The National Association of Software & Services Companies (Nasscom) initiated the 10,000 Start-ups programme to incubate, fund and support start-ups over the next 10 years. According to Nasscom, products and start-ups are expected to contribute $100 billion or one-third of the total revenues of $300 billion generated in the IT sector by 2020.

In an interview to BusinessLine , Ravi Gururaj, Chairman - Nasscom Product Council, speaks about the focus on start-up and products, developing the ecosystem and helping the Government. Edited excerpts:

Why is Nasscom focusing on product innovation and start-ups, especially when the service sector has done wonders for the industry?

We have done very well in IT services, by taking it from zero to $130 billion over the past two decades. But now, we want to excel not just services but also in delivering innovative products out of India.

In fact, it is actually a combination of software products, hardware, data/analytics and high value services that will be packaged up to deliver solutions and experiences in this new phase we are entering. And, with good planning and nurturing of our ecosystem, we’ll be appropriately positioned to do so.

How important is the differentiation between product innovation and service start-ups?

Compared to service start-ups, the product ones have longer gestation period, spend more cash to achieve a market-fit product and break-even cash flows.

Also the kind of talent – deeper technology (commitment), customer need elicitation, high capability engineering staff, product thinking team orientation, technical sales & marketing skills and world-class design – are quite different than those of a services firm. In product businesses, revenues are often secondary or in balance with IP value creation.

What is the status of the 10,000 start-up programme?

We celebrated out first anniversary two months ago and the programme has been a resounding success. We received over 4,000 applications in the first batch and another 3,000-odd in the second.

Of the 7,000 applications we short-listed 500 start-ups and positively impacted 130 ventures. By impact we mean angel funding, venture capital fund raising, admission to an accelerator and entry into a corporate incubator.

How long will it take for the incubation programmes to yield results?

It took the Silicon Valley over four decades to get to where it is now. We cannot be there overnight. But, there is a fantastic opportunity ahead of us. We need to join hands – entrepreneurs, academia, industry, Centre and State governments and industry organisations.

It’ll take years to build up a world-class ecosystem. But, we are on track.

However, we cannot predict the exact timing of achieving the goal.

Is Nasscom looking to set up its own angel fund to help start-ups?

Not really. We would like to keep working as facilitators. But we are ready to help the government structure and facilitate disbursement of funds they want allocated to start-ups.

We can also act as a trusted governance layer. We have good connect with the Centre, State, industry and founders. We can be an enabling hub.

Start-ups have a high failure rate. But, how will it be possible to overcome the stigma across personal, social and government levels to encourage entrepreneurship?

Start-ups will fail and we need to be prepared for that. That is the nature of the entrepreneurial beast. You need to show people results; only then, will the mindset change. The best counter is to showcase successes to change attitudes.

The stigma (of failure) is rapidly dissolving as people now understand that inherent in the pursuit of entrepreneurship is the risk of failure.

We are now starting to see several visible start-up success stories. Once people internalise those stories, they’ll look at failures in a different light.

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