No Internet, No Investor: The Trials Of Owning A Start-Up In Kashmir

Tech entrepreneurs in Kashmir cannot take for granted the one thing most start-up owners in India do — the internet.

After a long day of fielding desperate calls from delivery drivers whose bikes had been seized by the police in Kashmir, the co-founder of an app-based start-up tweeted how law and order was 'crumbling' again just as businesses were trying to recover from the losses suffered during the abrogation of Article 370 and the Covid-19 pandemic.

The next day, an investor he had been pursuing for months, backed out citing the tweet.

The tweet, the investor told the owner, stood for everything that he felt was wrong with investing in his company— first, it was evidence of the 'volatility' of Kashmir, second it protested against government crackdowns which was never a good strategy for young businesses.

Their start-up is currently valued at Rs 6 crores according to the owner, who did not want to be named in fear of repercussions. However, he estimates it would be worth at least Rs 20 crores if it wasn't in Kashmir and finding investors too wouldn't be such a challenge.

The start-up's story represents how multiple sanctions by the Indian government have been crippling hopes of a technology-based start-up culture in Kashmir, while investments steadily nurture tech ventures elsewhere across India.

The website of Startup JK, supposedly an online platform to connect start-ups in Jammu & Kashmir with investors, mentors and government schemes has a panel that shows the number of investors, mentors, and accelerators on board as 'zero'. The latest 'news' on the website's feed is from 2019 and about actor Rajkummar Rao's childhood and the launch of 230 new emojis.

Making It Work

While the start-up ecosystem across India is riddled with challenges, entrepreneurs outside the union territory don't have the problem that is single-handedly wiping out possibilities of Kashmir witnessing a rise in tech businesses. And that is internet shutdowns.

For example, Abid Rashid, co-founder of Fastbeetle never imagined that they'd have to keep extensive, and sometimes handwritten, manual logs for their app-based business. But in order to survive the frequent and long internet shutdowns in Kashmir, Rashid and Samiullah not only had to radically change their operations, but also optimise their app, ironically, to partially function without the internet.

The optimisation is key to the operations of Fastbeetle, a Srinagar-based startup working the supply chain's last-mile delivery. "We made the app so that it works even if someone doesn't have the internet," said Rashid. "The app connects to the internet only at the last click."

Fastbeetle is a delivery service that works much like Dunzo, or Swiggy Genie or WeFast— you can order local pick-ups and deliveries by finding delivery executives on the app. It was imperative that everyone had access to the internet to use the app to function, but the makers had to adapt thanks to the internet shutdowns and hybrid restrictions on the use of technology being put in place.

Fastbeetle is a delivery service that works much like Dunzo, or Swiggy Genie or WeFast. Image: Fastbeetle/Facebook

When there is no internet at the last click, Rashid said, it simply queued the data.

Unlike most apps that transfer data in real time, Fastbeetle queues the data till the delivery executives connect back to the internet and can send it. This works for the delivery executives now — they upload details of packages picked up and delivered on the app if there's no internet and the data gets transferred to the company's servers when the connection is restored.

Soon after their launch, Fastbeetle realised they have to maintain offline outreach in order to keep operations running. So they gave customers the option to place orders over the phone in case of a total internet blackout — and till now, that has worked.

"We used more data caching to solve our local problems," he said.

According to a 2015 report by the Telecom Regulatory Authority of India, nationally there were about 25.37 internet subscribers per 100 individuals. In Kashmir, there were 28.62 subscribers per 100 individuals. Yet, very few tech start-ups have been able to raise funding from outside Kashmir.

In Kashmir, entrepreneurs often talk about the plight of an e-commerce platform akin to a Flipkart — but one that dealt exclusively with products made in Kashmir — as a cautionary tale for any ambitious new business in the union territory. Considered the first start-up to raise funds from outside Kashmir, the platform is on the verge of a shutdown, forcing the owner to take up a job in a tech company in a Gulf country.

Within a few years of its launch, the company (we are not disclosing the name to protect the owner's identity) roped in almost 10,000 artisans making everything from food products to handicraft and helped them connect to buyers across the world.

