UNIT 1

1.1 MEANING AND CONCEPT OF ENTREPRENEURSHIP

Performing the activities of an entrepreneur is called entrepreneurship. It is a French
word, which means “to undertake”. Entrepreneurship refers to the process of creating
a new enterprise and bearing any of its risks, with the view of making the profit.
Entrepreneurship is a process involving different activities to set up an enterprise. It
starts with discovering opportunities, designing a business plan, applying resources
and techniques and finally implementing the ideas. It also involves managing and
controlling of various risks and uncertainties, and turning it into a successful business
venture. The person who creates a new enterprise and embraces every challenge for its
development and operation is known as an entrepreneur. And the undertaking or
organisation, typically a startup company, set up by the entrepreneur is called
enterprise.

• The word “entrepreneur” is derived from the French verb enterprendre, which
means ‘to undertake’.

• This refers to those who “undertake” the risk of new enterprises.

• An enterprise is created by an entrepreneur. The process of creation is called

“entrepreneurship”.

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 • Entrepreneurship is a process of actions of an entrepreneur who is a person
always in search of something new and exploits such ideas into gainful
opportunities by accepting the risk and uncertainty with the enterprise.

• The innovation, creativity and risk bearing are an integral part of being an
entrepreneur. It involves the ability to create and conceptualize something new,
which can consist of anything from a new product to a new distribution system
to method for developing a new organizational structure.

1.2 THE HISTORY OF ENTREPRENEURSHIP

DEVELOPMENT
12th Century/ Early Period

The term entrepreneur, in French, if literally translated, means “go-between” and has
been used since the 12th Century. An earliest example of an entrepreneur as go-
between is Marco Polo, who attempted to establish trade routes to Far East. As a go –
between, Marco Polo would sign a common contract with a capital provider
(capitalist) to sell his goods, which provided loan to the merchant–adventurer at a high
interest rate, including insurance. The capitalist, being the passive risk bearer, and the
merchant, bearing the physical and emotional risk used to trade the goods. After the
merchant completely sold off the good, the profits were divided between both with
capitalist taking around 70-75 percent, while the merchant- adventurer getting the
remaining 25-30 percent. In the Middle ages, the feudal system dominating in
Europe hampered the development of and entrepreneurship. Feudalism was a
combination of legal and military customs in medieval Europe that flourished between
the 9th and 15th centuries.

Middle Ages:

In the Middle Age, the term entrepreneur was used to describe both an actor and a
person who managed large production projects. In such large production projects, the
individual did not take any risks, but merely managed the project using resources
provided, usually by the government of the country. A typical entrepreneur in the
Middle Ages was the cleric- the person in charge of great architectural works, such as
castles and fortifications, public buildings and cathedrals.

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17th century:

During seventeenth century, the term entrepreneur was used for a person who
entered into a contractual arrangement with the government to perform a services or
supply stipulated products since the contract price was fixed , any resulting profits or
losses belonged to the entrepreneurs, thereby assuming the risk arising out of his
expedition. Richard Cantillon, a noted French economist during 17th century,
developed one the early theories of entrepreneur and is credited as the founder
of the term. He viewed the entrepreneur as a risk taker, observing the discrepancies
between supply and demand and options for buying cheaply and selling at a higher
price. He defined an entrepreneur as a merchant or farmer “who buys at certain price
and sells at an uncertain price, and bears the operating risk”.

18TH century:

By the eighteenth century feudalism was eliminated and legal and institutional
conditions had changed with the emergence of the joint stock company. During
this period, the person with capital was differentiated from the one who needed
capital. In other words, entrepreneur was distinguished from the capital provider.
One of the reasons for this differentiation was the industrialization occurring
throughout the world. Many of the inventions developed during this time were
reactions to the changing world.

19th Century

It was only during nineteenth century, entrepreneurs were viewed from an economic
perspective. The entrepreneur organizes and operates enterprise for personal gain. He
pays current prices for the materials consumed in the business, for the use of land,
for personal services he employs and for the capital he requires. He contributes his
own initiative, skills and ingenuity in planning, organizing, and administering the
enterprises. He also assumes the chance of loss and gain consequent to unforeseen and
uncontrollable circumstances.

20th Century

In the middle of twentieth Century, the first economist, to focus on the role of
entrepreneurship in economic development through innovations was Joseph A.
Schumpeter. In his words, “The function of the entrepreneur is to reform or
revolutionize the pattern of production by exploiting an invention or, more generally,
an untried technological method of producing a new commodity or producing an old
one in a new way, opening a new source of supply of materials or new outlet for
products, by organizing a new industry (Schumpeter, 1972).
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21st century

The 21st century has changed the face of entrepreneurship and development.
Venture capital volume almost tripled since 2006 and concepts like microfinance
have emerged and spread. Spurring the creation of new technologies and new jobs,
the role of entrepreneurs now affects globalization and amplifies the dynamics of
markets and economic growth.

