Leadership in Indian High-tech Start-ups: Lessons for Future

Abstract

As India wakes up to its ‘start-up dream,’ high-tech start-ups comprise a lion’s share of the total. This work delves into a very significant issue for these start-ups, i.e., leadership. It classifies the types of start-up entrepreneurs, their leadership traps, and the dilemma of exploration versus exploitation in the start-up sector and discusses the issues related to government policies, financing, cloning from the Silicon Valley, stress levels of start-up employees, among others. It summarizes the leadership lessons from several leadership theories such as transformational leadership, complexity theory, entrepreneurial leadership, and contingency leadership. It explores the possible characteristics of successful high-tech entrepreneurs, human resources skills required, and significance of relevance of ideas in the Indian context. Authors discuss the case study of Infosys—India’s most successful IT start-up: How its founders have turned into mentors and financiers and the recent differences between founders and current management. Inclusion of lessons from best-rated Indian high-tech start-ups, incubators in this ecosystem, financing guidelines, and government measures to promote innovation and start-ups supplement the leadership lessons. The future of leadership in Indian high-tech start-ups would be a journey from ‘start-up to keep-up.’

Appendix

Appendix - A

Newspapers’ headlines about leadership in high-tech start-ups in India and others

∙ ‘Indian start-ups pay top dollars for silicon valley talent’—Source: Verma and Dalal (2015)

∙ ‘Psyche of start-up leaders’—Source: Burling (2007)

∙ ‘Quikr buys Common Floor in a $200 mn all-stock deal’—Source: BS Reporter, Bengaluru (2016)

∙ ‘Have start-ups benefited from expensive Silicon Valley recruits?’—Source: Verma and Dalal (2016)

∙ ‘Internet start-ups thrive in China while India lags: experts’—Source: Kumar (2012)

Appendix -B

Statistics ofhigh-tech start-ups in top 25 cities of India

City	State	Total start-ups	Total funding	Population (mn)	Literacy %	CBD rents (per sqft/month) in INR
Bengaluru	Karnataka	689	$7.99 bn	8.43	89.6	98
Mumbai	Maharashtra	423	$2.67 bn	12.48	90.3	210
Delhi	NCT	324	$2.91 bn	11.01	87.6	249
Gurgaon	Haryana	236	$2.38 bn	0.88	86.3	75
Hyderabad	Andhra Pradesh	115	$258 mn	6.81	83	53
Chennai	Tamil Nadu	107	$845 mn	4.68	90.3	71
Pune	Maharashtra	100	$322 mn	3.12	91.6	77
Noida	Uttar Pradesh	88	$1.25 bn	0.64	88.6	46
Ahmedabad	Gujarat	43	$77.9 mn	5.57	89.6	38
Jaipur	Rajasthan	21	$117 mn	3.07	84.3	30–40
Kolkata	West Bengal	11	$2.34 mn	4.49	87.1	115
Kochi	Kerala	10	$3.37 mn	0.6	97.5	50
Indore	Madhya Pradesh	9	$1.03 mn	1.96	87.4	40–50
Nagpur	Maharashtra	6	$4,47,000	2.41	93.1	50–63
Kanpur	Uttar Pradesh	6	$4,10,000	2.77	84.1	25–30
Chandigarh	Chandigarh (UT)	6	$16.8 mn	0.96	86.8	40–50
Vadodara	Gujarat	5	$2.6 mn	1.67	92.4	30–35
Thiruvananthapuram	Kerala	4	$2,50,000	0.75	93.7	28-33
Thane	Maharashtra	4	$5,50,000	1.82	91.4	61
Goa	Goa	6	$4.1 mn	1.4	88.7	50–60
Mohali	Punjab	4	$8.26 mn	0.15	93.2	40–45
Coimbatore	Tamil Nadu	4	$5.53 mn	1.06	91.7	30–35
Mysuru	Karnataka	3	$15 mn	0.89	86.8	50–55
Lucknow	Uttar Pradesh	3	$1,50,000	2.8	84.7	NA
Udupi	Karnataka	2	$18.6 mn	0.13	93.9	50–55

