Something jumped out at me in Yourstory magazine’s list of top 100 Indian startups and their founders. There seemed to be more Agarwals, Bansals, and Chadhas on there than in my high school class in Chandigarh. Were north Indians really more likely to start-up than their brothers and sisters down south?
Why was the south – in spite of having a better trained workforce (more on this later) – not pulling its weight when it comes to startup founders. We set out to get some answers.
Method for classifying startups
The founders of the top 50 start-ups on the Yourstory list (a total of 104 founders/co-founders) were collated. They were classified into north and south Indians based on surname (or birthplace if background was not sufficiently clear). For comparison, the start-up’s founding locations were also classified into north and south India.
(A couple of delicate concerns right off the bat. First – what about the north-south border states like Orissa, Chhattisgarh and Maharashtra? This is a valid question – but the list did not really have many founders from these border states. Second – what about north Indians who were born and brought up down south – and vice versa? It did not matter too much to this study since its focus is on investigating a cultural pre-disposition. Mostly based on family, linguistic or caste histories).
Results and inferences
1) Are north Indians over-represented among to start-up founders?
The answer is an emphatic “yes”. 74% of top Indian startup founders are north Indians. Only 20% are from down south (remaining 6% are not Indians – though their startups are).
2) Is this because of a superior business climate or other geographic advantages up north?
Nope. The south (even excluding Mumbai) is over-represented when it comes to startup founding locations (more than twice as likely given the background of the founder).
This location advantage is not surprising. The south is ahead when it comes to literacy rates, the number of technical institutions per capita, and overall human development indices. Schools from the south make up 12 out of the 14 top performing CBSE schools for 2016-17. South Indians are less likely to startup, despite having superior technical pre-requisites.
3) What does this mean?
The likelihood of a person starting-up has strong correlation with their cultural pre-disposition. Southern states that are looking to encourage more people to startup need to keep this in mind.
I was recently in Calicut (Kerala), where as part of the state government’s push towards fostering more startups, they were leasing out office spaces at fire-sale prices. They are also emphasizing (even more) technical education and tool building.
The data suggests that this may be the wrong approach. The emphasis should be in training young professionals and college kids in more intangible skills – an eye for opportunity, appetite for disruption, and (most importantly) risk tolerance, and no fear of failure. These characteristics seem to be more inbred in folks up north and make up for their technical disadvantages.
If there is one thing the south can learn from the north, it’s that opportunities are all around us in India, and they are waiting to be exploited
Footnotes, drawbacks, and assumptions:
- This article is co-written with my husband (and amateur social scientist) Ashif Panakkat. Groundwork was done by Naeem Mohammed of Christ University, Bangalore.
- Research for this article is based on Yourstory’s list of top 100 Indian start-ups. Their ranking is based on multiple factors as explained in the linked article.
- This work needs to be expanded to include data on all top 100 Indian startups. We would also like to normalize the data to account for population distribution, education levels, and start-up domain (example – are the results different if you take out e-commerce start-ups?). Anyone who has time to look into these aspects can contact me for my spreadsheet.
- There is one (sobering) piece of data that’s not up for debate. Almost all Indian startup founders are dudes. This is just an extension of the limited female participation in the work-force in general. We have a long way to go to get to parity on this front.