“The government is very excited about FNCCI having this committee so they are supporting us; they are collaborating with us for getting the policy in place;
Apart from the recently acquired responsibility at Startup & Innovation Committee under FNCCI, Ranjit Acharya is the CEO at Prisma Advertising, Director of Media Hub, Chairperson of Bridgewater Education & Research Foundation, and MD of Neel Barahi Films.
This is Acharya’s third term as an Executive Committee Member at FNCCI. Because of his own experiences of mentoring and managing the startup ecosystem, and having worked intensely with some of the accelerator programs as a mentor, he says the repertoire of knowledge provided the impetus to take on the responsibility of steering Startup & Innovation Committee as the Chair. The committee has two co-chairs, Siddhant Raj Pandey and Suman Shakya. Prakash Dev Palikhe, Niraj Khanal, Dipendra Chaulagai, Mausami Shrestha, Sumana Shrestha, and Swarna Tamrakar are its members. The invited members of the committee are Tenzing Sonar Gomsar and Kavi Raj Joshi. Further former executive committee members of the FNCCI Om Rajbhandari, Saurabh Jyoti and Anil Chitrakar act as advisors of the committee. Many of these individuals are already attached to doing something similar to what FNCCI has envisioned. Acharya remarks, “We are bringing their expertise onboard and since this is a federation, they were more than happy to come and work with us. They are sharing their knowledge, expertise, documents – everything that is needed.That’s how we are moving forward.”
Ujeena Rana had a talk with Ranjit Raj Acharya regarding the Startup & Innovation Committee and the reasons why entrepreneurship in Nepal should be promoted.
Why did FNCCI decide to form the Startup & Innovation Committee now, almost 55 years after its establishment?
When the new leadership team under the leadership of our President Shekhar Golchha came in, we decided to plan not just for one or two years but to have a 10-year vision. In that 2030 Vision Plan, there are a few basic objectives which we are talking about:
Double digit economic growth; taking our economy from 34 billion dollars to 100 billion dollars; and creating 400,000 employment every year
If we are looking at these figures and if we are looking at the plan of action that we have and the objective driven programs, then we are also hoping that by the end of 2030, the trade deficit that exists will come down by at least 50%.
When we look at 400,000 employment generation, then we cannot leave aside small and medium enterprises and when we look at SMEs, we cannot then discard the startup ecosystem. That’s the link between the entire program.
When we were developing the vision paper, when the above mentioned objectives came as our main objectives for 2030, we thought about ways to achieve it and wondered if it is 400,000 employments every year, then is it just the industries, is it just the service sector, is it just small enterprises or is it also startups through which we plan on accomplishing our target figures. The way the world is growing, the way startups have been emerging and making impact in the entire economy, the way the startup ecosystem in Nepal started evolving and growing; the way the new breed of entrepreneurs started coming up and blossoming in the startup ecosystem, startups will be basically one of the forces to create employment. That’s where we realised that now is the time to focus on startups.
FNCCI, which is the federation of different industries and chambers of commerce, felt that there is a missing link between FNCCI and youth entrepreneurs. Youth entrepreneurs have not looked at FNCCI as their federation or umbrella body. So that gap was always there. The federation wants to encourage new ideas, new entrepreneurs and startups to move ahead and encourage them to get into entrepreneurship so that there is opportunity to create employment through them which will substantiate our objective of 400,000 employment.
So how does the committee achieve this?
This committee was designed to create a strong linkage with budding entrepreneurs to help achieve goal of 400,000 employment per year as per the Vision 2030 of FNCCI; and to support the startup movement in Nepal by collaborating with the government and regulating bodies for creating governing documents and policies to help the growth of this committee. These are the objectives we have to help build a robust ecosystem for entrepreneurs.
We are also working with the government at this point in time to develop startup policies and to develop SOP for incubation centers. All the policy driven things being done through the government right now is through our committee. Last week we had a meeting with the Finance Minister, Finance Secretary and the team. We also had a meeting with the Ministry of Industry, Commerce and Supplies.
We will be bridging the gap between large businesses and new businesses. We wish to cater to the missing middle – there are starting startups, those who have ideas and then there are startups, those who have converted into entrepreneurs and have done well. But in between there is a missing middle; they are not catered to by anyone. So we are trying to cater them.
We plan to create new employment opportunities through new entrepreneurs. It is not a fund-management program. This is not a seed capital. We are basically bringing onboard investment and this is open to all category startups.
Is this where the Investor Forum comes into play?
