Trickle-down startups

Small Town India Growth

 

When you talk about startups in India, people usually talk about nifty companies hustling in large cities. Visions of co-shared spaces towering above relentless traffic swim up as do deals struck in coffee-shops in Bengaluru or Mumbai.

But Invest India data shows that 45% of the startups in the country have mushroomed in tier II and tier III cities, that is, towns that are smaller than the mega cities like New Delhi, Mumbai, Bengaluru and others in India.

I know of an AR/VR (augmented reality/virtual reality) startup director who divides her time between her creative studio in Goa, where all her designers and techies work from, and an administration office in Delhi. She told me that productivity among her creative staff had gone up significantly since the move to Goa. Primarily because there was little time spent travelling to and from office, and low pollution.

The anecdote and statistics add up to a bigger picture – according to research from Oxford Economics, all the fastest growing cities in the world till 2035 will be from India. The cities listed are not merely the biggest in the country but include the likes of Surat, Agra, Nagpur, Rajkot, Tiruppur, Tiruchirappalli and Vijayawada.

Many of these names not always discussed when excited conversations about startups happen in India but they have a host of natural advantages. They have land which is cheaper than in a New Delhi or Mumbai or Bengaluru. They also have cheaper labour (sometimes even a more content labour which can work in the ecosystem that they know best rather than uprooting themselves from their hometowns).

I think of this phenomenon as ‘trickle-down startups’ or a process of democratizing the idea of startups. While the process of creating a startup is a grounded, bottom-up, block by painstaking block building process, phrases like a ‘startup ecosystem’ might perhaps suggest a certain lofty and urbane image which confines the energy of the world of startups to mega cities or designated to a highly techno-elite world.

But, in fact, the magic of startups, if you will, is that some of the best ideas could emerge from the humblest surroundings. This process is now happening across India where the energy of the country’s many startups – estimates suggest that India has more than 50,000 startups and is the world’s second-largest such environment – is not confined to the big cities but is indeed spread across the country.

The energy of the world of startups has spread from the remotest corners of the north-east to the southern-most tip of India. By basing themselves in smaller towns, these startups are becoming hubs of growth in those towns, transforming not only economic pockets but also changing how people look at jobs and employment. The trickle-down is not merely in the spread of wealth or jobs but also in the triggering of entrepreneurial ambition.

Prime Minister Narendra Modi’s exhortation for people to become job creators and not job seekers needs a change of not only economic attributes but also a mindset transformation. This is the role that startups in smaller towns play effectively even as they democratize the world of entrepreneurship and bring it to the smallest hamlet.