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Dealing with Startup Challenges in India

Posted by: Today's Tip Contributor on April 29, 2011

India’s 1 billion people and 9 percent annual growth are attractive to nearly any business, as are the 380 million new Internet users that will come online there by 2015. Starting a business in India, however, can be difficult. Here are three common challenges that people face when starting a business in India—and some tips on how to deal with them:

1. Navigate bureaucracy. India is fraught with complex rules and regulations. Enforcement can be uneven and unpredictable. Be prepared to find (and vet) experienced India-based advisers before making commitments. In addition, bring a good pen and lots of passport pictures: the digital age is slow in coming when it comes to paperwork in India, so be prepared to sign and affix pictures to dozens of forms for everything from SIM cards to equipment and office leases. Having at least one India-based investor will help your cause, as long as the money comes from a seasoned businessperson within the country. Locals know how to navigate the red tape and find answers from their contacts much more effectively than from a Google search.

2. Raise capital. Although in years past the investment focus in India was on infrastructure and real estate, early stage venture capital is arriving. Many of the top Silicon Valley venture capitalists have offices across India, and there’s a vibrant new community of angel investors, including groups such as the Indian Angel Network and the Mumbai Angels.

3. Patience. I’ve heard India described as "beautiful chaos." One of the fundamental challenges outsiders face is trying to thrive within the chaos. Traffic, time, and even commitments have a different flexibility in India, so expect the unexpected. Make sure you pack plenty of patience, and be prepared to adjust. To succeed, you will need to embrace and understand the cultural differences and execute accordingly.

Sonny Caberwal
Co-Founder and Chief Operating Officer
New York

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