Author: Sandeep Goel, Senior Vice President – Technology at Moglix.
There is enough on-ground evidence now to suggest that the COVID-19 pandemic by virtue of imposing a new set of challenges for the economy has brought a major inflection point for startup enterprises. Economic challenges of such unprecedented proportions while delivering a powerful blow to startup enterprises that are built on weak fundamentals, shall concurrently create new opportunities for enterprise, innovation, and new-age solutions to the problems created by the COVID-19 pandemic. As such the ability to startup enterprises to leverage the following paradoxical economic conditions to their advantage shall decide the winners and losers.
- First-Principle of Problem Solving Carries Greater Relevance Than Ever Before
The economic challenges that are integral to the COVID-19 pandemic are unprecedented and new. Resolving these new challenges requires startup enterprises to focus on the first principle of problem-solving more than ever before to innovate new products and processes for their customers. Businesses and consumers alike are faced with problems that are hitherto unknown and thus require startup enterprises to stretch the boundaries of their imagination in creating new solutions to zero down the gap. Startup enterprises shall have to spot such problems, provide relevant solutions, and monetize them to create new models of revenue enablement.
- Startups Have the Advantage of Being Innovative and Nimble-Footed
Startup enterprises in India have been known to be innovative and nimble-footed in responding to business challenges in the past. This is testified by the fact that Indian startup enterprises had filed 6000 patent applications in the United States, thus representing 60% of the total patent applications in the country. If Indian startup enterprises can unlock new avenues of innovation and roll-out new products, services, and concepts quickly, they shall have the first-movers advantage.
- Startups Built on Weak fundamentals May Succumb to the Challenge
While those startups that continue to innovate and respond to customer challenges with agility are likely to take pole position in the race for market leadership, others that fail to do so are likely to be left behind. Startup enterprises that are built on weak fundamentals of finances and operations and are plagued by an inability to innovate have a very bumpy road ahead.
- Headwinds for Large Firms and Startup Enterprises Alike to Level the Playing Field
Given the new realities of the COVID-19 pandemic, both large businesses and startup enterprises are faced with strong headwinds. It has created a new paradigm of horizontal equity with both large business and startup enterprises being subjected to similar challenges across the economic landscape. This implies that a focus on aspects like awareness, innovation, speed, execution rigor, and unit economics will make a winning formula and businesses, whether large or startup enterprises that are quick on their feet and innovative in their approach will win the war.
- VCs to Back Select Startups That Innovate While Government to Support MSMEs
Further, the pandemic is likely to impact the risk appetite of venture capitalists and private equity funds in the short term and thus, make them more selective in their choice of funding with a stronger anchoring to startup enterprises that demonstrate the ability to innovate. Government support for MSMEs and short term measures to infuse liquidity shall, therefore, assume greater importance from the perspective of keeping startup firms afloat and solvent.
Epilogue: The Future of the Indian Startup Ecosystem in the Post COVID-19 Economy
A few Indian startups are already contributing significantly to the economic fight back against the COVID-19 pandemic and are poised to navigate on the trajectory of growth in the near future. Recent success stories of innovation like “Pran Vayu”, the low-cost ventilator developed by IIT Roorkee suggest that partnerships between startup enterprises and premier tech schools can create new opportunities for cutting edge research and development and low-cost innovation. Given the contours of the new normal that has just begun to emerge, it makes sense to suggest that startups that shall focus on the aspects of execution rigor, frugal innovation, and unit economics shall be able to stitch together a winning formula for the times ahead.
About the Author
Sandeep Goel is the Senior Vice President – Technology at Moglix. He comes with over 20 years of leadership experience in setting up, managing, acquiring and integrating businesses. A graduate from the prestigious Indian Institute of Science,
Sandeep’s role prior to joining Moglix was with Invasystems where he was instrumental in driving the growth through a combination of organic and inorganic strategies. He has also worked with Intelligroup as a Senior Director where he played a pivotal role in creating Global eBusiness practice. His focus areas included enterprise application integration and analytics. After Intelligroup, he spearheaded Acuvate as the CEO for over 8 years and was instrumental in building a 200 people organization focussing on business productivity by leveraging AI, collaboration and analytics.