If you were to ask any college-going student about his future plans, chances are a considerable number of answers would involve the term ‘startups’. The recent spurt in indigenous startups and their success of late has led to many students opting to take the entrepreneurial road. However, the concept of startups was alien to our country in the 20th century. It was in such circumstances that seven employees of Patni Computer Systems decided to resign and start a company of their own-Infosys. We at The Scholars’ Avenue had the privilege of interviewing Mr Senapathy ‘Kris’ Gopalakrishnan, who was in IIT Kharagpur as the Chief Guest of the Annual Convocation. He spoke to us at length about his take on the burgeoning startup culture, the pre-requisites for a successful startup and how some startups can be given a head start over others by venture capitals.
TSA: Over the past two days, you would have seen a lot of young graduates and they’re all going to start their careers now. What do you think is the main difference in opportunities that you had and that these people have, in terms of both job opportunities and opportunities to start up?
KG: There’s a significant difference.First of all, the environment is lot more open. Multinationals come to India now to recruit and they are all present here in India, not just in IT, but in other sectors also. And there are significant opportunities with Indian companies also. The perception about the Indian professional is completely changed in the last 35 years and the Indian professionals are now seen as global professionals. On the entrepreneurship side, again there is a confidence that you can create global companies out of India.There’s a confidence that if you have a good idea, you can get funding. A lot of the global venture capitals are present in India. We have created large companies even in the short period of last 5-6 years. So there’s definitely a significant difference.
TSA: You founded Axilor ventures, which aimed to improve odds of success of companies in their early stages. So what do you think are the main challenges that startups face in the early stages, and this is mainly considering that a lot of startups come out of IIT Kharagpur and they’ll also be facing similar challenges?
KG: You start with evaluating the idea. Most startups think that they have a great idea. But it’s a great idea only if somebody else thinks it’s a great idea. So you have to do validation of your idea first. Talk to ten other prospective customers, twenty other prospective customers, make sure what you think is a great idea, that they also think it’s a great idea. You have to find out whether they are willing to pay for it. Because if it’s a great idea, somebody’s willing to pay for it.You have to think about your team, you have to think about incorporating the company properly; we’ve found many cases where they have not done a great job of incorporating, they have not looked at all the compliance requirements. So, when it comes to funding, that’s when suddenly they realise that things are not set up properly. And it takes a long time for the money to come in. So, there are various things that you can do. Making sure that you improve the odds is about doing the mundane things properly, so that when the difficulty comes, you are only faced with those challenges. You will face difficulties. But if you don’t take care of the mundane things they become big challenges later and that’s an unnecessary waste of time.
TSA: While mentoring startups, you must have met a lot of bright, young individuals. Do you think there are some distinctive qualities which make them capable of creating a significant difference?
KG: Of course, the idea is very important and different people have different ideas. If you keep that aside, since there is no way you can compare these ideas as different people have different ideas and you cannot say which ideas will succeed and which will not succeed. That’s almost impossible to actually predict. But what you can predict and what you can gauge is the passion and the team dynamics. Do they have similar cores? Do they have similar values?
It’s very important because if we’re creating a team and people differ in values and cores then they will not be able to stay together. So you can evaluate people on those dimensions. Ideally, you make a guess, take a risk, take a bet and decide to go forward and there you will evaluate based on certain parameters but ultimately it is a gut decision.
TSA: You did an MSc in Physics before moving onto the IT sector. So what made you switch and did your background in basic sciences help you in any way?
KG: Of course it has helped me. Ultimately education is about learning to learn. It’s about understanding the fundamentals. Something like the Second Law of Thermodynamics clearly has relevance in group dynamics. If you don’t have rules things will become chaotic, entropy will increase. Clearly, there are useful things in Physics that you can use elsewhere, especially in computer science, because a lot of computer science is about electronics and physics.
What made me switch was the fact that I was struggling to find something I would be passionate about and by accident, I was introduced to Computer Science and then I felt passionate about it and felt like it was a field I could work in. I enjoyed problem-solving and I enjoyed challenges; and in computer science you are constantly solving problems, thinking of new ways of doing things and you get instant gratification. Your program runs, immediately you feel good. You don’t have to wait a long time and I liked it. Fortunately, it became my career.
TSA: When you had started out, that was the time computers were becoming the rage . There was a time people wanted to study mechanical engineering but now everyone wants to go for computer science. So do you think other fields are losing their significance?
KG: Not really. The interesting thing is that computing is now used in every field. If you go into biology now,the future of biology lies at the intersection of biology and computer science. If you look into automobiles, the impact of computing in creating unmanned vehicles, autonomous vehicles, is where a lot of investment is going. For example in designing buildings that are environment-friendly, have a low Carbon footprint and at looking for new materials. Even the new materials are going to be created with computers. Every field today has the impact of computers. In fact, that is why people say that we are at the beginning of the fourth industrial revolution, where digital is getting combined with the physical like IOT and things like that. Digital is getting combined with the biological like computer-human interface.
