Startups need sustainable business model to survive, says Ola CEO | The Financial Express

Startups need sustainable business model to survive, says Ola CEO

Companies that do not have a sustainable business model will not survive, Ola Cabs CEO and co-founder Bhavish Aggarwal said on Friday.

Startups need sustainable business model to survive, says Ola CEO
Aggarwal said startups often misunderstand what disruption means. (IE)

Companies that do not have a sustainable business model will not survive, Ola Cabs CEO and co-founder Bhavish Aggarwal said on Friday. “…Those who do not have a sustainable business model will die one day or the other. Whether they will die today or tomorrow is their choice, but if they want to survive, they will have to build a sustainable business model,” Aggarwal said at a fireside chat at the TIECON Pune 2022 conference.

He said the ride-hailing company started building a sustainable business model four years ago. “We do not talk about this publicly, but we are a very profitable business; in the core ride-hailing company, business is growing well …,” he said.

Aggarwal said startups often misunderstand what disruption means. “Disruption is a very misused word and everybody says they are a disruptive company and have made apps … just one aggregator app on top of another … That is not disruption and every idea is not disruptive.”

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There will be a few large disruptions happening in the world where the entire ecosystem is getting disrupted, and within those, there will be interesting ideas that startups could build towards, he said. The best judge of disruption is the end consumer and if the consumer gets it, the startup is disruptive, he said.

Speaking on the funding winter and challenges before startups, Aggarwal said capital cycles would come and go and they had seen three such downcycles. To ride out these cycles, there is a need to build a business with a long-term vision and innovation at the core, he suggested. Startups had enjoyed the upcycle with crazy valuations and when the times are down they should make the most of that too — hunker down, manage costs, consolidate the business, focus on customers and make sure their products were the best in the market to ride out of this cycle, he said.

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He said his philosophy was never to ape somebody, and he does not agree with the comparisons with Uber and Tesla. “The reason we won the Ola race was that we understood India better. The reason we will win the EV race and the EV disruption is that we understand what is required to be done and what kind of technologies are required to be built and what the consumers in India want and what our place in the world can be if we build towards it,” he said.

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First published on: 12-11-2022 at 07:27 IST