SV.CO

At Startup Foreword
Village, we are
now beginning At Startup Village, our mission is to build an
the next phase entrepreneurial culture in society.
of our journey Startup Village is a unique experiment in the
by launching evolution of the Indian Startup Ecosystem and
the world's the only Public-Private-Partnership incubator
first digital with the Government of India, Government of
incubator, Kerala and private sector as partners.
SV.CO, for We have been consistently doing many
student experiments since 2005 and the learning from
entrepreneurs. them has contributed immensely towards our
current understanding of building startups and
incubators.
At Startup Village, we are now beginning the
next phase of our journey by launching the
world's first digital incubator (SV.CO) for student
startups. This innovative approach, aligned with
the honourable Prime Minister Shri Narendra
Modi’s Startup India programme, has just
received formal approval from our partners, the
Government of India and Government of Kerala.
As this is a key moment in our journey, we would
like to share our thoughts on why we took this
decision, and why the Government of India and
Government of Kerala have aligned themselves
with us and have formally approved this plan.
This book is our story through my eyes.

Sanjay Vijayakumar
Founder & Chairman

Our tryst with student entrepreneurship No one seemed to be challenging the
dates back to 2004, when the future status-quo, and whenever we tried to
founders of MobME were studying in question people who could make a
college. Like most idealistic youth, we change, the only answer we received was
were constantly questioning how the that we would finally understand when we
world worked and why seemingly archaic “grew up”. The twenty-year-old idealist
rules were still in force: for instance how that I was, I decided the best way of
attendance measures our level of dissent was to create something new.
commitment, and how intelligence is The year 2005 was significant in two ways
tested by our ability to accurately for many in my generation.
reproduce the contents of a textbook
from memory.

The Year 2005 was significant in
two ways for many in my
generation.

part 01

OUR ORIGINS

1 2

It brought broadband Internet to the The first mobile phone revolution had just
average Indian middle class family. started and crossed 50M users. College
YouTube still buffered but if you typed in students were starting to get their first
Google.com, it loaded instantly. It was a second-hand Nokia 3310s and trying their
relief from the dial-up-connection days, hand at playing Snake. It was pretty
where it took 10 minutes just to get obvious that this device would soon be in
connected to the world wide web. the hands of many Indians and there was
going to be an explosive growth in the
market, reaching over 900M users.

For the very first time in our lives, our thoughts and
imagination began to run free. We soon
started to learn how to use the Internet as a way to
broaden our knowledge. Learning anything by heart or
memorizing stuff was not required, and so began our
voyage of true learning: the ability to understand and
apply what was being learned to a real- life situation

I stumbled across I was in the 2nd year of Industrial
Silicon Valley and Engineering at the College of
learned how Engineering, Thiruvananthapuram,
students in college and quite curious to find out what
started companies other people my age were doing
during a similar around the world. I stumbled
revolutionary across Silicon Valley and learned
period when how students in college started
computers were companies during a similar
born and then went revolutionary period when
on after many computers were born; they went
decades to become on to become Fortune 500
Fortune 500 companies, like Apple and
companies like Microsoft, several decades later.
Apple and Microsoft. A combination of Paul Graham’s
essay on “A Student’s Guide to a
Startup”, my general aversion to
the educational system that
prevailed (which, I was convinced,
was not giving me the education I
really needed to face life), and the
opportunities that were presented
by the first mobile phone boom
resulted in us thinking about
building a startup while still in
college.

part 02 From Coupon Sellers to Innovators, the
story of Torque and MobME is fairly well
Creating a documented through many articles in the
media, both offline and online. Friends in
college became co-founders, and soon
started the search for a home like
Y-Combinator in Kerala. We approached
Technopark, Trivandrum, the only place we
knew where Information Technology was
happening, and said we wanted to build a
startup.

in College Friends in college
became co-founders
There was no Technopark Technology and started searching
Business Incubator (T-TBI) at that time, but for a home like
then Technopark business consultant, Y-Combinator in Kerala.
RC Dutt, and the CFO, Dr. KCC Nair, were
eager to experiment with us, as we were With our team as a case study, Technopark
persistently following up. applied to the National Science and
Technology Entrepreneurship Development
Board, Department of Science and
Technology, Government of India, to set up
an incubator. As the process took almost a
year, we were given virtual admission to
Technopark and allowed to use Technopark
as our office address. This was an added
bonus, as it instantly brought a sense of
credibility to our fledgling startup.

part 03

Fundraising in College

We had raised our By the time the official Government of India
first 80 lakhs of sanction of the Technopark Incubator came
angel investment and the initial instalments of funds were
from a clutch of released, we had already begun our last year
individual of college. The Dubai housing boom was
investors and happening, and NRIs from Kerala were making
professionals significant wealth during that short period.
We were quite lucky, in hindsight, that these
events coincided, and by the time were in
the final year of college, we had already
raised our first ₹80 lakhs of angel investment
from a clutch of individual investors and
professionals.

To put the enormity of this achievement into some kind of perspective, let me briefly
consider my own parents, both of who were civil servants - while my mother was a clerk at a
PSU, my father was an engineer with the state electricity board. They both worked for 40
years of their lives and managed to save 40 lacs, and my first angel investment was double
that. Immediately, the conventional path just didn't make sense to me anymore.

I was convinced that a chance at success Such thoughts led me to think of
is there for people who take risks and creating a new kind of institution where
dare to dream. After all, even the new ideas and risk-taking would be
longest life is short, and it’s worth living a encouraged.
life of adventure than a life living by a
set of rules someone created in the past
in some other context. It dawned on me
that a lot of the rules that I grew up with
could be changed, but it’s not going to be
easy.

part 04

Growth of
MobME and
Technopark TBI

The prevailing culture in Kerala at
that point of time used to baffle me.
The curious paradox was that while
there was continuous cynicism
towards being a businessman, there
were few job opportunities to be
had. The path taken by the average
engineering student back then was
way too predictable: get yourself an
engineering degree, then go to
Bangalore in search of a job.

We wanted to see if it was possible to remain in Kerala and grow, so we took a conscious
call to base MobME out of Kerala. While business requirements have taken us to many
other cities across India, even in this 10th year of operation, we continue having our HQ
in Kerala.

