Founding A Career Counselling Startup: Exciting Conversation With Entrepreneur And Founder Of Career Naksha

The startup scene in India is getting interesting every year, with new startups continuously cropping up and many reaching the unicorn status. In the last few years, India has seen meteoric rise of startups like Byju’s in education sector, OYO in hospitality sector, Scoop Whoop in media sector, and Tonbo Imaging in defense sector. This has been a result of the economic and social climate in the country becoming more favorable for entrepreneurship. However, many challenges remain. Setting up and operating a startup in India is still harder than in many other countries.

In my attempt to cover the startup scene in India from the grassroots level, in this post I bring to you a frank and enlightening exchange with Nimish, the founder CEO of Career Naksha, which is a career counselling startup currently based from the M. S. University, Vadodara. We talk about all issues from how to found a startup, what challenges to expect, both inherent to entrepreneurship around the world and India specific, what this particular startup does and what are its future goals.

Me: Can you briefly describe your life before you founded your startup?

Nimish: I finished my BTech in Biotechnology from IIT Roorkee in 2012, and my family has been based out of Vadodara since 2008. In 2010 I did internship under Prof. B. B. Chatoo , who had set up the Genome Research Center at M. S. University. I loved working under him. He used to handle large projects and had well equipped labs. Many PhD and MSc students worked under him. Sadly, he passed way a few years ago. After finishing my BTech, I founded a startup called Poster Gully, after which I did my MBA from the US. After coming back to India in 2018, I founded Career Naksha.

Me: What does Career Naksha do?

Nimish: The purpose of Career Naksha is to help students choose the right career for themselves. We help them find the right degree course, college and stream. For example, after 10th standard, we help them decide whether to take Science, Commerce or Arts. After 12th standard we help them decide which career path to take, and which college and degree course to enroll in. After college we further guide students on which career path to take, which higher degree course to enroll in, or which job to apply for, or if they want to start their own business, how to do that.

We conduct a psychometric test to judge the student’s inclinations, strengths, weaknesses etc. which helps us guide them. We also help students find colleges and degree courses abroad. In near future, we will also start guiding professionals in how to navigate their career and professional life. But as of now we are primarily focused on school and college students.

Me: If someone decides to found a startup in India, what is the procedure for that? I have noticed most people are not aware of it.

Nimish: Correct. The lack of awareness about the procedures is a huge problem. The first thing to do for founding a startup is to approach a chartered accountant. They know how to register a company, how to get recognition for a startup from the government and what different types of companies exist. For example, there are private limited firms and partnership firms, among others. The company has to be registered with the Indian Ministry of Commerce. And you need a certified chartered accountant to validate your credentials during the registration process.

Besides, for starting a business, you need a good business idea, which needs to be unique. Something new and useful. Once you get the idea right in your mind, you need to build a team of like minded people. In the team, you would need people for sales and marketing, and people for product development. In other words, the team needs to have people with complementary skill sets.

Me: What are the different sources of funding that a startup can tap into?

Nimish: There are several different sources. There are accelerators, incubation centers, venture capital funding, crowd funding, seed funding from angel investors, funding from friends and family, and of course your own pocket. Angel investors are high net worth individuals who have spare money and are looking to invest it. Venture capital funds are basically investment companies. They are similar to banks, but unlike banks, they don’t ask for collateral. They just invest in your business if they find it sound. They create a portfolio of startups to distribute their risks.

Then there are crowdfunding platforms where individuals like you and me invest small amounts in your startup, if they like it. In return you can either supply them with your product or you can give them your company’s shares. Its similar to listing your company on the stock exchange.

Me: How much difference has the Startup India campaign made for the startups in India?

Nimish: I wouldn’t say it has made founding a startup easier than before. But it has certainly increased awareness about entrepreneurship, and has increased risk appetite in people for businesses. The increased awareness has also made investors more inclined and eager to fund startups, increasing funding for startups. And since more startups have started to come up, it has increased volumes, further increasing the funding.

The regulations for startups are still pretty much the same though. Of course, one change the government has made in the procedures is that startups now don’t have to pay tax for the first few years of business. But to be honest, even before this change was made, you were not required to pay tax if you were unable to generate enough revenue from your startup. Not just startups, even big companies do that. However, you are still required to perform annual auditing of your startup’s finances, and also fill the balance sheet and properly maintain all the accounts. This process costs ₹ 40,000-50,000 per year.

