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Start, scale, stall: The unseen struggles behind IITs’ start-up success stories
Start, scale, stall: The unseen struggles behind IITs’ start-up success stories Premium
Student entrepreneurship at the IITs has become a celebrated trend, with incubation centres, mentorship, and early-stage funding fostering a culture of innovation. Yet behind the success stories lie struggles, failures, and lessons that often go unnoticed.
Professor Ashok Jhunjhunwala, Chairman, Immersive Technology and Entrepreneurship Labs, IIT Madras, says, around 2% of IIT students kickstart their careers through student start-ups and rest of the start-ups are established by graduates, alumni, and faculty members.
Shashank Jaiswal, an IIT Madras alumnus, began his professional journey as a co-founder of a digital payments start-up while still a student on the campus of the institution. This was when digital payments were on the rise and not as common as they are today. “We gained good initial traction. Just before graduating, I managed to raise funding, which was rare at the time. I skipped campus placements and went full-time with my start-up after graduation. Things were great at first—we scaled fast,” he pauses.
“But soon, we burned through our funding on cashbacks and user incentives, all in the name of growth”, he says. In a year and a half Mr. Jaiswal and team realised that they hadn't figured out a way to monetise their users. With the passage of time, big brands aggressively took over the market and no investor was interested in funding this smaller start-up.
“It was a dead end. Two of my co-founders decided to leave and move on. But I stayed. I wanted to give it one more shot. With barely any funds left, I had to let go of 90% of our team. Those who stayed did so voluntarily, without salaries—myself included. I moved from Hyderabad back to my hometown, Bhopal, and turned a room in my house into an office to save on rent and living expenses,” Mr. Jaiswal narrates, recounting the failures and tribulations of trying to keep a modest start-up alive.
In the end, Jaiswal sold his start-up to a larger company after new RBI regulations made it impossible for him to secure an NBFC license.
Jaiswal's story is not a standalone narrative but part of a larger pattern. Ever since the older IITs began setting up incubation centres to conceive ideas and nurture student start-ups, a new culture has emerged—one where a few taste success while many others bid adieu to an unpredictable journey.
The Director of IIT Kharagpur, Professor Suman Chakraborty, analyses what distinguishes successful student start-ups from those that fail. “The winners fall in love with a problem; the rest fall in love with their intelligence. Successful student start-ups are obsessively anchored to a real, painful problem and are willing to look foolish while solving it. Failed ones optimise elegance, not relevance. One builds gravity around itself; the other waits for applause.”
Prof. Jhunjhunwala says, “There is no fixed formula for turning a start-up into a successful venture. The two criteria required for us to take a start-up into incubation are, first, whether the student can survive for the next three years without earning money, and second, their acceptance of failure.” He adds that other parameters, including the initial idea, play a smaller role.
“Any start-up conceived with an idea evolves into a completely different one by the end. They are never the same throughout the process. Similarly, no start-up ever succeeds without failure or without taking on challenging problems. This process has to happen multiple times,” explains Prof. Jhunjhunwala.
Answering whether technically strong students underestimate market understanding and customer discovery, Professor Chakraborty says, “Almost always. IIT students are trained to eliminate uncertainty, while start-ups require running toward it. When founders delay customer discovery, they don't just lose time—they build false confidence into the product DNA. The market doesn't reject the start-up later; it was never invited in the first place.”
Arunav Ghosh, a final-year student at IIT Madras, aims to build a platform that allows students to interact with and seek guidance from peers who have achieved excellence in specific domains. When he first arrived at IIT Madras, the campus felt like a place of endless possibilities. “One of the biggest things IIT gave me was exposure to people who are among the best in their fields,” he says.
Talking about this start-up, Mr. Ghosh says, “A student preparing for JEE could learn from an IITian, or someone interested in learning the guitar could get guidance from a professional guitarist. The challenge was to make the platform affordable for students while also ensuring that mentors were fairly rewarded for their time and expertise,” he says.
Professor Chakraborty says the IIT brand lowers friction, but friction is feedback. When capital arrives before customers, start-ups learn to perform rather than to learn. The brand should be a microscope, not a cushion. Used wrongly, it delays failure instead of preventing it,”
A common pattern observed among student start-ups is that they meander in the first few years, experts say.
“One major reason is the constant struggle between academics and product building. The pressure to maintain a good CGPA often takes priority over start-up progress. Additionally, many student founders fail to identify or validate products–market fit early, which leads to a loss of direction and motivation. Academic pressure is definitely a reality at IIT, but it also trains students to manage multiple commitments effectively,” says Mr. Ghosh.
Explaining why many student-led start-ups at IIT Kharagpur do not survive beyond the first few years, Prof. Chakraborty says, “Because they mistake momentum for meaning. Hackathon wins, grants, demo days, and press mentions feel like progress—but they are simulations of success, not success itself. When the scaffolding disappears, only customers pull remains—and many discover they never had it.”
Prof. Chakraborty says, “Failure should not be a footnote; it should be a case study taught in classrooms. We are improving—but we still celebrate valuation louder than wisdom. A shutdown with insight is more valuable than a round raised without understanding. The culture must reward truth-telling, not survival theatre”.
“The strong placement culture acts as a safety net for student founders. Knowing that placements are an option reduces the fear of failure and allows students to focus on building their start-ups. Many students sit for placements while working on their ventures, and internships or pre-placement offers help them evaluate whether they want to pursue a start-up or a traditional job,” says Mr. Ghosh.
“Placements are triggers, not root causes,” Prof. Chakraborty adds. “Founders quit not because placements exist—but because the start-up never crossed the psychological threshold where not continuing feels irresponsible. Conviction beats calendars. If belief is shallow, the placement season merely exposes it.”
Incubation and mentorship matter
According to the student fraternity, the institute actively supports students interested in building products by bringing in founders, venture capitalists, and product managers for workshops and mentoring.
“IIT Madras has several incubation and entrepreneurship initiatives, including the School of Innovation and Entrepreneurship and the M.S. in Entrepreneurship programme, which strongly support student founders. Nirmaan, the pre-incubator at IIT Madras, stands out as one of the most impactful initiatives, providing early-stage funding and mentorship,” says Mr. Ghosh.
“Before the first line of code—and after the first customer says “no.” Incubation matters most at two moments - when founders are framing what not to build, and when reality breaks their first assumptions. Money helps later. Mentorship helps earlier. Courage is required throughout”, Prof. Chakraborty.
Professor Jhunjhunwala believes students who start ventures must be prepared for 16-hour workdays, six days a week, often without pay and with a high risk of failure. He adds that they are trained in understanding markets, costs, margins, receivables and payables, people management, retention, and leadership. A key component is mentoring, followed by regular monitoring. According to him, entrepreneurship is a lonely journey and succeeds only when founders possess the right mindset.
Prof. Chakraborty concludes, “Start—but don't cosplay entrepreneurship. Start small. Start close to the ground. Start with customers, not pitch decks. Build something so real that walking away feels morally difficult. Do not confuse optionality with progress. Do not outsource thinking to accelerators. Do not treat IIT as a safety net—it is a launchpad, not a landing zone. An IIT start-up should not ask, ‘Can we raise funds?' It should ask, ‘If we shut down tomorrow, who would genuinely be affected?' That question separates entrepreneurship from experimentation—and institutions from ecosystems”.
(Sign up for THEdge, The Hindu's weekly education newsletter.)
Published - January 22, 2026 05:41 pm IST
education / engineering / students / startups
Source: TheHindu
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