However, the owner soon started facing an issue with logistics as internet shutdowns kept hitting Kashmir. When the company launched in 2012 — two years after the civilian uprising against security forces in Kashmir that killed at least 100 people — the owner was 20 and is considered the first start-up owner who raised funds from investors outside Kashmir. While the company kept struggling with deliveries thanks to the unstable internet, the abrogation of Article 370 and the prolonged internet blackout dealt a death blow to the venture.

The owner's friends told BoomLive that, 'dejected', he took up a job outside India next year, scaled down the already small operation, and mostly refuses to talk about it anymore.

On paper, however, it is claimed that all's well with the start-up economy in Kashmir.

In 2020, the government in Kashmir announced 12 lakh rupee grants each for 12 start-ups – including Fastbeelte. However, none of the companies have received them yet, an official associated with the government body responsible for the disbursement of the funds confirmed.

Besides e-commerce giants, Fastbeetle serves about seven hundred local micro-entrepreneurs and is among the few Kashmiris who have dared to venture into the digital sector in Kashmir's market, crippled by Covid-19 and the many lockdowns before it.

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Internet Is Oxygen

Fastbeetle's app was launched on July 25, 2019 — just a fortnight before Kashmir was forced off the grid when New Delhi abruptly imposed a telecommunication blackout and total curfew as it unilaterally abrogated Jammu and Kashmir's residual autonomy and statehood.

So no sooner did it start up, it faced the threat of shutting down. The owners tried to adapt. The few orders they had prior to the complete internet shutdown, they tracked and started keeping logs on Excel. This process also helped them identify the gap they had factored in, but did not think was going to be central to their business model — working without the internet.

By February 2020, the Indian government allowed a crippled internet to Kashmir—restoring 2G network but with a whitelist of about only three hundred websites. Hybrid restrictions on the internet have since become the norm. And by then, Fastbeetle had worked round-the-clock to optimise their app to work on intermittent, unsteady internet which was to become a harsh reality of their lives in Kashmir.

"Internet is our oxygen," Samiullah, the co-founder of Fastbeetle said. Yet, a majority of their resources have been directed to constantly brainstorm ways to function without it.

Samiullah, a business graduate from Kurukshetra University in Delhi, who worked as a sales manager for several years and Rashid, who worked with an agency that implemented the government's digital initiatives across Kashmir, decided to fall back to how businesses worked in the days without the internet: with rigorous manually maintained logs.

That was the only option to stay afloat with seemingly never-ending internet blockades facing Kashmir.

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"We have a full manual back end set up to process the data," said Samiullah. "We have someone in the office who can do everything on the phone. The executives call and tell them for example to put a delivery status on queue."

And how did they get orders?

Employees of Fastbeetle physically visited business owners and executives working with both national and small businesses in Kashmir and took delivery orders — basically doing just the thing their app was trying to simplify and digitalize in the first place. And in trying to keep their own business alive, Fastbeetle also gave a lease of life to several small manufacturers and entrepreneurs who'd be wiped out because of the multiple adversities.

Yet, Samiuallah pointed out that investors keep pulling out, and they struggle to raise even Rs 5-10 crore, which start-ups like theirs get easily in India.

Another Lockdown, Another Hurdle

With sentiments and the political atmosphere still raw from the abrogation of Article 370, Covid-19 hit Kashmir's already smarting infrastructure disastrously. However, a 23-year-old Jibran Gulzar, a computer science graduate from Chandigarh University, decided not to be perturbed by it.

He created a food delivery app Gatoes from his rented apartment in Faridabad, where he was stuck when travel restrictions for Covid-19 were imposed on Kashmir.

In early 2020, Gulzar had been staying with a friend in Faridabad, working on the delivery app Gatoes. Due to restrictions on travel, he registered the company in Faridabad where authorities could conduct physical verification. While food and grocery deliveries still functioned in Haryana, Gulzar shuddered to think what it must have been like back home, where his family was dealing with both a pandemic and the constant threats of internet shutdowns.

He invested about 28 lakh rupees — borrowing from friends, and family — and created the app. "Whenever we upload data on our server, the API compresses the data based on the internet speed of the user. The app understands your internet speed and optimises as such."

In a little over a year, Gatoes has 150 vendors registered with them and 85 riders.

Gulzar is eyeing to innovate on Fastbeetle's optimisation a step further. Once the data is queued up and the user doesn't have access to the internet still, the delivery request will be sent via an SMS to the company.

