Finance

Setting up an ‘incubator of incubators’

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If a swanky building with gleaming glass for walls, towering several others is a head-turner, then it is bound to come as a bigger surprise when you are informed that the government is the one responsible for building the structure.

It does not end there as the aesthetically designed, multi-storied building is part of a well-chiselled plan to nurture start-ups. Welcome to Indian Institute of Information Technology (IIIT-Hyderabad) campus in the fast growing Gachibowli area where, on November 5, the doors will open to a one of its kind incubation facility in the country.

T-Hub, as Telangana’s IT Secretary Jayesh Ranjan explains, is not just about a building offering space for 800 people to work on innovative technology-driven products and solutions, but an integral part of a larger ecosystem the State government is keen on creating. Though competition with Bengaluru and the need to build on Hyderabad’s image as an IT destination are reasons that come to mind, Mr. Ranjan says it was a different factor that paved the way to T-Hub.

“Why is it that several persons of Indian origin are involved in the U.S. ecosystem for start-ups, considered the best, while the same is not happening in India?”, he asks. A reason for that is a lack of effort on the part of governments in India, he says, adding that elsewhere in the country, start-ups have come up in an organic way.

With Bangalore cementing its place way ahead of others in the conventional IT and ITES fields, essentially because of its first mover advantage, Telangana decided to carve a niche for itself in emerging area of IT where the leadership slot remains vacant. Thus, the idea of an incubator for start-ups came about and along with it came the idea for an innovation fund to provide venture capital, a pool of mentors, and international outposts to help the enterprises.

Entertainment technology, cyber-security and data analytics are some of the emerging areas where Telangana would like Hyderabad to make an impact.

Accelerator programmes

Describing the facility as an “Incubator of Incubators”, T-Hub CEO Jay Krishnan added that there are two aspects to it. Initially, we are getting technology start-ups to “co-habit”, followed by accelerator programmes that will be launched in tandem with multiple partners.

Making the cut, however, is not going to be easy for the start-ups. They need to not only meet the qualifying norms on the potential for success of their project, but also shape up fast. Early stage start-ups have one year to prove themselves. They will have to move out after that to make space for others.

Initially, 50 start-ups will occupy the space, and by November, 50 more will get in. By December, the facility will be fully occupied and functional. It will house a good mix of start-ups catering to various fields, according to Mr. Krishnan. The city, which is witnessing a start-up boom of late, is waiting for the launch of T-Hub, evident from the over 400 applications authorities have already received.

“Compared to private incubators, T-Hub is an industry-government partnership that seeks to provide entrepreneurs an edge. Also, the scale of the project is so huge that the exposure and the networking opportunities it would generate will be tremendous,” said Jeevan Chowdary, founder of the Start-up Shoppers Express and one of the applicants.

If the applicants sound enthusiastic, the government is equally concerned about meeting the expectations of the people. Laying the ground for T-Hub, according to Mr. Ranjan, is the motto of the State’s industrial policy — innovate, incubate and incorporate.

Making of a Silicon Valley

Hyderabad, he declares, possesses all the ingredients that contributed to the making of the Silicon Valley. It is all about “meticulously putting them together and creating an ecosystem,” he said, adding that the government has partnered with three Hyderabad-based premier academic institutions for T-Hub — the IIIT-H, Indian School of Business and the National Academy of Legal Studies and Research (NALSAR). They are expected to be the catalysts for promoting innovation similar to the roles played by the Stanford University and the University of California in the success of the Silicon Valley.

The government may have spent Rs.40 crore on the T-Hub building. Yet, Mr. Ranjan, says, what will ultimately matter are not the commercial elements but the intangible benefits T-Hub will deliver. “If you encourage start-ups it will have a tremendous multiplier effect. Lots of students, young professionals with ideas, keen to try something out but deterred by the absence of such ecosystems will come out. Their contribution will be there for the State and the country.” Return on investment, in any will be enough to maintain and cover the costs, he feels.

At the same time, T-Hub, Mr. Krishnan said, is unlikely to pick up a stake in the start-ups. However, there may not be a need to do so as the Innovation Fund proposed would have Tata Capital and other venture capitalists. It will be big shot in the arm for the start-ups as the conventional banking system is not going to extend loans to them, stemming out of the banks’ inexperience in assessing such projects.

Care, Mr. Ranjan asserts, will have to be taken about all aspects, which includes the T-Hub building that has been designed to promote a sense of fraternity. He says “the work environment will promote creativity.”

But the best part about T-Hub will be minimal interference from the government. “We will not be involved in running the day to day affairs in areas like which start-up to select, how long should an enterprise continue there and who will get funding,” he declared. All these will be professional decisions taken by people involved in the management and guided by a 10-member empowered board in which the lone government representative will be the IT Secretary.

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Nagaraju Tadakaluri
Nagaraju Tadakaluri is a Professional Web Designer, Freelance Writer, Search Engine Optimizer (SEO), Online Marketer, Multi Level Marketer (MLM) and Business Promoter. Have developed Latest Updates in hopes to educate, inform and inspire.

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