13-19 February 2015 #745

Start-ups need staying power

Finding paying customers is more important than pitching to investors
Ashutosh Tiwari
In the last six years, there has been an explosive growth in the number of new Nepali entrepreneurs influenced by the spread of the Internet and sustained by committed organisations and networks.

Entrepreneurs for Nepal (E4N) is a Facebook networking page with 38,000 members that organises the Last Thursdays program which connects aspiring entrepreneurs with established ones. E4N has chapters in Pokhara and Biratnagar, where local businessmen run their own monthly networking sessions.

Biruwa Ventures provides working space, guidance and market linkages. ChangeFusion Nepal supports women entrepreneurs from rural Nepal to sell products or provide services that have demonstrable social impact. Sambriddhi Foundation runs Arthalaya, which teaches college students how entrepreneurship flourishes in a competitive market. Likewise, several well-attended sessions of Startup Weekend (Kathmandu and Pokhara), for men and women have brought many individuals together to launch their own tech-driven companies ‘in 54 hours’ and have also won prizes.

Idea Studio, a brainchild of UNICEF and Kathmandu University, supports selected entrepreneurs, turn their ideas into marketable products and services. One to Watch, a Dutch-Nepali investment firm, recently launched Rockstart that remains Nepal’s first-ever accelerator. It works intensively with 10 selected companies, whose services range from providing clean water to selling organic fertilisers, to refining business models and sales pitches in ways customers and investors find sensible.

Meantime, Microsoft Innovation Center Nepal and Nepal Young Entrepreneurs’ Forum (NYEF) have recently opened up their own selection processes: meaning more start-ups are going to receive necessary training, resources, as well as local and international support in the upcoming months. On one level, it does seem encouraging.

At a time when 1,500 young people are leaving the country every day to work overseas, any emphasis on entrepreneurship that may potentially lead to more jobs should be appreciated. But what if we get, as it seems to be the case, forever stuck in the first phase of the start-up work?

The initial excitement is starting to have two visible effects. First, they have unwittingly led most to think that launching start-ups is easy, fun and akin to supervised group work. Else, why would so many launch start-ups and almost immediately win donor-funded prizes? Second, the dominant focus in the start-up scene has been on rehearsing pitches for investors without understanding what is really needed.

Running even established businesses is hard: and start-ups from the moment they are born do not do much but continue to swim in uncertainties. Coming up with a business idea is easy but developing it into a money-making business is the hard part. Building a team that continuously works well together demands skills that can’t be mastered in one go.

Investors like a good pitch, but they do not base their decision solely on it. Nepal’s investment market is not developed enough where a variety of investors are willing to take risks on unproven ideas. First investors check to see if the new entrepreneurs already have a loyal following. If not, the pitch may win over the organisers, but not the investors’ confidence.

Looking ahead, there is a challenge for those involved in nurturing the start-up scene in Nepal: it is necessary to mentor entrepreneurs to have a consistent money-making following before pitching their ideas to big time investors.

Read also:

Empowering young entrepreneurs, Paavan Mathema

Empowerment through entrepreneurship, Marit Bakke

Innovating a new Nepal, Kunda Dixit

Giving and receiving

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