Entrepreneurship in the time of Covid-19

Musings
on impact of the Coronavirus pandemic on India’s start-up ecosystem

Entrepreneurship
in the Time of Covid-19, an insightful opinion piece by Hemant Gupta, MD, Zone
Startups India

Hemant Gupta

So,
another week has passed, and the lockdown continues! Unless you are engaged in
provisioning of essential goods or services, you should be working from home.
Maybe even working on something that will help in detecting, preventing or
treating the deadly virus that has brought most of the world to a grinding
halt, or on ameliorating its direct or indirect impact on people. Who would have
thought that a few strands of RNA in a thin layer of fat could do that!

However,
this too shall come to pass, as have all calamities, be they man-made or
otherwise. Things will start to improve, hopefully sometime soon. But they will
not be the same as they were before this pandemic. This pandemic, like other
calamities before, shall have both short-term and long-term impacts. And,
hopefully, again like the ones before, this one shall also result in
innovations that will dramatically change our lives for the better.

While all
that is good to know, the pandemic is extracting a severe toll on business,
economic and social capital across the country and across the world. This is
particularly true for the startup ecosystem where the impact has been much
greater that in the more established businesses for obvious reasons.

Having
said that, there are several sectors that have actually benefitted from the
pandemic and I really love this infographic from Dcode EFC that does a fabulous
job of depicting the same.

Before we
delve further into coping with the pandemic in the short and long term, it is
worthwhile to mention that our start-up ecosystem has been playing a pivotal
role in the formulation and execution of plans to address the crisis. In fact,
the imposition of the lockdown was borne out of the suggestion by a group of 70
start-up founders and investors who came together voluntarily to help the
government and the country.

One can
proudly say that the moment the crisis hit us, we immediately saw the coming
together of government, industry, entrepreneurs, investors and the entire
start-up ecosystem to pledge their support and contribute to the response.

Startups,
Indian and global, are playing an extremely crucial role in our lives amidst lockdown.
Be it the social media and news apps for widespread information dissemination
and entertainment, ecommerce platforms to deliver our essential provisions, EdTech
and health-tech solutions, audio-video conferencing, collaboration and workflow
tools facilitating remote working etc. etc. Further, it is wonderful the way
the entire start-up ecosystem in India is rallying together under the
leadership of Startup India, DST and various central and state governments who
have been working in complete unison to respond to this crisis.

However,
all indicators point to an overall slow-down in large parts of the start-up
sector owing to recessionary trends in the economy, negative business
sentiments and drying up of funding support. Not only has there been a huge
drop-in activity for a lot of businesses, there are supply chain slowdowns that
are impacting most businesses. We anticipate that startup valuations will be
taking a hit and will become more tightly coupled with revenue and
margins.

Start-ups
in travel, tourism, hospitality, shared economy, real estate and lending will
get adversely impacted in the near term; while the trends indicate a positive
outlook for health-tech, EdTech, ecommerce, conferencing facilities, workflow
and collaboration tools. However, those are sectoral trends, ultimately it is
the product or service each individual start-up has that will define their
fate.

A lot of
the players in the start-up ecosystem have been working with the singular focus
on finding near-term solutions for detection, prevention, treatment of
COVID-19. Several have pivoted from their original business models. Tremendous
support has been forthcoming from Government as well as private sector through
various grants and challenges. These initiatives have mobilised the
entrepreneurial spirit in the country and will have a positive impact for our
healthcare and related industry in the short and long term. We are bound to
witness tremendous innovation in healthcare globally.

Having
said that, overall, some sectors such as travel and oil and gas will see a
protracted downturn, while most others should see a decent come back. The
pandemic shall result in several short-term and long-term changes in the way we
live, and the way business is conducted. Start-ups in all sectors need to have
a coherent and comprehensive strategy both in the short-term and long-term to
manage these changes and attempt to convert the challenges faced to
opportunities.

Some of
the things I feel start-ups should be doing, both in the short and long term
are-

• Define
your strategy and ensure that your entire team knows about it and has bought
into it

• Trim
your cash burn to the bone, cut down expenses, reduce salaries

• Be
realistic and decisive, do not fall prey to false optimism or to the hope that
bad times will go away, and it will be business as usual soon

•
Communicate, communicate, communicate – to your team, investors, customers etc.
Tell them your status, your plans, get their feedback and their suggestions

• Remember,
your mentor is your guide not just in good times, but in bad too

• Any
changes or pivots should be thought through and strategic, not knee jerk

• But at
the same time, you need to be nimble and quick

•
Remember, there is no one-size-fits-all solution here, you will need to define
your strategy and your roadmap

I pray
that the COVID 19 outbreak, a White Swan Event as per Nassim Taleb, is brought
under control sooner rather than later. Just remember, it is no longer just
survival of the fittest, but also of the nimblest. Be adaptable, but only if it
makes sense.

(Hemant Gupta is MD at Zone Startups India. Views expressed in the article are of the author.)

Tags: Opinion