Why and how to build a Tech Startup in college?

Edited using Canva. BG and Graphics derived from Vecteezy.

Over the past few years, open discussions on businesses and their contributions in the development of the country have increased significantly. Success stories of startups coming from different backgrounds have inspired many entrepreneurs. But, as a student, it can be intimidating to think about starting a business. This article focuses on three most important questions any college student faces when thinking about entrepreneurship —

1. Why startup?
2. When to start a startup?
3. How to choose a problem/idea for startup?

Why Startup?

A simple answer to this question can be to become self-reliant. But let’s take a longer route. As per the 2022 NASSCOM Annual Review report, the Indian technology sector registered a rise of 15.5% (which is approximately double the GDP growth) and contributed around 9% to the country’s GDP. The industry employs more than 5 million people out of which 4.5 Lakh freshers were recruited in the FY 2021–22 alone (despite the global slowdown caused by Covid-19). It is important to note that these figures do not include technology interventions in other sectors such as agriculture, healthcare, manufacturing, construction and utility services.

Coming to the national economy — while it took around 60 years (since independence) to build a $1 trillion economy — we added another $2 trillion in the last 15 odd years. But, what is causing this unprecedented growth — Politics? Global Relations? Government Policies?

Yes, these factors do have a significant impact, but, the end drivers of this rapid growth are the entrepreneurs who spot opportunities and build valuable enterprises with their vision, courage and hard work. Eruption of new unicorns, rise in exports & FDIs, improvement in global benchmarks — all are witnesses to the contribution of entrepreneurs towards the growth of our country.

National and international agencies have estimated that our economy will cross the $5 trillion mark by the end of this decade. With this inflow of another $2 trillion into the economy, the per capita income and spending power of the common man will increase significantly. To meet this increased demand, many startups and businesses will evolve with their innovative products and services. However, most of the innovation in consumer startups come from technological interventions.

Before we address the question of why, we also need to look at the job market as well. While colleges used to be a gateway to kick start your career for a long time, the scenario is changing day by day. Due to low retention ratios and to reduce the cost of hiring, bigger companies are preferring open recruitment processes (such as TCS NQT), PPOs, and Hackathons over campus placements. Further, many companies who opt for campus placements are pushing students to start corporate training and working on projects while they are in college. Smaller companies are willing to offer part-time/work-from-home roles to students along with their regular studies to save costs. While this sounds exciting and acceptable from a fresher’s point of view, this is giving rise to an unhealthy job environment in the sector.

Considering everything, as a technology student, you can either choose to become a part of the historical economical growth by opting for entrepreneurship, or continue to depend upon other businesses to offer you a job at their terms and conditions. Convincing enough? Let’s move to the next question.

When to start?

Let’s walk you through a story. I used to draw sample logos for a IT consultancy company during the third semester of my engineering studies. In the following summer, I learnt HTML/CSS and built a homepage for the proposed consultancy company. In fifth semester, I built an OMR Evaluation application for a coaching institute in my hometown. Early sixth semester, I started learning web development while working with an alumni senior — mostly photoshop and frontend design for his freelance projects.

I also remember building 4 small software projects for a xerox shop owner who used to sell them to final year students. It was unethical — yes. Guilty — no, as I used that money to learn .NET and repair my laptop. In the following summer, I along with some friends started working on a social networking-cum-document sharing website, hosted it and gathered over 200 users. We were all set on my path to entrepreneurship at a time when startup was not a cool word and all my family expected was to get a good job.

But, I can’t recall which one of these was the exact trigger in the seventh semester — exciting pictures of fellow students on FB who completed internship from big companies, peer pressure of preparing for the upcoming placements, attending seminars about GATE/CAT from coaching institutions, fear of telling the family about starting a business or something else — we started slacking off on the social networking project and eventually took it down.

Later that December, I got placed and convinced myself that I will pursue entrepreneurship after 2–3 years of experience in the industry. Thereafter, one thing led to another, and the idea of starting a business seemed more and more impossible. While I don’t think I made any wrong career choices and I am not sure that I would have made a successful entrepreneur, but I continue to keep the regret of not starting that company in college.

