Rethinking Business for a New Age

The last couple of weeks have been challenging as businesses navigate a new way of working. However, if you are an entrepreneur or a business leader, staying calm under pressure and finding a plan B is a part of the job description. Many startups have taken proactive steps to deal with the immediate fallout of the lockdown. But what about the long run? How can startup founders bring their businesses to a more secure position and recover faster once the crisis is over? Take the case of China. While it remains the epicentre of the illness, it has also slowly started moving towards economic recovery with many factories and businesses opening partially.

We spoke to several Indian entrepreneurs to understand how they are coping during this crisis. Here are their insights and the strategies that they are applying to help their businesses recover from this upheaval.

Shifting priorities

Augmented Byte is a startup developing products for indoor navigation. Its augmented reality-based tool can help people navigate any given space without Wi-Fi or Bluetooth. The team had foreseen the lockdown and realised that their product, which is mostly used to navigate large buildings and premises such as hospitals and malls, would not be used much as people would stop visiting these places. The team sold its product to a corporate, and all employees involved in product development also work with this organisation. As the founder, Radha Krishna, explains, “We knew that we might not have many users for our product. So, it felt like the right time to sell it. In the meantime, we are going to use this time to focus on R&D. We are witnessing many changes to the business and lifestyle sector now, and there are sure to be more. We thought that it would be better if we were to spend this time focusing on these needs, analysing them and seeing what possible solutions can be created. The shift will help Augmented Byte develop new technology and a long-term strategy for its business.”

Developing new models

One of the side-effects of this lockdown has been the growing list of new-found needs, and each offers startups a new opportunity. These new-found needs have led to Exprs, a micro-distribution company, creating a new channel of income. Earlier, the startup focused on tech spaces or gated communities. Partnering with e-commerce and other online delivery portals, they received parcels from these companies and ensured last-mile delivery to end-consumers within those premises. Explaining how the lockdown has brought about a new opportunity, the founder Srinivas Madhavam, explains, “We are now seeing gated communities approaching us and asking us to deploy two dedicated and pre-screened delivery executives. These executives can help the residents practise social distancing by ensuring the delivery of all their groceries and other essential from the gate to the doorstep.” The increase in demand has not only been from the gated communities they earlier operated in but also from newer ones. “Where earlier we rented our spot in their premises, we now have them pay us to help them with their essential services,” he continues. Srinivas also believes that it has shifted the needle as more and more people are going to opt for online shopping rather than go out to make purchases, and also look at shopping locally. Even those who never made online purchases are now having to make them. With increased downloading and usage of their apps, Exprs is focusing on ramping up its technology as it needs to scale up to keep pace with the increased technology adoption.

Moving to the cloud

Earlier, consumers often opted for offline channels for particular activities even when online options were present. But everyone is choosing the online option now. Pencilton is a digital piggy bank that helps parents teach their children real-life money skills. As part of its services, it also provides a debit card for children to use. As a FinTech business, it has not been impacted much since it does not have any overheads or high logistics costs. It has, however, seen a dip when it has come to the purchase of debit cards. Logistic services, an offline dependency, are not available now, and people are not comfortable with receiving parcels in the current social climate. “So, while parents are engaging with us, looking up our product and showing interest, it is not converting to sales,” explains founder Vishwajit Pureti. “Another factor is that parents are not giving their kids much pocket money now, and any shopping done is limited to only essentials. So, we will have to wait for a couple of months before kids are back to stepping out and making other purchases.”

As a result, Pencilton is now looking at developing a component of its product that can be delivered online. “FinTech has options of always having an online or Lite version. While we have a card now, we will also need to expand to something like a Unified Payments Interface (UPI) version, which can be served through an app. All companies are undergoing a shift now, and I think they will all need to include a cloud-based or app-based component in their offerings, which will help them keep going. Like now, even though people cannot step out of their house, they still have their phones and laptops to place orders, conduct transactions, watch movies and stay connected to the cloud. Having an online version will help you stay continuously engaged with your customer.”

Changing the way businesses operate

Businesses need to evolve with the times and the growing needs of their market. Other important criteria for startups now include conserving cash. Srinivas Madhavam says, “Cash-flow management is something that business leaders and founders should address. On the one hand, our revenue is delayed, but on the other, our expenses remain unchanged. Business leaders will need to prioritise it to ensure that they stay afloat.”

Radha Krishan echoes the sentiments, “Where earlier we had funding for six months, we might now have to stretch that out for double that time. It is not going to be easy, and many startups are already facing difficulties, and some have even shut shop. It calls for a reprioritisation of what is essential and what is not.”

Vishwajit Pureti says, “While FinTech may not be as affected as others, this whole situation has taught us that we need to plan for emergency credit and finance. We will need to either keep three-four months of extra money aside or have options to access that extra money from elsewhere to help us get through unforeseen circumstances.”

As remote working has become the norm, businesses are rethinking their workforce management strategy. “I think working from home is practical, saves money and is more effective than previously perceived. It is something businesses should be evaluating seriously in the next couple of months as it will help them reach out to a larger pool of talent. It is also a great way to increase employment and extend opportunities to those who would otherwise not be able to come into the office, such as those with physical disabilities.”

Where earlier startups were taking risks and experimenting, they are becoming cautious now. As Srinivas Madhavam explains, “We still want to experiment, but we need to take calculated risks and will need to verify all our assumptions before we start.”

While the next couple of months are going to be difficult, it is also going to be a time where innovation and creativity grow by leaps and bounds. The period will also establish a “new normal” across businesses and industries. Some of the big names in the industry today, such as General Electric, IBM, Disney, General Motors, Microsoft, Apple, Uber and Groupon began at a time of economic crisis. COVID-19 has effectively changed the future of industries and life as we know it. While the global market tries to navigate the implications of a pandemic of this magnitude, startups are presented with the unique opportunity to redesign that future. It only remains to be seen how many are up for that challenge and how they envision our future.