"When we started, people said we were a copy [of another food delivery service] but it doesn't matter. Like you can see, the execution can't be copied," he said. Sources told BoomLive that representatives of a food delivery giant met several restaurant and cafe owners prior through 2019 for a market survey, and abandoned it midway as the internet shutdown was imposed in August 2019.

Gulzar added that it would take a Kashmiri to understand the typical problems of their home to design a business that truly caters its people. Mostly because it's a lot of work.

"We know the difficulties, the political instability. Our riders, currently about 85, are treated differently by security personnel… Recently, some of our riders were thrown into jail without much of an explanation. Sometimes security personnel open food packages," he said.

It takes a special kind of commitment to keep going on, said Gulzar. For example, after a series of targeted killings rocked Kashmir in the first week of October, police started apprehending several bike borne riders and throwing them in jail. The police had justified the crackdown by stating that the assailants were mostly bike borne.

"So when we can, we quickly send another rider to collect the food while the detained driver and us negotiate with the police. The customers get angry and complain that the food has gone cold," Gulzar said.

And on several occasions security personnel rip open food packets to check — these losses, now increasing by the day — have to be borne by Gulzar's company.

While Gatoes has not had to spend a lot on marketing yet — their business became popular mostly word-of-mouth — the restrictions on the internet and the security clampdowns have severely affected growth. "We do 1000 deliveries every day, just 10% of our daily target of 10,000," Gulzar said.

Innovations In The Past

The first lockdown in India in 2020 due to the Covid-19 meant schools in Kashmir that was closed for almost a year already, following the abrogation of article 370, was to remain shut. But it was only when schools elsewhere started going online, that some schools in Kashmir tried to start online classes.

The transition wasn't smooth.

The slow internet bandwidth Mubeen Masudi had did not support seamless uploading or functioning of the online education modules he wanted to use to teach students of his coaching institute in Kashmir. Masudi has been coaching students for national entrance exams and IIT entrance for over a decade and during the lockdown also volunteered to teach high school students who had been missing crucial time in school.

"Most education tools are primarily developed in the West or by being inspired by those," he pointed out. "In the West, all tools are developed based on the assumption that internet infrastructure is amazing or that even if it isn't, it will improve in a few years," Masudi said.

This wasn't the case in India, especially in Kashmir where the technology of the past was still a reality for the public. That is when Masudi — along with another IIT colleague, a Pune-based engineer — decided to develop WISE App, an app for south Asians, especially, Kashmiri teachers and students.

"Most of the development happened outside Kashmir, but for problems, I have been facing as a teacher in J&K," said Masudi.

The app merges various pre-existing platforms with newly developed tools to create a virtual classroom keeping in mind India's problems.

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WISE App brought together the functionality of different tools — like Zoom's conferencing, Google Drive's file-sharing, and text messaging, etc — in a single app; a solution that Masudi said was needed by teachers and students all over. "People who work in the tech sector usually work on the side of innovation. And innovation is linked to modernisation, [accounting for] what will happen ten years later. Very rarely innovations in tech are based on such limitations," said Masudi. "It is interesting that we are still solving those problems [of the past]."

Simply put, Masudi said that when technology innovations look towards the future and working on 5G, in Kashmir, they have to design tech that works effectively on 2G or no internet, at times.

Initially WISE App was used in Kashmir but Masudi soon found himself paying monthly bills running into "several hundred dollars". Upon probing further, he realised that the app had made its way to neighbouring Nepal where teachers had begun to use it. The bills were because of the OTP verifications over SMS. Masudi realised that internet connectivity issues weren't just a phenomenon restricted to Kashmir.

Large swathes of India outside its bustling metropolises has poor telecom infrastructure and consistently low bandwidth, if at all. The app is also widely used in Lakshadweep island and the northeastern state of Manipur.

Kashmir, said Masudi, now comprised just ten percent of the app's users. The application has been downloaded more than a million times on the Google Play Store.

The app was also featured as the 42nd story in the Government of India's 75 Atmanirbhar Stories of India series. "Now because Covid is weaning off people are going back offline," said Masudi, "What his app has done is introduced a hybrid model of instruction where teachers may want to teach offline but check homework and give tests online. We have built very good tools in the app itself."

Troubles Starting Up Jammu And Kashmir

It isn't just the actual instability on the ground but its perception by people outside that impacts these start-ups.