The entrepreneurship development scenario in India has intensified in recent times,

particularly with the rise in knowledge-intensive services. The number of budding
young entrepreneurs, who do not have prior entrepreneurial experience, has been
rising constantly. Easy access to finance and other institutional support to ‘techno-
preneurs’ have helped improve the climate for entrepreneurship in India. In the Indian
context, the more entrepreneurial developmental activities are confined to Micro,
Small and Medium Enterprises (MSME) sector, which is often termed as the ‘engine
of growth’. It is considered as the most dynamic and vibrant sector of Indian economy
as it provides large number of employment to rural as well as urban segment.

1.3 ROLE OF ENTREPRENEURSHIP IN ECONOMIC

DEVELOPMENT
Schumpeter opines that entrepreneurial process is a major factor in economic
development and the entrepreneur is the key to economic growth.

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 1. Wealth Creation and Sharing: By establishing the business entity,
entrepreneurs invest their own resources and attract capital (in the form of debt,
equity, etc.) from investors, lenders and the public.

• This mobilizes public wealth and allows people to benefit from the success of
entrepreneurs and growing businesses.

• This kind of pooled capital that results in wealth creation and distribution is
one of the basic imperatives and goals of economic development.

Capital Formation:

• Entrepreneurs mobilize the idle savings of the public through the issues of
industrial securities. Investment of public savings in industry results in
productive utilization of national resources. Rate of capital formation increases
which is essential for rapid economic growth. Thus, an entrepreneur is the
creator of wealth.

2. Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to
job seekers.

• The simple translation is that when you become an entrepreneur, there is one
less job seeker in the economy, and then you provide employment for multiple
other job seekers.

• This kind of job creation by new and existing businesses is again is one of the
basic goals of economic development.

• This is why the Govt. of India has launched initiatives such as StartupIndia to
promote and support new startups, and also others like the Make in
India initiative to attract foreign companies and their FDI into the Indian
economy.

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 • All this in turn creates a lot of job opportunities, and is helping in augmenting
our standards to a global level.

3. Balanced Regional Development: Entrepreneurs setting up new businesses and

industrial units help with regional development by locating in less developed and
backward areas.

• The growth of industries and business in these areas leads to infrastructure

improvements like better roads and rail links, airports, stable electricity and
water supply, schools, hospitals, shopping malls and other public and private
services that would not otherwise be available.

• Every new business that locates in a less developed area will create both direct
and indirect jobs, helping lift regional economies in many different ways.

• The combined spending by all the new employees of the new businesses and
the supporting jobs in other businesses adds to the local and regional economic
output.

• Both central and state governments promote this kind of regional development
by providing registered MSME businesses various benefits and concessions.

4. GDP and Per Capita Income: India’s MSME sector, comprised of 36 million
units that provide employment for more than 80 million people, now accounts for over
37% of the country’s GDP.

• Each new addition to these 36 million units makes use of even more resources
like land, labor and capital to develop products and services that add to the
national income, national product and per capita income of the country.

• This growth in GDP and per capita income is again one of the essential goals of
economic development.

5. Standard of Living: Increase in the standard of living of people in a community is

yet another key goal of economic development.

• Entrepreneurs again play a key role in increasing the standard of living in a

community. They do this not just by creating jobs, but also by developing and
adopting innovations that lead to improvements in the quality of life of their
employees, customers, and other stakeholders in the community.

• For example, automation that reduces production costs and enables faster
production will make a business unit more productive, while also providing its
customers with the same goods at lower prices.

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6. Exports: Any growing business will eventually want to get started with exports to
expand their business to foreign markets.

• This is an important ingredient of economic development since it provides

access to bigger markets, and leads to currency inflows and access to the latest
cutting-edge technologies and processes being used in more developed foreign
markets.

• Another key benefit is that this expansion that leads to more stable business
revenue during economic downturns in the local economy.

7. Community Development:

• Economic development doesn’t always translate into community development.

Community development requires infrastructure for education and training,
healthcare, and other public services.

• For example, you need highly educated and skilled workers in a community to
attract new businesses. If there are educational institutions, technical training
schools and internship opportunities, that will help build the pool of educated
and skilled workers.

• A good example of how this kind of community development can be promoted

is Azim Hashim Premji, Chairman of Wipro Limited, who donated Rs. 27,514
crores for promoting education through the Azim Premji Foundation. This
foundation works with more than 350,000 schools in eight states across India.

• So, there is a very important role for entrepreneurs to spark economic

development by starting new businesses, creating jobs, and contributing to
improvement in various key goals such as GDP, exports, standard of living,
skills development and community development.

1.4 AGENCIES OF ENTREPRENEURSHIP MANAGEMENT:

• The Government has set up various centres or institutes to impart training and
development to entrepreneurs, so as to improve their knowledge, attitudes, and
skills.

