5 Things Non-tech Startups Need To Showcase To Survive COVID And Attract Funding For startups in the non-tech categories that have survived a funding freeze, now is the time to showcase those resilient characteristics
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The Indian startup ecosystem is the third largest in the world; the year 2019 was considered a blockbuster success and the expectations for the year 2020 were equally high. However, with COVID-19, financial markets were disrupted, and the world has been at the edge of an economic downturn. At the same time, the situation continues to unfold and offers ample scope for companies to transform these challenges into opportunities. The Indian startup ecosystem has always been agile in adapting to the dynamic business environment, and especially for startups in the non-tech categories that have survived a funding freeze, now is the time to showcase those resilient characteristics. Here are five things that the investor community is looking at—to draw hope and confidence for times to come—and help startups become Aatmanirbhar (self-reliant), operationally and financially.
Creativity and adaptability
Assessment of current requirements of your set of customers is going to be key with extension of product lines, re-thinking deliveries and re-vamping ops where required being just a few examples of differentiated approach. Continuing in current form or pivoting is the key strategic decision to be taken. Adapting to changed circumstances and innovating with the right kind of offerings would set you apart.
If your business has been able to sustain these challenging times, it means that you have come out stronger, and your underlying business exhibits a strong sense of resilience. This communicates very strongly about the strength of the idea as well as execution and even that the business is well managed when the chips are down. Investors get huge confidence from these traits. Do what is required to keep your business relevant, and as mentioned earlier, pivot quickly rather than wait for the markets to take a turn.
Startups by nature have been extremely nimble and quick on decision making. They spot opportunities and don't waste time in acting on them. Success through trial is in their blood. These traits play a very positive role in these times, and rather than being bogged down by the external environment, being agile and focusing on opportunities would help you succeed. We are seeing many sectors such as ed-tech and gaming gaining strongly, and evincing investor interest. Pure-play digital startups have a distinct advantage here. Pivot or perish has become the new mantra for organizations irrespective of its scale of operations.
It appears that no industry or category is immune to the current changed environment, except that the extent is of varying degrees. At the same time certain sectors have benefited big time. Many consumer mind-set changes which were expected to happen over perhaps a few years, seems to be happening in months, for example rapid increase in e-commerce penetration in India, US and many other countries. Consumer preferences and requirements are changing rapidly which opens doors for experimentation and innovation. Companies have looked out for alternate methods to reach out to their consumers, be it a "farm to table' concept, moving beyond traditional distribution networks and e-commerce platforms to exploring newer approaches. Digital-first brands, online education are reaping benefits. How is your startup adjusting to this phenomenon?
Business viability and unit economics continues to be in the forefront of decision-making criteria for investors. It is increasingly being acknowledged that start-ups cannot perpetually leverage venture capital money to discount their services. Hence, how much cash needs to be invested in the business before it starts becoming profitable, how is the retirn on equity looking like for your business, etc, are becoming more and more relevant discussions. How are you addressing these aspects? What are your permanent and temporary measures to weather the storm?
COVID-19 infection numbers are not coming down anytime soon, and regional lockdowns are becoming frequent. Investors are keen to know the relevance and sustainability of the startups in the dynamic environment, how are they converting adversity into a meaningful opportunity, and protecting the interests of the investors, their partners and its stakeholders at large.
Give them reasons to believe in you.