"Investors see your business, its growth, cash flow, etc. But here the situation is such that business is [dependent] on the internet and investors hesitate," said Samiullah.

However, despite adversities, both Fastbeetle and Gatoes are expanding. Fastbeetle is all set to open its offices in the Jammu division and Ladakh, which was carved from J&K out as a separate Union Territory in August 2019. Gatoes is operational in Faridabad in the National Capital Region and is soon starting services in Mohali as well.

It is precisely their grit and ability to survive that made Anuj Sharma of the Alsisar Impact invest in Fastbeetle. "They survived and from a start-up ecosystem this is the best quality to have: resilient, persistent, and passionate about things," Sharma, the founder of Alsisar, an advisory firm working in the impact investing space.

Sharma focuses primarily on social entrepreneurship, so Fastbeetle interested him given it was in Kashmir and has been battling odds not familiar to the start-up ecosystem elsewhere in India. "It's difficult to convince mainstream guys to invest in Kashmir and NE," he admitted.

The government response to digital start-ups' struggles in Kashmir is also seemingly confined to newspaper headlines. Nationally, J&K is among the first to launch a state policy for start-ups called the Startup J&K, it is modelled on the central government policy but with a few additional perks for local start-ups.

Under the state policy, the Jammu and Kashmir Entrepreneurship Development Institute (JKEDI) is notified as the nodal agency for the implementation of the Startup J&K policy launched in 2018 to "facilitate and nurture the growth of at least 500 new Startups" by 2028.

Among other things, it proposed to build three "state-of-the-art incubators" and fabrication labs in the Jammu, Kashmir, and Ladakh regions of the unified former state. It also intends to set up "Innovation Labs" in selected schools of the region.

The reality of these claims, said a local start-up on the condition of anonymity, was that there was only one incubation centre at the JKEDI campus in Pampore town, "run by bureaucrats who have little understanding of what startups are".

"The EDI is not even sure what start-ups are. They finance traditional businesses and call them start-ups," they added. The JKEDI has been conducting programmes on entrepreneurship and provides small loans to help set up a wide range of small businesses.

The start-ups registered with the JKEDI are enrolled in a three or six month incubation programme which ideally is meant to mentor them. The centre also provides uninterrupted internet facility. "But all we have there is a computer and table. There is no mentoring," the start-up owner said, adding that entrepreneurs trying to set up a business "can't afford daily trips outside the city on a daily basis".

If internet services are functional in Kashmir, start-ups logging onto the policy's website are greeted with a popup bearing a smiling photo of prime minister Narendra Modi along with the BJP's touted motto "sab ka saath, sab ka vikaas" written in Hindi.

The website boasts of 75 start-ups registered but has no details of incubators, investors, accelerators, mentors, angel investors — not even a government body. Its news section is filled with stories from around the country but ironically none from the region it caters to.

Since the policy's launch in 2018, start-ups in Kashmir say they are yet to benefit from the policy.

Admitting that none of the 12 start-ups received the promised grant, Irtif Lone, Incharge- Centre for Innovation Incubation and Business Modelling at the JKEDI , said the process had slowed owing to the abrogation of J&K's residual autonomy in 2019 and the subsequent Covi-19 lockdown in 2020.

Now, Lone said, they "are concentrating on raising equity investments".

"We are trying to be able to invite a lot of investors who would provide equity based investments to the start-ups which would eventually make them competitive enough to compete with the start-ups at the national level," said Lone. "Eventually we also have to realise that private equity market has to be upgraded in the entire Union Territory so that we have this flow of new start-ups coming up."

Currently, Lone said there were around 273 start-ups in J&K, but sources say that number could be a bit of an overestimate.

"We are trying to build two local angel investor networks — one in Jammu and one in Kashmir – so that private players come together and [local] start-ups don't need to go to Delhi or Mumbai for small investments of 5-10 lakhs," said Lone, adding that one network is expected to be operational within a month.

"If we had counted on the government for help," said a start-up owner in Srinagar, "we would still be sitting at home, waiting for money to come through. Eventually, we decided to take things into our hands instead and test the waters ourselves."

Rayan Naqash is an independent journalist based in Srinagar. He can be reached at @rayan_naqash on Twitter.

Updated On: 2021-11-30T19:13:51+05:30
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