• For the development of entrepreneur a number of specialized agencies have

been set up by the state and central goverenments which are as follows:

➢ Small Industries Service Institutes (SISI)

➢ Small Industries Development Organisations (SIDO)

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 ➢ National Small Industries Corporation

➢ Small Industries Extension Training Institute.

➢ Entrepreneurship Development Institute of India

➢ National Institute for Entrepreneurship and Small Business Development

(NIESBUD)

➢ National Alliance of young entrepreneurs (NAYE)

➢ District Industries Centers (DICs)

➢ Technical Consultancy Organisations (TCOS)

➢ Government plays a very important role in developing entrepreneurship.

Government develop industries in rural and backward areas by giving various
facilities with the objective of balances regional development.

The government set programmes to help entrepreneurs in the field of technique,

finance, market and entrepreneurial development so that they help to accelerate and
adopt the changes in industrial development.

Various institutions were set up by the central and state governments in order to fulfill
this objective.

Small Industries Service Institutes (SISI)

• The small industries service institutes (SISI’s) are set-up one in each state to
provide consultancy and training to small and prospective entrepreneurs.

• The activities of SISs are co-ordinate by the industrial management training

division of the DCSSI (Development Commissioner for Small Scale
Industries ), office (New Delhi).

• In all there are 28 SISI’s and 30 Branch SISI’s set up in state capitals and other
places all over the country.

• SISI has wide spectrum of technological, management and administrative tasks

to perform.

Functions of SISI

1. To assist existing and prospective entrepreneurs through technical and

managerial counseling such as help in selecting the appropriate machinery and
equipment, adoption of recognized standards of testing, quality performance
etc;

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 2. Conducting EDPs all over the country;

3. To advise the Central and State governments on policy matters relating to

small industry development;

4. To assist in testing of raw materials and products of SSIs, their inspection

and quality control;

5. To provide market information to the SISI’s;

6. To recommend SSI’s for financial assistance from financial institutions;

7. Conduct economic and technical surveys and prepare techno-economic

feasible reports for selected areas and industries.

Small industries development organization (SIDO)

• SIDO was established in October 1973. SIDO is an apex body at Central level
for formulating policy for the development of Small Scale Industries in the
country, headed by the Additional Secretary & Development
Commissioner(Small Scale Industries)under Ministry of Small Scale Industries
Govt. of India.

• SIDO is playing a very constructive role for strengthening this vital sector,
which has proved to be one of the strong pillars of the economy of the country.
SIDO also provides extended support through Comprehensive plan for
promotion of rural entrepreneurship.

The main functions of the SIDO are classified into:

(i) Co-ordination,

(ii) Industrial development, and

(iii) Extension.

These functions are performed through a national network of institutions and

associated agencies created for specific functions. At present, the SIDO
functions through a network of 27 offices, 31 Small Industries Service
Institutes (SISI), 37 Extension Centers, 6 Product-cum-Process Development
Centers, 4 Production-cum-Testing Centers and 4 Regional Testing Centers.

• The SIDO covers all the small-scale industries except those falling within the
specialised boards and agencies like KVIC, Coir boards, Central Silk Board,
etc.

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 Functions Relating to Co-ordination:

a. To evolve a national policy for the development of small-scale industries,

b. To co-ordinate the policies and programmes of various State Governments,

c. To maintain a proper liaison with the related Central Ministries, Planning

Commission, State Governments, Financial Institutions etc., and

d. To co-ordinate the programmes for the development of industrial estates.

Functions Relating to Industrial Development:

a. To reserve items for production by small-scale industries,

b. Assessing the requirements of indigenous and imported raw materials and

components for the small-scale sector and also arranging their supply.

c. To collect data on consumer items imported and then, encourage the setting of
industrial units to produce these items by giving coordinated assistance.

d. Preparing model schemes, project reports and other technical literature for
prospective entrepreneurs;

e. To render required support for the development of ancillary units.

f. Encouraging small units to actively participate in the Government Stores

Purchase Programme (With a view to increase the share of purchases from the
small-scale sector, the Government Stores Purchase Programme was
launched )

Function Relating to Extension:

a. To make provision to technical services for improving technical process,

production planning, selecting appropriate machinery, and preparing factory
lay-out and design,

b. To provide consultancy and training services to strengthen the competitive

ability of small-scale industries.

c. To render marketing assistance to small-scale industries to effectively sell

their products, and

d. To provide assistance in economic investigation and information to small-

scale industries.

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 SIDO has been renamed as Micro, Small and Medium Enterprises
Development Organization.

Entrepreneurship development institute of India (EDI)

Entrepreneurship Development Institute of India (EDI), an autonomous and

not-for-profit institute, set up in 1983, is sponsored by apex financial
institutions – the IDBI Bank Ltd., IFCI Ltd., ICICI Bank Ltd. and the State
Bank of India (SBI).

EDI has helped set up twelve state-level exclusive entrepreneurship

development centres and institutes. One of the satisfying achievements,
however, was taking entrepreneurship to a large number of schools, colleges,
science and technology institutions and management schools in several states
by including entrepreneurship inputs in their curricula.

