Focusing on Core functions and Engaging with suitable Market Accelerators can make the startup journey successful.
The acquisition of majority stake in the Indian e-commerce startup, Flipkart, which has been a posterchild of tech startups in India for over a decade, by Walmart, is a testimonial to the maturity of the Indian Startup Ecosytem, which has seen 12 uniconrs (> USD 1 Bn in Valuation) until now, and 34 more is expected to join the unicorn club by 2020. India is the third largest startup hub globally, with about 5200 tech startups, and with a growing share of B2B startups (40%). Indian startups have leveraged the power of cloud, mobile platforms, personalised marketing and AI powered operational processes to stay relevant and ward off the threats from multinational online and offline giants. India had some of the start-up success stories in the past, but nothing compared to the present times that Indian Startup ecosystem enjoys. Experts suggest that the major growth drivers are due to large domestic market, easy access to capital & mentors and increased M&A activities. India is a significant value player in the global startup ecosystem, which churns out multitude of possibilities for making the world, a better place.
When the environment seems to be bullish and enticing for startup entrepreneurs and ecosystem players, it is to be noted that one-fourth of the startups face the valley of death before achieving significant traction and getting follow-on rounds of institutional funding, due to lack of operational prudence. We have seen some of the iconic Indian startups like PepperTap, Fab Furnish and Stayzilla, failing to sustain due to lack of focus on core value proposition. Even some of the heavily funded US startups like Jawbone and Solyndra, which have received close to a Billion dollar in funding, failed to sail through the conundrum of market acceleration through sustainable growth. While there are other factors such as failure to scale, weak business model, high cash burn, as well as the external factors like change in regulations impacting the startups, the determining factor which culminates to the demise of startups is the lack of razor sharp focus on product and growth.
The mad rush in VC funding, mounting losses and unstable business models have become the reality of this industry. Some of the Top reasons cited by startp entrepreneurs for failing are: Non-existent market need, Funding crunch, Pricing mistakes, Overlooking competitive forces and Unfit business model. Interestingly, all of this can be tackled if you do the market validation with the support of a market accelerator, which also can support you in allied activities of your startup, other than the core business of building and scaling your product. Allying with suitable partners in Market Research, Marketing, and Growth strategy will help to give a critical thought to those functions and avoid inefficiencies which can be futile.
In 2018 and coming years, we will expect fewer additions to the yearly startup base as the sustenance of them is a factor of their operational prudence and quality of product offerings, leading to positive cash flows. In order to stay relevant, startups have to look at unconventional avenues for supporting their growth journey. We have seen that startups who are talent or payroll heavy with several in-house operations, find it challenging to oversee and get real RoI out of horizontal matrix structure. In early stages of the market and product validation, it is prudent to engage partners in the efforts of Marketing, Business Strategy, Sales, Talent Management and other allied processes. The partners, who specialise in these domains will have a clear roadmap and expectation set, which is aligned with the cofounders of the startups, driving the journey towards focused transformation.
ResearchFox is one among the Market Accelerators, which has supported several novel business ventures globally, across various stages of the growth; from product development to market penetration to scale up stage. We have worked with startups from Bangalore to Bay area, to get right insights during concept validation, product-market fit testing, product development and improvisation, user experience test and user acquisition. ResearchFox also supports post-launch activities like product/application adoption, sensitization, and on-boarding support for B2B and B2C on-demand platform businesses.
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