For innovators and start-ups in these times of great change
Author: Mr Anupam Jalote, CEO of iCreate, India’s largest tech innovation based start-up institute.
iCreate is a key partner incubator for both the Social Impact and AGNIi teams
Dear fellow innovators and start-ups, these are turbulent times, and our world is changing. The old rules by which we had raised money perhaps, built up a certain business plan and a burn rate may not be relevant now. And all of this change has hit us in a matter of a few short weeks as the world struggles to overcome the curse of Covid-19.
The rules of engagement, business and finance world over are shifting very rapidly and will settle on a ‘new normal’ fairly soon, after decades of stability and predictability.
As start-ups, some of us will be very early stage, working on the ‘proof of concept’ of our idea, will have invested small sums of money as well as months of our time. Some will have started approaching customers, would had a mid-sized team (and a significant monthly cash burn), will have raised capital and will be attempting to understand market dynamics and generate sales revenues. And some of us will be more mature, have revenue streams, and might be dreaming of operational break-even.
What should we be doing at this point in time? What should our strategy be? Carry on with our plans, or re-calibrate?
There are no easy answers, but there are certainly some important points that should be used to guide our decision making:
People and organisations the world over will think carefully before spending money. Therefore, start-up businesses based on genuine customer need, providing a ‘must have’ rather than a ‘good to have’ will thrive. In case your business depends on customers spending casually for something they can manage to survive without, then you might face revenue challenges. You should re-evaluate your skills and see if you can pivot your business to providing some necessity to customers.
People will have a degree of mistrust of public spaces and public objects for some time to come. This is a natural fear – can I get infected as I go into a crowded shop, or a bus or a taxi? Is it safe to order deliveries online? In each of these very human concerns lie business opportunities for us.
The biggest priority of countries will be to get businesses back on track. What do they need in order to restart? What can slow or disable this process? Once again in thinking about these challenges, we spot opportunities for innovation.
Customers think rationally – we need to understand them, and take our direction from them. As a vital ‘thought experiment’ please spend a couple of days inside the mind of your customer, attempting to think what they think, worrying about things that worry them. It is not really as difficult as it sounds – visualise your customer in her home, or in the office or factory, imagine their day starting, the decisions they are making. Now add in the fact that they too are worried about their incomes, and that they would like to cut unnecessary costs. Now think about them evaluating your own offering to them – is it compelling and useful for them to buy right now, or can they postpone it for a few months? In case the answer is the latter, you very quickly need to chance your offering more in line of making it impossible for them to do without.
Evaluate your core competencies as a start-up. Are you masters of hardware? Are your software cats, good also in data analytics? Perhaps your strong suit is science-based technology and its applications in product development? Whatever your core competence, you will have to focus on it to modify you’re your offering so that it aligns with your customers’ needs.
Fancy valuations and initial show of interest from investors might no longer be valid. Therefore, conserve your cash, and work very closely with your customers to re-validate that they will indeed be able to support your sales projections with their purchases of your offerings. Understand that investors too will be more cautious in these times, and will want to be doubly sure of your revenue projections and the probability that you will actually achieve them.
The oldest lesson in the book is that times of great change are times of great opportunity. An open, innovative and questing mind is needed. Think deeply, be courageous, be bold – your country needs all its innovators in this hour of crises, and you will be supported firmly in your journey. The real inspiration of course is that your efforts will benefit millions of your countrymen!
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