Me: According to some estimates, 85% of all startups don’t survive the first few years of business. What does an entrepreneur need to do to avoid this fate?

Nimish: Actually, 85% is an underestimation. I would say as many as 99% of all startups fail in the first few years. The major reason for this is poor market research. You need to ensure that your product is actually wanted in market. Second reason is that you might not be able to scale up your business. A process that works on small scale might not necessarily work on a large scale. This will cause problems even if your product is in demand. In fact, I am facing the same challenge right now. I am finding it hard to find like minded people to expand my team. People who can understand the company’s vision and think long term.

Besides, another scaling problem we are facing is that we are still trying to figure out how to automate our product delivery. In career counselling business, most customers want to meet you face to face, not online. So if you have a small team, you will only be able to cater to customers in your local region. So this is a people intensive business. You need a large number of career counselors to cover all major cities. The demand for career counselling is high. But scaling up your career counselling business is a challenge.

Me: Your mention of automation reminded me of a friend who founded an industrial automation startup. He used to design and sell software for automating industrial processes. But the time taken for the clients to pay him was very long. This affected his finances to the point that he eventually had to close the startup. Is this a common problem?

Nimish: Yes its quite common. There are two types of transactions, B2B (Business to Business) and B2C (Business to Customer). B2B transactions take a long time because the procedures in the large businesses are very tedious. But in B2C transactions you are directly interacting with individuals, in which case you get paid immediately. We are exploring both B2B and B2C approaches. In B2B transactions we have conducted, our payments are also stuck in the process. But because we also engage in B2C approach, we are still able to survive financially.

Me: How does basing your startup in a tier 2 city like Vadodara compare with basing it in a tier 1 city like Mumbai in terms of costs and benefits?

Nimish: Basing your startup in a tier 2 city is a double edged sword. On one hand, expanses like office space rent and property prices are far lower in tier 2 cities then in tier 1 cities. The general cost of living is also low. So that is easy on your finances. But on the other hand, the customers in tier 2 cities have lower paying capacity than customers in tier 1 cities. Plus the awareness about career counselling is also low in tier 2 cities compared to tier 1 cities. So you need to weigh the pros and cons when deciding where to base your startup.

Me: This is the first startup supported by M. S. University right? How has the university helped you?

Nimish: Correct. This is the first startup supported by the university. The university has provided us with free office space, and the university’s brand also helps us gain recognition and publicity.

Me: Why is it still more difficult to start a business in India than it is in many other countries?

Nimish: The rules and regulations in many other countries are much simpler. For example, you don’t depend on a chartered accountant for getting your startup registered. You can complete the entire procedure yourself, and the process is online. It takes a very short time and is much cheaper. In India, the process is longer, and the chartered accountant takes a fee, which makes it expensive as well.

Me: The mindset in Indian society is gradually changing in favor of startup culture. But even now, starting your own business is considered way too risky, compared to a 9 to 5 job. Especially a government job, which is highly coveted for its stability. What do you think needs to be done to change this mindset?

Nimish: What you are talking about is behavioral change. Such a change takes a very long time. More than a decade usually. Only people who have the risk appetite can start a business. Usually, students from renowned educational institutions are more willing to take risk and start their own business, because they are confident of getting a good job if they do fail in their business.

Me: What are your plans for near future?

Nimish: We want to be Gujarat’s most trusted career guidance and counselling platform, offering psychometric test and personal counselling. Particularly school segment. Right now our focus is on scaling up in school segment. Eventually we will move focus to college and professional segments. For the next 2-3 years, our focus will be on Gujarat. After that we will aim at expanding beyond Gujarat.

Me: Do you have any competitors?

Nimish: There are many individual counselors at local and state level. But at macro level, there is no branded career counselling company aiming at expansion on a national level. We have already opened an office in Ahmedabad in collaboration with another startup, and soon we will also be opening an office in Surat. Then we will expand in other cities of Gujarat like Rajkot.

Interview ends.

I wish Nimish and his team the very best in their endeavor.