New Delhi: Future Group Chief Executive Officer Kishore Biyani said that start-ups are too small to create jobs as majority of them miss the bigger picture and work with a ‘smaller canvas.’ In most of the start-ups, the only goal of promoters is to sell themselves. They need to think bigger, observes Biyani. Manufacturing sector has potential for employment generation, he said.
Biyani spoke at The Economist India Summit here on Wednesday. Continuing his skepticism about new-age companies, Biyani further said: “I think 90 per cent of the start-ups have no meaning at all; they are nonsense. I think the canvas of start-up needs to be bigger.”
About 90 percent of start-ups are failed to generate desired results. All the start-ups are taking off using venture capital (VC) funding. After second and third phases, 80 percent of shares get disappeared and subsequently taken over by corporate firm. They are just building start-ups to sell them; there is no long-term goal. This is what needs to change.
While saying that many people are doing aggregation, Biyani added: “Let’s take the business of taxi aggregation. The revenues of these companies in four-five years would not be more than Rs 3,500 crore. They are not creating a new economy any which way.”
About 90 percent of start-ups are failed to generate desired results. All the start-ups are taking off using venture capital (VC) funding. After second and third phases, 80 percent of shares get disappeared and subsequently taken over by corporate firms, said Biyani. Citing an example from Ola, Biyani said the revenues were not over Rs3,000 crore and it didn’t create any new economy as well, but only catering to the requirements of people.
He said most of the start-ups are coming up with a goal to sell themselves. That is what is happening to many as big businesses are taking over major e-commerce companies, Biyani added. “They are just building start-ups to sell them; there is no long-term goal. This is what needs to change.”
Last month, Biyani had indicated his online retail venture Big Bazaar Direct might be closed down as the business became unviable. Set up in 2013, Big Bazaar Direct is an assisted e-commerce venture of the Future Group with 1,000 franchises. It had plans to enrol 50,000. “I have attempted e-commerce four times in my life. We have opened and shut Future Bazaar. We will close Big Bazaar Direct within a week,” he said.
However, Biyani says that the time is not right to run an e-commerce 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 e-commerce business,” he said.