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Rishi Kapal

How govt, industry can help local startups scale up globally

26 April, 2017

The fastest way to undervalue a company is to focus on a country-of-origin strategy and not have a time-bound global scale-up vision. Often, at the early stage, startups quickly create a country-specific minimum viable product and ignore how they can be a world-class company. While it does not hurt any startup to scale up globally, the vision of being an international company is the responsibility of the ecosystem and the so-called advisors as well. Here is how we can make Indian companies globally viable, relevant and scalable.

All companies need bootstrapping to set up infrastructure and offices in external locations. The cost of incorporating an Indian company from overseas is a costly affair and, likewise, having an international working space is prohibitively expensive. This is where the various chambers of commerce in the Indian ecosystem, such as Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industry (CII), should pitch in, and allow 5-10 companies to operate for a span of 6-12 months from their international locations along with their overseas legal and compliance support offices. Once the companies sync with the culture and macroeconomic viabilities of the other nations, scaling up will be faster and cost-effective. The viability of a globally relevant product is as good as the technology support reaching the startup. Industries such as Internet of Things, telecom, augmented and virtual reality, aviation and automobiles have a base in India. So why can’t foreign firms from these industries support Indian startups with cutting-edge products and technology advisory services? All it takes is the Department of Science and Technology and the Department of Industrial Policy & Promotion to release an advisory to these multi-nationals to help Indian companies refine their products in high-tech labs in India and overseas. Organisations like National Association of Software and Services Companies (NASSCOM) owe it to Indian startups for giving them technology and support in all parts of the world. We are waiting to see this happen.

Another reason companies fail to scale overseas is the availability of global manpower and the right teams. Government initiatives such as Invest India and Startup India give Indian companies venturing overseas strong publicity, which, in turn, enables these firms to attract the best and appropriate local talent. Once a company is incorporated and the technology and product are sorted out internationally, the need then arises to have the first official beta customer application overseas. Now, that can’t be very difficult as most Indian companies have foreign operations and they should be willing to onboard Indian startups as service providers. When one or two of them will have a great success story to showcase, customers that belong to the country of origin will effectively consider Indian startups as serious contenders of business. All this requires is a Startup India Outreach Centre in each country, where Indian startups can register their products and services. These were expected to be announced in the Budget but, alas, got missed. The outreach centres can then advice the startups on potential customers/business opportunities and help them compete.

Generating demand in overseas markets is as much a task for the Indian government as it is for Indian companies. All it takes is a mandate, budget, intent and policy commitment to make it happen. Marketing management plays a key role in the success of a startup scaling up globally. Marketing strategies in one part of the world may or may not work in another part. For example, some countries may still find print advertising more appealing and relevant than digital marketing. These learnings can be used to ensure that the startups scaling up globally don’t reinvent the wheel. Instead, they dip into the data of various country demographics available with international public relations and marketing companies operating in India, who can help our startups conduct proper consumer research at a global scale and at an optimum cost.

Indian startups need the necessary support to scale up their businesses on other shores. In the absence of structured guidance, they constantly require considerable reworking and modification in order to keep up with the advancements in international technology products. Potential investors will continue to not invest in Indian startups due to their inability to scale globally.

Let’s bring the Make in India dream to the world stage by creating a conducive ecosystem for Indian companies to scale up overseas.

Rishi Kapal is chief executive of ed-tech startup accelerator Eduguild, and an advisor to 18 startups.

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How govt, industry can help local startups scale up globally

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