Can startups break the Covid 19 lock!
To understand thing so a broader prospective let us understand the situation of the startup space amidst this extremity by analysing the words of fewremarkably resource persons of the industry:
• Deepthi Ravula, CEO of WE HUB
Owning the history of working with the big wheels of the industry in the foreign land (USA) and having joined the Government of Telangana as the Joint Director for Electronics, Deepthi is enlivened towards shaping up a work environment that is free from gender prejudices. As a pronounced visionary she has been insightful about the impact of this coronavirus pandemic on the market and particular in the startup ecosystem.
Throwing light on which she says, “COVID 19 has thrown up challenges which have been most deterrent to startups. There are challenges in terms of product relevance, pricing relevance customer retention, supply chain disruptions, employee management and more importantly the burnout and runway plans made will no longer be relevant. Particularly in the technology startup companies, it has made a lot of startups revisit the products they are working on and also deal with supply chain related issues.The situation that the startups and mostly tech startups find themselves is something which is unchartered and a major unknown. So at WEHUB we are primarily working with start-ups 1-1 to understand their problems and their analysis of their own journeys would be post the global crisis.Based on the feedback, the first thing we did as an enabler is to waive off the rentals for all the startups at WEHUB.
Secondly, we have started engaging with each startup to work with them on strategies to sustain in the existing scenario including product line, understanding supply chains, possible funding issues, Business plans pivots, customer acquisition and organizational management.”
She also shares her opinion on the mannerism adopted by thetech startup segments that is enabling them to leverage these challenging times, to show growth and innovation. She says, “The tech segments in the mobility, last mile connectivity, hyperlocal delivery, hardware, healthcare, data analytics, Lean Manufacturing would be a few sectors which have been able to leverage the existing scenario and most importantly be of great assistance to amplify the efforts being put in by many to tackle the virus.”,
As the CEO of a state run platform for women entrepreneurs, WE HUB, Deepti took apt action to prevent the on-going pandemic having any negative impact on the employees by shifting all the programs online including the selection of the second cohort of startups and the final pitching. This approach has proved to be quite seamless from the teams and startups perspectives.
“The situation that the startups and mostly tech startups find themselves is something which is unchartered and a major unknown”
• Srikanth Chintalapati, Partner at Mantra Capital
Giving consideration to the impact Covid-19 pandemic is impacting India's startup industry; Srikanth Chintalapati, a triumphant entrepreneur who has put in place several tech startups has expressed his point of view saying, “As Covid-19 slams the world, we live in uncertain times as the severity of the downturn can lead to a wide range of potential outcomes.
Tech Startups will encounter difficult times and those who are in the early stage and in the fundraiser cycle will face an uphill task and some may perish. Those Tech startups who adapt by revisiting burn, product roll out strategy, hiring and customer acquisition cost can expect to survive by judicial allocation of available cash in their balance sheet.
The intent is to support the startup ecosystem which enables them to cope up financially during this period and avoid raising funds as a firesale through equity. Governments (Central & State) can involve VC fraternity to form think tanks to support with strategy and ideas that can help sustain the ecosystem and work together to support the community at large in solving basic fundamental issues that crop up during this period.”
Completing a jubilee in the industry, he is well versed about the up and running of the tech environment. That is how he exactly knows the tactics through which startups can observe acute development. According to him, “Tech startups which fall in the bucket of online education, remote work technologies, online entertainment, B2B2C tech startups in staples space are the ones that benefit during this downturn.
They can take advantage of lower CAC and build strong balance sheets and cash reserves. They can even explore acquisition of weaker competitors. If these Tech startups beef up their tech stack to absorb higher volume with increased security and roll out more products and services, they can stay ahead of the bell curve.”
Tech startups which fall in the bucket of online education, remote work technologies, online entertainment, B2B2C tech startups in staples space are the ones that benefit during this downturn.
At the time of such national emergency, he has made sure that his company Mantra Capital, stays committed to funding. As he believes that some of the best companies are created in a time of such crisis.
In the light of which, the company would like to focus on non-traditional approaches to investment and seek opportunities that can create potential defining companies. A he comments, “Case in point are some of the best companies that were created between 2008 - 2009 during the financial crisis - Airbnb, Pinterest, Github, Slack, Square, Cloudfare, Whatsapp etc. Tech startups would still remain the engine of economic growth and Mantra Capital will keep advising its existing portfolio companies to rejig their operating plan and also look out for opportunities in this downturn for startups that can withstand this storm.”
• Sunil Kumar Maddikatla, Founder & CEO of BlueSemi R&D Pvt. Ltd
Prime mover of a semiconductor firm and a research enthusiast, Sunil Kumar Maddikatla imparts his comprehension about the stature of the startups in the technology industry. According to him the impact of the pandemic on startups will be two-fold: one on the business side of things and the other on the investment side. Sectors like hospitality, entertainment and food are bound to take a sharp hit as the demand for essential products and services will shoot up. These sectors will have to reinvent themselves to stay relevant. Even for technology startups, unless they are able to provide unique solutions to current problems, demand will probably be on the lower side.
Payment cycles will also change, so startups will have to be prepared to deal with that. Using technology to predict the impact based on current trends and alter course to meet immediate demand can be one way to stay ahead of competition. On the other side, finding investors will get harder. Even as valuations decline sharply, startups will have to prove the value addition of their products or services to attract funds. Fresh ideas may have to be put on the backburner and IPO plans may be delayed as there will be pressure to fund current portfolios rather than take on new projects.
“The pandemic is something that no one could have seen coming. Everyone is tackling it on the go. The need of the hour is for the scientific, business and medical community to come up with any solutions that can take some pressure off the crisis. As a tech startup, our priority is to try and meet any gaps in the health infrastructure at present.
With this in mind, the entire team at BlueSemi brainstormed to come up with NEEM using our existing resources, since both funds speaks and time are of key essence now. From here on, we intend to improve NEEM as best as we can to help our healthcare workers who are working tirelessly on the frontlines,” aversSunil Kumar Maddikatla, Founder & CEO of BlueSemi R&D Pvt. Ltd.
The world will adapt to a digital ecosystem much faster. IoT, machine learning and computer vision will no longer remain a luxury
He has make mention of the strategies and the assistance every startup need to combat this inhospitable situation. As per his understanding the reasonable financial support can rescue these companies from falling prey to the parching credit lines and venture funds.
Taking about the opportunity and state of affairs these technology- and AI-related startups are likely to encounter in the upcoming times, he states, “The world will adapt to a digital ecosystem much faster. IoT, machine learning and computer vision will no longer remain a luxury. They will have to be leveraged fast and more efficiently to deal with unforeseen circumstances such as these.
For instance, AI and machine learning can be specifically adapted for healthcare solutions so that if a situation similar to COVID-19 were to recur in the future, present results can be analyzed to understand what worked and what didn’t. This will help save time and hopefully, more lives if the situation demands it.”
Industry veterans and entrants are observing this never before seen situation from distinctive perspectives. If some are seeing this global lockdown a challenging time which needs to be tackle through dauntless approaches and witty strategies, others are still exploring opportune chance to flourish in spite of the set back. In essence, the entire world eagerly waits for things to take positive turns and life to retain normalcy.