GoWork is the world’s largest co-working capacity that has been launched with a mission to develop a mature ecosystem of entrepreneurship by breaking barriers of information, technology, access, and investment. Sudeep Singh, the Co-Founder of GoWork, is focused on building and leading key business areas of the company. He spoke to BE’s Varsha Singh about the problems that entrepreneurs face in India and about new initiatives that can help entrepreneurs.
Q. What according to you are the constraints faced by entrepreneurs in India?
A. While the Indian start-up ecosphere is still experiencing a steady growth, there are several constraints that hinder it from progressing robustly. Firstly, the lack of funding opportunities still acts as a pain point for a majority of entrepreneurs, especially those based in tier-II and tier-III cities. Since the start-up resource bases are mostly in the start-up hubs of metropolitan cities, most of the emerging businesses are struggling to acquire the required investment that is desperately needed to grow their businesses.
In terms of ideation, the Indian start-up ecosphere suffers massively from a lack of innovation and is mostly working on a herd-like mentality. This phenomenon causes extremely quick saturation of emerging business avenues as a large number of entrepreneurs quickly move towards a domain that appears to be lucrative and this creates a clutter. Indian entrepreneurs need to adopt an original perspective and start thinking about essentially Indian problems and localise production processes as well. Furthermore, a lack of awareness regarding the latest developments in global business among new-age entrepreneurs is also hampering their growth opportunities. Modern operational concepts, such as co-working or shared logistics, can go a long way in helping these businesses cut down on costs and help them increase their RoI (return on investment). Yet, the lack of information channels and proper guidance prevent them from implementing these
Q. What help is the government providing to promote entrepreneurship in the country?
A. Undoubtedly, India is experiencing its golden years when it comes to governmental support being extended to the entrepreneurial environment. The government has introduced many schemes to promote entrepreneurship. From promoting an entrepreneurial attitude in academic institutions to providing business assistance to
entrepreneurs from tier-II and tier-III cities, governmental support towards the business ecosystem has been steadily increasing.
One of the major positive aspects has been the government’s focused approach towards promoting entrepreneurship among women, especially to those from rural areas and backward communities. These women often need financial and social empowerment in order to enhance their living standards and social standing. With government backed initiatives and projects, these women have managed to carve out a bright future for themselves as well as their families. In order to provide them with skill-based education, essential business resources and ideal networking opportunities with peers, mentors and incubators, the start-up Entrepreneurship Hubs (E-Hubs) established by the government have been a grand success.
Q. What struggles did you face while starting your business?
A. While co-working was a popular concept in the West, in India it was still an unknown concept. The challenge initially was informing businesses about the various benefits co-working provides to organisations in terms of reduced costs, centralised availability of facilities, networking opportunities and the creation of a thriving business community. Raising adequate amount of funding during our initial operational stages also proved to be a tough task.
Q. What are the new business taxation procedures for start-ups and SMEs in India?
A. One of the biggest gains from this year’s Budget has been the massive budgetary allocation of `10000 crore over four years for the Department of Science and Technology (DST) to boost the adoption of new technologies such as Artificial Intelligence (AI) in India. In fact, a specific NITI Ayog wing was also created to establish a national programme that channels the government’s efforts in AI towards national development.
However, not every policy announcement has brought good news for entrepreneurs. Arguably, the biggest bone of contention has been the introduction of 18% GST for online service providers, while offline providers of the very same service do not have to pay anything. This is in contradiction to the Indian government’s stringent efforts to formalise the economy through digitisation. A differential tax structure creates disadvantages for both online service providers such as UrbanClap and offline businesses as well as customers.
Also, the present tax policies need to be further simplified to facilitate easy understanding. For instance, while there are certain benefits provided to ‘innovative’ start-ups, there is still a lot of confusion regarding what constitutes ‘innovative’.
Q. To what extent are funding and taxes major hassles to the entrepreneurial sector in India?
A. Securing funding for businesses is still a difficult task for Indian start-ups. Indian banks have always been wary of extending business loans, and in the light of recent controversies regarding loan defaults by premium businesses, start-ups have also taken an undeserving, yet significant hit. It has become difficult to secure bank loans, and even if a business manages to do so, the amount of documentation and process delays accompanying the loan procedure makes it an unattractive proposition. The government needs to look into simplifying loan accessibility to businesses and incorporate technology to streamline the process.
The lack of domestic investors is also a major hassle for start-ups today. 90% of funding comes from foreign investors and venture capitalists. It sometimes becomes difficult to convince foreign investors about the existing prospects of a highly localised business due to cultural differences. However, many new investors and venture capitalists are establishing networking circles, especially in tier-II and III Indian cities, strengthening India’s investment framework for emerging businesses.
On the tax front, the implementation of the historic GST has not brought forth the desired results. India currently has one of the world’s most complex structures. It is also the second highest tax structure. While GST has the potential to enhance revenue from tax and bring many enterprises under the tax ambit, its current form is extremely confusing for businesses.
Q. What should be your advice for budding entrepreneurs?
A. Inculcating discipline in one’s thought process is essential for a person who wants to succeed as an entrepreneur. It is this characteristic that helps to stick with an idea from its conceptualisation to its eventual completion. Good research is essential for a successful start-up. It is necessary to have comprehensive knowledge of one’s target market, existing competitors and diversification options to understand the complete potential of an idea. Lastly, emerging businesses need expert assistance and mentoring by industry veterans possessing relevant experience and business acumen. Apart from providing ideal networking opportunities, industry experts can help early stage businesses to identify their mistakes quickly and thereby increase operational efficiency.