In the international arena, efforts to develop entrepreneurship by way of

sharing resources and organizing training programmes, have helped EDI earn
accolades and support from the World Bank, Commonwealth Secretariat,
UNIDO, ILO, British Council, Ford Foundation, European Union, ASEAN
Secretariat and several other renowned agencies.

All India Small Scale Industries Board(AISSIB)

• The Small Scale Industries Board (SSI Board) is the apex advisory body
constituted to render advise to the Government on all issues pertaining to the
small scale sector.

• It determines the policies and programmes for the development of small

industries with a Central Government Minister as its president and the
representatives of various organization i.e. Central Government, State
Government, National Small Industries Corporations, State Financial
Corporation, Reserve Bank of India, State Bank of India, Indian Small
Industries Board, Non government members such as Public Service
Commission, Trade and Industries Members.

National Institution of Entrepreneurship and Small Business

Development(NIESBUD),New Delhi

• It was established in 1983 by the Government of India.

• It is an apex body to supervise the activities of various agencies in the

entrepreneurial development programmes.

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• It is a society under Government of India Society Act of [Link] major
activities of institute are:

i) To make effective strategies and methods

ii) To standardize model syllabus for training

iii) To develop training aids, tools and manuals

iv) To conduct workshops, seminars and conferences.

v) To evaluate the benefits of EDPs and promote the process of Entrepreneurial

Development.

vi) To help support government and other agencies in executing entrepreneur

development programmes.

vii) To undertake research and development in the field of EDPs.

National Institute of Small Industries Extension Training

It was established in 1960 with its headquarters at Hyderabad. The main

objectives of national Institute of Small Industries Extension Training are:

i) Directing and Coordinating syllabi for training of small entrepreneurs.

ii) Advising managerial and technical aspects.

iii) Organizing seminars for small entrepreneurs and managers.

iv) Providing services regarding research and documentation.

National Small Industries Corporation Ltd. (NSIC)

• The National Small Industries Corporation Ltd. (NSIC), an ISO 9000 certified
company, since its establishment in 1955, has been working to fulfill its
mission of promoting, aiding and fostering the growth of small-scale industries
and industry related small-scale services/businesses in the country.

Functions of NSIC

• NSIC provides a wide range of services, predominantly promotional in

character, to small-scale industries.

Its main functions are to:

a. Provide machinery on hire-purchase scheme to small-scale industries.

b. Provide equipment leasing facility.

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 c. Help in export marketing of the products of small-scale industries.

d. Participate in bulk purchase programme of the Government.

e. Develop prototype of machines and equipments to pass on to small-scale

industries for commercial production.

f. Distribute basic raw material among small-scale industries through raw

material depots.

g. Help in development and up-gradation of technology and implementation of

modernization programmes of small-scale industries.

h. Impart training in various industrial trades.

i. Undertake the construction of industrial estates.

j. Developing and upgrading technology particularly for projects based on

wastes.

E-Commerce Portal for MSMEs:

• The NSIC has set up an E-commerce portal exclusively for MSMEs.

• This site will provide a platform on which MSMEs can exhibit their range of
products, get brand certification and close deals with their counterparts abroad.

• The entrepreneurs will get the opportunity to procure market information and
to participate in tenders.

• The portal will provide both B2B and B2C services. It will have call center
support and trade assistance. It will have online national and global tender
notices and alerts.

National Alliance of Young Entrepreneurs (NAYE)

• Contribution in encouraging women entrepreneurship

• Set up women’s wing in 1975.

• This wing assists women in:

– Getting better access to resources,

– infrastructure, markets

– Identify investment opportunities

– Attending to problems of individual industries

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 – Sponsor participation in trade fairs, exhibitions, conferences

– Organise seminars, training programmes, workshops

District Industries Centers (DICS)

• The District Industries Centers programme was launched in 1978 for effective
promotion of cottage and small-scale industries widely dispersed in rural areas
and small towns.

• These centers are the focal points providing under one roof all the services and
support required by small scale and village entrepreneurs.

• These serve as an integrated administrative framework at the district level for

industrial development.

Structure:

• A DIC consists of one General Manager, four Functional Managers and three
Project Managers having technical background.

• Functional Managers are concerned with economic investigation, credit, village

industries and raw materials/marketing/training, etc.

• Project Managers provide technical service in the area relevant to the needs of
the district concerned.

• District Industries Centers maintain close linkages and coordination with

various Central and State level organisations concerned with promotion and
development of cottage, rural and small-scale industries.

• Government has delegated necessary powers to these centers. Monitoring and

coordination Committees have been set up to review the functioning of these
centers.

Functions and Role:

The main functions of DICs are as follows:

(i) Surveys:

• A DIC conducts surveys to assess industrial potential of a district keeping in

view the availability of raw materials, human skills, infrastructure, demand,
etc.