This is probably the best time to be a student and enter the job market because you’re going to see a wave and you’re at the beginning of the wave. I was at the beginning of the digital age( when I was a student). In the late 70s, Apple introduced Apple 2, in ‘81 IBM introduced the PC. I was at the right place at the right time, and you’re at the right place at the right time for the 4th Industrial revolution.The best thing is it impacts every industry. It impacts every discipline. Everything is getting changed using computers. For example, I watched Robosoccer and I watched the Team Kart demonstrations. Everywhere computers are playing a role and it’s wonderful to see that every field is changing.
TSA: You donated 225 crores to IIsc in brain research. What are the other fields that you think need more money?
KG: India needs a lot of money for research. Good research can only happen when we don’t worry about the money. You have the ideas and you test them out. First of all, we’re not correct in saying that we should not worry about money. In the US also 25% of the researcher’s time goes into raising money. In India, we actually don’t worry about that. We don’t make an effort to raise money. It is the job of the researcher to raise money. The only thing is that the interaction of the donors with the industry has matured there. So both sides are used to this. In India, we’re not used to this.
In India, primary funding comes from the government for research whereas in the US only a 10th of the funding comes from the government and 90% of the funding comes from the private sector.
There, the government funds basic research and the industry funds applied research. It’s a well-oiled mechanism. But in India, it’s not the case. Secondly, many of the better-known research institutions there have huge endowments, like MIT, Harvard etc. So they are self-funded in the sense and they can explore new areas without worrying about whether they’ll get funding and if the area is interesting, the industry will come and fund it. In India, the problem is that we’ve not built this ecosystem of industry and academia doing joint research and funding properly. That interface has not been built.
My effort has been to popularise this and tell people about this need and lead by example to tell people that we need to fund research. You need to fund research if you want to see India develop into a much larger economy because the larger economy is driven by research, innovation and entrepreneurship. We need new products, new businesses coming out of ventures. So we need to create such an ecosystem. But I am very confident that it will happen soon.
TSA: A lot of colleges in India are now realising the importance of incubating the start-ups from within their colleges. So what do you think about how should these incubation cells should be set up and what structure and facilities should they give to students who want to startup? What sort of activities should they carry out to enhance the entrepreneurship culture on the culture on the campus ?
KG: First of all, entrepreneurship culture is for everyone. It is something you need to inculcate in every student. And what I mean by this is problem-solving. When you face a challenge, you don’t fear that challenge.You feel excited that you will be tested and you will be able to find a solution with excellence. You are an optimist and that’s what I mean when I say entrepreneurship culture. And that should be inculcated in every student and the way to do that is to probably say make every student pick up a problem- say, anything non-trivial- and must solve it and find what help they need by themselves ,or maybe work in a team of two or three. Try and solve that problem and it will benefit them. It should not a problem you create and solve. Walk around the campus or in your department. Find something that is not working, something that is not right. Something that can be improved and you make an effort to improve and solve that. Figuring out what is required, whether it is solvable or not and finding the resources, finding the money, finding the right solution, finding the person who would accept that as a solution and confirm that they are benefitted from that will actually create an entrepreneurship spirit and the culture. That is for everybody.
However, starting a business is not for everybody. So they will create a difference between entrepreneurship culture, spirit and become an entrepreneur, a traditional definition of starting a business. That is only for some people and there if somebody wants to try their hand in starting a business. Again, the academic environment is probably the safest environment that they can try their hand in . So in some colleges like Kerala University, Cochin University, Gujarat University,they have actually included in their curriculum an element which says that in the 2nd year of a 4-year engineering programme, you can start a business. And just like for NSS or NCC ,you are given credits to start a business.You get 5% credit and you get 20% attendance waiver because you are running a business. If the business succeeds, you continue running the business. If the business fails, you take your degree and go and get a job. That’s why I said it’s the safest place, to start a business. If I ask you – “Who are your icons?”; you’ll say, Michael Dell, Bill Gates, Sergey Brin, Larry Page, Mark Zuckerberg. All of them started their business while studying. All of them dropped out also. So our heroes are also people who started businesses while studying. So, there’s nothing wrong in saying that I’m studying and I’m running a business.
Having said that, the incubators are places where you get all the support systems necessary to start the business properly. A place to sit, direct communication links if you want help in registering the business or if you want help in negotiating a term sheet etc. You get all the support that’s necessary, and that’s why these incubation centres are very useful. And this is primarily for students to start a business while studying. If they’ve finished their studies they can go out and join an incubator outside the institute.
TSA: In your opinion, if you assess the situation of the country right now, does it need more startups or more research ventures?
KG: Both. Because research is what creates new business. We want our businesses to have unique products, unique ideas.Yes, some of them will be copycats. But we need some at least which create unique products and unique services. That will come out of research. Why do you think a startup is required? If you look at job creation – this is data from the US, actually – almost all the jobs that were created in the last 10 years, were created by businesses less than 5 years old. Businesses greater than 5 years old have been stagnating, or declining in the number of jobs because of productivity improvement, because of the economic environment, etc. So, all the jobs are created by companies less than 5 years old.So if in India, we want to create 500 million jobs in the next, let’s say 20 years, we need to have a vibrant environment for new business creation.
