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What Startups Can Learn From Traditional Family Businesses in India?

Success Key

India’s entrepreneurial activity is at its peak, with tremendous excitement shown by students today to launch new startups. As technology evolves and the cost of starting a business decreases, we will see more activity happening. However, the startup culture is plagued by lack of original ideas and a tendency to copy everything that Silicon Valley does.

We need to understand and appreciate the difference between the two eco-systems. First of all, the problems faced by the masses in the Western World are very different than the problems masses face in India. Secondly, there is huge difference between the talent pools in the two places. Thirdly, the needs and aspirations of people who want to create a business are very different.

Unless we understand and appreciate these differences, it is a futile exercise to blatantly copy Silicon Valley and crib when we cannot make an Indian startup as successful.

So rather, the startups in India need to take inspiration not from the West but from the traditional family businesses that have excelled for generations in India.

Here are some facts about how traditional businesses have impacted the Indian economy:

  • Account for 40% of the country’s domestic production
  • Account for almost 50% of India’s total exports
  • Account for 45% of India’s industrial employment
  • Contribute 35-40% to the GDP and account for more than 90% of all industrial enterprises in India.

If our startups follow the way traditional family businesses function, there is a greater possibility of success.

So here are the top 11 things every startup can learn from traditional businesses in India:

  1. Business model first: Startups get caught up in the fact that, let’s build traction and money will come. However traditional businesses run on the basic fundamental that it is money that makes a business sustainable. So they have a strong focus on revenue from the start.
  2. Do not create a volatile business: When we talk of a bubble burst, we mostly see digital startups going out of business. How many family businesses are affected by such volatility? Only a handful.
  3. Choose a mentor: Mentor is not a new word in business. In fact all successful traditional businessmen have a mentor who can guide him from time to time. A mentor is very important to keep you focused and making the right decisions.
  4. Create a strong company culture: A business that lasts over generation is proof enough that there is a strong culture in place. Startups should imbibe this quality as well. Build a company that can last for generations.
  5. Build strong relationships with your customers: Most traditional businesses have few customers who generate the maximum revenue. How? They have strong personal relationships with their customers. Trust plays a big role.
  6. Cash is king: Traditional businesses run on the principle; revenue on paper is vanity, cash is reality.
  7. Focus on Profitability: Traditional businesses are not simply excited with revenue. They believe in Revenue – Expense = Profit
  8. Do not incur unnecessary expenses: Study the life of any traditional Indian businessman and you will know how prudent he is with spending money unnecessarily.
  9. Have a strong operational practice: We may not realize this at the face of it, but when it comes to operational practices, Indian traditional SMEs are very strong operationally. As a result they can consistently deliver good products or services to their customer over the years.
  10. Building a lifestyle business is cool:  Startups are obsessed with creating a business and exiting it in few years’ time. SMEs have proven that lifestyle businesses can generate very good earnings and one can afford a very high quality of living.
  11. Don’t chase glamour: How many SMEs have you read about in the magazines? And compare that to the number of startups who are talked about in the media. And within 2 years how many of these featured startups actually stay in business? As an entrepreneur, focus on building a sustainable business rather than chasing glamour.

Although traditional businesses are capital intensive in nature as opposed to digital startups, they are built on strong business fundamentals and ethics that stand the test of time. Startups need to imbibe these traits if they are to become successful.

Do you agree that startups should learn from traditional family businesses in India to be successful? Give your views and opinions in the comments section below.

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Raunak Guha – Co- founder

Raunak holds an MBA in Innovation and Entrepreneurship from Imperial College London. Prior to starting, he was working as a Business Development Executive with a Financial Analytics SME in the UK. He has been very active in the startup eco-system in London and possesses a deep passion to foster entrepreneurship globally. provides startups/business owners with access to top-notch business expertise, product development and social media services.

Raunak can be contacted at +91 9008 639 690 and his email id is:

Raunak’s past article(s): Find them here

Article Name
What startups can learn from traditional family businesses in India?
The startups in India need to take inspiration not from the West but from the traditional family businesses that have excelled for generations in India.