As the first company incubated at By 2009, MobME had hit its growth stride
Technopark TBI, we were invited to join and was sensing momentum. MobME won
its Board of Governors since there was a the Nasscom India Leadership Award for
need to have an incubatee on the board. the Most Innovative Startup in India. For a
Having had no prior experience of state which considers itself highly literate
running an incubator, the officials at and thus IT savvy, it was the first time that
Technopark used our requirements as a any company from Kerala had won this
template to create schemes that would be national award, and the Hindu ran a story
applicable not only to us but also all on it.
startups incubated there in the future.

The “Those college kids have still not shut down; if they can do it, may be we could do it
too” mindset slowly started setting in amongst the youth, and in that one year, the number
of applications received at Technopark grew from 20 to over 150.

Both MobME and Technopark-TBI were making great progress and at the same time,
facing their own challenges.

part 05

Challenges and
Constraints of
Government

I have always been intrigued by systems, Very early on, we developed an
and rules that govern these systems. understanding that if you want to
change the system, you need to
Steve Jobs was a great exponent of change the rules, and that means
lateral thinking and his vision on how to working with whoever is in charge of
change the world was one of the most the system. The most important rules
important videos that influenced my that govern our life are created by
thinking about these systems. governments, and with Technopark TBI,
I was observing from very close quarters
We developed an how such a system has an inherent
understanding that if bureaucratic inertia that’s difficult to
you want to change the overcome.
system, you need to Rules and processes that were once
change the rules, and created to make the system more
that means working with accountable became speed breakers
whoever is in charge of as we received more applications from
the system. startups at T-TBI. The Government
works with public money, and every
rupee has to be accounted for. This
means, of course, that formal systems
have to be put in place, for decisions
cannot be taken arbitrarily.

Such safeguards prevent misuse of the system but an unavoidable downside of this is that
the system loses flexibility and speed. Though safeguards are generally a good thing, in
the world of startups, decision making by committee is a painfully slow process.
As for a startup, which by definition is an “un-established business that is losing cash”,
by the time the system begins to kick in, it would most probably be dead!

part 06

Brainstorming
with Dr. Mittal

The ensuring brainstorming that During an evening in the summer of
evening would eventually lead to April 2009, while in Delhi, I visited
MobME submitting an application the office of Dr. HK Mittal, Head of
to the NSTEDB during the National the National Science and
Advisory Meeting at Coimbatore in Technology Entrepreneurship
August 2009. The proposal was to Development Board (NSTEDB),
set up a first-of-its-kind Government of India. Diplomacy is
Public-Private-Partnership model not really my strength, and my exact
incubator, where MobME would set statement to Dr. Mittal was, “You
up a not-for-profit society and have no clue how to run Technology
commit to bring in 10,000 Sq.ft. of Incubators.”
space and raise a grant of INR 2.5Cr
- either from its own resources or Dr. Mittal, who heads India’s premier
other private funds - for supporting programme for creating Technology
48 startups over a five-year period. Incubators, was stunned. However,
being an open-minded individual,
he quickly regained his composure
and asked “Okay, what do you
suggest that we change?”

The Brainstorming which
happened that evening
lead to MobME
submitting an
application to the
NSTEDB to set up a
first-of-its-kind
Public-Private-Partner
ship model incubator

part 07

Launch of Startup
Village with Kris
Gopalakrishnan as
Chief Mentor

For the next two years, various
technical and financial
committees in DST deliberated
over the application submitted
by MobME Wireless at length. As
for the Department of Science
and Technology, which had until
then funded mostly premier
academic institutes like IITs, IIMs,
IISCs or large IT parks (like
Technopark or IKP Knowledge
Park), evaluating the PPP model
was a first.The application was,
therefore, scrutinised at length to
make sure that adequate
oversight would be present.

Side Note Kris responded to that email and also met
In 2005, while the stories that I had read us when he was in Thiruvananthapuram
about Silicon Valley left me amazed, next. Meeting one of our heroes
a niggling doubt as to whether this could from college days was an incredible
be in India also lurked in my mind. The experience, and from that day onwards, I
only Indian IT success story that I could would send him an email every six
relate to was that of Infosys, an instance months, updating him on our progress or
when average middle class Indians came lack of it.
together and built a globally successful
and respected company. I didn’t know
anyone on the leadership team at Infosys
but that didn’t stop me from sending an
email to Kris Gopalakrishnan, one of the
founders from my hometown,
Thiruvananthapuram, requesting for
support and mentoring.

After much analysis, in September 2011, the department gave its formal sanction orders
to set up the incubator as a 5-year project. The incubator, registered under the Travancore
Societies Act, was called the “Indian Telecom Innovation Hub-Technology Business
Incubator” (ITIH-TBI), with a core thrust area on student entrepreneurship, telecom, mobile
and Internet.
I didn’t know where to get the 2.5 crores from, and I made a trip to Bangalore to meet Kris
in October. The only parts that I remember from that conversation are: “Kris, you helped
me by igniting the fire in my belly. We want to ignite a 1000 more such fires. Will you help
me?”, and the one-word response he gave - a resounding “YES!”

Kris agreed to become the chief mentor for the incubator and support us with necessary
grants. Very soon other leading industrialists and well-wishers weighed in with more
financial aid, and we were well on our way to launching an experiment that had neither
been designed nor done before in India.
While looking for space to set up the incubator, we met Mr. S Ramnath, who was the MD
of KINFRA, a Kerala state government agency to develop infrastructure in the state. Mr.
Ramnath listened to our proposal for space to set up this incubator called Startup City, a
pun that was a reference to the Smart City project that I had been hearing about since the
day I was born.

Entrepreneur Steps Star in the sky Final design
Chasing dreams Indicates growth Symbolizes victory Startup Village logo

Mr. Ramnath said he would offer space in the centrally located KINFRA Park at
Kalamassery, Kochi, which was a sprawling 250-acre stretch of land with nothing but a
building that had been lying empty for many years.
I instantly agreed, and while leaving he said, “You guys are young and starting up, so
replace the word ‘City’ with ‘Village’.