The main takeaway of the story is that there can be several reasons for not starting a company in college, but, it is the best place and time to do so. Here is a curated list of reasons to help you take the plunge —

1. Finding co-founders and building a team: I repeat this statement to a lot of my students - College is the last chance in life to choose who you want to work with. Luckily, college is full of talented like-minded people who are not expecting you to pay for their time.
2. Cost of trying: You have least commitments and best support system during the college life. As you grow older, things will change, adding more and more responsibilities to your shoulders. Thereby, increasing the cost of experimenting with your ideas.
3. Energy and time: Starting a business involves working on many aspects and learning new things rapidly. It takes a lot of physical energy, mental energy and longer bursts of time, something you can afford right now.
4. Ease of networking: I have not figured out the reason yet but somehow it is easier to network with strangers when you are in the college age. Although it takes effort in building deeper connections with elder people due to the generation gap, but, that can be worked around if you have the right value proposition.

However, consider it a pro tip, that it is also easier get distracted and feel confused during this time, which leads to self-doubt and lack of persistence. Moreover, starting a business involves working with a lot of people and adhering to the legal and societal expectations. It takes emotional maturity and knowledge about common pitfalls of the problem domain to handle them carefully. Seems like a deal breaker? It is not. By taking help from mentors and advisors, you can benefit from their years of experience and overcome these limitations.

How to find a problem?

Statistically, the best problem to work on is your own problem. Most successful self-funded startups are usually conceived as a solution for the personal problems of their founders. Examples include Facebook, AirBNB, Shaadi.com, Basecamp and many others. These problems can come from your day-to-day life, your communities, or your professional goals.

However, no matter how easy it is to say, it can be challenging to find such a problem. And deciding if it is worth working on or not, along with studies, can be a bigger dilemma. Ideally, it is recommended to look for opportunities that need little (or no) initial money, offer recurring revenue and do not mandate extensive marketing. When it comes to entrepreneurship, it is very common among students to think of feature-rich enterprise-ready solutions or problems that involve large audiences. Such ideas come with a fair share of challenges to execute and scale along with the studies.

Alternatively, here are three unconventional (among Indian entrepreneurs) yet recommended options to explore. These are curated explicitly for CS students, but others may benefit from the core ideas —

1. Developing for an existing ecosystem

Using a phrase from Google Scholar homepage, most of the technology development stands on the shoulder of giants (a proverb indicating the use of knowledge and resources created by pioneers in a field). If we look at the history of software development, there are several examples of open-source/freemium/premium projects that have fueled the growth of the industry. These include platform tools (like JDK, GNU, .NET), libraries (like OpenCV, JQuery, numpy), frameworks (like Django, Laravel, React.js), application-specific systems (like WordPress, Shopify, SAP), Deployment tools (like Docker, Jenkins, Ansible), client platforms (like Chromium, FileZilla), developer-targeted tools (like VS Code, GitHub, Heroku), and so on. Some of these projects have been very successful; for e.g. WordPress (a PHP-based CMS) holds a 64% share of all websites on the internet.

Fortunately, most of these projects have an ecosystem built around themselves that offers the opportunity to other developers to come up with their ideas and integrate seamlessly, for e.g. WordPress themes, JQuery plugins, GitHub Actions, Ruby Gems, Chrome/VSCode extensions, etc. While, as a student, you may use most of the free add-ons, companies and professionals are more than willing to pay for an extension/plugin that saves time and hassle for developing a specific functionality and testing it. Some statistics to support this are given below –

1. Premium WordPress Themes have an estimated market size of 50 million US dollars,
2. Google Workspace Marketplace has more than 5000 third-party apps that integrate well with Google Apps like GMail, Drive etc.
3. Around 71% of Salesforce customers actively use apps from the AppExchange (most of which are paid).

I have included these statistics because they were easy to find; however, don’t let these examples give the impression that ecosystems exist only for projects from big organizations. Overall, the point is if you can learn to develop extensions that improve any of the existing widely used platforms and meet the frequent repetitive needs of the developers/users, it can be a good low-investment entrepreneurial opportunity.

