Top ten fears likely to haunt startups
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
The year gone could be seen as a fruitful year for startups in India as lots of startup friendly activities have taken place in 2015. Innovation and technology have created ripples in the business world. However, experts believe that the thought of gaining a competitive edge is most likely to haunt the startup community because every entrepreneur seems to be involved in the tug of war to emerge as a frontrunner.
Policy paralysis and uncertainty in the implementation of the Government’s initiatives may also put entrepreneurs in a discomfort zone.
We did a crystal ball gazing for you and interacted with renowned industry experts, mentors and entrepreneurs to the top ten fears that are likely to haunt startups in the coming year.
Here are the top 10 fears:
1. The party is over: Capital and appetite for new businesses has had an extraordinary run in the last 5 to 8 years. This has allowed businesses like Uber, AirBnB, Snapchat, Snapdeal, and Flipkart etc to flourish. But the question still looms whether this trend will continue or not?
2. Regulation of online and mobile commerce: The internet, cloud and mobility space opened up new business avenues and entrepreneurs were quick to pounce on them. A massive number of new startups have ventured into the e-commerce and mobile app space.
Not only did these media reduce cost and time to market, they were relatively free of documentation, red tape and mandatory compliance. Globally, governments are moving in with new rules and regulations. While the intent is to protect consumers and eliminate fraud, such retrofitting of regulation will add to time, cost and complexity to operations and many entrepreneurs may struggle to comply with them, while also being profitable.
3. Extension of the tax net: More and more new age businesses are being brought under VAT (Products) and Service Tax (Services) by Governments across the globe, increasing costs and impacting competitiveness. Many providers will struggle to pass on these mandatory costs entirely to customers, since a lot of online and mobile sales are driven by discounts and low costs.
4. Differentiation: Every other person is either an entrepreneur or wants to be one. It is therefore more difficult now to find gaps in the market and address them than ever before. It is even more difficult to convince prospects about the uniqueness and suitability of your products or services to their needs. Customers in turn, are flooded by more options than they can comprehend; find decision making more difficult leading to increasing postponement and abortion of purchases.
5. Parasitic Entrepreneurs: Transparency is becoming crucial to earning customer trust. Technology and tools are available to everyone, people are transferable resources and processes can be copied more easily. As soon as a successful business model is created, there is a surge of ‘parasitic enterprises’ who move in like hawks to feast on the new opportunity by replicating the model and undercutting the pioneer on price, hoping to bleed them to financial ruin, and thereby, take over the market. Weak legal systems, difficulty in enforcing contracts and poor IP protection are incremental spoilers in developing markets like India.
6. Getting and retaining the right people: A successful organisation relies on talented individuals who work well as a team. There is a serious shortage of talented and trained professionals in several areas critical to business success in present and future – Big Data Technology and bleeding edge analytics are two such areas. It is not only about finding the right talent but to woo and retain the same, given the deep pockets of more established businesses and the sheer range of options available to the most talented folks.
7. Technology disruption: Big Data, Cloud and Mobility are three areas that are critical to modern businesses. How these technologies evolve or what others could come in and turn things on their head are a constant source of worry for entrepreneurs – both tech and non tech.
8. Continuous Innovation: The world has moved from the age of invention to the age of innovation. Usage of similar tools, technologies, skills and processes will enable individuals and organisations to stay ahead of competition on innovation and that will keep entrepreneurs awake.
9. What's after Mobile? 2015 was the acceleration of mobile devices and mobile apps. Does anyone have a looking glass on what's ahead this year and next?
10. Change: 2016 shall have various new ways of doing business. Using the new age technology, certain businesses shall become obsolete. Traditional businesses shall keep having a hanging sword of fear of being extinct. Only solution for them being, adapt and move on!
(With inputs from Shrenik Gandhi, Co-founder, White Rivers Digital; Rajeev Gupta, Co-founder & CEO, GeckoLife; Satyakam Mohanty, CEO, Ma Foi Analytics.)