Successful Startups – Critical Factors
New Delhi, June 20, 2021
This year we have seen 10 Unicorn Startups in the first 4 months of 2021 – Digit Insurance, Infra Market, Innovaccer, Meesho, CRED, Pharmeasy, Sharechat, Groww, Gupshup, Five Star Business Finance. In comparison, 2020 saw 14 unicorns, 2019 had 10 and 2018 clocked 7 (per Forbes India, May 2021 issue). This is a reflection of the success and the growth of startups in India. The mood seems to be upbeat across the ecosystem both on demand side (entrepreneurs) and supply side (investors).
Now, there are many questions surrounding your mind when you read these numbers such as what did they do? How did they get there? Or, is there a secret sauce to be successful?
Here is my take on the critical factors (in no particular order) which put these startups on the unicorn growth path.
1. Ideas which are innovative, disruptive or offer a unique value proposition, tend to capture the consumer attention or at times create a completely new segment. Ventures which focus on consumer behaviour, convenience, quality of service, affordability, transparency, holistic one stop shop, personalization etc., are likely to be more successful.
2. Founders matter a lot. The word that marks the difference between a successful founder vs. others, is “enterprising”. An enterprising founder will have many leadership qualities. They willbe focused, driven, and passionate with never give up attitude, willing to learn and adapt since consumers, market, investors will challenge them at every stage and business model tweaks will happen on the fly.
3. Funding is the key to any business – big or small. While many startups begin with bootstrapping, they need access to funds to invest in technology, create platform, marketing, customer acquisition, expand the team and so on. This is where Angel Investors, Individuals or LLPs, Accelerators, VC Funds come in. Raising the funds at the right time and seeking investors help is one of the key ingredients to lay solid foundation for growth. However, the trick is not just to get the first round but continue to get continuously so that you stay on course.
4. Timing of the launch of startup is overly critical as predicting the market maturity is not easy. Some of the great ideas have failed since they were ahead of time or too late where opportunity was already lost to competition.
5. Consumers have become more discerning. They are willing to appreciate the true value of the offerings rather the cost. Startups, therefore, need to focus on building a long-term strategy that is based on excellence and on building enduring customer relationships.
6. Execution is the key. You can have the best idea and a solid strategy, but it is useless without the capability to execute. Excellent execution needs competent, capable, committed, and passionate team members. Operations need to work closely with Sales, Marketing, Product, and Customer Service teams to ensure that customer feedback, enhancements, competition moves are all well anticipated and factored in execution plan.
7. Right team is critical because initial effort is too intense and everyone puts disproportionate amount of time to get the business going. Founders must get like-minded people who believe in the idea and are willing to go through the pain of creating an enterprise for the cause. During initial days, you would expect the team to multi-task and even 24 hours may be less. However, as you scale up, bring in right professional talent who can help setup the optimum processes, controls, tech tools and governance mechanisms for the progressing needs.
8. Ecosystem plays an important role. Thankfully, In India is much better than what it was a decade back. Our overall Startup India programme announced by the Prime Minister and number of policies, regulatory changes which have been announced over the years, are all making the environment startup friendly. India’s ease of doing business ranking improved from 142 in 2014 to 63 in 2019 and as per NITI Aayog chief executive officer Amitabh Kant, aim is to be among the top 50 countries by 2021.
I have seen many startups become successful, because they were vigilant about the above-mentioned factors.