The investors in startups have matured and want to see some results, some revenues, focus on customers etc.
The Start-Ups story is well into its phase II. This trend began about ten years or so back. Initial teething problems have been greatly ironed out, though the scale has been reached only by a few startups. Rest is still in struggle mode. In between private investments had dried up in the last couple of years, barring some small investments here or there.
Some really successful ones are as below:-
However a huge number have not got off the ground as serious businesses. Here are some causes of this slow or negative growth.
The environment in India still does not match up to that in places like Silicon Valley, Israel and some European countries. Especially in USA, the individual funding for start-ups is being done by thousands of HNIs (each high network individuals) who make many investments and on a continuing basis. Such countries have already matured for Start-Up activity Entrepreneurs in India are yet very raw. Mostly they focus on a Me Too copycat manner, trying to duplicate foreign success stories. There are few original ideas floating around in Indian startups. Most such entrepreneurs think they will get millions of Dollar equity investments, even without proof of concept. The initial euphoria of blind scatters investments got over 3 to 4 years back. The investors have matured and want to see some results, some revenues, focus on customers etc.
Teams: Entrepreneurs out of college, or otherwise too, need first to put together a team which compliments one another. They have to put together tech, commercial, marketing, financial and gen admin (HR etc) people to form and manage the company.
Honesty: This is one of the most crucial areas where startups go wrong. Once they get any funding, they feel it’s their own money and use it for things, not in the business plan. Some even use part of the money for their personal spending or unnecessary expenses which are not essential for growing the business. Often entrepreneurs don’t pay statutory dues and keep it for later. This is a major fault. Statutory must compulsorily be paid on time and not used for working capital. An image of honesty is also essential for the business to grow.
Short cuts: There are no short cuts. Startup entrepreneurs make mistakes when they try to grow their business too fast. Rarely one becomes a billionaire overnight. Thousands of startups have made this mistake and folded up. Slow and steady is the way to go. Every business takes time to mature. There are always snags which crop up in the initial months and years. Often the business plans have to be changed from what was envisaged in the beginning.
This happens due to several reasons like :-
Current business plan not working out
Too much competition
Some competitors being heavily funded
The expected market demand not growing
Start Up entrepreneurs should never give up. Just keep costs as low.
Sometimes the promoter start demanding high salaries which do not match up to revenues.
Other Startups which are funded and in growth mode are below:-
iD Fresh Food
iD Fresh Food, a Rs 100 crore turnover ready-to-cook packaged food company in Bengaluru that makes idly and dosa batter, ‘just heat’ parotas and chapattis, and curd and paneer. The company, which made 10 packets of one kilogram batter a day in 2005, manufactures 50,000 packets a day now and has grown into a team of 1,300 employees who work at their units in Bengaluru, Chennai, Pune, Mumbai, Delhi, Hyderabad and Dubai
iD Fresh Food, a a private limited company was founded in 2005 by Mustafa and his four cousins – Abdul Nazer, Shamsudeen TK, Jafar TK and Noushad TA. Mustafa holds 50 per cent share in the company and his cousins hold the rest. As of today, the total investment for iD Fresh Food is around Rs 4 crore (Rs 40 million) and revenue is Rs 100 crore (Rs 1 billion).
Practo, a health a tech company with the motto of #DoGreat is prospering greatly with 2,00,000 doctors and 20 million patients across the world has kick-started its journey in the year 2008 from Bengaluru by two NITians Shashank and Abhinav Lal.
Practo is the perfect example of “In the middle of difficulty lies opportunity” because of the idea of PRACTO was initiated from the difficulties Shashank faced concerning his father’s health. Practo, a product of Naabo solutions, became the Home for health by its hassle-free solutions for doctor appointments, delivery of medicine at the doorstep, online consultation with their registered doctors along with online appointment booking software for doctors to manage their clinics.
Practo in collaboration with ICICI Lombard launched an app “IL Take-Care” for the cashless consulting for health insurance.
Zivame, an online lingerie business has been ushered in the Indian market by Richa Kar, a BITsian in the year of 2011 with the vision of “Offering every woman the confidence, comfort and choice she deserves”. Richa while working in her the previous job, got a chance to explore the profits available in India in lingerie market. Zivame won brownie points from its customers by including unique features of all women customer care to ease the customer issues, Availability of Plus sizes, Virtually checking the fit,
Size calculator and wide availability of brands across the world. The website also included loungewear, Swim & beach wear, Activewear and apparel for women along with its niche products range.
Geetansh started Rentomojo for providing the online rental services for furniture (only for a period of 3 months) in the year 2014. It was started with the intention of providing customers with the ever-evolving style without the actual investment costs for furniture. The company was funded by IDG Ventures India and Accel partners initially and in 2017, the company gained USD 10 million Series B funding from Bain Capital Ventures and Renaud Laplanche. Rentomojo expanded its business to renting of two-wheelers and appliances in 8 cities (Hyderabad, Pune, Mumbai, Chennai, Gurgaon, Noida, Bengaluru, Delhi) with an option of a Rent-to-own model by the year 2018. Rentomojo is offering new features to its customers like annual cleaning, free maintenance along with the subscription, swap products and many more for their convenience.
LeadSquared started its journey in the year 2012 for addressing the issues of task and lead management by marketing automation and CRM software for businesses. The company was founded by Nilesh Patel, Sudhakar Gorti, Prashant Singh, Sukhbir Kalsi and Anand Kumar. The solutions include Lead capture automation, Lead Nurturing, Sales Management, Market Analytics, Lead Management, Dynamic Content and Mobile Call centre. The company has been ranked as the 5th fastest growing tech company in India by The Deloitte Technology Fast50 India 2017 awards.
The company offering its products in three pricing plans Basic, Standard and Premium. It is ensuring its customer’s data protection by encrypting all the web interacting through SSL and also all the data is stored in Amazon data centres securely.
Writer Vikash Mittersain is Chairman and Managing Director, Nazara Technologies Ltd and Founder & President, India Business Group Chamber of Commerce.