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• It prepares techno-economic feasibility studies, identifies product lines and
work out costs. On the basis of such investigation, it provides investment
advice to entrepreneurs.

(ii) Action Plans:

• On the basis of endowments and possibilities in the district, a DIC prepares an

action plan for industrial development.

• This plan is coordinated with District Credit plan of the lead bank.

(iii) Appraisal:

• A DIC appraises the various investment proposals received from entrepreneurs.

Then it helps worthy entrepreneurs in obtaining credit by explaining various
credit schemes, preparing application forms, helping in assessing the
applications, keeping liaison with banks and financial institutions and
monitoring flow of industrial credit in the district.

(iv) Guidance:

• A DIC guides and assists entrepreneurs in identifying appropriate machinery

and equipment, ascertaining sources of machinery and equipment, helping in
planning orders, helping in importing machinery, etc. It also ascertains raw
material requirements and their sources, arranges bulk purchase of raw
materials and interacts with various authorities for the supply of scarce and
critical raw materials.

• (v) Marketing Assistance:

• Under this function, a DIC collects marketing information, organises marketing

outlets, keeps liaison with Government procurement agencies, assess the
possibilities of ancillarisation and exports, and suggests appropriate marketing
strategies to entrepreneurs.

(vi) Contact with R&D Institutions:

• A DIC maintains links with research, and development institutions for up

gradation of technology, quality improvement, industrial training, etc.

(vii) Training:

• A DIC conducts artisans training programmes. It also serves as the technical

arm of DRDA(District Rural Development Agencies ) in the administration of
IRD and TRYSTM (Training of Rural Youth for Self Employment )
programmers, and identifying opportunities and projects for the trainees.
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 (viii) Special Schemes:

• DICs have been assigned operational responsibility for special schemes to

provide self-employment to educated unemployed youth.

Technical Consultancy Organisations (TCOS):

• A network of Technical Consultancy Organisations (TCOs) was established by

the all-India financial institutions in the seventies and the eighties in
collaboration with state-level financial/ development institutions and
commercial banks to cater to the consultancy needs of small industries and new
entrepreneurs.

• Functions:

• Initially, TCOs’ functions were focused on pre-investment studies for small

and medium scale enterprises.

Over the years, they have diversified their functions to include the
following:

(a) To prepare project profiles and feasibility profiles.

(b) To undertake industrial potential surveys.

(c) To identify potential entrepreneurs and provide them with technical and
management assistance.

(d) To undertake market research and surveys for specific products.

(e) To supervise the project and where necessary, render technical and
administrative assistance.

(f) To undertake export consultancy for export-oriented projects based on modern

technology.

(g) To conduct entrepreneurship development programmes.

(h) To offer merchant banking services.

(i) A summary view of the progress/performance of TCOs during the last two
years.

Special Economic Zones (SEZ)

• Government of India has set up eight special economic zones in the country. A
SEZ is a specifically delineated duty free enclave with all the required

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 infrastructure. Units established in a SEZ do not require license for imports.
Several other incentives and facilities are offered to such units.

• Government policy on SEZ will help to attract industries in the states wherein
such zones have been set up. Now companies in the private sector are also
allowed to set up SEZ. SEZs will help to attract industries in backward areas
because most of the SEZs are being set up in such areas.

1.5 FUTURE OF ENTREPRENEURSHIP

• The most important trend for the future of entrepreneurship is that the
connection between new business ideas and job-creation will become weaker.

• Nowadays, internet out-sourcing and automation already mean that many

growing businesses can be run single-handedly for a long time.

Driving innovation in India is an army of tech-enabled startups that are

working to revolutionise various sectors like healthcare, education, financial
services, travel and tourism and logistics, among others.

By leveraging emerging technologies like IoT, Big Data and analytics, artificial
intelligence, blockchain and machine learning, these startups are completely
restructuring the way business is done in the country.

• Taking the lead in 2017 were ecommerce and fintech. In ecommerce, for
instance, home grown unicorn Flipkart picked up a whopping $2 Bn-$2.5 Bn
funding from Japanese investment giant SoftBank.

• Post demonetisation and the launch of IndiaStack (India Stack refers to the
ambitious project of creating a unified software platform to bring India's
population into the digital age. IndiaStack is a set of Application Programming
Interface (APIs) that allows governments, businesses, startups and developers
to utilise an unique digital Infrastructure to solve India’s hard problems
towards presence-less, paperless, and cashless service delivery.), the fintech
sector underwent a sea change, with digital payments companies reaping huge
returns.

HealthTech

• Home to over 1.31 Bn individuals, India continues to be a country where

quality healthcare is largely confined to tier I and tier II cities.

• Despite massive technological advances in recent decades, more than 75% of

the country’s pharmacies, around 60% of hospitals and 80% of doctors are

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 currently located in urban areas, as per a report by KPMG and the Organisation
of Pharmaceutical Producers of India (OPPI).

