Start, Scale, Stall: The Unseen Struggles Behind IITs’ Start-up Success Stories
Student entrepreneurship at the Indian Institutes of Technology (IITs) has become a celebrated trend, with incubation centres, mentorship, and early-stage funding fostering a culture of innovation. However, behind the success stories lie struggles, failures, and lessons that often go unnoticed.
The Reality of Start-up Success
Professor Ashok Jhunjhunwala, Chairman of the Immersive Technology and Entrepreneurship Labs at IIT Madras, highlights that only about 2% of IIT students kickstart their careers through student start-ups. The majority of successful start-ups are founded by graduates, alumni, and faculty members.
Case Study: The Journey of Shashank Jaiswal
Shashank Jaiswal, an alumnus of IIT Madras, began his professional journey as a co-founder of a digital payments start-up while still a student. This was during a time when digital payments were on the rise but not as ubiquitous as they are today. He recalls, “We gained good initial traction. Just before graduating, I managed to raise funding, which was rare at the time. I skipped campus placements and went full-time with my start-up after graduation. Things were great at first—we scaled fast.”
However, Jaiswal soon faced challenges. “We burned through our funding on cashbacks and user incentives, all in the name of growth,” he explains. Within a year and a half, they realized they had not figured out a way to monetize their user base. As larger brands aggressively entered the market, investor interest dwindled. “It was a dead end. Two of my co-founders decided to leave, but I stayed. I wanted to give it one more shot,” he recounts.
With barely any funds left, Jaiswal had to let go of 90% of his team. Those who remained did so voluntarily, without salaries. He moved back to his hometown, Bhopal, and turned a room in his house into an office to save on rent and living expenses. Ultimately, he sold his start-up to a larger company after new regulations made it impossible to secure a necessary license.
Patterns of Success and Failure
Jaiswal’s experience is not an isolated case but part of a larger pattern observed among student start-ups. Professor Suman Chakraborty, Director of IIT Kharagpur, analyzes what distinguishes successful student start-ups from those that fail. “The winners fall in love with a problem; the rest fall in love with their intelligence,” he states. Successful start-ups are anchored to real, painful problems and are willing to look foolish while solving them, whereas failed ones often prioritize elegance over relevance.
Professor Jhunjhunwala emphasizes that there is no fixed formula for turning a start-up into a successful venture. “The two criteria required for us to take a start-up into incubation are, first, whether the student can survive for the next three years without earning money, and second, their acceptance of failure,” he explains. He notes that while the initial idea is important, it plays a smaller role in the overall success of a start-up.
The Importance of Market Understanding
Professor Chakraborty also points out that technically strong students often underestimate the importance of market understanding and customer discovery. “Almost always, IIT students are trained to eliminate uncertainty, while start-ups require running toward it,” he explains. Delaying customer discovery can lead to false confidence in a product, resulting in market rejection later on.
The IIT Brand: Boon or Bane?
Arunav Ghosh, a final-year student at IIT Madras, aims to build a platform that allows students to interact with and seek guidance from peers who have achieved excellence in specific domains. He states, “One of the biggest things IIT gave me was exposure to people who are among the best in their fields.” However, he acknowledges the challenge of making the platform affordable for students while ensuring that mentors are fairly compensated.
Professor Chakraborty comments on the IIT brand, noting that while it lowers friction in the start-up process, it can also delay necessary failures. “When capital arrives before customers, start-ups learn to perform rather than to learn. The brand should be a microscope, not a cushion,” he warns.
Survival of the Fittest
Experts observe that a common pattern among student start-ups is that they often meander in their early years. One major reason is the constant struggle between academics and product development. The pressure to maintain a good CGPA frequently takes precedence over start-up progress.
Conclusion
While the IITs have fostered an environment that encourages innovation and entrepreneurship, the path to success is fraught with challenges. Many student-led start-ups face significant hurdles, and the journey often involves navigating failures and learning from them. Understanding the market, embracing failure, and focusing on solving real problems are crucial for aspiring entrepreneurs.
Note: The stories and insights shared in this article highlight the complexities of entrepreneurship within the IIT ecosystem, emphasizing the need for resilience and adaptability in the face of challenges.