1. (Source Seetharaman, 2016)

Appendix - C

The Economic Times Start-up Awards, 2016

Sr. no.	Title of the start-up award	Criteria for award	Winner and takeaways for new start-ups
1.	Start-up of the year	This award goes to a start-up which has the potential to become a blue-chip company. The criteria for selection include breakthrough innovation, flawless execution, and exponential growth	For 2016, Freshdesk a cloud-based customer engagement software provider with presence in 145 countries and 80,000 plus clients was declared start-up of the year
2.	Midas touch award for best investor	This award recognizes an investor who has a history of identifying potential winners. The start-ups financed by that investor must have shown rapid-paced growth	Matrix partners India , founded by Avnish Bajaj in 2006, was recognized for this category of award. Its important investments have been in high-tech start-ups such as Ola, Quikr, and Practo—all of which have demonstrated high growth and market leadership
3.	Best on campus	This award demonstrates a start-up whose impact can be judged both by the idea and the execution. The start-up idea should have budded in the educational campus	Ather Energy, a start-up incubated by Tarun Mehta and Swapnil Jain at IIT-Madras, has developed its first smart electric scooter prototype and was recognized ‘Best on Campus’ for 2016. Backed by angel investment from Flipkart founders, these scooters will be manufactured at a production plant in Bengaluru
4.	Top innovator	This award recognizes innovations that launch a business or boost others with an original idea that is a core to the business or the one that provides the differentiation	Mitra Biotech, a US-based company with R&D center in Bengaluru, founded by Mallik Sundaram and Pradip Majumder, received the honor in this category. The start-up ’s patented technology platform, CANscript, helps hospitals and doctors to find the right combination and sequence of drugs to be administered to cancer patients
5.	Bootstrap champ	This start-up will have demonstrated the ability to win clients and earn revenue without the aid of outside finances	Zerodha, founded by Nithin Kamath, offers equity investment services, currency and commodity trading, and retail and institutional broking services received the award for this category
6.	Woman ahead	This category awards a woman founder who leads her start-up and wins against the best in the business. In the start-up ecosystem in India that is starved of women leaders	Meena Ganesh, founder and leader of Portea Medical, received the award. The company, that brings in-home patients the full range of geriatric, chronic, postoperative care, and allied healthcare services, has expanded operations in 20 cities with 5000 employees
7.	Comeback kid	This award celebrates failure and recognizes those who have survived the failure to tell the tale with a comeback to rebuild or launch a successful start-up	FreeCharge, founded by Kunal Shah, which is present in several bill payment and recharge categories, has received this category award for 2016
8.	Social enterprise	This award recognizes the start-up that best embodies the dual goal of profits and public good	AgroStar, a mobile commerce platform through which farmers procure the right raw material, real-time information, and assistance, founded by Shardul and Sitanshu Sheth in June 2016, was recognized for this category of award

1. (Source Authors’ interpretation based on Team ET, Bengaluru 2016)

Appendix - D

List of abbreviations used

Abbreviation	Full form
AIM	Atal Innovation Mission
CBD	Central Business District
CEO	Chief Executive Officer
CFO	Chief Financial Officer
COO	Chief Operating Officer
CSR	Corporate Social Responsibility
DNA	Deoxyribonucleic Acid
EO	Entrepreneurial Orientation
ET	The Economic Times
GSF	Gross Square Feet
GST	Goods and Services Tax
HR	Human Resources
ICT	Information and Communication Technology
IIM-A	Indian Institute of Management—Ahmedabad
INR	Indian Rupee
IPO	Initial Public Offer
IT	Information Technology
NCR	National Capital Region
PE	Private Equity
PTI	Press Trust of India
RoW	Rest of the World
TMTs	Top Management Teams
UIDAI	Unique Identification Authority of India
UK	United Kingdom
US/USA	United States of America
USP	Unique Selling Proposition
VC	Venture Capital
VUCA	Volatile, Uncertain, Complex, Ambiguous