• In the last couple of years, a growing number of healthtech startups have come
up to bridge the gap that currently exists between healthcare providers and
patients, across urban, semi-urban and rural areas.

• Traditionally, healthtech startups have largely focussed on providing

diagnostic, enterprise, medicine delivery services, etc.

• However, a new breed of tech startups has emerged in the Indian startup
ecosystem in recent times, with the goal of solving issues on the root causes
such as the consumer lifestyle, mental stress, early diagnosis of genetic
disorders and even reducing the after effects of painful processes such as
chemotherapy.

• By leveraging digital technologies, these startups are ensuring easy access to

patient medical records and family history, while also providing deep insights
into the lifestyle choices of patients for increased transparency and more
effective treatment.

• In the Indian startup ecosystem, companies that are trying to revolutionise

healthcare include Practo, Healthkart, Zoctr, Tricog, Care24, 1mg, Portea,
Lybrate, JustDoc, DoctorInsta, MedGenome, Pharmeasy, Netmeds and Mera
Medicare, to name a few.

Logistics

• Since the middle ages, logistics has been a determining factor in winning or
losing any war.

• Today, efficient logistics is crucial to the success of any business.

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• Poised to touch $307 Bn by 2020, the Indian logistics sector has always been
crucial to the country’s infrastructure and economic development.

• In recent years, tech-enabled startups has emerged in the country, thereby

bringing innovation and disruption into the mainstream.

• As players like Flipkart, Snapdeal, Amazon turned to establishing their in-

house logistics services, a number of startups started tapping other areas to
support the existing supply chain solutions or to fill the gaps in the otherwise
fragmented and unorganised logistics industry.

• The technological intervention introduced by these startups has, in turn, paved

the way for dramatic improvements in productivity, transparency, end-to-end
visibility, warehouse and yard management(A yard management is a software
system designed to oversee the movement of trucks and trailers in the yard of a
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 manufacturing facility, warehouse, or distribution center.), fleet
management(Fleet management is an administrative approach that allows
companies to organize and coordinate work vehicles with the aim to improve
efficiency, reduce costs, and provide compliance with government
regulations.), fuel cost management, customer relations and accessibility, real-
time tracking (Real-time locating systems are used to automatically identify
and track the location of objects or people in real time, usually within a
building or other contained area. )and accountability.

• Equipped with advanced technologies like IoT, Big Data, artificial

intelligence and machine learning, the country’s logistics startups have
ushered in a sea change in the last few years.

• Within the logistics sector of the Indian startup ecosystem, there are big players
like the online marketplace for logistics transactions Blackbuck; Grey Orange,
which provides intelligent solutions for warehouse management by hi-tech
robots; Delhivery and Rivigo, both of which are potential unicorns.

Fintech

• Financial technology, often shortened to fintech, is the technology and

innovation that aims to compete with traditional financial methods in the
delivery of financial services.

• It is an emerging industry that uses technology to improve activities in finance.

The use of smartphones for mobile banking, investing services and

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 cryptocurrency are examples of technologies aiming to make financial services
more accessible to the general public.

Financial technology companies consist of both startups and established

financial institutions and technology companies trying to replace or enhance
the usage of financial services provided by existing financial companies.

• Fintech now includes different sectors and industries such as education, retail
banking, fundraising and nonprofit, and investment management to name a
few.

• Fintech also includes the development and use of crypto-currencies such as

bitcoin

• Since early 2015, the fintech sector has undergone massive changes, chief
among them being the move towards a cashless economy.

The government’s enthusiastic promotion of cashless technologies – digital

wallets, Internet banking, the mobile-driven point of sale (POS) and others – as
well as the launch of IndiaStack including Aadhaar, eKYC, UPI(Unified
Payments Interface) and BHIM(Bharat Interface for Money. BHIM is a mobile
payment App developed by the National Payments Corporation of India
(NPCI)) have also managed to restructure the financial sector, disrupting the
long-held monopoly of traditional institutions like banks.

TravelTech

• Travel technology (also called tourism technology, and hospitality automation)

is the application of Information Technology (IT) or Information and
Communications Technology (ICT) in the travel, tourism and hospitality
industry.

• Some forms of travel technology are flight tracking, Trip Planning journey
planner, Booking Price Tracking and more.

• Currently ranking 7th globally in terms of its contribution to the country’s

GDP, the Indian tourism and travel sector underwent an impressive 8.5% jump
last year, with 2017 witnessing an additional 6.7% leap. Interestingly, domestic
travel is what currently leads the charge, accounting for a staggering 88% of
the total revenue generated by the tourism sector in 2016.

• According to a Google India-BCG (Boston Consulting Group )report, the

country’s travel market (both offline and online) is expected to become a $48
Bn industry within the next three years. As per an IBEF (India Brand Equity

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 Foundation) report, the online travel space will likely account for 40% to 50%
of total transactions by 2020.

