This article is contributed by Dr. Ambrish Kumar, Founder of Zipaworld and Group CEO, AAA 2 Innovate Private Ltd.
This is the age of innovations and new ideas are getting implemented at a very fast pace. The past decade has seen the emergence of Startups where we have seen a lot of innovators, first movers, and hustlers coming up with problem-solving ideas and causing disruption to a set pattern of the trend followed for years.
In other words, we have seen a new league of entrepreneurs who have a disruptive idea, USPs, strategies, a problem-solving business plan, but may or may not have the capital or funding, or may not belong to the traditional league of businessmen. We have also seen many investors and financers encouraging these entrepreneurs by funding their ideas and becoming a part of the disruption to the stereotype. We have seen the exponential growth of many startups to become Unicorns crossing the $1bn mark in a very short time.
India has seen the growth of Unicorns and with the current pace of new ideas being coined by startups and the response received from the markets and the masses, there could be more than 100 Unicorn companies in India by 2023. All thanks to technology that the pain areas are being efficiently addressed by digitization and automation. When we speak about the emergence of startups, we have to see the flip side of the coin as well.
The pandemic that started in 2020 was unexpected and unprecedented and caused massive disruption to whatever was normal before that, and the new normal came into existence. Businesses and entrepreneurs globally have faced severe turmoil in their routine operations and have had to make acute decisions to get hold of the situation. All grades of companies, be it small or large, were forced to take desperate measures of survival and sustenance. Cash flows were hit badly, debts increased, receivables were stuck or delayed, investments went wrong, and so on.
As per a survey conducted by FICCI during mid-2020 with 250 start-ups and incubators considered, almost 70% of startups were adversely hit by the pandemic, approx. 12% had to shut down operations, and 68% had to cut down on their expenses. The adverse situation compelled investors to hold investments that were signed pre-pandemic.
This ought to be the learning curve for the entrepreneurs to approach odd circumstances like the post-COVID times differently and more effectively. The entrepreneurs are now getting cautious about what to sell and what not to, that is, to re-invent their business strategies. Hence, the entrepreneurs need to filter out their products and services precisely focussed on the need of the consumers.
The Pandemic has impacted the funding, investments, cash-flows, timelines, schedules, and also untimely non-availability of raw materials, labor, logistics delays, the lower purchasing power of consumers, etc. In these times, focussing on products that suffices the necessity, would sell. The entrepreneurs need to be more generous in setting realistic timelines and keep a balanced check on cash flows. Fund-raising and investments have taken a back-seat due to the prevailing circumstances and may take another couple of years to come back to where it was pre-pandemic. Mr. Alex Lazarow rightly puts it in the Harvard Business Review article – “Startups, It’s Time to Think Like Camels — Not Unicorns” which means entrepreneurs need to disguise themselves as camels which can survive in worst scenarios, for the next few years, then aiming to be ‘Unicorns’.
The change in mindset and trends may see a deceleration in the rapid scaling up the process by the means of fundraising. The startup trend of burning cash to capture the market needs to have a new dimension. Entrepreneurs and survivors might take a balanced, steadier, and smarter growth path. The endurance of the concept and problem-solving ability of a start-up would play an important role in retaining customers. Marketing, virtual omnipresence, and brand identity will play a significant role in the present times. The more constructive and cost-effective e-commerce solutions, digital marketing, web services will be resorted to extensively, rather than the traditional marketing drives. Further futuristic aspects of technology Machine learning, Artificial Intelligence, IOT, will help anticipate and keep a check on adverse scenarios and will also help in comprehending demand prediction and anticipation based on data analysis, and to cater to customers’ needs more precisely, thereby mitigating risks and avoiding wastage of resources.
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