And thus originated the name “Startup
Village” on that day in 2011. We asked a
then little-known creative studio called
WowMakers (who were incidentally
incubated at Startup Village!) to design
our logo. Today this iconic image has
become the face of the Indian startup
ecosystem for the international media,
which pretty much use it as a stock photo.

part 08 On April 15, 2012, Kris
Gopalakrishnan formally launched
2012-2015 Startup Village at Kochi and predicted
A Social that it would create a fundamental
change in the entrepreneurial climate
in Kerala.

Experiment While it may not look so now, at the
for Change time of the launch in 2012, Sijo
Kuruvilla, founding CEO of Startup
Village, was worried whether the
concept of startups would even
generate interest in a state such as
Kerala especially in a state like Kerala,
where the general societal attitude
towards entrepreneurship was, to put
it mildly, hostile.
Honestly, even I couldn’t be certain about our
propects at that time, and the only way to find
out was to launch and gauge how the youth Kris
responded. Gopalakrishnan

Within a week of launching, the 5000-sq-ft- predicted that it
center was fully occupied, and for the next three
years, applications just kept pouring in, until we
got to a 6000-applications-in-a-1000-days would create a
situation, at which point we had to stop fundamental
accepting any more.
change in the

Innovation and execution at speed was in full entrepreneurial
force, with the tripartite MoU signed between climate in
the Department of Science and Technology Kerala.
(Government of India), Technopark
(Government of Kerala) and MobME (the
private entity in the PPP). The agreement
assingned complete responsibility of vision,
execution, gap-funding, financial management
and daily operations to the host institution,
MobME.

We experimented quite a lot “Young founders who will
and did what we felt were come to our incubator
the right things to do for simply will have nothing more
startups. During those early than eyes gleaming with
days, neither rent nor talent and a passion to learn”
incubation fee was collected
from startups – from our own
experience, we knew that the
young founders coming to
us simply would not have
anything to spare; the gleam
of expectation in their eyes,
the obvious talent, and a
passion to learn were all they
had to offer.

To build a world-class startup ecosystem, we realized that the presence
of five things was integral:

1 Amazing infrastructure that can 4 Global exposure (read Silicon
house a thousand startups Valley).
under one roof.
5 Adequate angel and venture
2 A good number of incubators and funding.
accelerators that can offer support
from pre-seed to Series A stage.

3 A great talent pipeline (8th
standard – 4th year of engineering
students).

To achieve this, many new initiatives were created with the support of the
Government of Kerala, such as:

1 5Student Startup Policy - Students SV Square - The Startup-Village-to-
to be given 4% additional grades Silicon-Valley programme where young
and 20% attendance for creating college students were taken on a visit
startups while in college. to Silicon Valley.

Learn to Code - India’s largest 6 MIT Fab Labs - A partnership was
inked with MIT to bring the world's
2 software & hardware programming best Fab Labs for supporting hardware
education programme witnessed startups.
10,000 Raspberry PIs given to 8th
standard school children. And the
thought behind this initiatve?
Simple: if we need to build the next Electronics Incubator – Maker Village,
Facebook, we need world-class a new electronics incubator, was
engineers. sanctioned by DEITY, Government of
India, as part of the Digital India
7Startup Box - A scheme to distribute programme. IIITM-K is the nodal
agency, with Startup Village and the
first-class equipment to college Kerala Startup Mission as Knowledge
and Infrastructure Partners respectively.
3 students. Every Startup Box
comprised a Macbook Air, iPhone,
4 8iPad, Google Nexus, Amazon Kindle
and other goodies. Technology Innovation Zone - This is
Startup Bootcamps - Entrepreneurial a major infrastructure project to set up
clubs that function in colleges, half a million square feet of space
where complete responsibility for on 15 acres of land at Kochi. The
project will help house multiple
incubators in Kochi, will be home to
decision-making lies with students. over 1000 startups at time, and include

a live-work-play environment.

All these path-breaking projects were started as New Initiatives by PH Kurian IAS, who
initiated, detailed and executed all the above for the first time in India. Kurian sir made
the extra effort to find time, either during his early morning walks at Mar Ivanious College
or during late-night discussions energised by fresh omelettes and black tea at the
wayside "Thattukada"near his home, as he was already overloaded with work as
both Industries and IT Secretary.
The press in God’s Own Country covered these
initiatives in all earnest, which some labelled as pure
media hype; anyway very soon the word Startup
became a talking point across households in the state.
Darlington Hector, Senior Journalist with the Financial
Express, noted this hype early on in a well-worded
opinion article. However, on visiting Startup Village,
he was convinced that there was action on the ground
as well.

The fact that Startup Village had a non-profit
structure also helped in creating significant trust in
the state, which generally viewed for-profit
businesses with skepticism and cynicism.

part 09

The Comprehensive
Report by Kerala State
Planning Board and
Andhra Pradesh
Startup Policy

By 2014, the Indian startup ecosystem I chaired that committee with Federal
had started scaling dizzying heights, with Bank MD, Shyam Srinivasan and Kerala
funding pouring into the startup State Industrial Development
ecosystem. Founders became celebrities Corporation (KSIDC) MD, Aruna
and Indian brands started becoming Sundararajan, IAS, as members. The
household names. To help Kerala reach committee submitted a report in June
the next level of growth, a committee was 2014 to the Government of Kerala,
created in the Kerala State Planning which was used as a template by
Board, and one of the sub-committees was Andhra Pradesh Chief Minister Shri
on Technology Startups and Chandrababu Naidu in September
Entrepreneurship. 2014 - with of course due
modifications – to create India’s first
Technology Startup Policy for the state
of Andhra Pradesh. In November 2014,
the forward-thinking Vice Chancellor of
GTU, Dr. Akshai Agarwal, took relevant
parts from the document and released
the country's first University Startup
Policy at Gujarat Technical University.
In 2015, Kerala released its Technology
Startup Policy, and since then many
states have used this template to
create state-specific startup policies.

Technopark TBI was
upgraded to Kerala Startup
Mission, and the
responsibility of
implementing the Startup
Policy was entrusted to this
government agency.

Technopark TBI was upgraded to Kerala Startup Mission, and the responsibility for
implementing the Startup Policy was entrusted to this government agency.

