Simon Mundy reported yesterday at The Financial Times Online that, “Manish Supermarket appears typical of the kirana neighbourhood stores that have been at the heart of Indian communities for decades, its every available space crammed with goods from soap to biscuits.

“Yet amid the household essentials are two distinctly modern, smartphone-wielding young interlopers sent by Grofers, a technology start-up seeking a slice of an Indian ecommerce market that Morgan Stanley analysts predict will be worth $119bn by 2020.”

The FT article explained that, “A dizzying number of tech companies have emerged to offer Indian online shopping ventures in recent years. The number of web users increased by roughly 50 per cent to pass 300m between 2014 and 2015, according to the Internet and Mobile Association of India, and is expected to reach 462m this year. In a country where western-style hypermarket chains never took off, this has fuelled predictions that consumers will leapfrog directly from local family-run stores to ecommerce.

“But Grofers has taken a more nuanced approach, developing an ecommerce service that piggybacks on the age-old kirana network, enabling customers to order from their local store with a few taps on a smartphone.”

Mundy noted that, “To entice consumers to the platform, Grofers decided to ‘give them a look into the inventory’ of their local stores through a smartphone app, which customers would use to order products instead of calling the shop.”

Yesterday’s article added that, “There is an intimidating new competitor on the scene in the form of Amazon’s Indian subsidiary, which this year began testing its own grocery delivery service, which also relies on kirana stores and other local retailers.

“Still, some investors are sceptical about the notion of trying to integrate kirana stores, with long-established ways of operating, into ecommerce.

“‘If you take too much [commission] from the kirana shop, they’re going to say: why the hell am I bothering with you? You’re just giving him the customer that’s already coming to him,’ says Sandeep Murthy, a partner at the Mumbai venture capital firm Lightbox Ventures.”

Farhad Manjoo reported in today’s New York Times that, “The typical start-up fairy tale goes something like this: You begin with young entrepreneurs from Stanford or Harvard who have come up with some novel idea for disrupting restaurants or dog walking or whatever else.

“After creating a prototype, the guys (they are almost always men) enter start-up boot camps like Y Combinator, recruit a group of early investors, and perhaps launch a Kickstarter with a slick video. If the initial plan succeeds, the founders go into heedless expansion mode, which usually means selling off huge chunks of their company in exchange for gobs of money from venture capitalists. Then, after a few years, if all goes according to plan, they hit the big time — an initial public offering and a chance to be the next face of the future.”

The Times article noted that, “Well, sometimes. What’s often left out of the start-up dream story is any mention that there’s another way.

“In fact, it’s possible to create a huge tech company without taking venture capital, and without spending far beyond your means. It’s possible, in other words, to start a tech company that runs more like a normal business than a debt-fueled rocket ship careening out of control. Believe it or not, start-ups don’t even have to be headquartered in San Francisco or Silicon Valley.”

Mr. Manjoo explained that, “There is perhaps no better example of this other way than MailChimp, a 16-year-old Atlanta-based company that makes marketing software for small businesses. If you’ve heard of MailChimp, it’s either because you are one of its 12 million customers or because you were hooked on ‘Serial,’ the blockbuster true-crime podcast that MailChimp sponsored.

“Under the radar, slowly and steadily, and without ever taking a dime in outside funding or spending more than it earned, MailChimp has been building a behemoth. According to Ben Chestnut, MailChimp’s co-founder and chief executive, the company recorded $280 million in revenue in 2015 and is on track to top $400 million in 2016. MailChimp has always been profitable, Mr. Chestnut said, though he declined to divulge exact margins. The company — which has repeatedly turned down overtures from venture capitalists and is wholly owned by Mr. Chestnut and his co-founder, Dan Kurzius — now employs about 550 people, and by next year it will be close to 700.”

Today’s article pointed out that, “As a private company, MailChimp has long kept its business metrics secret, but Mr. Chestnut wants to publicize its numbers now to show the road less traveled: If you want to run a successful tech company, you don’t have to follow the path of ‘Silicon Valley.’ You can simply start a business, run it to serve your customers, and forget about outside investors and growth at any cost.”

