NEW DELHI: Indian startups need to reset their work, reassess and reimagine their business as they navigate through the coronavirus crisis, according to a new playbook for the startup community by Google.
The pandemic has caused massive disruptions, and startups, in particular, have been hit hard since they operate with lean teams and resources and have far less cushion than a scaled enterprise.
To support startups, tech giant Google that runs its own Google for Startups Accelerator (GSF) programme, has launched a playbook on how startups can emerge strong from the covid crisis. The playbook contains inputs from venture capital firms, startups and mentors to bring informed and actionable advice from across the ecosystem to young businesses and their leaders, as they navigate their way through this Black Swan event.
“Adapting is the name of the game, first we recommend startups to reset, then reassess the impact on their company and the workforce and most importantly, reimagine the future. That is a thing to do for entrepreneurs given the fact that they are passionate about what they had set out to do," said Paul Ravindranath, Google Program Manager, GFS Accelerator India.
The playbook recommends building a two-month and a six-month plan based on current beliefs. It asks founders to keep that plan as a living document and update it as required every week or so basis any material information about the environment or business.
Managing cash flow is a core challenge that startups are facing at this point, remote working is another challenge, managing burn and making sure that there is a runway for at least 18-21 months is important, said Ravindranath, adding that it is imperative to look for new revenue sources as the core revenue stream may have been impacted during the crisis.
Fund-raising may also get pushed back till there is clarity on economic recovery and there will likely be fewer new deals in the first half of 2020. Since revenues are difficult to forecast, it is critical that leaders double down and evaluate moving to a cash flow-based planning and look at bank statements on a day-to-day basis.
On raising new money, Sanchita Bamnote of Blume Ventures said, “If there is money on the table right now, during the covid criris take it with the most optimized terms. External capital will be more difficult to raise. Amidst funding woes, alternative financing options like venture debt helps startups weather the financing challenges and keep their ships afloat."
Ravindranath said verticals such as online education, health and fitness, gaming and e- grocery have been witnessing a surge in demand and can contribute to the community at large by providing free subscriptions, contactless delivery and waiving fees to address a larger user base and enhance customer experience.
He cited the example of Dunzo that pivoted to contactless delivery providing users with daily essentials when they were unable to step out of their homes.
Similarly, Bengaluru-based Wysa, a mental health startup, has a range of tools that can be accessed for free from relaxation techniques to cognitive restructuring, improving focus or regaining motivation. Most of these take under ten minutes to do and 93% of the users find them helpful.
Verticals like telemedicine, remote diagnostics, productivity tools and solutions that enable remote working, fintech and financial inclusion have opportunities despite the challenging times. Those in emerging areas like mental health or AR-VR-based conferencing also have potential, the playbook said.
From a global perspective, founders who are connected to communities are getting the opportunities they need to survive through the challenge, said Sami Kizilbash - Global Head, Accelerators, Google.
Kizilbash said despite the covid situation, VC funding has not dried up.
“Venture capitalists are hungry for more deals, they have raised their funds and are looking for greater opportunities to invest in those startups that have adapted to the covid environment so the dollars are still being spent," he added.
Google has mentored over 60 startups in India till date and has supported over 250 through the Covid-19 outbreak.
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