“India will be a $7 Tn economy by 2030,” Chief Economic Advisor V. Anantha Nageswaran boldly declared when tabling the Economic Survey (2022-23) in Parliament in January this year. Of course, it is nothing more than a forecast, and reaching the goal will depend on a host of internal and external factors. However, it is evident that Indian startups will play a critical role in rejuvenating the country’s economy.
India, home to the third-largest startup ecosystem globally, has witnessed the launch of more than 57K startups to date, with a combined valuation of $450 Bn+, according to an Inc42 report. A 2022 StrideOne report also states that the country’s startup ecosystem has the potential to contribute 4-5% to its GDP in the next three to five years.
But this can easily be an uphill task for young companies.
From finding the product-market fit to acquiring and retaining customers, from scaling up to sustainable growth, most startups have to undergo an arduous journey. What’s more, about 30% of new businesses fail within two years.
So, the question remains: What does it take for a startup to succeed beyond an innovative product, a great founding team and good customer centricity?
“If the timing is right, 90% of things go smoothly, and companies can scale up successfully,” said Dhruvil Sanghvi, founder and CEO of the logistics SaaS soonicorn LogiNext.
Rahul Garg, founder and CEO of Moglix, a B2B ecommerce marketplace for industrial equipment, agreed. Had it not been for the GST tailwind, Moglix’s rise to the unicorn status or its current growth – about 1,800 employees and operations in multiple countries – would never have happened, the founder said. Earlier, the business was present in just two Indian cities.
Garg and Sanghvi believe that a founder’s journey while scaling up a startup is one of self-discovery. One that helps founders introspect and understand their actions and reactions (whether governed by logic or personal bias) and, hopefully, make better decisions in the future.
“It takes a fair bit of commitment and belief to build an organisation,” said Garg. “It’s an important task that cannot be delegated; hence, I spend 25-30% of my time doing just that.”
When building one’s business, good governance remains a top priority. Given the recent controversies in the Indian startup ecosystem involving companies such as BharatPe, Zilingo, Trell and more, the spotlight should be on the founders in mitigating the crises.
Garg said three critical factors – capability, blind spot and intent – must be considered when examining governance issues.
“[Wrong] intent is absolutely unacceptable; it is fraud,” he said. “But it also calls into question the board’s capability as good governance is a joint responsibility.”
Sanghvi did not agree, though.
“I think it is the founder’s or the CEO’s responsibility first to ensure all compliances are met. Yes, the board, too, is responsible. But I think it comes second because everybody is investing their capital, time and more in the founder’s vision,” he said.
Speaking about the road ahead, Sanghvi said LogiNext would try to become the backbone for everything that supply chain companies do, be it logistics, accounting or HR.
“There are tonnes of challenges. But I feel that becoming a one-stop operating system can be a large market opportunity for us,” he said.
Referring to India’s target to emerge as a $7 Tn economy, Garg said that Moglix would play a significant role in recreating distribution for modern India.
“By 2030, we need to have better distribution experiences, and we are building the ecosystem’s capabilities to ensure that,” he said. “I am fairly bullish on what India can achieve in the next 10 years.”
Watch Moglix’s founder-CEO Rahul Garg and LogiNext’s founder-CEO Dhruvil Sanghvi discuss with Inc42’s Vaibhav Vardhan the duties and obligations of a founder in driving a startup from inception to profitability, implementing good governance practices across the organisation and more.