NITI Ayog Vice Chairman Aravind As mentioned earlier, government systems
Panagaira in an article had stated: “It is do work but at a pace of their own, so the
said that only God, and a few good men and results of these decisions will be seen in
women, run India. One such man is PH the coming years in the form of new
Kurien”. “Bullet Kurian”, the IT and schemes and announcements.
Industries Secretary of Kerala, succeeded in
leveraging this significant momentum for a
new budgetary allocation. Today, 1% of
the Kerala state budget of nearly 500Cr is
earmarked across various schemes for
technology startups and job creation.

part 10

Scaling up
Startup Village

Startup Village went through an amazing Kerala Startup Mission has released a
journey en route to its initial destination. detailed report on the latest figures in its
On the way, we had some really fun times Report on Kerala Startup Ecosystem that is
as a team, and with the kind of freedom a very insightful read.
that is only limited by imagination, we
carried out numerous experiments. While Our commitment was to
a few succeeded, many failed, but the raise 2.5Cr, but we went
overall progress was trending upwards. ahead and raised
nearly 5 Cr.
Our original commitment to the
Government of India was to create 48
startups over a five-year period; however,
we ended up supporting nearly 75 startups
physically and around 425 startups virtually
in Kerala and Andhra Pradesh. Collectively,
these startups managed to raise over INR
45 crores in funding as well.

Though our commitment was to raise 2.5 crores, we generated nearly double that figure
in the end. So rapid was our pace of execution that out of the committed expenses by the
Government of India, we have surrendered capital grants worth nearly 53 lacs to avoid
buying outdated equipment.

Yes! Once a five-year project is approved, the process to change it is so time-consuming
and challenging that it’s better to surrender the grants than utilize them. This and many other
interesting lessons were learnt from our experience (for more, read: “Mistakes and
Challenges”).

Part 11

Growth and
Evolution
of MobME

The telecom industry reached its growth The smartphone industry, which was in its
peak by March 2013, with the subscriber infancy, was rapidly ramping up, and we
base close to the predicted 900M from its could see that this was just like the old
50M subscribers in 2005. At MobME, we revolution of mobile phones in India. One
grew to over 150 people, and with thing was clear to us: from 16M users in
explosive telecom growth over, we 2013, 900M Indians would have a
decided to look for other growth smartphone and now a high-speed
industries. Internet as well on that smartphone.

We were a team of nearly 150 people, and it was not possible to pivot a business
overnight with so many. We had to reduce headcount, which meant losing some good
people in the bargain. This was a difficult decision, but the top 20 team-mates were given
the task of exploring new ideas. We raised an additional capital of 16Cr from HNIs to
pump in as seed capital into these ideas.
My role at MobME began undergoing a fundamental change - from an operating CEO, I
was fast turning into a board member who provided guidance and nurtured these early
ideas to growth.

Sony Joy with the Chillr team at their awesome Bandra office
Chillr, the brainchild of Sony Joy, co-founder of MobME, was first off the blocks, amassing
more than INR 45C in venture funding from Sequoia Capital and other investors. This was
the first venture-capital investment into any technology startup based in Kerala.

Another co-founder, Vivek Francis, created Davis from our team built the Digital
a mobile payment gateway, JetSetPay. Banking Labs division, while the extended
Our leadership trio of Abe, Manu and leadership team also nurtured the legacy
Nithyan, meanwhile, created a big-data telecom business that was our cash cow.
product called Geckolyst.

From left: Sathya Kalyanasundaram, Sreekanth, Davis Parakal, Abe Sam Thomas, Sajith MR,
Nithyan Martin and Manu Joseph
We also successfully transitioned from a founder-CEO-led company to a professional-CEO-led
one. As part of the next level of growth, we brought in professionals to fill gaps that
the founders lacked skills to bridge. The most significant change was when in the third
quarter of 2015, we brought on board seasoned industry veteran Sathya Kalyanasundaram
(ex-Director of Finance and Operations at Texas Instruments) as the CEO of MobME.
I now add value to the company as Vice-Chairman of the Board of Directors at MobME.

part 11

Celebrating
Wins*

The job of any incubator is to create new jobs for the investment that went in.

The total amount of investment that has gone into Startup Village till date is
approximately 14.6Cr, with 4.8Cr from the Government of India, 1.65Cr from the
Government of Kerala (75 Lacs through subsidised infrastructure for startups), 2.4Cr from
the Government of Andhra Pradesh and 5.8Cr from the private sector.

This has resulted in approximate 3139 new jobs being created and nearly 45 crores of
funding being raised by startups. What these numbers really mean is that:

This has resulted in 1 For every 1 rupee invested by Government, ₹1.22 was
approximate 3139 new invested by the private sector into the incubator.
jobs being created and
nearly 45 crores of 2 For every 1 rupee invested by Government, ₹9.68 was
funding being raised invested into startups from investors.
by startups. What
these numbers really 3 For every ₹15,309 invested by Government, a new job
mean is that was created.

For its outstanding achievements at break These achievements were made possible
neck speed, Startup Village set the record through the hard work of the founders of
as the youngest incubator to win the startups like Profoundis, iTraveller, Riafy
Government of India’s award for Best Technologies, Asimov Robotics,
Incubator in India at the National WowMakers, Mindhelix, CAT Entertainment,
Technology Day 2015. Exploride Technologies, RHL Vision, Sastra
Robotics, Sector Cube, and others that have
graduated from Startup Village 1.0.

The key here is These achievements were made
that 90% of the possible through the hard work of
founders are founders of startups like
first-generation Profoundis, iTraveller, Riafy
entrepreneurs Technologies, Asimov Robotics,
from a WowMakers, Mindhelix, CAT
middle-class Entertainment, Exploride
background, and Technologies, RHL Vision, Sastra
they used their Robotics and Sector Cube
life force to
create a
technology
startup through
sheer will power.

Though small, startups like Asimov Though we aimed to do more, we just
Robotics supply robotic arms that are used couldn't scale up our systems or get the
in space and at many leading universities necessary resources in time for many of
such as Stanford. Exploride got underway these startups to progress to a different
the largest crowdfunding campaign in orbit altogether. We have had our share of
Asia. FIN Robotics launched Neyya, a spectacular failures as well.
bluetooth enabled ring, and the design
firm Wowmakers has reputable clients like
HDFC .

