills that are required to manage the issues and challenges when running a

startup company. A recent trend that has become common is to organise startup competitions, to present early ideas to a panel of investors, and seek funding to progress further. Ideas presented in these forums are generally on paper, with limited studies conducted on market demand or financial viability.

The emphasis on pitching versus managing the business diverts the founder from working on the venture on a day-to-day basis. Entrepreneurs who begin a startup with a small corpus end up focusing on generating investments from pitching sessions early on, and the venture invariably suffers from poor management. The company is often forced to close as these ideas do not have any innovation or have not reached the viable stage that could attract funding. Pitching is important and needs to be carefully planned with milestones achieved in the business before initiating these presentations.

Startups that are successful in attracting funds in the initial stages but are poor in managing the company often fail in converting the venture into a viable company. This focus on pitching versus managing the company has led to several startups closing very early in their entrepreneurial journey.

The focus on pitching could also be traced to startup founders lacking the practical skills needed to build and sustain a business. Such founders are excellent at narrating and selling the idea in a pitch to attract investors. However, they are poor at managing the startup and lack skills in marketing, product development, financial management, and business strategies.

Research has shown that the training and management skills of the entrepreneur are a positive factor in obtaining investments. Investors are keen to understand the level of expertise of the founder in running the organisation in the selected domain. This criterion is a key factor for investors deciding whether to fund the startup.

Several HEIs have introduced startup management programs in their curriculum. These institutions and universities need to ensure such programs are built on the foundation of management functions such as finance, accounting, marketing, operations, and human resource management. Entrepreneurs should also be trained on the use of current technology and data analytical tools to help them make data-driven decisions. They should learn to manage cash flows, interpret financial statements, analyse markets, and create viable products that solve problems and challenges faced by society. Business strategies should be taught through business simulations and case studies. A focus on building sustainable businesses is necessary as this criterion plays a major role in securing funding.

Technology has advanced to a stage where no venture can be established without incorporating the latest innovations. In the last few decades, changes in technology have been developing at a rapid pace, and the entrepreneur must be trained and aware of the latest enhancements in technology and tools that can be incorporated in the startup. An entrepreneur today needs to be technologically, financially, and market-wise competent before creating a successful venture.

Universities and higher education institutions should take the lead as the main platform for providing these skills to potential founders. Incubation centres on university campuses provide the environment for nurturing and growing a startup with extensive handholding and training on management functions by the faculty. Education for founders needs to be curated with a focus on managing the business, instead of only looking for funds for the venture. Training founders to manage the startup end-to-end is the only method that will sustain the idea to be converted into a long-term, successful company. Pitching is important, but it is only relevant at a certain stage and should not be the sole objective of setting up the startup.


Prof.Umesh S. Mahtani - School of Business Studies, Program Chair - BMS (Hons) Program, Director - Start-up Management Program, Vidyashilp University






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