• Despite this enormous potential, the Indian online hotel booking sector has a
penetration of only around 19%, according to a report by Deutsche Bank AG.
Most customers in Tier II and Tier III cities around the country still prefer to
book hotels and accommodations through offline means in the travel space.

• To counter this problem, a number of startups based on the online travel

aggregator (OTA) model have surfaced in the Indian startup ecosystem.
Among these are online search engines and travel booking platforms such as
Naspers and Tencent-backed MakeMyTrip, Cleartrip, Ibibo Group, Goomo,
Expedia, Yatra, ixigo, and others.

• Then, there are hospitality companies and budget hotel chains like SoftBank-
backed OYO, Treebo, FabHotels, Wudstay Hotels, GoStays and NightStay,
among others. In recent years, majors like Taj and Hyatt are also competing
against traveltech startups by offering cheaper rates, complementary services
and loyalty points on direct booking through their website.

• The biggest round of funding in the traveltech space this year was raked up by
Ritesh Agarwal-founded OYO. This happened in September when the
startup raised $250 Mn in a Series D funding round led by SoftBank Vision
Fund with participation from existing investors Sequoia India, Lightspeed
Venture Partners and Greenoaks Capital.

• This was followed by Goomo, which secured $50 Mn in June from PE

firm from PE firm Emerging India. Other big-ticket investments include
Yatra’s $15.4 Mn fundraise. Last, there was Ebix taking over Bengaluru
based omnichannel online travel and assisted ecommerce exchange, [Link].

Edtech

• Being the second most populous country in the world, India comes with a lot of
baggage that other nations are not subjected to. Lack of quality education is one
of the biggest shortcomings that the Indian government is still struggling to
overcome.

• This is where edtech startups come up. By wielding up-and-coming

technologies, Indian edtech startups are working to enhance access to
affordable quality education across primary, secondary and higher levels.

• However, the dynamics of the edtech sector are very different as compared to
other sectors like ecommerce. Although there is an enormous market to cater,

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 edtech startups in India are currently held back due to inadequacies in
infrastructure and awareness.

• But in 2017, the country’s education market underwent substantial growth,

with a lot of startups expanding into tier II and tier III cities in order to create a
social impact. Instead of focussing on the academic curriculum, a number of
startups are now working to provide personality development and career
counselling services.

• Players in the edtech space of the Indian startup ecosystem include

BYJU’S, Unacademy, UCLID, Avagmah, Embibe, iProf, Simplilearn,
Meritnation, Toppr, NeoStencil and Englishleap, among others.

• Online education in India will see approximately 8x growth in the next five
years, says a recent report by Google, KPMG. This will have a significant
impact on the edtech market that has a potential to touch $1.96 Bn by 2021
from where it stands now i.e. $247 Mn.

• As per Inc42 Datalabs, the sector this year saw a total infusion of $165.5 Mn
through 48 deals till November 2017 and the funding amount was almost
similar in 2016.

• When it comes to Seed funding, 2017 saw a total infusion of $6 Mn as growth

capital for early-stage startups while the number of around $13 Mn in 2016.
This suggests that investors are looking to bet on well-established startups
rather than investing in new ideas that do not have a considerable market share.

EnterpriseTech

• Enterprise tech, as a sector, is moving forward in India with businesses getting

more specialised help from SaaS(Software as a service) and ERP management
startups.

• With technological advancements in India, numerous SMEs are now leveraging

SaaS and related technologies to optimise their overall performance.

• In 2017, the major contribution in the enterprise software sector was made by
SaaS (software-as-a-service) startups. At the top of the SaaS game are two
giants, Zoho and Freshworks, with over 4,000 total employees and a combined
revenue of over $350 Mn.

• Startups like Deskera, which develop cloud-based ERP software for accounting
and inventory have also taken a giant leap in 2017 and are effectively catering
to ecommerce sellers with warehousing facilities.

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 Consumer Services

• Consumer services, as in hyperlocal food and grocery delivery, has been the
hottest ticket in the Indian startup ecosystem since 2015. However, it saw a
dramatic fall in 2016, as funding dropped almost overnight and more than 100
startups shut their shops.

• However, 2017 was more generous to consumer services startups in the

country. Two of the most promising sub-sectors this year were food delivery
and only grocery. On the one hand, foodtech unicorn Zomato became
profitable throughout the 24 countries where it operates, and across all its
businesses in September.

• On the other, big players like Amazon, Flipkart and Paytm are now taking their
first steps into the country’s online grocery delivery and food retail market.

• Morgan Stanley expects the online food and grocery segment to become the
fastest-growing segment, expanding at a compounded annual growth rate of
141% by 2020 and contributing $15 Bn, or 12.5%, of overall online retail sales.

• The food delivery space of the Indian startup ecosystem is populated by big
names like Zomato, Swiggy, foodpanda, and others, while players in the online
grocery sector include ZopNow, Satvacart, Godrej Nature’s Basket, Grofers
and DailyNinja, among others. The newest entrant in the online grocery
segment is Quikr, the classifieds platform founded by Pranay Chulet in 2008.

