Start-ups miss the big picture; 90% of them are nonsense: Biyani
08 September 2016
Continuing his scepticism about new-age companies, Future Group chief executive officer Kishore Biyani on Wednesday said that start-ups are too small to create jobs, and that in fact 90 per cent of them were ''nonsense''.
Speaking at The Economist India Summit in New Delhi, the pioneer of brick-and-mortar chain stores in India said that most start-ups missed the bigger picture and worked with a ''smaller canvas''.
"I think 90 per cent of the start-ups have no meaning at all, they are nonsense. I think the canvas of start-ups needs to be bigger,'' he said.
There are so many people who are doing aggregation, he added. ''Let's take the business of taxi aggregation, the revenues of these companies in four-five years would not be more than Rs3,500 crore. They are not creating a new economy any which way."
He said that most startups are coming up with a goal to sell themselves. That is what is happening to many, as big businesses are taking over major ecommerce companies, according to Biyani. "They are just building start-ups to sell them, there is no long-term goal. This is what needs to change," he said.
He said that start-ups which go on for funding rounds anyway sell almost 80 per cent of the companies to their investors. "I think most of the start-up companies are funded by venture capitalists, once they are all created, the large companies would buy them out."
Thinking big and long term should be the goal, Biyani later said on the sidelines of the event. "They are all very bright and talented people, so they should work on a bigger canvas and big ideas. There is a scope of expansion of start-ups to another level altogether," he added.
Last month Biyani had indicated that Future Group may close its online retail venture Big Bazaar Direct, finding the business unviable. Set up in 2013, Big Bazaar Direct is an assisted ecommerce venture of the Future Group with 1,000 franchises. It had plans to enrol as many as 50,000.
"I have attempted ecommerce four times in my life. We have opened and shut Future Bazaar. We will close Big Bazaar Direct within a week," he had said earlier.
However, Biyani said that while the time is not right to run an ecommerce business, they could be disruptors in future. "We have acquired Fab Furnish, we are trying to be a disruptor. One can always do that and we will do it more when the time is right. Today it is not viable to run an ecommerce business," he said.
The company will however go on with its omnichannel approach. It has recently partnered with online mobile wallet player Paytm to sell its products of the digital wallet's marketplace.