2. Develop an improved version of existing utility apps

We use many utility apps on a daily basis (e.g. Calculator, Scheduling apps, image editors etc.). Statistically, the cost of purchase/subscription is the prime factor for choosing these apps for individual users. On the other hand, businesses and professionals care more about features like customization, integration with other apps, activity logging and adaptability (to their culture). Further, as the internet economy grows, more and more individual users have also started getting comfortable with spending a few bucks on their digital needs. Below are some examples of such solutions –

1. Basecamp started as an information-sharing platform between their teams, but since it was optimized for small agencies, it grew to a large premium user base rapidly.

2. Canva started offering templates & resources along with an editing platform; and found itself an audience among beginners and social media enthusiasts (despite having competitors like Adobe).

3. GoodNotes, a premium iOS app (charging as much as $9 a month), is designed for creating, presenting and sharing handwritten notes. Despite having competing free apps from big software companies like Microsoft OneNote, Apple Notes etc., the app has almost 80K user ratings (and probably 50x downloads) on the Apple store.

You can find these opportunities by asking people around you or studying the business processes of a target industry. Further, attending talks and conferences, following experienced professionals & entrepreneurs, and subscribing to newsletters related to the target industry can be instrumental in gathering great insights. Here, the key component is to choose a utility app that does not require much initial investment and/or frequent after-sales support.

3. Develop solutions for a niche audience

If you cannot figure out anything from the above two categories, the next best option is to build a solution (even if redundant) for an existing niche audience. The driving factor behind this recommendation is that when starting a business, a lot of time and money goes into customer development, finding product-market fit and executing marketing campaigns. This audience can be people from your music club (for example), a local community (where you/your family is active), juniors (from your study/sports circle) or even a group on social media that you are a part of. You can offer solutions catering to the customized needs of this audience, for e.g. a tutorial app for the music club, an information-sharing website for your community, or a scheduling app for GATE aspirants.

The key idea is to design solutions that cater to a very niche audience where you have a direct impact. This helps you in growing the initial user base, get genuine feedback, and improve your solution. At a point in future, when your solution is mature enough, you can start generating revenue from the same or take external funding to grow it further.

Alternatively, if you cannot identify any target audience to start with, it is recommended to develop content or curation platforms to help others learn what you are learning. Although it might seem redundant as so much content is already available on the internet, practically at any point in time, there are many others who are on the same journey as you. If you are a few steps ahead, you can help make the journey smoother for others. Therefore, creating value for them (something entrepreneurs do, remember!).

These may include writing concise articles on technical topics, customized short courses (for e.g. in regional languages), book summaries, course reviews, curation of study references, video tutorials, roadmap logging (blog/video), short stories on historical events, interviews with professors/entrepreneurs/researchers, and so on. These initiatives (if pursued consistently) can help you earn small revenues, build a personal brand, identify the problems of your audience, and develop confidence in the target technology/industry. However, as a precaution, it is essential to keep the focus on value creation while avoiding the pressure to influence (chasing followers and adapting to platform-specific algorithms).

EDIT: Tips for student techpreneurs — Due to the length of the article, these recommendations have been removed. I will post these as social media posts and/or a separate article later.

Wrapping up

When comparing corporate career and entrepreneurship, there is no obvious choice as both have their pros and cons. Many good companies have started building cultures that allow employees to experiment with their ideas and link their career success with their innovations and initiatives. Moreover, a corporate job offers early financial comfort and better learning opportunities in your specialization (mostly).

On the other hand, running a business requires building a diversified skill set and has a lot more to offer in the longer run financially as well as professionally. Personally, I believe (do not have any data or statistics to prove it) that the probability for a fresher to become CEO/CTO of a large tech company might be same or less than the success rate of tech founders in our country.

At last, it is recommended to keep the brain open to ideas and innovations irrespective of the career path you choose. Especially, during college, if you ever stumble upon an opportunity to try your entrepreneurial skills, you should not miss it by will. As the saying goes — “If you think cost of taking risk is too high, wait till the bill of regret is served”.

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