We are doing different programs from this committee; one of the landmark programs that we are looking at is 50/50 which is Fifty Businesses and Fifty Investors.
From our experience, what we and the committee members involved with us realised is that in Nepal the startups come up with great ideas. The idea sprouts and becomes a small plant and they put in all the effort, whatever money they have, they put in to create it as a plant. So when it has to grow and it needs fertilizer, that’s when things kind of shake up because they don’t get funding to buy the fertilizer.
Accordingly, these startups do well initially but because they cannot scale it up, because they don’t have the support, that’s where they fail. Through 50/50 we are not talking about generating ideas, we are talking about those who already have ideas and who have already rolled in their business; we will be supporting those startups who have not been able to scale business through investment. We plan to meet our objectives in two ways:
Large industries, large groups, large business houses have not looked at startups as an investment opportunity until now. We wanted to show them that there’s an opportunity with startups where you can invest and make them grow as well as there is business opportunity for you. We want to showcase that to our business entrepreneurs those who are affiliated with FNCCI.
We also want to showcase that there are enough investors in Nepal. If there is a good idea in business, then they are ready to support and invest. Every startup entrepreneur is thinking that s/he will be getting funds from outside through angel investor and venture capitalists. All those fancy terms are there. So they feel that that’s the only place they need to focus on. So we wanted to showcase to them that there are investors in Nepal if you do well; there are investors in Nepal interested to work with you.
Walk us through the process of the 50/50 program functions.
We will be launching our forms by the second week of April in public and any startup can participate and apply. There is no restriction to the kind of business. Any field of business can apply whether they are in service sector, agro or tourism. Startups involved in any field can apply. When I say any startup, I mean any startup which has been running for a year or more, has a one-year balance sheet, and is in, up and about situation can apply for this program.
The form will have other questionnaires which a startup needs to fill in their profile, partners profile, objectives, what have they achieved till now, what kind of growth opportunity that they see with their business, all those things they have to fill in to apply.
Thereafter, our team will screen the applications. Whoever will pass through that stage, our team may ask for certain supporting documents from them. If they pass through this, then the third stage is the interview session where the committee will take interviews of the selected entrepreneurs to make the final selection.
Once the startups get selected, then the selected list will be provided with mentors from our side. We have a rich mentor pool; 20 eminent experienced mentors from the business sector. We are also adding a few more mentors to make it bigger. The selected startups will then undergo the Mentorship Program wherein they will be assigned with a mentor for three months and those mentors will individually mentor the business to repair their issues – wherever they are making mistakes, guide them to correct it; wherever they don’t know how to monetise, show them the approach and help them transform. The mentorship program is ‘20 businesses with 20 mentors’ for three months of mentoring.
Once that is done, we will train them on presentation skills for a couple of days. They will then be pitch ready to present their ideas to investors. We will invite them to FNCCI where the investors will be waiting for them to pitch their ideas. Once that happens, investors will be given the forms to select the business they are interested in and we will then facilitate them to have meeting with these startups. After that they will negotiate on their own and take the deal forward. That’s the program we are looking at when we are talking about 50/50.
In a nutshell, screening of the first list will be done by the second week of May 2021; interviews of the selected list will be completed by the last week of May 2021. The final list will be published by the second week of June 2021. Mentorship program will start from July, and will run through August and September. The first pitch will take place in the first week of October.
The form will be made public from the second week of April. There is no deadline for the form submission. People can keep applying and we will keep screening and the process will keep rotating because it is not a three-month program as such. This will continue for two years. I am there as the executive committee member for two years. I have to get re-elected and come back, until then I can make a plan for my term only. FNCCI will continue with this committee and some other members will lead it who will introduce other new programs.
Who are you collaborating with for the fruition of the programs?
We have been collaborating with the government for policy and regulation. Right now, the government does not even have a proper definition of startups. So we are helping them develop the definition. Committee is also involved in creating conducive environment for startups by having dialogues with stakeholders, banks and development agencies.
If I am heading the Startup & Innovation Committee, if there is no proper policy which is startup friendly, then whatever I do is going to fail. Startups were not in our focus. FNCCI was focusing on SMEs, MSMEs and then industries and it was only advocating for policies friendly to all these employments. That is there but startups was not the focus of FNCCI till now. Now, it has become the focus.
We are also planning to create database of startups by creating a directory so we are planning to have an e-directory which we will publish with the details of the startups and their contact details and business descriptions. For this we are partnering with Anterprerana.
