Though Powai Start-up Ecosystem is strong at foundation, off-late it faced multiple road bolcks. The ecosystem has begun to flounder and the reasons for this are multifold.
i. Competition has intensified and the market has started punishing bad ideas and poor execution. “Rationalism based investing” has taken hold of investment based solely on “Pure optimism”. This has turned off the money tap
ii. Over the past few years, thousands of Powai employees have lost their jobs. At least a dozen startups have shut shop. Investor funding has reduced dramatically.
iii. Another significant issue was the concentration of too many poor ideas. Typically, one model took off and then everybody jumped on. So, at one point, there would be multiple companies from IITB doing the same thing.
Few Troubled Stories:
Some of the Powai’s celebrated start-ups have run into trouble.
I. The success story of TinyOwl, a food-tech company and one of Powai Valley’s poster children, closedand merged into Roadrunnr later
ii. Housing.com’s tale was more infamous—it sacked hundreds in multiple rounds over two years, and merged with realty research firm PropTiger.
iii. Laundry startup Doormint shut its doors in September 2016.
iv. Taskbob closed recently
v. Edu-tech firm Purple Squirrel, founded by IITB alumni closed.
Though the scenario seems bleak it has resulted in a healthy and re-constructive phase. Investors are taking cautious calls rather than irrational seed funding. Because of mass layoffs, companies have many more resources to choose from at lower salaries. A renaissance has taken place in IIT-B too, resulting in maturity of startup pitches and ideas. The two surviving large-scale startups in Powai, both spawned by IIT-B alumni, are CredR and Toppr are showing symptons of success.
Achche Din, Where are you, Powai Start-ups need you:
The Powai start-up culture along with several others is evolving, but it needs to be compounded with support from the government.
i. Increased focus is required on creating a stronger start-up support infrastructure and relaxing regulations. Collaborations between government agencies, private players and start-ups need to be explored for better utilization of shared resources.
ii. ‘Startup India’ initiative promised to provide to such budding venturists, but failed to do so. It’s bureaucratic operational methods and an inactive approach, resulted only a handful of start-ups to be included in the programme till date. The extensive list of criteria has also been a major deterrent for startups to register with the program.
iii. Due to bureaocracy, government authorized funds have reached only a small number of start-ups, prompting most applicants to look for alternative avenues of raising market capital. Funding slumps makes meeting day-to-day operational costs and achieving profitability extremely tough for start-ups.
It is an immensely crucial juncture in this fairytale story of start-up culture in Powai. The performance of start-ups in the near future will govern the fate of the entire ecosystem. Government is required to take cognizant of woos faced by this eco-system and help it to sustain and flourish.
(Meher is a resident of Hiranandani Powai. He is studying at PACE Junior College, Powai. He is a technology enthusiast and attempts to contribute to the society by spreading awareness by writing about relevant activities and developments.)