10 points that the Kerala should address to create a healthy startup ecosystem

Following up on previous article about asking the right questions and looking into details , let me start with a topic which is close to my interest.

Kerala jumped into the startup race even before any other state or the startup India campaign even got conceptualized. But for the state which also launched India’s first IT park, the trend is to fall back in policies it pioneers in. The initial run of guts and glory soon loses its steam and the state becomes a mere spectator whereas neighbouring state marches ahead in quantum leaps.At least this is what has happened in most of the cases.

I was both amazed and shocked to read the first startup policy in the country but then I was convinced about one thing that it’s a cause worth fighting  and it required more hands to make it reality and government alone cannot do much  and that’s how i ended up starting kitchen.This was then followed up by the student entrepreneurial policy. and then the Frying Pan happened.

Frying Pan Workshops

I been working with the team at kerala startup mission which is the nodal agency responsible for implementing the policy as per document and i must say that the leadership team under its CEO has done quite a remarkable job in past two years. And i admire the passion and vigour of the work the team does. And what i am writing here is very little to do with KSUM and more to do with the vision/plan of the state machinery towards entrepreneurship in general.

The timing of such a policy was important, on one side a state fighting the highest unemployment rate in the country & on the other side a shade of a looming recession in the middle east which is the major income source for the state.Imagine 3 million NRI’s living in the gulf countries and how this could affect the state economics. One would argue that the oil crisis is just a temporal fracture and for those, here is some food for thought :

Now, i have invested 12 months in trying to contribute to startup eco-system of the state. And having seen it all, i thought i had to pen down some important things that needs to be fixed or addressed  if we are to see any of these big goals to be reality. I am proud that the government has taken such steps and taken the leap of faith but like i wrote in my previous article its time to look into the details and ask questions. And here is what they are :

  1. Start with the basics : the Vision

    Now, I have always used the vision statement of the startup policy in all my presentations in the past 12 months in highlighted form and this is what it says “ Kerala to emerge as the No.1 Destination in India for Startups and amongst the top 5 startup ecosystems in the world “. As i always say the most strategic part of this document or statement is that we don’t really set a target as to when we want to get there. But having said that, we really need to ask ourselves on how we want to get there be it even 100 years from now.( starting up village like model and spending Rs.2500 crores is definitely not the answer )  I have full faith in the talent that this state produces but i feel that people who created this document hasn’t really looked at the chart of top 5 startup ecosystems in the world. startup-ecosystem-rankings-2015-chart

  2. No vote bank politics in startups

    We also have a special program for SC/ST who wants to start-up. I am nor against or for reservations based on caste but entrepreneurship is one thing which does not or should not be brought under this ambit.

  3. Too much or only focus is on IT driven product startups

    The policy is termed ‘technology’ policy and is extremely sided for technology product startups.Now, let’s recap and look at our state. We launched India’s first IT hub but missed the IT growth bus  but then world’s biggest producer of value added spices , Asia’s largest producer of blood bank ,biggest manufacturer of footwear  but yet we choose not to bring in the expertise and accomplishment of these businesses and focus extremely on IT/technology driven products because, ” hey, that’ what everyone is doing ! ” Now, one might argue that KSIDC,KFC are working in the space of manufacturing but the domain Kerala government chooses to focus/project however is of a IT driven startup policy.

  4. Lenient Student policy with no ground mechanisms in place

    The student entrepreneurial policy & the technolgy university setup to steer this notion has even more bizarre ideas to promote entrepreneurship. One of the points from the policy is   ” KTU permits the concept of Student Entrepreneur in Residence. Students will be permitted to apply for grant of official leave of one year at a time for entrepreneurial initiatives during their study. ”  I believe that entrepreneurship cannot be taught, incidentally that’s what i teach in my orientation classes for entrepreneurship clubs via Frying Pan ( another oxymoron perhaps 😉  ). Now,points #5 ,#6 & #10 are collective reasons of why i feel that there is no real ground mechanisms in place but simply a general notion to observe and copy silicon valley entrepreneurs and their ideas.

