Amid a sliding economy and a negative consumer sentiment, several Indian startups rose to the occasion to join the unicorn bandwagon in the pandemic. 2020 has witnessed the 12 startups gaining unicorn status. Right at the beginning, 2021 saw 6 startups clinching the unicorn status within 4 days in the month of April raising funds worth $1.55 billion.
Although India has emerged to be a breeding ground of startups, a report from IBM titled ‘Entrepreneurial India’ states that 77 percent of the venture capitalists feel that Indian startups lack innovation in developing new technologies or unique business models. Indian startups are devoid of originality and replicate western business models. The ventures built on the foundation of global startup ideas shall increase the market value but lower the entry barrier increasing competition.
Lack of innovation in business models signals that the research and development arm of startups in India requires support from industry veterans, past case studies and other experienced professionals- This led IIT Madras to launch CREST (Centre for Research on Start-Ups and Risk Financing).
Why was CREST formed?
Besides business models lacking innovation, a startup struggling to sustain can be attributed to executives not receiving adequate mentoring from experienced leaders of established companies, incubators, and investors. Although numerous startup accelerators have been formed in India as part of public-private partnerships, mentoring typically remains informal.
The mission to hone the research skills of startup founders led IIT Madras to form CREST to provide academic and thought leadership in innovation, entrepreneurship and risk capital.
Benefits of CREST
CREST aspires to become a globally recognised centre providing scholarly research in the areas of creation, development and financing of innovation, start-ups and entrepreneurship.
It aims to offer cross-country collaborative research, resulting in the use of unique data sets on start-ups and venture capital that will help in breakthrough findings.
Its entrepreneurship-specific language models will facilitate a better understanding of the entities in the ecosystem while facilitating the use of the latest research in artificial intelligence and machine learning to generate new insights.
A report from IBM titled ‘Entrepreneurial India’ states that 77 percent of the venture capitalists feel that Indian startups lack innovation in developing new technologies or unique business models.
What Will CREST Do?
Through this initiative, IIT Madras is planning to develop a world-class data repository on Indian startups and ventures to be made accessible to researchers and policymakers that can result in top-tier publications and aid in research and development.
How can startups benefit from CREST?
India’s journey to becoming a $5 Trillion economy by 2025 is drawing policymakers on three main pillars i.e. Innovation, venturing and entrepreneurship for the startup ecosystem to nurture.
The establishment of STPI’s Centre of Excellence to provide incubation facilities has been a fillip to startup activity in India.
CREST’s evidence synthesis based on the repository of unique data sets of Indian startups and ventures will help generate new business insights for the incubators, investor networks, startups and government missions therefore, creating an infrastructure conducive for high-quality research.
Entrepreneurs for usual trust-building cannot solely depend on the law, regulatory oversight and government projects but require a change in mindset that focuses not just on creating startup ideas but also on the condition to create.