Can Mumbai catch up in the Startup Race
Mumbai (Bombay), the capital city of Maharashtra also happens to be India’s Commercial, Financial and Entertainment capital. The city is home to some of India’s top entrepreneurs and is socially, culturally and economically diverse. The numerous conglomerates, MNCs and industries in various sectors such as Finance, Textile, IT and Healthcare among others have helped the city scale new heights. At the moment, Mumbai is the wealthiest city in the country.
The number of startups in Mumbai are nowhere close to that of Bangalore and Delhi. The reasons for this can be can be narrowed down to:
- The cost of home rental
- The lack of space
- Cost of renting work spaces
- Tax incentives
- Travel distances and jammed traffic
Startups require a good deal of investment. In Mumbai, due to the cost of living and home rental, many budding entrepreneurs find it difficult to sustain their business. While large corporates can easily afford to rent out decent sized office spaces, the same cannot be said about startups. The initial days can make or break a business and high rents eat into profit margins.
Many entrepreneurs move to a different city, postpone their plans, or give up on their dreams if they run into losses. Business owners finally end up looking out for jobs instead. While there are no shortage of skilled manpower in Mumbai, young entrepreneurs do not have all the right ingredients in the city for their business to boom.
The costs in Mumbai can make business owners and investors run out of cash quicker than in other Indian cities. The vagueness of the tax structures could make business owners spend a lot more than they should. There are plenty of tax hurdles which can run down startups if the entrepreneurs are not careful or do not know the ropes. To add to this, the high availability of job vacancies in Mumbai, encourage employees to jump jobs for a higher salary, which could have a negative effect on startups.
Due to these reasons, many venture capitalists in India and abroad have started to avoid funding startups in Mumbai. Startups in cities such as Bangalore, Hyderabad, and Delhi are given preference instead.
In spite of all these problems, there are plenty of startups that have made it big and have managed to spread to other parts of India and abroad. What startups require in order to survive are authenticity and innovation. Mumbai is definitely not short of people with ideas.
For a growing economy, startups need to be encouraged. Since the country is on a spree of promoting companies and items that are made from home soil, it is important that every city, town or village plays to their strengths.
Strengths of Mumbai for entrepreneurs
No Shortage of Resources
While many parts of India face problems for various reasons such as drought, floods, extreme weather conditions, terrorism and so on, Mumbai does not face any such problem regularly. There are plenty of resources available and highly influential people in various industries and sectors.
No Lack of Talent
One of the biggest strengths of Mumbai is its manpower. There is an inexhaustible supply of skilled and unskilled workforce.
Plenty of Transportation
It is a well-known fact that traveling in Mumbai is time-consuming and requires the coverage of huge distances on a daily basis. However, the transportation system is good, fast and on the dot. People used to the lifestyle are willing to spend their time traveling to work and back on a daily basis.
No business has grown big by making too many enemies. Mumbai is a city in which an entrepreneur can network and build a good contact base without too much of a problem. It is a great city to learn the ropes of the business.
In addition to being centrally located, Mumbai has a massive airport which also happens to be the second busiest in the country. Mumbai is also a port city with plenty of harbors, making it a perfect city for trading, import, and export.
With the amount of talent and resources available in Mumbai, it is highly possible for the city to catch up with Bangalore and Delhi.