India has attained the unique distinction of being the third largest startup ecosystem after the US and China. From 2014 to 2021, the amount of money that Indian startups raised grew at a CAGR of 49%. Close to $42 billion was raised as investment through 1500 deals by the startups. However, lately the startup system in India is facing hiccups and is under close scrutiny.
Having been the envy of the world by creating 105 unicorns between 2018 to 2022, today the active number is reduced to 84. Some of them like Quikr and Hike have lost their unicorn status due to investor markdowns. Byju’s came under close examination after the delay by a year in filing its audited results saw its revenues fall by 3% even as losses increased 20-fold to around Rs 4500 crore in 2021. Nykaa, the new-age beauty and fashion retailer has seen shareholder wealth erode by 56% over a year. Touted as India’s then largest ever IPO, Paytm stocks are down over 70%.
Despite the setbacks of some of the promising startups and the disappointment of investors, there is a cautious optimism amongst entrepreneurs and investors about the potential of the Indian startup ecosystem. The upcoming The Indus Entrepreneurs Conference (TiEcon) Pune also dwells on the subject of future achievers and the importance of continued innovation for sustained success. In this context, RA Mashelkar, the celebrated scientist and thought leader on innovation, talks about the importance of radical and sustainable transformation in his book Leapfrogging to Pole Vaulting. According to him, the traditional leap-frogging approach is reactive and leads to only small incremental gains. It is the pole vaulting approach that would lead to breakthrough disruptive gains that are sustainable in the long run.
Pole vaulting requires a combination of intricate skills that involve maintaining the perfect balance right through different stages of the vault – grip, run-up, pole carrying, take-off, hang, swing, pull-up, bar clearance, landing and recovery.
Similar agility and acumen are required for businesses to build equity for their offerings and acceptance with their customers. Businesses such as Uber and Zoho have been conceived right from the start as global disruptors with innovation at the core, making their products relevant, distinctive and easy to adopt.
All successful disruptors focused on innovation have superlative understanding of the needs of customers and identification of their exact pain points in their current consumption pattern to create outstanding digital products, assuring ease of navigation from Day One of the product launch. Dreamers who are thinking of making a big difference in their respective domains could draw inspiration from these successful case studies. Money will come chasing not just where the idea blooms but where there is a crucible for thriving innovation with continuous support from customers.