Other than that, we are looking at some partnership with UKaid Skills for Employment Programme (सीप). They are trying to get us some expertise from the financial sector. They will be involved in these businesses as financial consultant to help them fine tune their financial approach and practices.
So 50/50 is what the committee is basically focused on?
Besides 50/50, we have another program; it’s a knowledge series called ‘First Friday Talk’ in which we invite successful entrepreneurs from different fields of expertise. In essence, First Friday Talk is an objective driven talk program. We did our first one with Gagan Pradhan and his team on ‘Franchising as a Business Model’. The participants were all invitees after they applied and they are all involved in franchising business or they were looking forward to franchising business. The almost three hour long interactive program was based on the success story of franchising business of Himalayan Java and how to do business as a franchise business, the mistakes you can make, the corrections you need to make, the opportunities; everything around the subject was discussed followed by a Q&A session. We conduct this series on the first Friday of every English month between 3-5:30pm. Since the entire program is a knowledge series, it is objective driven. Attendance by invitation only. Prequalification is required for this as we don’t want anyone to come and listen to something that is not relevant to them.
Moreover, we have incubation centers, which is a support program. We are operating iHub at FNCCI right now as FNCCI Innovation Center which will be converted into incubation centre from May. Co-working space for four startups will be provided at FNCCI. If there are startups with great ideas and have recently started but without a working space, we will select some of them to provide free co-working space. It is more to help district level startups which cannot come to Kathmandu otherwise and those who cannot have a working space in Kathmandu. We will be helping them through this.
We are also looking at district level incubation centers which will be planned with few of the district chambers who are our partners. Ministry of Industry and Commerce, Kathmandu Metropolitan, Kathmandu University, Anterprerana will be partners for incubation centers. Then the district chambers will be partners for district incubation centers.
Are mentors also possible investors?
Yes, some of them are but not all. The selected mentors so far are Anil Chitrakar, Pashupati Murarka, Om Rajbhandari, Saurabh Jyoti, Ashutosh Tiwari, Suman Shakya, Ranjit Acharya, Siddhant Raj Pandey, Amit Agrawal, Biswas Dhakal, Sumana Shrestha, Niraj Khanal, Anand Bagaria, Gagan Pradhan, Niranjan Shrestha, Dileep Agrawal, Sanam Chitrakar, Yogendra Shakya, Bhaskar Dhungana. We will be adding a few more.
What are the identifiable challenges you have anticipated for 50/50 program?
The possible challenges that we might have is not finding the right businesses. Though there is excitement in the market, it could be possible that while we are doing this, there may be companies which may not be following due diligence of financial protocols. And they may not get selected and we may not have enough number of businesses to take this program forward.
Other challenge is that they could be good businesses but their deal may not materialise because of the negotiation with the investors.
Additionally, every startup will have to understand that when the mentor is ready to mentor them and if they are not ready to take the suggestions and take their mentorship then I don’t think that the startup has a great vision. In our times, we did not have that opportunity; today there is. Today, experienced people who have failed many times are going to share their knowledge, experience about how not to fail, and if a startup is not ready to provide that kind of time and get committed to those suggestions, I don’t think they have a long road to travel.
Provided these challenges will not come, we will be successful in getting the program rolling. The government is very excited about FNCCI having this committee so they are supporting us; they are collaborating with us for getting the policy in place; bringing it onboard and getting some policies corrected like right now FDI for startups starts from Rs five crores plus. We are trying to bring it down to Rs fifty lakhs. That way many startups can get seed fund from outside. All these things are happening. I am excited about it.
What’s the importance of startups and innovation in a country like Nepal?
Nepal is such a country where large industries which can export products outside of Nepal cannot come. We are landlocked with China and India; their turnovers are high, their population is huge, so their production cost is always low. We cannot compete with them. But Nepal has bounteous room for entrepreneurship where we can export our technology to the rest of the world. We have certain niche over others and we need to utilise that so a lot of entrepreneurship opportunities are there in Nepal and people should explore. New breed of entrepreneurs should explore. Since Nepal is an underdeveloped country, we have a lot of opportunities to bridge the gap between the need vs what is available in Nepal. So that can happen through intervention of technology, through new ideas and innovation and the youth that is there in Nepal are very capable of doing that. So rather than going and working in foreign countries in some blue chip company, they need to start on their own and that will create employment opportunity for others to work with them. There is ample opportunity for every youth to do something in Nepal. That’s why I keep saying that there is opportunity attached with every problem and every challenge.