Wealth Issue

The Romance of the First Million

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Ten young entrepreneurs relive the thrill of starting up
Until about a decade ago, entrepreneurship was a no-fly zone for middle-class Indians. Business was a rich man’s island and they could scarcely afford a ticket, let alone take on capitalists who had made sacks of money manipulating people to their own aspirations. Or so they thought. They were the dutiful mainland drudges who had inherited their parents’ socialist morals. Surely the occasional glimpse of the sea from their high-rise corporate offices was enough? All this would change with talk of a bridge linking the two worlds. A long and treacherous bridge, leading to an enchanted forest with unicorns. Angels would watch over this island of plenty, holding platters of money, and as long as you could prove your smarts, you would secure passage. Yes, it sounded worse than a snake oil salesman’s pitch, but for many young Indians, it was their one chance at a life of glory. And they took it.

It was not necessarily because they hankered after wealth or wanted to be their own boss. Most of all, they were excited by the prospect of fundamentally changing the way people looked at something. For Flipkart, it was e-commerce. For Ritesh Agarwal, India’s youngest startup poster boy, it was cheap, quality hotel rooms. “Our parents could never afford to dream this way,” first-generation entrepreneur Shashank ND said to me, talking about what made his entrepreneurial leap of faith possible. “So it was with a lot of hesitation that I borrowed Rs 2 lakh of their hard-earned money when I started up.” He paid it back with hefty interest by building India’s biggest healthcare software startup, Practo. The company has raised $125 million, about Rs 800 crore, in funding from investors so far. How does Shashank feel about that? “I was a little uncomfortable at first. We raised money cautiously. What made us believe we could scale was the fact that we were sustainable right from day one,” he said.

With venture capital, earning one’s first million dollars, the quintessential American metric of financial success, became a realistic dream for Indian techies fresh out of college. For the first time in India, an entrepreneur could be readily forgiven for making losses to gain a foothold in the market. Dorm room upstarts could now upset 800-pound gorillas; young, unlikely interlocutors joined the conversation on the superfluousness of a formal education; investors chased people who chased grand ideas. In short, it became clear that the new economy would belong to entrepreneurs with ideas that grabbed you by the lapels, pedigree and Ivy League degrees be damned. So we have Vijay Shekhar Sharma, who studied in a Hindi-medium government school in Aligarh and taught himself English, leading Paytm, India’s largest mobile wallet. One day in 2007, when he realised he had made his first million dollars, he could think of nothing but going home to Harduaganj in Aligarh to a hero’s welcome. He could finally tell his parents he had made it big. He was a ‘crorepati’.

Not all the 10 millionaires we spoke to were as forthcoming with their financial ambitions. Some claimed, in messianic fashion, to be moved not by wealth but by a sense of purpose. The socialist hangover had apparently not left Bangalore, the new capital of capitalism. Others cited the diminishing marginal utility of money, for they had already bought their Audis and designer homes. A few, like Aprameya Radhakrishna, who co-founded TaxiForSure and nurtured it into a Rs 1,200 crore company before giving in to an acquisition, enjoyed the good life but had to deal with the angst of a journey interrupted. The common streak that emerged was that they all had more money on paper than in their bank accounts, and they were heavily invested in the future of their respective startups. Most of them also turned angel investors, believing in other entrepreneurs like themselves, spurring on the world’s fastest growing startup ecosystem to greater heights.

We have heard it said, with annoying frequency, that India has reached its funding peak. But this year alone, Indian startups expect to raise $6 billion. According to Nasscom, India is home to 4,200 startups. Of these, just eight unicorns, put together, are valued at about $35 billion. The digital economy has birthed a litter of market-share-first-profits- later startups, and many of them will turn to dust in a few years’ time. After all, creating value and fostering innovation are expensive propositions in a winner-take-all market. In such a scenario, an entrepreneur’s life is never idle; he or she is always on the lookout for a more sophisticated product or service that can instantly make others fungible.

“Not many startups are thinking big today. Instead of aiming for category leadership, they celebrate too early or they are okay with being mere acquisitions,” argues Sharad Sharma, former Yahoo India CEO and co-founder of iSPIRT, a software product think tank, when I tell him I am writing about startup millionaires. “There is a false sense of having arrived,” he adds. The entrepreneurs we have featured here, though, are not the ones eyeing a shortcut through the thickets of competition. They believe in creating lasting value, jobs and wealth, and are wending their way through the asymmetry of the internet sector to make bigger impacts. Some of them are in fact beautiful losers, daring to start up afresh soon after taking a fall. Emerging from these stories, then, is a chronicle of a new beginning, of a young India that is not afraid to live its dream.