  5. Merely a breeding ground but no real ecosystem

    So we want to follow silicon valley but do not want to create a similar ecosystem. Our blind focus on tech based products is like the achilles heel of our startup policy. So i have a tech product, i figure it out and implement it but then India’s first & only digital state doesn’t have enough market or user base or demand for such a product. So what do i do ? Move to Bangalore or anywhere else ! Exploride, slated to be the biggest crowd sourced campaign , or Neyya ( Finn technologies ) another crowd funding success or Dexetra which started off in Kerala is now termed a bangalore based success story , all these are startups who was bred here and then its IP/value/tech was exported to bangalore or US. Just as how we are the biggest exporters of human capital to the world we now started exporting high value startup tech to other cities.

  6. Blind Eye to the Indigenous

    While we are busy exporting human capital from the state, there were some people who were trying to turn a different stone. We forget our own strength in the battle to be a silicon valley ( which we truly cannot become ) , the state completely ignored or lost eye to detail for indigenous industries. Be it spices or coir, production has fell back dramatically as quoted by the world’s largest producer of value added spices. Not just these, people who took up indigenous products are still being ignored, take for instance Lifetree Agro who has been working on bringing forth tender coconut water as a brand for the last 5 years has found very little or limited support from state machinery. It’s funny, how yet players from thailand sell the same product in Lulu Hypermarkets at Rs.99.

  7. Ease of doing business

    I am not going to keep saying about low score on this particular index. Forget private business, what’s the status of government infra projects which gets stuck due to petty political differences.Even an ambitious project like Kochi metro has hit delays due to delays in land allotment. Smart City which is really supposed to be live in early 2004-05 was somehow launched last month and now imagine doing your startup in such a climate.

  8. Uncertain government policies

    So a startup comes with a tech product to find lifestyle destinations or things to do in Kerala or a tech product for MICE industry & Boom ! Enter new alcohol policy and there goes your prospective customers to other states/cities owing to govt. policies. Every policy is interconnected however remote things might look.

  9. Lack of Lifestyle options

    Now this is a issue startups & MNC’s face.People don’t want to work in the greenest IT park in the country, forget people from other states even our own youth doesnt want to stay back and work. a dipstick i did with 1000 students from professional & arts colleges had a shocking 60% youth wanting to migrate outside kerala for work or higher studies. So what does the state with the biggest coastal line in the country offer as lifestyle or entertainment options ? There is more entertainment or lifestyle options per sq.inch in a small state like Goa compared to Kerala or be it even bangalore.

  10. Lack of Mentors

    So we want to create entrepreneurs & more jobs in the process. What does successful people or businessmen from the state do towards this ? Are they brought in to the picture or given a role ? Let me tell this again, entrepreneurship cannot be taught ! All we can do is show a direction & leave to the individual to find his/her calling. But to do this we need veteran businessmen or successful startups to return to their state and spend time with incumbent entrepreneurs and share collective wisdom. In case you are one of them who wish to do it, I have created Kitchen & Frying Pan Academy just for that.

To sum up, i think we have a very good chance to be a good breeding place for innovation but that necessarily needn’t be like another silicon valley. We have created ‘Kerala model’ in human development index, one of city is voted to be the place in live in. We have so much good things happening around due to good work and vision of the people of this beautiful state. I point out these things, cos I want to see our state overcome these and march forward.

I’d like to know your thoughts too on these points ? Is there any point i missed ? Like to hear your thoughts on the same.

Disclosure : I have spent 12 months executing Kitchen CAN events with a small team , doing orientation classes for Entrepreneurship clubs in colleges via Frying Pan Academy. While the CAN events have been FREE events, the college sessions were charged classes.

The oxymoron state named Kerala : Literally God’s own country

God’s own country is gearing up for elections & the political reality show is heating up day by day. The opposition party has chosen to expose the shades of scam & corruption by the current ruling party to win the hearts of voters.

Now,before we get to that topic, what intrigues me is the complete silence any of the political fronts have taken on serious issues, which really grips and holds the key to the growth of the state. Let’s have a quick look at these topics :

  1. Smart City Kochi : Is it really Smart ?

    There has been reports of how some major IT companies stayed away from Smart City and most of the companies who leased out space in the IT SEZ (Special Economic Zone) don’t really require to be in an IT SEZ area. The ruling party has been in the forefront in terms of announcing how smart city was made a reality under their leadership and in a rush to inaugurate the project before poll dates were announced. One might debate that had the project taken off as planned during 2004-05, things would have been very different.

