'80% startups in India are nothing but a racket': Suhel Seth defends Piyush Goyal

'I am in total agreement with Piyush Goyal. India, if it has to make a meaningful contribution, has to be innovative. Where are our innovations?' Suhel Sethi, columnist, founder and MD of consultancy firm Counselage India, said.

Businessman, brand guru, and columnist Suhel Seth has defended Union Commerce minister Piyush Goyal's criticism of the startups in India and accused a majority of founders of filling their own pockets while their companies ran into losses worth thousands of crores.

"Eighty percent startups in India are nothing but a racket," Seth said on a Republic TV debate. "The first thing that these startup founders do is buy themselves Lamborghinis and homes in Amrita Shergil Bagh and big apartments."

"I am in total agreement with Piyush Goyal. India, if it has to make a meaningful contribution, has to be innovative. Where are our innovations?" Seth, the founder and managing partner of the consultancy firm Counselage India, said. "We keep talking about our software prowess... have we produced a Facebook? No. Have we produced a Google? No. Have we produced anything that is innovative which is a global brand? The answer is no. So you can keep defending 'Oh, but we're doing great stuff,' make statues of yourselves. Startups are not changing the world."

He also countered Zepto co-founder and CEO Aadit Palicha's point on startups providing employment opportunities. Seth said that although he has no hard feelings for Zepto, Palicha terming the company a “miracle in Indian innovation” and citing its contribution to jobs and Foreign Direct Investment (FDI) was illogical.

"Are startups an employment exchange? No. We need the incremental value that startups will provide. And this is all a game of valuation. Which person in the world starts a business with a view to get out of it? That's what most of our startup founders do. They want to make money fast and get out of the business," Seth said.

He questioned startup founders for paying themselves big fat paychecks while their company bled money. "When was the last time you paid yourself Rs 100 crore when your company was losing Rs 3,000 crore? These guys are doing it," he said before clarifying that he was not referring to all startups.

Seth also accused the founders of making free money. Claiming that the startup founders and the venture capitalists have been working together in this "racket," the brand guru cited Softbank founder Masa (Masayoshi Son) as an example. "The so-called geniuses who created Softbank India, how they punted and messed up every deal they did," he said. "So please save me this whole thing that startups are the next big thing after sliced bread. They aren't."

On April 3, Goyal stirred controversy after he urged startups to innovate better instead of focusing only on food and grocery delivery businesses. Speaking at the inaugural ceremony of the second Startup Mahakumbh he said, “We need to go global and think big. When we look at deep tech, there are only about 1,000 startups in the ecosystem, and it is a disturbing sign. It is upon the startups to focus either on wealth creation in the short run or rising to the international scale.”

He was severely criticised for "belittling" Indian startups. Goyal called the reaction to his remarks "unfortunate".