The great Indian start-up growth story – Part 2: More than a leap of faith

The confidence of Indian entrepreneurs is at a high point and experts say that this momentum will continue for some more time and is yet to reach its peak. Part 1 of this special report dwelled on the factors that are contributing to the growth of the start-up ecosystem in India, especially during the tough pandemic period; how the communication strategy can be further fortified; how the current times are proving to be a golden period for tech-led start-ups; and of course, how India is turning out to be a land of the Unicorns.

Part 2 and concluding part of the report features insights by a cross-section of industry experts, who decode the start-up ecosystem in India, the key challenges and how the start-ups are addressing these challenges. The experts also highlight the growth drivers propelling the Unicorns in the country.

Also read:
The great Indian start-up growth story – Part 1

Aryaman Vir, Founder and CEO, MYRE Capital, noted that any start-up in today’s digitised world faces immense competition and thus, they need to focus on their USP. “Having a clear differentiator in their offerings will help build brand awareness, keeping the company above its competitors. That is what we have done as well. Identifying the key problem statement, finding a scalable solution, and executing a differentiated solution,” he said.

Vir further added, “When it comes to marketing and communication strategy, word of mouth and referral is the strongest marketing tool. We strongly believe that by providing users, investors and partners a seamless experience, they, in turn, become spokespersons for the company. This encourages prioritisation of user experience.”

Educating the customers is equally important. So, when developing an innovative solution, it is imperative to spread awareness of the platform and the category. Rather than trying to sell the product, start-ups need to focus on educating their user base about the category itself.

Continuing further, Vir remarked, “Becoming a Unicorn, although it sounds like an end goal, is just a pit stop in our bigger goal to democratising commercial real estate and making this asset class accessible to investors. So, while we obviously plan to communicate better, our immediate priority is improving our product and making it seamless for the investors to own commercial property and removing roadblocks at every step. The journey to becoming a Unicorn is similar to journey to get every single customer – do the little things right, while the big things function in place.”

Quoting a well-known saying, “A smooth sea never made a skilled sailor”, Kunal Bhardwaj, Senior Director - Marketing, Upstox, said, “The challenges that come along the way help entrepreneurs survive and develop themselves into successful business owners. Having a start-up idea is one thing, but taking the leap of faith to nurture and execute that idea is a different ball game.”

Working with partners, investors, and choosing the right team with a common passion are some of the factors that play a crucial role in the early stages. Bhardwaj strongly believes that start-ups should use creative marketing, instead of just spending more money on traditional advertising and digital media, and think outside the box for huge results.

“Creating content that engages potential and existing customers to learn about your product is the key,” he said, adding, “As a founder and leader, you need to believe in your vision, product, and people very strongly. The decisions or policies you define today should align with your long-term vision. Companies with ground-breaking innovation are better geared to become Unicorns.”

Talking about the challenges face by his start-up FloBiz, its Founder & CEO, Rahul Raj, said that the myriad challenges faced by a growth-stage start-up like FloBiz and other early-stage start-ups are no different. According to him, some of the broad key obstacles that every start-up faces include:

• Hiring relevant/ suitable candidates
• Cracking GTM strategies
• Sustained product development velocity
• Building an enduring organisation culture

“For an early-stage start-up to reach the growth stage and become a profitable company, it is critical to solve these challenges strategically. As a start-up, we understand that marketing and communications are the key to growth and setting ourselves apart from the competition. Our marketing and communications strategies include goals, audience, thorough market research and budget. Our long-term goal is to increase brand awareness and attract new users for our flagship product, myBillBook. That’s why, we ideate, plan and execute our strategies to reach the right set of audiences and solve their problems with the relevant message and best-optimised budget. We take an iterative and experimentative approach through multiple channels like social, digital, offline, etc. Also, we focus on enhancing users’ experience for both free & paid users and working through the funnels for improvement in conversions,” Raj added.

He further said that the ultimate goal at FloBiz is an IPO. “With the product-cum-user first approach, we want to make an impact in society by accelerating the growth of Indian SMBs with the power of technology and digitisation. We strive hard to provide the highest quality product and service to our SMB partners and solve their most pressing problems,” he added.

Along similar lines, Amit Verma, Head of Marketing and Growth, Rapido, said that start-ups faced several challenges in their early stages, ranging from investment and human resources to customer service. Customers being of utmost importance, it’s essential that start-ups build, open and maintain all channels of communication with their customers. “Clearly defining the target customers and understanding their needs and the current gaps in depth result in creating a mutually beneficial long-term association and recall value. Finance is the segment to be prioritised. Right from scouting for appropriate investors, subject to the stage of funding, to selecting partners and advisors, all these associations go a long way in evaluating projections and determining the brand’s stability,” he added.

According to Verma, the key building blocks to establishing long term relevancy are cracking the brand’s positioning. He remarked, “Our world is faced with so many lookalike products, a brand needs to back itself with a powerful message and vision to support its positioning in the market, and thus, the minds of its customers.”

Early age start-ups focus on two key pillars to power growth – acquisition and retaining the existing customer. Today, customers stay with a brand if it meets their evolving needs – both tangible and intangible.

A successful business venture necessitates forming ideas based on thorough research and in-depth knowledge of a specific need that the company will address. However, to make the business venture successful, start-ups must establish a comprehensive grasp of their target audience and market demand.

Organisations today are now using technologies to build brands, improve customer service, increase productivity and efficiency, discover trends, develop products, and promote growth. A top-down approach to ideation in an organisation is required for the intricacy of the decision-making process.

Shirish Nadkarni, a serial entrepreneur and author of the book ‘From Startup to Exit’, said, “The key challenge that start-ups face in the early stages is to prove that they have achieved product-market fit. A lot of start-ups either don’t address a critical pain point or enter a crowded market without sufficient differentiation. Another challenge that start-ups face is to raise funding for their start-up. This can be particularly challenging if they don’t have the right credentials or have sufficient customer traction.”

Nadkarni’s advice to the start-ups is to plan their marketing strategy even before they have a product in the market. He further said, “They can set up a website that talks about their product and registers users for a beta. They can then utilise Facebook advertising or Google SEM to test different messages to see which one resonates best with end users. Once the product is launched, the start-up is in a better position to allocate its marketing dollars on the right set of audiences and channels.”

“In order to become a Unicorn, a start-up needs to generate roughly $50 million in revenues and be growing at a 30-50% growth rate. To achieve this kind of revenue, the start-up needs to invest a significant amount in sales and marketing and create a repeatable sales motion that they can scale over time,” Nadkarni concluded.