By Editor, Sunday Times, Sri Lanka
Mar 1 2017 (The Sunday Times – Sri Lanka)
Confused by the heading? Well, this is the golden age of the millennials. Many moons ago while discussing small and medium scale businesses with a young entrepreneur, he referred to start-ups and a new ecosystem.
Intrigued and pursuing further led me to one of the meet-ups ( a regular meeting of people having the same interests) of the start-up community at a Colombo café, resulting in an energetic conversation on a new generation of entrepreneurs who are taking on the world, without waiting for government facilitation, banking handouts or too much mentoring.
Bootstrap, bitcoins, artificial intelligence … these are all new terms that have come into the vocabulary in recent times mostly due to the entry of millennials into the creative and innovative workspace. Along with that new job titles and designations are emerging like chief innovation officers, chief information officers, etc. Many years ago the chief information officer of an organisation was the public face of a company and from whom the media could get information and developments of a company. That title, description and role have changed dramatically to communications officer while the chief information officer is generally nowadays regarded as the ‘brains’ in an organisation, particularly a tech-heavy one. It may even be something else, such is the rapid pace of development.
“Mahattayo, mokade mey bootstrap kiyanne? Boot eka denawada?’ asked the gossipy Kussi Amma Sera, as usual butting into a phone conversation I was having on this subject.
Most of today’s start-ups have emerged through bootstrapping where an entrepreneur starts a company with little capital, often raised from personal finances. This is unlike the generation of small and medium scale industrialists in the late 1970s to the 1990s where entrepreneurs resorted to bank funding.
However, the generation of entrepreneurs born before the Second World War walked the streets or rode bicycles selling their wares funded through their own resources, later turning to be successful, millionaire businesspersons across the world including Sri Lanka. Some of those businesses in Sri Lanka have been taken to the second and third level through the millennial generation, bringing in new ideas and creative thought.
Start-ups are developing rapidly in Sri Lanka, at a faster pace than the emergence of SMEs in the 1970s-1980s for multiple reasons: They start young, don’t wait for bank funding or government handouts or a regulatory framework.
In fact, in most cases across the world, governments see this ecosystem as a useful tool of revenue to bring in all kinds of taxes because traditional businesses also do complain of the need for a level playing field. In the recent budget, taxing online travel platforms was one of the measures.
However, governments like in the Sri Lankan context are neither tech savvy nor clearly understand how start-ups work and pounce on them through rigid systems and taxes which could “kill the goose that lays the golden eggs”. For that matter, quite a few proposals in the budget were not properly thought of and seen as knee-jerk reactions as the desperation to collect revenue overrode any rationale decision-making or thought.
Over the past fortnight there have been two discussions on tech-related sectors and the evolution of the start-up community, raising some interesting issues. In a conversation with senior journalists last week, Krish Canekeratne, co-founder Chairman and CEO of Virtusa spoke about where the world was heading, in fact rapidly, in today’s .com generation.
Millennials are driving societies, businesses, cultural change and norms. Things are moving so fast that it’s difficult to predict the future, so much so that at an interesting discussion on start-ups at the monthly meeting of the Sunday Times Business Club on Wednesday in Colombo, Deputy Chairman of John Keells Holdings Ajit Gunewardena – when asked what businesses would look like in the next two decades — said some of us would be fossils and not survive in a business environment that is unpredictable and is changing so fast, unless you keep up with the times.
Wednesday’s discussion brought together Ajit who is also Chairman of Pickme and involved in funding a few other start-ups and Thilan Wijesinghe – Director/co-founder Wow.lk and Director/co-founder SLIIT, both of whom after years of experience in the organised corporate world, plunged into the start-up ecosystem.
Joining them on the panel were Lahiru Pathmalal – CEO and co-founder of Takas Pvt Ltd and Mangala Karunaratne, Founder/CEO – Calcey Technologies, LLC. This discussion looked at how the start-up community has evolved in Sri Lanka, its progress, how the government perceives this new ecosystem and its future.
Interestingly, both Lahiru and Mangala come from families with entrepreneurship in their veins and succeeding after a long struggle. The formative years of takas.lk and Calcey were the same – some struggles, a lot of frustration, despair and ‘tearing your hair out’ situations.
The point they made in the discussion is that success doesn’t come overnight and multiple factors can stymie promoting new ventures. The poor education system or the way it is structured kills entrepreneurship in Sri Lanka and is the cause of many start-up failures, according to Thilan while Ajit’s simple take on the success of start-ups is: Proper execution of a business plan, finding funding sources and a mentor in the absence of business experience.
No doubt, millennials are taking on the world. New ideas, different work ethics, shifting cultural norms – some of which are frowned on by the baby-boomer generation like casual dress in the workplace, too casual indeed –, and a lot of money in their pockets.
In fact according to real estate developers, many of the investors in apartments today are young, wealthy business professionals – some making their first million bucks as young as 20 years – and buying 2-3 apartments for rental purposes.
Where the real estate market is heading with growing numbers of new apartments coming up – 10,000 units according to some estimates – and whether it could lead to a possible bubble in the rental market, no one knows and probably should be the focus of the next KAS column. Maybe we should check this phenomena in coming weeks.
In many of the tech-savvy companies, millennials rule the roost and are the dominating force. At Virtusa for example, 80 per cent of its 10,000-strong workforce comprises millennials.
The start-up ecosystem is disrupting business practices like never before. Acquiring huge infrastructure like machinery, vehicles or even computers is becoming a thing of the past. For example, at least three to four of the richest people on the planet like Amazon’s Jeff Bezos or Facebook founder Mark Zuckerberg have little or no assets unlike the oil magnates and car manufacturers in the 1950-60s. Just like for example Jack Ma, founder of e-commerce web, Alibaba, and the second richest person in China.
In the US, rather than acquiring, farmers are hiring tractors and farm equipment. Outsourcing is the name of the game. Rental car companies like Hertz, probably the largest car rental company in the world working in 150 countries, are finding it tough against Uber-type companies that don’t own vehicles, offer more competitive rental rates and are driven by mobile apps and limited human contact. Kodak collapsed with the entry of smartphones sans films while Fuji films moved to other product lines. Innovation and creativity are the new mantra. Innovate or go bust just like Ajit’s assertion that if you don’t embrace today’s technology and move with the times, we become fossils.
Not a comforting thought, though to baby boomers. On the topic of the model of new business entrepreneurs being hiring, outsourcing and connecting suppliers and vendors with customers and clients, another futuristic thought that emerged in these conversations is that millennials are not in the habit of acquiring assets for personal use just like the disruptive business model. For example, this generation is bound to be living in different cities, on the move and with no fixed abode. Thus acquiring a property or owning an apartment, a priority today, is not on their radar. So will the property bubble burst? Maybe, maybe not but something to think of as Colombo’s skyline changes rapidly and won’t be the same in the next five to 10 years. Millennials indeed will decide what we eat, what we wear, what we own and how we live. Last but not least, how we think, too.
This story was originally published by The Sunday Times, Sri Lanka