Good Time To Startup As India’s GDP Will Grow 5-10X: Sridhar Vembu
In an exclusive interview with BW Businessworld’s Rohit Chintapali at Tenkasi (Tamil Nadu), Zoho Corp. CEO Sridhar Vembu speaks on starting up in the current climate, advice for entrepreneurs and the promise of Eastern Uttar Pradesh. Excerpts:
Funding is not abundantly available in the current climate. What kind of mindset should entrepreneurs have to startup right now?
If you are a young entrepreneur in your 20s, these are good times because when the noise level is lower you can focus on the long haul. You have room to make mistakes and recover. If you are financially prudent and make a mistake, you will go to zero – at worst. You can come back up from there. But you don't want to be in the negative because you don't want serious debt.
Overall, I think it is a good time to be an entrepreneur as our economy is poised to grow. There's a fivefold to tenfold GDP coming.
What more should they do?
I would advise entrepreneurs to focus on tactical and immediate opportunities – but with an eye on the long-term. For example, they must know about ‘how to create a culture?’ And also, I would urge them to look at Tier-2, 3 towns to keep their cost of operations low. For example, entrepreneurs from Tenkasi (Tamil Nadu) can look at cities like Bengaluru, Mumbai, Chennai or Pune as markets. Why? Because there are rich customers there. You don’t always have to look at Germany or Switzerland.
In the current scenario, would one be able to start Zoho as a bootstrapped company?
Yes, that’s true for anytime. Suppose I am in Eastern UP at Sonabhadra and I’m 25-year-old, when I look at the surroundings and where it is at – the population within the 300-kilometre radius is about 10 crore. Then I look at Bihar, Jharkhand and Chhattisgarh – within a 500-kilometre radius, we have a lot of people, and that's like a population of Germany and UK put together and very low GDP today. That area growing to the level of current day Coimbatore will be massive. So, absolutely you would want to bootstrap. An entrepreneur just has to visualise that they are there and that they can do it. So, that's what I'd do if I were to do it. I would have moved myself somewhere there and sit there and think – “I'm here”.
And why is this location so promising? Less capital is required?
Yes, it’s because of less capital is required but you also have a long runway. In addition, you get access to raw talent i.e., lots of willing and able youth. Then, you have markets in the form of the Delhi-NCR region and Bengaluru. These markets are willing to buy from Tenkasi because they know it supports our own rural people. Hence, a budding entrepreneur can target Bengaluru and Pune which is meant for the middle-class or upper middle class. These are good internal markets already. And then, they can look at Singapore, Dubai and beyond as well. Why? Take the example of Netherlands. It is a densely populated country but they export USD 100 billion worth of agriculture. Our districts don’t even do USD 1 billion. But a district like Tenkasi can do USD 10 billion in agriculture. Similarly, Eastern UP can do USD 10-50 billion in exports alone. There’s a lot of potential.
