Covid-19 crisis for startups: Innovating to survive, and then thrive
According to the legendary boxer Mike Tyson, “Everyone has a plan, till they get punched in the mouth”. And, punched most of start-ups have been by Covid-19. Though badly bruised, many refuse to be knocked down.
Globally, India has the third-largest ecosystem for successful start-ups, behind China and the US. In 2019, Indian start-ups had raised over $11 billion. This was 55% higher than 2018 in value and 30% higher in deal volume.
According to the US-India Strategic and Partnership Forum, in the next five years, they could attract investment of over $21 billion, creating 550,000 direct and 1,400,000 indirect jobs. In February, some had planned to go for public issue over the succeeding months. Then came the Covid-19 pandemic, bringing with it global lockdowns, closed borders and stuck funds. This was reminiscent of Future Shock as described by Alvin Toffler, “a certain psychological state of individuals and entire societies” resulting from “too much change in too short a period of time”.
According to a recent NASSCOM study, out of 9,300 tech start-ups, most suffered severe impact, with the bigger impact being felt by early- to mid-stage start-ups. It was reported that “90% plus was facing a decline in revenues, 30-40% temporarily drew shutters on their operations or in the process of closing down and 70% had runway of less than 3 months”. This has a serious bearing on the emerging start-up ecosystem in India—both because of the highly intertwined nature of the businesses, and also because of the job losses. But then, entrepreneurship is all about taking risks and being nimble-footed to change course.
E-commerce and online service platforms have a quintessential role in enabling the new norm of greater distancing, and providing vital services in retail, health, education, finance, agriculture and marketing. As Covid-19 is likely to stay, work from home is becoming the new normal, as also the delivery of goods and services.