For someone who’s started, operated and nurtured businesses across sectors in the last 25 years, the prevailing mentality of Indian startup ecosystem is rather unsettling.
The “me-too” phenomenon has reached a crescendo – a pitch so high that there is no way from there but down. Investment trends have been favouring run-of-the-mill, parroted business models since the dawn of the tech startup scene in India. Almost 10 years hence, nothing has changed even though many behemoths are still struggling to balance their P/L’s while the newer kids on the block are being swallowed by competition in an already over-crowded space.
Meanwhile, the age-old established business fundamentals are being hung out to dry.
The tech startup industry is like a new species of a beast that no one has yet figured out how to tame. We’re learning its nature as it grows but as with all things uncertain, are erring on the side of inhibition and hiding behind mass sentiment.
This practice of, for the lack of a better word – herd mentality, has resulted in the recent crises that are beginning to emerge and the impending trouble in paradise that has come to fore. Take for example, the food delivery aggregator services that have majorly downsized in workforce and shut operations in certain territories. The pressure to perform and deliver returns is leading the best in the industry to indulge in verbal spats on public forums.
Simply put, the nascent and bullish startup market is starting on its first course of correction since the last bubble burst 15 years ago. It’s high time we took a long term approach to our businesses instead of worrying about evaluations, GMVs and other trendy metrics that measure everything but the core of a startup.
As investors and business owners, we need to see these challenges as a clear call to get back the basics. No matter how complicated and new a situation, the best strategy will come from the most basic principles. Startup entrepreneurs need to head back to their drawing boards and re-evaluate their approach to scaling operations overnight and burning funds to acquire a market share that is 100% price sensitive and fickle.
But even more importantly, investors who shape and establish the market sentiment and mentor young founders, should re-assume their shunned responsibilities of identifying, backing and shaping startups that possess the core, concept and conviction of being the blue-chip companies of tomorrow.
The investors’ current lack of vision and risk-averse apathy is leading us into a state of me-too economy of copycats that offer little long-term value and thwart innovation.
For if over two decades founding and running enterprises has taught me anything it is that an entity built on a solid foundation will weather any storms. That a first mover advantage and almost non-existent competition will always be a business’ best assets. And that a close community of like-minded people and strong relationships will never fail to deliver in the long run.
Because if you want to build Rome, you cannot do it in a day.
[About The Author: Raj Iyer is the CMD and Founder of Icustommadeit.com]