Outlook 2021: Empathy and positivity top Indian startups' expectations for 2021
COVID-19 has been hard on everyone. Startup corridors echo stories of entrepreneurs working non-stop for days, communicating with teams, customers, suppliers and trying to chalk out the best possible strategy to adjust to the new normal. Many pivoted, many opted for consolidation.
However, a few traits remained unchanged: resilience, grit and tenacity to overcome any challenge.
Efforts made by the ecosystem’s stakeholders, be it the government, investors or corporates, were also encouraging. Through a combination of cost reduction, alternative deployment of resources, support from existing investors in the form of bridge funding furloughs and layoffs, startups endured 2020 quite well.
Now that 2020 is over, how will the next year shape up for startups? At YourStory, we reached out to a few leading startup entrepreneurs to understand their expectations from stakeholders of the ecosystem that would help them navigate 2021 better.
The five key expectations of startups from stakeholders in 2021 are:
Empathy and a positive outlook
Empathy is what startups expect the most, whether it’s from their team, customers, suppliers, investors or the government. During the pandemic, every stakeholder rose to the occasion and helped each other out. With a strong local investor community of angel networks, seed-stage funds, venture capital investors and timely support initiatives by the government, the startup community has weathered the storm much better than anticipated. It expects this momentum to continue in 2021.
Prepare the ecosystem for recovery
Investors bring diverse perspectives and deep knowledge from their learnings across various sectors. Startups want investors to impart their wisdom to the community of entrepreneurs and thus help them accelerate their recovery.
“In the wake of COVID-19, there has been a drastic change in the dynamics of capital due to capital rebalancing and change in correlation between projections and past performance,” said one founder. “It would be beneficial for startups if scenario planning could be co-created in order to proactively prepare the ecosystem for recovery.”
Ready to take risks and invest for the long term
The pandemic might have had a severe impact on many industries, but it has also given rise to a breed of entrepreneurs, who are betting on technology for growth, while harnessing opportunities that are emerging due to changing consumer needs. Entrepreneurs expect the ecosystem’s stakeholders to take some risks and support their innovations. In addition, the spirit of collaboration must continue among stakeholders to encourage entrepreneurial energy with a long-term approach in mind.
Nurture more talent
Several companies that have money to spend are struggling to find the right talent. With edtech on the rise and an increase in technology adoption, startups expect stakeholders to work on expanding the talent pool in India. While the government is expected to make higher education more accessible by making it available at a low cost, corporates can invest in offering better internships and on-the-job training as well as vocational training courses at the school level.
Increased support for women entrepreneurs
According to a Makers India-YourStory Research report on the state of tech women entrepreneurs in India, of the 2,460 investors who participated in startup funding during January 2018-June 2020, only 22% (540) invested in companies led by at least one woman founder. While women entrepreneurs in tech receive support and visibility at an early stage, funding needed for growth and scaling depends on market sentiment and volatility. Startups expect a change in this approach so that women entrepreneurs are offered more proactive support without scepticism.
The new year is expected to be a better one for the Indian startup ecosystem. With more people coming online, startups’ scaling and expansion plans are expected to get a boost.
Initiatives such as Make In India and Aatmanirbhar Bharat have fostered a culture of entrepreneurship among the country’s youth. The growing need for innovation has prompted startups to venture into deeper niche areas and cater to consumer demand in different ways. These developments are likely to improve the startup climate in the new year.
There are some worries, though, particularly on the revival of startups in sectors that have been adversely impacted by the pandemic. However, helping startups through predictable cash flows in the form of longer-term contracts, offering some working capital support and bridge funding and introducing them to networks that can buy from them will certainly help the startup community perform better in 2021.
(Edited by Lena Saha and Meha Agarwal)