1.6 IMPACT OF CUSTOMER FOCUS IN RELATION TO

ENTREPRENEURSHIP
Every entrepreneur should be intensely focused on his or her prospective customers.
The ability to find a customer, sell your product or service to that customer, and
satisfy the customer so that he buys from you again should be the central focus of all
entrepreneurial activity. The greater clarity you have with regard to your ideal
customer, the more focused and effective your marketing efforts will be.

Everyone is in the business of customer satisfaction in some way. The most important
activity of any entrepreneur is to clearly identify the very best customers for your
product or service, and then focus all marketing, advertising and sales efforts on this
particular type of customer.

Here are some tips to help you find your business's ideal customers:

1. Define the product or service from the customer's point of view.

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 What does your product do for your ideal customer? What problems does your
product solve for your customer? What needs of your customer does your product
satisfy? How does your product improve your customer's life or work?

2. Define the ideal customer for what you sell. What is his or her age,
education, occupation or business? What is his or her income or financial
situation? What is his or her situation today in life or work?
3. Determine the specific benefits customer is seeking in buying the
product. Of all the benefits you offer, which are the most important to your
ideal customer? What are the most pressing needs that your product or service
satisfies? Why should your customer buy from you rather than from someone
else?

4. Determine the location of the exact customer. Where is your customer located
geographically? Where does your customer live or work? Where is your customer
when he or she buys your product or service?

5. Determine exactly when your ideal customer buys your product or

service. What has to happen in the life or work of your customer for him to buy
your product? What time of year, season, month or week does your customer buy?

6. Determine the customer's buying strategy. How does your customer buy your
product or service? How has your customer bought similar products or services in
the past? What is your customer's buying strategy? How does your customer go
about making a buying decision for your product?

Imagine placing an ad in the newspaper for your perfect customer. How would you
describe your perfect customer? What prospective customers are the most likely to
buy your product or service immediately? What are the most important qualities that
your ideal customer would have?

Your ability to clearly define and determine the very best customer for your product or
service will determine your success in business. How could you find more perfect
customers for your product? How could you create new customers for your product?
Define your unique selling proposition and communicate this key benefit in every
customer contact.

Most entrepreneurs aren't clear about their ideal customer. For this reason, they waste
a lot of time and money trying to sell their product to people who aren't good potential
customers.

Your ability to clearly define and focus in on the customers who can most rapidly buy
your product or service will be essential to your business success.

1.7 VISION STATEMENT AND MISSION STATEMENT

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A Mission statement talks about HOW you will get to where you want to be. Defines
the purpose and primary objectives related to your customer needs and team values.
A Vision statement outlines WHERE you want to be. Communicates both the
purpose and values of your business. A mission statement expounds the entity’s
business, its goals and approach to reach the goals. On the other hand, a vision
statement is one that tells the desired future position of the entity.

Definition of Mission Statement

A justification statement which signifies the reasons for the existence of the company
is known as Mission Statement.

The mission statement is the organizational goals that are to be accomplished. Unlike
vision statement, mission statement reflects every aspect of the company, i.e.
employees, customers, products or services, technology, quality, position in the
market and survival. The mission statement should be drafted in such a way that it
answers the questions: What we do? Why we do? How do we do? And for Whom we
do?

The mission statement is the core purpose of the business. The statement represents
the company in front of the world. It must be clear and complete as well as it should
be such that it makes reminiscence in everybody’s mind. The statement is mainly
developed for shareholders, investors, suppliers, customers, creditors, employees,
competitors and partners.

Definition of Vision Statement

A declarative statement that defines the company’s long-term plans for the future is
known as Vision Statement.

The vision statement specifies the company’s future goals and values. It does not
change with the passage of time i.e. it remains same. The statement must have clarity,
concreteness, conciseness, completeness, correctness and courtesy. Someone has
rightly said, “A man without eyes is blind, but a man without a vision is dead.”
This statement defines that a company without having a vision will not survive for a
long time.

A vision statement is helpful for the company to set out specific objectives. As the
whole organization works to meet out those objectives in a stipulated time. The
statement is mainly developed for the employees so that they understand the actual
aim of the company and work to achieve the aim. The planning and strategies are also
made in the similar direction by the company.

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Key Differences Between Mission Statement and Vision Statement

The following are the major differences between mission statement and vision
statement:

1. The vision statement discusses the desired position of the company in future.
On the contrary mission statement talks about the company’s business, purpose
and the approach to pursue them.
2. The Vision Statement remains same till the company survives. Conversely, the
Mission Statement may change if required by the company.
3. The Vision Statement is made to inspire. On the other hand, the Mission
Statement is made to inform.
4. The Vision Statement shows the company’s future aspirations whereas the
Mission Statement explains the company’s core purpose.

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