* All data provided by incubated startups.

part 12

mistakes and
challenges

While Startup Village is built upon a vision to We have faced and
create an entrepreneurial culture in society, we overcome
operate in a real world that poses some innumerable
significant challenges in making this happen. financial and
While we have faced and overcome innumerable operational
financial and operational hurdles, there are challenges
many more to clear to achieve our mission.
Here are some of the main challenges that we
faced.

1

Teaching
Entrepreneurship
at Scale

A lot of young people want to learn how to become an entrepreneur, and this means that
we need lot a of teachers. Right now, our world is facing a dearth of quality doctors and tutors;
similarly, there is a shortage of teachers and mentors for startups.

Just like how a swimming coach needs to The fact remains that since 2000,
possess the skill of swimming, most great approximately 500 startup teams in India
entrepreneurial teachers also have real have raised more than 1M USD, out of
entrepreneurial experience. And given which only 200 teams have raised more
the fact that swimming coaches might than 10M USD in venture capital funding.
not be efficient football coaches, or that The number of founders who have really
heart surgeons cannot be expected to seen the full cycle, achieved a liquidity
perform brain surgeries, an expert in one event, and generated return on
type of entrepreneurship may not be an investment for shareholders is very low,
expert in another. so the number of mentors we potentially
have is also low.

From this pool, getting great mentors to come to tier-2 cities like Kochi or
Vishakhapatnam is very difficult.

2

Scaling up Physical
Infrastructure

Due to lack of space to In November 2013, the total
grow, Startup Village built-up space available at
converted what was KINFRA High Tech Park was
technically a water tank 15,000 sq. ft. Startup Village,
into an incubation space. for lack of space to grow,
converted a structure
designed to function as a
water tank into an incubation
centre.

The construction of a 100,000 sq. ft new building inches forward, with the government
favouring contractors who bid very low to win a tender, a practice that leads to cash-flow
problems. The Government of Kerala has earmarked 15 acres of land to create the
Technology Innovation Zone; once ready, this will become one of the highly significant
startup infrastructure projects that will come up for startups in India.
Further, nine more states sent official delegations to visit and study the Startup Village
model. With a small team, it was impossible to operate out of many states at the same
time.

3

Raising Matching
Private Grants

It’s mostly the super Raising grants in India is very tough.
wealthy who donate to a It’s mostly the super-rich who donate
non-profit and social to a non-profit and social cause, but
cause, but there are way there are way too many worthy causes,
too many worthy causes, such as education and poverty, that
like education and need more funds desperately.
poverty, that need more Even with supporting legislations, like
funds desperately. the fact that CSR funding can be
accepted by incubators, raising the
CSR grants required to build world-class
incubators is near to impossible.

Limitations and 4
Liabilities of
Government
Grant
in Aids

Rule No 209. 6. 9 of General Flexibility at speed
Financial Rules, Ministry of Finance, is thus lost to
Government of India, lays down that account for
for every rupee that has been compliance. If we
received from the government, any change without
organisation receiving grant has to permission, there is
sign an unconditional bond that a legal liability to
in case of any financial pay back the money.
misappropriation, the entire money
has to be paid back in part or full.
This is a standard clause while
receiving any grant-in-aid and is
required to protect public money
from being misspent.

However, in the fast-paced environment of startups and incubators, one has to be very
responsive and adapt quickly. This means that the original five-year project approved will
have to be changed frequently to adapt—to technology change—but to effect every
change in plan, an approval from the National Advisory Committee of DST is required.
This committee, however, meets only twice a year.
Quick adaptablity is thus lost to account for compliance. If we change plans without
permission, there is a legal liability to pay back the money.

5

Inability to
Provide Industry
Compensation to
Team Members

Any organisation receiving a Great startups attract
grant-in-aid also has limitations on and retain high-quality
how much compensation can be talent by providing
given to the team. To run world-class equity to early and key
incubators, you need to provide employees
generous remuneration packages that
match international standards, but
this is often not possible with the
GFR Rule 209.6.4, as there are
limitations on the maximum pay that
is possible.

Great startups attract and retain high-quality talent by providing equity to early
employees who are instrumental in making them a success, but under a non-profit society
structure, this option is also not available.
For anyone who likes to know more details of how this system works, the General
Financial Rules of the Government of India is a great place to start.

6

Operational
Delays
Associated
with
Government
Process

Being extra cautious The incubators which are approved by
is the way the system the Government of India submit a
is designed, but five-year plan at the start of the
efficiency is selection process. Even after a
sacrificed when it long-drawn-out selection process, which
comes to use-cases takes almost a year from the date of
like setting up application to the first receipt of funds,
Incubators. is over, long delays at almost every step
await. This delay is because the
government system has been
inadvertently designed for
accountability, as public money is being
utilised. Being extra cautious is the way
the system is designed, so efficiency is
sacrificed when it comes to use-cases
like setting up incubators.

Inflexible 7
Frameworks
to Respond Technology moves at a very rapid
Quickly to pace and creates disruptive
Changes changes in our society. The
government system, on the other
hand, has a rigid set of rules that
needs to be followed.
Startups create innovation by
thinking outside the existing rule
set, whereas government
frameworks work on rules that are
designed to actively avoid any
misuse.

This approach, while ensuring some A typical example of this is acquiring
much-needed accountability, infrastructure that a growing startup needs,
directly affects speed and efficiency. like hardware (computers, mobile phones,
While in startups, innovation is etc) and specialized software
rewarded and failure accepted as part (programming editors, graphics,
of the journey, in government visualization software, etc).
systems, mistakes are penalized and
failure is not accepted - ultimately, The Government System,
someone has to be held responsible. on the other hand, is a
While this works in favour of decisions system with a set of
that involve human safety, the approach rules to be followed.
fails in the context of startups,
which function at a rapid pace, often
breaking rules and challenging
conventional wisdon.

Delays in procurement at the government level mean that, by the time these grants are
approved, the hardware and software asked for are already outdated, and while it’s still
theoretically possible to change a requirement even after approval, the process of getting
another round of approvals is long enough to make the new equipment outdated again.
This is a vicious circle that currently has no solution.

