Building a Value Chain For Sustaining Your Startup
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India has emerged as one of the leading ecosystems today for entrepreneurs. With one of the youngest and talented populations in the world, it’s poised to be a potential hub for becoming an innovation first market. We have seen India emerging as a manufacturing hub for textiles in the 80s and 90s followed by the IT development boom from late 90s to mid-2000s. Post global recession we saw some great startups emerging out of India.
As per the recent report by Startup Genome and Global Entrepreneurship Network, Asia has a 70 per cent share in development of the startup ecosystems around the world. India made its entry with five cities posing as strong entrepreneurship hubs on the global scale. Delhi has been consistently producing 2-3 unicorns (billion-dollar club) since the last five years. India also continues to be one of the most affordable nations for access to talent, as well as potential consumer markets. However, we feel there are a few key elements for emerging startups in India which need to be addressed or understood by its founders.
Building a foundation for Unicorns
‘Unicorns’ is the buzz word amongst the millennial and being in the billion-dollar club is the aspiration of every founder, but the current crises have strongly questioned this aspiration.
While a monopolistic approach might be one of the key strategies of VCs or PEs by the deployment of excess capital and underwriting the losses for market acquisition.
However, the new trends have questioned this approach and we are talking more about localization than monopolization. Today, our approach to life is completely changing. It’s no longer about building valuations and burning a large amount of money on changing the habits of your user. It’s about building sustainable businesses, which solve a basic problem and also generate unit economics. Once you do that, you automatically end up building a large value.
Unlocking multiple capital sources
Through my experience of building a bootstrapped business and witnessing the recession of 2008 as well as the slowdown in 2016 and 2019, only those businesses eventually survive who contribute towards building a strong economy and take proper care of the value chain. This pandemic has definitely taught us the value of a strong chain, where everyone is linked to each other, you try breaking one rod, and the whole chain would dismantle.
Today governments are also bleeding primarily due to non-movement of humans and lack of consumption. Interestingly oil consumption is directly related to mobility, whether by road, rail, water or air. We are hearing about large US corporations filing for bankruptcy due to its heavy dependence on consumption.
There is a need for building stronger value businesses where each and every stakeholder is compensated with their fair share in order to build a long-lasting and sustainable relationship.
Being policy led
Hence, it is important for every founder to understand their stakeholders and value chain and also ensure they spend adequate time in building relationships as well as a business model which would serve all.