How the lessons learned in 2020 will help the Indian startup ecosystem in 2021
The novel coronavirus pandemic is the defining global health crisis of our time. It has entailed disruptions like never before as it has affected humankind and businesses alike.
Throughout 2020, companies worldwide have had to reimagine their business models.
In the startup ecosystem, the unprecedented challenges that the pandemic posed have been unnerving. Layoffs, furloughs, funding crunches, and halting business operations became unusually common.
In such tough times, it was obvious that only the tough will keep going! And startups who would quickly re-invent or pivot will survive and be ahead of the pack! It became apparent that entrepreneurs had to decide whether the pandemic and the lockdown were a challenge or an opportunity!
Accepting the change
When the only thing constant is change and everything is dynamically changing, entrepreneurs learnt that resilience and responding to crisis constructively is key. Amidst the pandemic and the tough lockdown, Indian entrepreneurs faced innumerable challenges such as logistics, keeping the team together, customer engagement, the very need of the product, and, of course, cashflows.
Revenues for most businesses dried up completely.
But the entrepreneurial spirit was at its best: some quickly pivoted from offline to online, others created new products leveraging their competencies, still others leveraged the situation, and grew their businesses exponentially.
Founders who had their ears to the ground and engaged with the customer could quickly align with the new normal.
Companies like NOCCA, which was building robotic solar panel cleaners, built world-class ventilators from concept to product in just 95 days. This not only ensured that they kept the cash registers going but they also utilised the lockdown to build another line of business. Others like Maxwholesale leveraged the market focus on basic needs and grew their business multifold.
On the other hand, the pandemic also drove a seismic shift from conventional methods to entirely digitally-driven operations, thereby opening newer avenues for market forces.
More than before, startups enhanced their focus on emerging new-age technologies such as AI, IoT, data analytics, etc. to bridge wide-ranging gaps that were introduced in the market. For many startups, the pandemic meant diversifying into other sectors that were bucking the trend with creation of demand pockets.
While these changes were taking place in the startup ecosystem, we also witnessed growth in sectors like healthcare, biotech, edtech, fintech, online gaming, and OTT among others.
Year of insights
The key to a successful business transformation is to know and understand the customer and the market at large. Startups realised that the pandemic has brought a behavioural change in customers, in terms of needs, spending habits, and mode of buying.
Technology has taken centre stage and is the new highway for innovation, consumption, and building businesses. The world has become smaller as everyone can now connect virtually and this can help businesses grow, irrespective of the geographic boundaries.
New markets opened up for startups, not only new countries but even in India. Customer behaviour in rural areas also changed and opened up excellent opportunities for companies like Vernacular. Online dominated in growth and investments. The year 2020 also saw Nykaa, Unacademy, Zerodha, Razorpay, and Postman becoming Unicorns.
20210 will continue to see India innovate. Technology will be the new mainstay and startups will leverage it for cost efficiency, scale, and transparency. The basic needs of food, health, education, security, etc will be a focus.
The prime minister’s clarion call for Atmanirbhar Bharat will help build a robust manufacturing base, with a deep supply chain. Companies with a focus on top lines AND bottom lines will be the call of the day.
India is the fastest growing startup ecosystem and the world is looking at us for innovation to solve the world’s problems. This will make the Duniya Nirbhar on India.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)