There is no denying that COVID-19 has been hard on individuals and businesses alike. It has changed the way companies fundamentally operate.
With economies opening slowly yet steadily, many of them have been able to breathe a sigh of relief. The hard look into their business operations and models have given startups to focus deeper on innovation with frugality at the forefront.
Anu Hariharan, Partner, YC Continuity Fund, San Francisco, says,
“There was an increased amount of focus on the runway and the conservation of cash. This automatically triggered them to take a hard look at business models and if they are sustainable. Startups began focussing on questions like are they investing in the right areas, or have they overspent in others? This brings in focus and discipline, and makes sure that the foundation and health of the company are strong from a financial standpoint.”
Using the pause to grow
The global economy is no stranger to crisis. Although these crises have pushed startups earlier to the brink of the ‘valley of death,’ they have fuelled startups to create great innovations.
“In a startup’s lifetime, you never get a pause like this... where you can rethink things. A lot of amazing startups were built during the 2008 financial crisis. We thought let’s take a pause, and focus on building products. We are doing that,” says Laks Srini, Co-founder and CTO, ZeroDown. Laks also serves as the Co-founder of Zenefits.
For instance, in the early 2000s, Google only had its search engine to offer to the world. However, during the Dotcom boom, the company built innovative solutions and products to grow and expand.
When startups like Bounce and Rapido were negatively impacted during the lockdown, they immediately partnered with local kirana stores and grocery delivery startups. In fact, Rapido has started auto services amidst the crisis.
Further, Bengaluru-headquartered Curefit announced the launch of its digital classes shortly after the lockdown was imposed, and in May, it moved to monetise these classes. Wakefit, an online mattress selling startup, also expanded into online home solutions.
Image credit: Daisy
Availability of leaner and meaner talent
With economic crises come job losses. And, to nobody’s surprise, the pandemic continues to witness the furlough of several employees.
Mohit Aron, who is also known as the Father of Hyperconvergence, was one of the early employees of Google, who was instrumental in building the Google File System.
He says, “Google benefited immensely from the internet bust. All the good people were searching for a successful company, one that had no danger of going down. It attracted great talent, which made Google what it is today. Every week back then, they would hire close to 100 people. They were gunning for an IPO.”
It isn’t just Google. Gurugram-headquartered Zomato has also made use of crises to hire great talent. In 2014, Zomato put out a tweet, saying it is willing to hire oddly 400 laid-off engineers from Yahoo.
Bhavik Rathod, C0-founder of Bengaluru-based edtech startup Kyt, says,
“There is an amazing talent pool that is suddenly available. These have been nurtured by several companies. But now these companies have to go through a different cycle, which may not be exciting for this particular talent pool as these are generally the hustlers, the people who help build companies from zero to one. The new cycle may not be that exciting for them. So, it is an opportunity for several startups as this talent is what is needed to build great startups.”
The pandemic has removed geographical boundaries and constraints. Remote work has not only opened opportunities that didn’t exist earlier but has also increased the number of gig workers for specialised roles. And, people are welcoming the idea.
Innovation in goals and product
“People want quick results, and want ideas executed at a faster pace,” says Bhavik. Today, several companies are looking to pivot their existing business models. Businesses need to be fully-digital, which requires a certain nimbleness.
This means companies from day one have to start investing in digital tools, processes, and productivity solutions. “You can generally get more done with fewer people,” explains Anu. She adds that companies need to prioritise and focus on two or three strong strategic goals.
“The layoffs have also brought in an emphasis on smaller teams and more emphasis on two goals. This means the product philosophy of companies needs to improve and become sharper,” says Anu.
Innovation in operations
According to Bhavik, the pandemic has shown several discreet and distinct advantages to build a business and product faster. Many companies have also started to raise the margins they need to operate within. They have a sense of what can work and what doesn’t, and they need to focus on revenue, profitability, along with the growth from day one.
Apart from this, with the boundaries and borders becoming seamless with a truly digital transformation, people are open for partnerships across the world. Alok Goyal, Managing Partner, Stellaris Ventures, says, “COVID-19 has acted as a catalyst for a secular trend.”
However, just because of COVID-19, businesses will not suddenly start making sense. The business needs to have value with or without the pandemic, he adds.
“It, however, has hastened and accelerated the process of innovation. While the transformation was already on the way, the speed at which it is happening now is new,” Alok explains.
Faster growth
At present, product-market fit at scale is happening faster because everything is digital and built for scale. “You already are building rocket ships,” says Bhavik. It also means that entire processes are being innovated.
Neha Indoria, Co-founder of Boingg! — an online children’s furniture startup — says, when the lockdown was first announced, the team focussed on how they never have to worry about the stock and the entire manufacturing process.
She explains, “We focussed on building purely on-demand. This meant a stretch in the shipping of within seven days, which led to a change in the manufacturing process. This also let us focus on a plan that we had earlier - customisation of the product.”
Kyt started building a digital content and video production line from day one. This also means that internally, roles need to be synced perfectly. You need to work on how employees are empowered and moving in the direction of the company from day one.
“We have to imagine building a startup where we won’t have the luxury of fundraising as fluidly as earlier. So startups are becoming wiser and prudent on how they can grow and innovate,” Bhavik says.
Edited by Suman Singh
Link : https://yourstory.com/2020/11/ys-learn-covid19-frugal-innovation-mindset-indian-startups
Author :- Sindhu Kashyaap ( )
November 19, 2020 at 07:00AM
YourStory