8

Short Time
Frame for
Sustainable
Incubators

Incubator projects are designed with a Incubators are like
mindset of achieving sustainability in five houses for startups
years. This, in my view, is entirely wrong. and need a much
Angel and venture capital funds that invest longer time frame of
in high-risk startups have a time duration of 15-20 years, perhaps
10 years, from raising capital, to investing, like a housing loan, to
to losing money in the early years in the become sustainable.
startups that fail, and then waiting a further
8 to 9 years to finally receive money from
the ones that do succeed.

Incubators come even before: at the very beginning of a startup’s journey, when the
founder most often shows up with a team, the desire to create a startup, and nothing else.
They don’t have the ability to pay rents or utility charges. The equity that could be
exchanged generates value by the sixth or seventh year and liquidity by the eighth or
tenth year.
From my point of view, incubators are like houses for startups and need a much longer
time frame of 15-20 years—perhaps like a housing loan—to become sustainable.

Challenges to 9
Host Institute
in a PPP Model

The Positive and Negative Publicity
An incubator like Startup Village gathers significant publicity and attention due to its
uniqueness of being a Public-Private-Partnership and the bold, new experiments it
pioneers.

This creates both good and bad press. Positive news is always welcomed with open
arms, but when detractors and cynics start throwing spanners in the works, bad press
affects the remaining businesses. This would occasionally create nervousness among the
investors of a host institute, especially when an irresponsible journalist or blogger decides
to vent their emotions in the press or social media.

Another downer is that, the clients of various business units of the host institute also get
uneasy.

Raising External Capital

An incubator like A vast majority of venture capital investment in
Startup Village India comes from foreign shores. This capital from
developed economies has investors who have
strict provisions, like Anti-bribery Acts, to follow in
their respective countries.

gathers significant Association with the Government, across the world,
publicity and is viewed with the preconceived notion that a bribe
attention due to is invariably involved somewhere along the way.
its uniqueness of This perception creates a fear in the minds of
being a Public- venture capital and other prospective investors as
Private-Partnership to whether an investment in a company that has
and the bold, new MoUs with the government will create challenges
experiments it down the line.
pioneers. We have faced real concerns and questions from
investors while raising capital for MobME due to
this reason. This destroys value for shareholders,
whose primary motive to invest in the company is
to generate returns for the risk taken by building
technology products. Improving the entrepreneurial
culture in society is not the primary concern on
their minds.

We didn't anticipate this when we started off, but
we soon realised how real a concern it was from
experience.

Balancing 10
Personal
Passion and
Shareholder
Interests

Startup Village has always been a very I’m sure every
personal passion. entrepreneur out
It has been an idea that has grown in me, thanks to there is equally
nature (no one really chooses where they are born, burning his life
what religion they are initiated into, who their force to build his
parents are or what their true mission in life really future and change
is) and a great nurturing environment at school. our world.
Over the fourteen years I spent at Loyola School in
Trivandrum, the DNA to help others-a core value of
Jesuit education-was ingrained in me.

When I look back at my 10-year journey of
building MobME, it is clear that we were able to
grow not because we worked like bulls or lived like
nomads. I’m sure every entrepreneur out there is
working just as hard to build their future and
change our world.

The reason why a bunch of young engineering students like us, all from a middle-class
background and living in a small town in a remote part of India, were able to build a
company that lasted 10 years and employed more than a 100 people on average during
this time was the people around us.

From our first mentors to our recent investors, countless hours clocked by team members,
innumerable people in the startup community, general society, government, media,
academia, those within and outside Kerala, those within and outside India, there were a
lot of people who genuinely wished to see us succeed.

These are the people who believed in The only difference was
us when we had nothing to show but a that we were kids with
big smile on our faces and a belief that a hunger and burning
we could do things which we had not desire to win, and we had
done before. an endless passion
I still remember the day we got our first for technology and
break at BPL Mobile Kerala (the creating change.
pre-Vodafone, pre-Hutch days of 2006)
to put a critical voice server for Sony Joy at BPL Mobile Data Center in
customers in their data center. Let’s not Kochi, 2006
forget the fact that we didn’t have any
prior experience in deploying mission
critical systems for a telecom operator:
we were still students at an engineering
college.
The only difference was that we were
kids with a hunger and burning
desire to prove ourselves, and had an
insatiable passion for technology
and creating change.
People believed in our abilities, and
these very qualities helped us overcome
the fear of failure and create a mindset
to ignore other people’s opinions and
build a will to persevere and succeed.
We are really lucky to have a group of
entrepreneurs as our investors in
MobME; the decision to delink MobME
and SV.CO, thereby allowing me to
pursue my passion with SV.CO, has been
supported by MobME’s board of
directors.

Spatrta12rtup India: Building
Next Generation
Incubators

With the Hon. Prime Minister launching Startup India in January 2016, a new thrust and
direction for the creation of startups and incubators have been achieved in India.

Our country needs a million jobs a While many are aware of Startup India that
month-every month-for the next 20 years to is being implemented under NITI Ayog
employ all its youth. under Atal Innovation Mission, there is
The existing companies will not by another key development with Dept of
themselves be able to create these many Science and Technology that has been
jobs. Thus, new companies will need to be given a 500 increase in funds this year to
created, and for this, India needs a support the Startup India movement.
multitude of incubators, accelerators, angel
funds, angel networks, and venture funds,
among other things, like the programme
Skill India.

Any individual or organization which wishes to create more jobs for the growth of our
nation can use the new NSTEDB Schemes or NITI Ayog schemes.

The DST schemes have been significantly
revamped as well, after a gap of nearly a
decade, by taking into account the learning
from all incubator efforts and experiments till
date.

In line with the achievements of Israel (see
Startup Nation) and the move by its
government nearly 15 year back to have
for-profit incubators, NITI Ayog is conducting bold
experiments by creating provisions for various
new models like for-profit, non-profit, and
Public-Private-Partnerships (PPP), and leaving it
for incubators and their host institutes to
decide which models suits them best.

At SV.CO, we are aiming to align with the
Startup India schemes of Atal Innovation
Mission. We have consequently
chosen a for-profit model for the
next phase of our journey.