Mr. Manjoo pointed out that, “But if companies are forced to generate revenue from the beginning, ‘what you get really good at is making money,’ [Jason Fried, the co-founder of the software company Basecamp] said. ‘And that’s a much better habit for a business to work on early on, to survive on their own rather than be dependent on money people.'”

The Times article added that, ‘”Every time we sat down with potential investors, they never seemed to understand small business,’ Mr. Chestnut said. Venture capitalists always wanted MailChimp to serve ‘enterprise companies,’ large businesses with thousands of employees and, potentially, thousands to spend.

“‘Everybody we talked to said, ‘You’re sitting on a gold mine, and if you pivot to enterprise, you could be huge,’’ Mr. Chestnut said. ‘But something in our gut always said that didn’t feel right.'”

A news release last week from Sen. Christopher Coons (D., Del.) stated that, “[Sen. Coons] and Pat Roberts (R., Kan.) introduced the Support Small Business R&D Act, legislation that will help startups and small businesses take advantage of the newly available research and development (R&D) tax credit.

“Specifically, the bill would require the Small Business Administration and Internal Revenue Service to partner to develop educational and training materials for entrepreneurs who invest in research and could be eligible to use the R&D credit to offset their expenses. These materials would be provided to SBA programs around the country and business development entities that partner with SBA programs, such as universities, business accelerators, and business incubators.

“At the end of 2015, Congress passed legislation that not only made the R&D credit permanent but also expanded the credit to allow more startups and small businesses to access it. The inspiration to expand the credit was drawn from a proposal by Senators Coons and Roberts known as the Innovators Job Creation Act. However, despite these changes to the credit, many small businesses do not have the information necessary to take advantage of this opportunity to offset their research costs. The Support Small Business R&D Act is designed to address that knowledge gap.”

The release added that, “‘We welcomed legislation passed by Congress in 2015 that expanded the R&D credit to provide access to startups and small businesses,’ said Stephen S. Tang, Ph.D, MBA, President, University City Science Center. ‘The challenge now is to raise awareness in the startup community. We believe the Support Small Business R&D Act is an important step towards encouraging the SBA and IRS, in partnership with business incubators like the Science Center, to help educate the startup community about the R&D credit. This critical legislation introduced by Senators Coons and Roberts will help us explain the benefits of the R&D credit to the startups that are driving economic activity in the Philadelphia and Delaware region.'”

House Majority Leader Kevin McCarthy (R., Calif.) and Rep. Erik Paulsen (R., Minn.) recently penned an opinion item at The Mercury News (Silicon Valley, Calif.) Online where the lawmakers indicated that, “As anyone who has tried to start a business or turn an idea into a reality knows, the most difficult period to stay afloat is at the beginning. In the startup world, it is particularly hard to find and retain employees in the earliest stages.

“Startups don’t have the resources to compete with well-established companies, and they can’t offer potential employees the same salary and benefits as employers that have already become household names. However, startups can offer employees something potentially worth much more than a decent paycheck: partial ownership of the company.

“At many startups across the country, stock options make up a significant portion of employees’ compensation while offering employees a greater stake in a project they truly believe in. It remains the case, though, that more and more startup employees aren’t exercising these stock options because if they do, they are required to immediately pay taxes on the income associated with the stock, even though they may not have the available cash to do so.”

The GOP lawmakers noted that, “The solution to this problem is simple. We need to defer the tax either until employees have a reasonable amount of time to pay it or until their stock becomes tradable on an established market and they can sell stocks to pay the bill.

“That is the purpose of Rep. Erik Paulsen’s Empowering Employees Through Stock Ownership Act, part of the House’s Innovation Initiative, which recently passed the House with bipartisan support and now goes to the Senate.

“This legislation allows employees who own less than 1 percent of the stock of a privately held company that offers stock options to at least 80 percent of its employees to defer tax payments for seven years or until they are actually able to sell their stock, whichever comes first.”

The opinion item added that, “The innovation economy is the key to America’s economic future, and a growing economy is the foundation of a stronger and more confident America for everybody. Giving startups room to grow at their inception and attract creative talent will keep America at the forefront of innovation, ensuring continued American leadership in the 21st century.”