  2. More than 60% of youth prefers to work outside Kerala post their UG/PG.

    Though I don’t have an official record to make this claim. Having done a dipstick myself with a sample size from professional and arts colleges with 1000 students, a staggering 60% students does not want to stay back and work in the state and prefer to migrate to to other cities. One might argue, when the state has the most pathetic unemployment rate in the country, what choice does the young generation have ? I fear that the trend has more to do with the uncertainty in policies/direction and also lifestyle restrictions the younger generations have within the state.

  3. Has the first & biggest IT park in the country & yet IT exports fall short behind Karnata

    Now 7 SEZ in Kerala Vs 17 in Karnataka is not my point of discussion here. Even after pioneering into IT when other states were taking baby steps, Kerala and its infrastructure didn’t grow to match the industry growth and naturally the opportunity was lost to cities like bangalore,Gurgaon & so on. Different governments and public policies ensured that the concept of technopark has not grown at the pace it deserved. Now, we have the ruling party advertising about Smart City in its election communication but the point irrespective of who comes into power, our leaders lack the eye for detail and going far with whatever they start.

  4. First state to unveil Entrepreneurial policy in the state but the ease of doing business score is 18

    What good is Rs.2500 crores kept for promoting the startup eco-system when the state’s machinery puts itself in exactly the opposite direction. The ease of doing business score of the state, is at a level which really needs to be relooked at if the government is serious about these policies. I have a had detailed look at why startups fail in Kerala, though this certainly is only, one of the problems there’s more to be looked upon beyond setting up a policy. The fact is successful companies from Kerala, eventually moves out  taking the IP and everything else away from the state.

  5. Highest deficit in India yet fiddles with  major revenue sources

    When Taxes from liquor sales ( 120% ) & tourism being major revenue source for the government machinery, one would think that they might be areas where some level of stability might be observed. Yet, in a surprising spin the ruling government has done the unthinkable, to certain voter segments. The nightmare is just beginning, from what it looks.

  6. The biggest remittances might be soon cut short: the NRI syndrome

    The recent report of remittances from middle east touching 1 lakh crore followed by oil price crisis which resulted in a recession like stage in the middle east is a time bomb ticking fast. The ‘ Money order economy’ as it is called relies too much on these foreign remittances and with instances of crisis hitting hard on the NRI community, this is a sign that it’s time to rethink about the ease at which economic policies are shaped.

  7. Model governance, UN award , Live video for Transparency yet a government trapped by scams at the highest level

    The UDF government has had the goodwill of the people, that’s the only explanation on how it managed to be in power for two consecutive terms. We have seen populist programmes like CM’s outreach program getting the UN Award  and the recent one where Kerala & Karnataka tops in the good governance index. However, towards the end of its term it seems that the machinery or people within have got a bit sloppy and have found itself between scams & corruption charges.

For now, I shall stop with this.

P.S : I have always been a pro congress voter but irrespective of who forms the next government what is important for me is that we march forward as a state and not get blinded by power greedy politicians.

Let’s not make this about politics, this state requires good people to lead the show.

[pullquote cite=”author and environmentalist Bill McKibben” type=”left, right”]Its infant mortality rate is very low, its literacy rate among the highest on Earth, and its birthrate below America’s and falling faster. Kerala’s residents live nearly as long as Americans or Europeans. Though mostly a land of paddy-covered plains, statistically Kerala stands out in social development; there’s truly no place like it.[/pullquote]

It’s good to see LDF side swinging in from their deep sleep with what looks like an eye for detail, their campaign communication though mostly dig on UDF have some well thought ideas of welfare for the elderly population. ( 11.2% of Keralites are age 60 )

If you are reading this, I have only one request. For once, forget your pedigree for left or right politics and ask the right questions. Ensure that the people who are going to run this state, know what it means to have such a responsibility. To start with, let me give some points to start these questions :

  1. How are we solving the highest unemployment
  2. and suicide rates.
  3. Lowest Ease of doing business score. Read more here.
  4. Freedom or Civil rights to choose one’s own lifestyle : Uncertain laws on Alcohol consumption
  5. More PPP driven infrastructure projects
  6. Better Road ( Wider ) infrastructure

The way things have been functioning, i think we have taken our tagline a bit too literally – God’s own country.

Image credits : Manish