India has a population of 1.3 billion and is the third largest Start-up ecosystem in the World. Yet out of 177 unicorns in the world, India can boast of only 8 namely Flipkart, Snapdeal, Ola cabs, One 97 Communication (Paytm), Hike, Shopclues, Zomato Media, and InMobi. Oyo Rooms and Grofers are on the verge of joining the club. Reasons are aplenty from the lack of a more global outlook to scanty availability of funds for a dismal number of unicorns being present in India. It’s also the socio-economic factors prevalent here that hinder the evolvement of a potential unicorn.
Unicorns at a time like this..
Unicorns are aggressive, they grow fast and they hire exponentially.
India has the advantage of a huge demographic dividend. We as a country need to take advantage of this opportunity. Creating opportunities for two-thirds of a 1.3 billion population is a herculean task.
Unicorns are aggressive, they grow fast and they hire exponentially. The need of the hour is to build sustainable unicorn startups which will hire thousands of educated unemployed youth available.
We are nowhere close to the number of Unicorns which can meet such ambitious goals. We need an ecosystem which can drive faster yet stable growth of Unicorns to achieve this goal. The current startup ecosystem in our country needs to drive in a daringly different direction to achieve this.
Sustainable growth is characterized by one simple rule, “New customer comes from the actions of the past customer.” Building a Start-Up Enterprise is an exercise of institution building. For generations, Indian traders have laws that govern the traded products and not the customer interests. Though the Indian Entrepreneur understands money very well, a startup enterprise is not all about money. If one needs to build a Unicorn, the focus needs to be on delivering value to the customer and the rest doesn’t matter.
DNA of a hunting Unicorn
What makes a unicorn startup cannot be explained through a hard and fast rule. It takes a certain concoction traits to attain such a state nevertheless.
- Business model totally aligned towards a good customer experience.
- Has positive unit economics from early stage.
- Is self-sustained and has the ability to bootstrap (essentially, survive) for a while even if the next level of funding is delayed. Efficient utilisation of capital is pivotal in attaining that.
- Business model must focus on the urban, Semi-urban and rural markets, albeit with a different marketing strategy.
- Emphasis should be laid on value and traction but primarily on revenue.
- A belief in originality rather than aping western businesses, since what works in a certain geographies doesn’t work in India.
The missing Link
The Start-Up ecosystem only extends to a few cities in India. The scenario needs to change, it has to expand throughout the country. The number of Non-Premium Educational Institutions are aplenty in India. The focus has to be on identifying the best ideas and grooming them to become Start-ups. We need more seed fund and grants which can enable innovation and invention. Early stage foundation is quite important for a start-up to become a unicorn, which can be taken care of through a structural shift of strong support systems that validate at the early stages.
Finally it’s the founder’s passion and the mentor’s guidance that make a big difference in building the Enterprise. If the early stage is planned and built solid, the chances of success are much higher.
Let’s hope for a vibrant ecosystem in the years to come which will be the breeding ground for numerous unicorns. Then India will truly be a super power to reckon with.
Devireddy Sreedevi (Executive Director, TiE Hyderabad) has Overall 17 years of diverse experience in Corporate Relations, Operations, Sales and Marketing.
Strong Business acumen coupled with people skills, Relationship management, Inspiring leadership evangelist