We need thousands of startups.I would say every year we should be able to create 1 million new businesses. So that at least 5 million new jobs are created by these 1 million new businesses. Some of them will die out, of course. But many will survive. Only a few will get funded. See, our concept of a startup is that one which gets funded. 95% of the startups or 90% startups don’t require funding.They are small businesses. So, we need all those businesses and that is how we will create jobs.
TSA: So you had mentioned 2 kinds of research – the research at the periphery and research at the core – the applied and basic research.So which sort of research do you think India needs?
KG: Again, the answer is both. Because this is a continuum. You have to start on the basic research now, so that 5 years from now, 8 years from now, then it can switch to applied. At that point, if you look for applied research we have to import the basic research from someplace else. Today we need applied research converting into business, then we need applied research converting into business 3 years from now. Then, we need basic research converted to applied research. Then, we need applied research converting to business 8-10 years from now. This is a continuum. Everything is required especially because we’re a very large country.
TSA: If a student goes to you or anyone for funding, you look at the credibility of the student, so, if you see someone who’s devoting all his time to a company and has previous industrial experience versus a student who partially devotes his time to a company and is inclined towards academics and also has no previous industrial experience, who do you think is more likely to succeed ?
KG: You need to change what a startup is. The expectation from a startup is to create a proper business. Second, I want to ask all of you, if you get 2000 rupees today, you’re happy whereas after you pass out if you get 2000 rupees you consider yourself a failure. Your expectations right now are significantly lower and some students work for free, just for the experience. The cost involved is only the treatment etc which you can borrow from research labs. The cost of student startups is very very low and hence this risk is very low and funding is available.
TSA: When you graduated, India used to be a closed country. Now, students look at things differently,they’re more aware. What do you think are some successful areas students can go into? For instance, everyone here has an idea, if he / she belongs to a specific department they can either go into the core or something else. In school, they only had the idea that they had to go into engineering or medical. What do you think about the other disciplines like humanities/arts and everything else?
KG: See, the interesting thing is there are opportunities everywhere. Something like Uber, for example, it’s a business model innovation leveraging technology. All they have done is, they have taken a workflow of how people hire taxis, and then they looked at it from the perspective of taxi drivers and asked them how much idle time you have , what is the use of the car itself etc. They have optimised it and created a business out of it. It worked because of the convenience that the consumer gets. Just using a phone you can call a taxi. Previously getting a taxi was a tedious task. But now, we can actually call for a taxi just by clicking a button. So, there is a benefit to the consumer, there is a benefit to the taxi owner and the whole system elevates and you have created a business. There is no breakthrough technology here,innovation and thinking, innovation and business model, so, without that you can create innovation.
I am supporting a company in Bangalore which is doing crowdsourced testing.The traditional model of testing is, you would employ let’s say ten thousand software engineers to test something. Now, this person has ten thousand part time testers. He has a full-time staff of only ten or fifteen, but a client gives him a job – he can actually enable – so you put it out as a challenge and ten thousand people will try to work on that. Whoever finds the bug gets paid. So there is a competition to find a bug and everybody benefits. You work for two hours, you find a bug and you get hundred dollars or sometimes two hundred dollars if you find two bugs. The client benefits because it is a very simple mechanism to deploy ten thousand people. People are willing to do it because they do it in their spare time. You’re working at home and you don’t mind actually just working at your computer and taking it as a challenge for a couple of hours. Everybody benefits.This is actually an HR issue- how can one create a temporary work-force? How can you create a new kind of relationship between an organisation and an employee or what here now is a prospective. It is a new model, so there are possibilities everywhere today to think outside the box, to innovate because technology enables you to do that. So you have a database of twenty-five thousand people, their skill sets, what time they will be available.He has their e-mail ids, past history etc. So he knows who is actually trustworthy, credible, who has found more bugs in the past etc. All the data is available. So,he can put it out and when he gets a response from somebody saying, “I have found a bug”, he gets somebody else who is a lot more senior. That means he is earning more money to actually double check that. So, if he certifies, that guy gets paid, this guy gets paid and it gets proposed to the client.
You can even create workflows. All kinds of things are possible. That’s the opportunity. So you have to question everything, you have to think outside the box, you have to ask the question- why not? You have to write down the workflow and say, ” Are there inefficiencies?” Can something better be done? Can a technology disrupt this? Can a technology change the workflow? That’s the whole fun, right? And that is why I am saying that in core engineering there’s a lot of opportunities and the industry section has a lot of opportunities for the engineering discipline. There is an opportunity here for engineering and biology and there is an opportunity to look at workflows of things we deal with on a daily basis. Everything is an opportunity. That’s why it is very exciting.
The Scholars’ Avenue would like to thank Dean of Alumni Affairs & International Relations, Prof. Siddhartha Mukhopadhyay and Vice President, Technology Students Gymkhana, Shovan Panigrahi for their help and support in making this interview happen.