Side Note

Here is the basic 101 to understand For-profit and Not-for-profit Incubators.
Legal Structure: The terms "for-profit" and "not-for-profit" are usually misleading. For a
large number of people, the term "for profit" means that there are automatically a lot of
profits, and "not-for-profit" means there are not much profits.
In India, there are a total of 5,82,889 companies, as per Indian Budget 2016.
Out of this 2, 54, 079 or ~ 44% of companies together have 4,76 006 Crores as losses.
The overwhelmingly large majority (94% or 5,48,690 companies) consists of those who are
making a loss, zero profits, or a profit of less than 1Cr.

Only 6%, or 34, 199 companies, make If not, you need to get continuous grants
a profit of more than 1Cr per year in or equity dilution to cover up the losses. In
India. All incubators that are either addition, the provision for continuous
"for-profit" or "not-for-profit" must grants is not permissible as per GFR rules,
generate profits for sustainability. and thus no Government of India schemes
"Profits" simply mean that income is allow for it.
more than expenses. Any business,
programme, project or incubator can
be self-sustaining only if your income
is more than expenses.

Distribution of Profits:
In the for-profit model, the entity can legally distribute profits as dividends, while there is
no distribution of profits in the non-profit version.

Taxes on Profits : In either case, income tax has to be paid to the Government of India on
profits made.
Just 297 very large companies account for 60% of total profits amounting to 12, 08,656
Crores.
Accounting Treatment: In Non-profit organisations, money coming in is "grants or
donations", where the donor does not get anything in exchange for money donated.
In the for-profit model, money coming in is usually treated as "equity", where one gets
shares in exchange for money invested.

Side Note

So a good question that naturally comes up is: why have Government-supported
incubators remained Non-profit entities till date?
The answer lies in Rule no 206 of GFR 2005, which says that you can only give grants to
non-profit firms as a “general principle”.

NITI Ayog has taken the view that creation DST, on the other hand, has taken a more
of incubators under the Startup India conservative view of this interpretation and
Programme is not a “general case” and thus supports only non-profit models at
thus has included both for-profit and present. Once the Finance Ministry issues a
non-profit legal structure models along with clear clarification on these GFR guidelines,
the flexibility of the host institute being a DST may also, in future, support for-profit
PPP model, academic model or industry-led models.
model.

6. In other countries, such as United States, all kinds of models have evolved:
for-profit, non-profit and newer structures like public-benefit corporations.

Connecting the dots, looking back over 10 years, I have been deeply involved in creating
a startup culture, right from a student entrepreneurship level to university policies ( in my
capacity as governing board member at Kerala Technical University and in partnership
with GTU), to advising chief ministers in Rajasthan and Andhra Pradesh, and being a
representative of the Government of India in the Indo-US Science and Technology Forum
established by the Govt of America and the Govt of India.

This allows me to form a comprehensive The learning never stops in building
view of what is happening around the incubators in India. Our experiences at
ecosystem from the eyes of other experts Startup Village have been made public,
at all these bodies: at university, state, initially through the handbook that we
national and international levels. And with released in year 2, and then through the
that view, I can clearly say that it's a great Impact Report, which was published in the
time to start many different incubators to subsequent year.
support the startup ecosystem.

Currently Startup Village is knowledge partner to
Kerala StartUp Mission, Maker Village, and
Andhra Pradesh Innovation Society.

Currently Startup Village is knowledge partner to Kerala StartUp Mission, Maker
Village, and Andhra Pradesh Innovation Society. We would be happy to partner with more
states, public and private organisations, and universities that wish to set up incubators
based on any of the above models, and share our experience, as this is in line with our
mission to create an entrepreneurial culture in society.

part 13

From
Challenges to
Solutions

Entrepreneurs are a Every entrepreneur aims at creating the
breed of people who future. The future is always unknown
come up with solutions and uncertain. The future has to be
to challenges and created within a limited set of known
overcome the variables and an unknown set of
impossible to make the unknown variables. Creating the future
future happen. is not easy and is therefore certainly not
for the weak or timid.
Entrepreneurs are a breed of people
who come up with solutions to
challenges and overcome the
impossible to make the future happen.
For entrepreneurs who create the future,
failure is not something to be feared but
an oppurtunity to learn about what
didn’t work and why it didn’t. We then
try again.

In our minds, we have three significant achievements:
A healthy and growing startup community in our home
state of Kerala, and early stages of a startup culture in

1 Visakhapatnam. This includes a fully functional Kerala
Startup Mission and Andhra Pradesh Innovation Society
with the sole mission to create world-class startup
ecosystems in Kerala and Andhra Pradesh respectively.
A culture of startups has been seeded in both locations,
especially amongst students.

2 Early success stories of students who graduated in Six
Ways and created a better future for themselves
through entrepreneurship is now available as the
timeframe of five years has passed. These real stories
are inspiring the next generation of youth.

3 Enough learning and data points for designing the
next experiment to scale up Startup Village.

With this background, we proposed to the Government of India and Government of
Kerala significant changes that would help us ensure that the next version of Startup
Village continues to be in alignment with the Startup India Action Plan.

There are four key changes that will happen during this transition.

Change of This move addresses challenges #1, #2 and #3 (see
Operations from a “Mistakes and Challenges”).
Physical Incubator to Our primary offering would be a digital incubation and
startup learning platform at https://www.sv.co/.
1 a Digital Incubator, Startup Village will continue to be a Knowledge Partner
and Expanding our to Kerala Startup Mission and Andhra Pradesh
footprint from Kochi Innovation Society, and will now focus on creating a
and Vishakhapatnam culture of entrepreneurship amongst engineering
to all over India .students in India.
As Lulu Mall is to Kochi and Flipkart to the nation,
In a physical Startup Village 1.0 is to Kochi and SV.CO is to the
incubator, we nation.
are limited by In a physical incubator, we are limited by the space we
the space we have but in our digital model, we can scale up to offer
have, but in our our basic introduction to Student Entrepreneurship
digital model, course to all five million engineering students in India.
we can scale up!

