Bribe check: It’s cleaner online

The day-long seminars hosted by the Internet And Mobile Association of India (IAMAI) continue to amaze — not the content, so much as the attendees.

You’ll spot several young, just-out-of-college graduates rubbing shoulders with middle aged men in suits.

Young they may be, but their visiting cards have a certain Zuckerberg streak about them. How else would these 20-something call themselves CEO, founder or chief evangelist, if not for the opportunity the web has given them to start up? Clearly, as Zuckerberg and many in the Silicon Valley have shown, the web needs innovators who can please more suits — venture capitalists, angel investors and the like — not those who are pro at running from pillar to post in dealing with the government.

For those attending these conferences for the first time, this may be puzzling, but many would agree that, when compared to brick and mortar ventures, web start-ups have it relatively easy in getting their businesses up and running.

The need for licenses is little, except for real estate (minimal) and registration of their companies. You need broadband connectivity, talent, servers, and of course, service.

Professor Nandini Vaidyanathan, an entrepreneurship mentor for many, says, “Amongst internet entrepreneurs, there is not much room for dealing with either government or bureaucrats. So the issue of corruption does not become a show stopper. In the case of brick and mortar entrepreneurs, it all depends on the value system of the entrepreneur.”

Not everybody agrees with the view that web entrepreneurs have it easy. Rajiv Dingra, editor of WATBlog, which tracks the internet and mobile space in India, says that corruption is rampant, whenever and wherever a business owner has to interact with a bureaucrat to get some work done. “The telecom sector has a limited number of players and therefore there is a regulator, but the web space is so fragmented that it cannot be regulated. Nevertheless, service-driven web businesses have to budget a certain fee whenever the taxman comes calling. Some form of bribery has almost become normalised and you cannot fight it.”

There are also some who feel that while start-ups may not require cash-heavy license acquisitions, plenty of lobbying does happen for easing of restrictions and rules. “Unlike in other countries, the RBI made credit card companies impose a double verification system. But on the other hand, restrictions and verifications on payment gateways for mobile phones, such as Itz Cash and ngPay have only been eased. This couldn’t have happened without intense lobbying by the companies, wherein money (or gifts) is certain to have exchanged hands,” adds Dingra.

Vaidyanathan says the goal of every enterprise must be to set up an ethical business. For that to happen, she considers the value systems of the business owner to be crucial. “If in his communication, he expresses desperation, chances are that the party at the other end will exploit it (and ask for a bribe). If he has breached the laws of the land, knowingly or otherwise, he lends himself to the vagaries of corruption. So when I mentor entrepreneurs, I make sure they put all the best practices in place, plan their business thoroughly, so that they can build an ethical business.”

Neeraj Roy, CEO, Hungama Digital, who started out as one of the first few web entrepreneurs in India and now operates globally in the web and mobile content spaces says, “Fortunately, given the kind of industry we are in, there is a huge amount of aggression and a strong sense of ethics associated with it. However, as the stakes in business keep rising, if we do not set the right kind of incentive structure, there is a need to worry. You can’t have a ‘good-guys-finish-last’ kind of scenario.”