2 Raising resources for our With the Startup India programme by NITI Ayog,
mission through Equity, incubator frameworks have now expanded,
not Grants allowing multiple models of for-profit and
not-for-profit bodies to experiment with, and we
We aim to attract intend to leverage this flexibility provided to
funding into SV.CO raise more resources as equity instead of
from Social Impact grant-in-aids.
Investors and We aim to attract funding into SV.CO from Social
Social Venture Impact Investors and Social Venture funds for
Funds for who who social impact is of high priority.
social impact is This move addresses challenges #4, #5 and #6.
of high priority. Note: Our best-case scenario is to be like
Kickstarter, which is a Public Benefit Corporation.
As the current rules in the Companies Act don’t
permit this in India at this point, we aim to
achieve a result as close to this by incorporating
significant clauses to this effect into the AoA and
MoA of SV.CO.

3 Change of Host Institute of Startup Village from
MobME Wireless Limited to SV.CO Learning
Platform Private Limited

SV.CO Learning Platform Private Limited is While this is currently a subsidiary of
a subsidiary of MobME Wireless that we MobME, the majority of shares will be
created to delink the business interests of apportioned to Sanjay Vijayakumar, Vishnu
MobME and the mission of Startup Gopal and Gautham, who will make up the
Village. team running SV.CO.

This move addresses challenges
#7,#8,#9,#10.

4 Exploring New Business Models while Retaining the PPP
Model with clear Roles and Responsibilities for the
Government and the Private Partner

Startup Village is a mission in the PPP model. The MoU between the Government of India,
Government of Kerala, and MobME clearly laid out that the Vision, Organisation,
Management, Execution, Control of Operations, Fund-Raising, Choice of Incubation
Models, Facilities Management and Fees, along with pro-active participation of other
private sector players, is the role of the Private Partner.

The financial support from DST, Government of India, is complete. The role of the
Government of Kerala is that of a Knowledge Partner, and is based on the Government
policies and schemes from time to time.

At SV.CO, we will aim to stay off Grant-In-Aids. Instead, we will experiment faster and find
long-term and sustainable business models. We will continue to work with governments to
fund startups directly instead of routing investments and grants through Startup Village.

part 14 the sv.co secret
master plan*

The SV.CO Team

Our goal is to build an entrepreneurial culture in society. We plan to do this in
4 simple steps:

Step 1. Create a Deep Awareness about Step 3. Work Hard to Create Success for
Entrepreneurship in Students. Student Founders.

We aim to achieve this through our MOOC We will work hard to make success stories
(Massively Open Online Course), of these hundred teams by ensuring they
Six Ways: An Introduction to Student get really amazing opportunities- funding,
Startups accelerators, acquisitions, sustainable
businesses, or great jobs or admission to
Step 2. Select Highly Ambitious Student higher studies.
Founders Step 4. Inspire Younger Teams with the
Twice a year, we will launch a nationwide Success Narrative
challenge to select 1000 top student Using these success stories, we then inspire
teams. We plan to filter and select 2000 more teams to become student
ambitious students, and then give them a entrepreneurs. The success of this will
world-class learning experience of how to inspire the next 3000 and so on, till we
build a startup in six months, all of this reach a tipping point in student
while they are still studying. We intend entrepreneurship in India, at which stage
to combine this with world-class exposure. this will become a routine part of going to
college and getting an education, and in
the long run, this should give birth to an
entrepreneurial culture in society.

We will work hard to make success stories of these hundred teams by ensuring they get
options for funding, admission to incubators/accelerators, acqui-hire opportunities,
becoming sustainable, getting great jobs or getting admission for higher studies.

* Inspired by Tesla & Elon Musk.

part 15

THE age
of Student
startups

Entrepreneurs create change. Change Every month, 1 million Indians turn 18,
creates friction. Friction creates pain and and this will continue for the next 20
yet, change precedes all progress. years. To employ all our youth, we need
For India to progress from a developing to 280M new jobs.
a developed nation, we need to leverage All big companies that we see around us
the innovation and creativity of our youth, were once small startups. We need to
popularly known as demographic dividend. create many more startups for growth.

In this 10th year of MobME’s operations, when I look back at its evolution since originating
as a student startup, it's amazing to see how the employment we have generated is equal
to creating employment for 22 lakh NREGA workers for at least one day, and how the
taxes we have paid is equal to paying for 25Crore Indians to get one kg of rice.
What one person can achieve individually pales in comparison with what a great team can
achieve. What one startup can achieve pales into insignificance when compared to what a
nation of startups can achieve.

While existing companies power our We believe young founders today are
nation, in order to leapfrog to being a special. Never before in history has it been
developed economy, we need to create possible for so few to build products for so
new companies and businesses. Timing is many. We have a unique opportunity to
the most important element in the success teach everyone how to build great
of a venture, and we believe the timing is startups, right in school and college
right for student entrepreneurship in India.

Many who learn will go on to build long-lived,
thriving companies that'll shape our future.
Many more will pick up great skills, knowledge
and enriching experiences that can help them
become interesting and amazing people: the
kind of people who will make a difference in our
world.
For India, the future has not yet arrived.

Our future as a nation is yet to be Our future as a
created, and many startups will nation is yet to be
co-create this future that we will live created, and many
in. We believe that the only startups will
limitation on this future is our co-create this future
imagination. that we will live in.
We imagine a future where We believe that the
ambitious students will be only limitation on
entrepreneurs, and our mission at this future is our
Startup Village is to inspire and imagination
empower many students to be
co-creators of this future.
And for those interested in world
history, we think that this
revolutionary period that we are
living in right now will one day be
known as the Age of
Entrepreneurship.

Epilogue

“A dream you Artists of both music and technology have played a
dream alone is only significant role in shaping our thoughts and culture.
a dream. A dream Somehow, by nature or nurture, they never see the
you dream together world of rules but free their mind to imagine the world
is reality.” of possibilities.
-John Lennon We see a new possibility for India. We see a new future.
You!

Resources

To learn more about our story, we’ve prepared a page
which has links to resources and data. To access that &
download other versions of this book.
Go to: https://sv.co/story.

We’ve launched a free online course for student
founders. Titled “Six Ways: An Introduction to Student
Startups”, this course is available at
https://sv.co/sixways.

SV.CO runs a six-month program for student founders.
Get guided through building a great product in college,
and then get a chance to go to Silicon Valley.
To apply, go to https://sv.co/apply.