Dauntless! That’s what defines the Indian high-tech startup ecosystem, which continued to develop via a pandemic and propelled the electronics business to aspire for a brand new purpose—a $300 billion business by FY26. Realising this formidable purpose isn’t any imply feat because the very drivers of this purpose proceed to battle to emerge out of the struggling startup stage and turn into a longtime enterprise. Yashasvini Razdan from Electronics For You writes on how high-tech startups can steer via the challenges that come their manner.
Eight years in the past, on August 15, 2015, the Prime Minister of India introduced a brand new initiative referred to as the Startup India Marketing campaign to catalyse startup tradition and construct a powerful and inclusive ecosystem for innovation and entrepreneurship in India.
Prior to now eight years, India has grown to turn into the third largest ecosystem for startups after the US and China. In December 2022, the Division for Promotion of Trade and Inner Commerce (DPIIT) declared that the variety of startups in India has grown from 452 in 2016 to 84,012 in 2022 of which 23,773 got here into being in 2022 itself.
Regardless of the wonderful numbers, 90% of the startups fail, of which 10% fail within the first yr and 70% fail between the second and third years. Many would attribute this to a scarcity of funding, unclear imaginative and prescient, and insufficient sources. Whitewashing the failure of startups utilizing these three causes isn’t going to assist. To scale back the proportion of failure one must dive deeper into the explanation why startups fail, particularly within the high-tech sector.
Traversing via ‘the street not taken’
Bengaluru is the hub for startups and site visitors, after all! Proper from selecting the proper transportation to factoring within the time taken to e-book a trip, pre-planning one’s journey earlier than heading out is a should. Constructing a startup is akin to planning a journey through ‘the street not taken’ and entrepreneurs must observe the identical step whereas finalising their vacation spot.
The primary rule to planning the startup journey could be very apparent—a marketing strategy! Far too many startup founders assume a pitch deck is a marketing strategy, which is a really improper notion. A marketing strategy is a stay doc, which is continually revised and never one thing with a fairly ring binder solely to be forgotten about later.
Trudging alone, on the street not taken, is a frightening activity however a accomplice can absolutely make the journey simpler. For startup entrepreneurs, selecting the best co-founder is like deciding on the fitting life accomplice. Co-founders with complementary abilities and people who mutually agree on the marketing strategy could make it simpler to navigate via the whirlwind of challenges encountered by a startup.
The co-founders should be clear on the objectives they purpose to serve. Do they want to be a product startup or a providers startup, or do they wish to sail on each the boats? Product improvement only for the sake of innovation doesn’t warrant the sustenance and progress of a startup.
To achieve success, startups must converse, work together, and discuss to no less than 50-100 clients in a selected phase to determine their wants and construct a product that serves these wants and ultimately sells. Asking the fitting questions that get a buyer to open up about their necessities, permits entrepreneurs to formulate and procure extra readability on how their product ought to get developed. These clients can later be approached once more, as soon as the prototype is prepared, to examine whether or not it meets their wants.
By this time, the ringing query that might come to an entrepreneur can be, ‘How does one collate all that data to know and utilise it?’ Large producers go to market analysis companies however startups lack the capital to afford that form of luxurious. So, they’ll make use of open supply instruments, equivalent to a Google Dashboard, which is free. Crunching numbers, simulating information, making a demo—it gives all.
The federal government has introduced a number of grants, such because the NIDHI (Nationwide Initiative for Growing and Harnessing Improvements) Prayas, geared toward offering prototype funding to transform an thought right into a prototype of a product that has the potential for commercialisation for aspiring innovators.
Whereas finalising the vacation spot and route, entrepreneurs must gauge the time it will take for his or her startup to realize its objectives. Factoring lead occasions and the price of uncooked supplies is an indispensable a part of this strategy planning stage. Covid-19 and the semiconductor provide crunch have proven us that entrepreneurs should be ready for all supply-chain points they could face.
Tackling the bull
Product improvement is a long-drawn course of. After crossing a number of boundaries, when a startup lastly reaches the product improvement stage, life doesn’t turn into any simpler than it had been earlier. Selections concerning funds and product design could make or break the lifetime of the startup.
Manoeuvring via this battlefield of challenges can’t be carried out with out the steerage of an skilled skilled. Having a mentor or a trusted community of people to speak to and focus on particular wants could be of nice help.
If the startup connects with a startup incubator, steerage pertaining to improvement and enterprise technique might be readily supplied to them. Numerous Centres of Excellences (CoEs) underneath the Software program Know-how Parks of India (STPI) have been arrange in numerous cities of India to help {hardware} producers engaged on disruptive applied sciences within the electronics business.
Each startup wants funds and help to provide you with a prototype for its clients. Connecting with the proper traders and incubators is much like discovering an escalator to achieve the subsequent stage of progress.
When on the lookout for funding via personal fairness traders, startup founders ought to select the proper traders who perceive the perils of growing a {hardware} know-how product startup. In search of funding from ‘actual property traders’ who need 100% returns inside a yr is identical as consuming soup utilizing a fork! The chef (investor) will carry on questioning why the soup (product) isn’t completed.
The federal government has introduced a number of grants, such because the NIDHI (Nationwide Initiative for Growing and Harnessing Improvements) Prayas, geared toward offering prototype funding to transform an thought right into a prototype of a product that has the potential for commercialisation for aspiring innovators.
Consortium of Electronics Industries of Karnataka (CLIK) President, Madhav R. Badsheshi, instructed EFY, “Schemes equivalent to Nidhi Prayas present a grant of `10 lakh (a million rupees) to startup firms or entrepreneurs. To start with, for making the preliminary prototype, this quantity suffices however as you go up the ladder, you’ll want extra funds. You’ll want some huge cash for a market survey alone! You’d want to review the market, and after getting the inputs, you’ll have to regulate your marketing strategy.”
To reap most advantages from traders, entrepreneurs must have a transparent understanding and give attention to what product they will construct. A lot of the work is already carried out if the innovator has a advantageous marketing strategy. Together with that, the entrepreneur wants to focus on the innovation and clarify what different choices are already out there out there.
Traders must know the rationale they need to put money into a selected startup. With an in depth however very articulate marketing strategy, startup founders can persuade the traders to put money into their startup even earlier than they provide you with a minimal viable product (MVP).
Transferring on from the ideation to an precise proof-of-concept (PoC) section is the subsequent problem within the lifetime of a startup. To provide you with an MVP, the startup wants to return to these clients they spoke to in the course of the ideation section.
“You might want to have a set of particular questions in your clients and continuously refine your thought to make it helpful. Don’t attempt to boil the ocean at this stage and add up all the options into one product. That may take one other yr,” cautions Bharat Innovation Fund accomplice Somshubhro Pal Choudhury.
Choudhury’s warning is additional supported by Maker Village CEO, Nizamuddin Mohammed, who articulates the necessity for speedy prototyping. He says, “With each {hardware} product, you want speedy prototyping. We name it the fail-fast approach. You might want to provide you with a product quick, try it out with the shopper in your goal phase, after which iterate on it.”
As soon as buyer curiosity is generated and the MVP is prepared, startups want to start out minting cash. The sustainability of a startup relies upon fully on how a lot cash it has in its coffers and the way it will get the money flowing. Taking eyes off the money circulation at any time means a certain loss of life for the startup.
Choudhury explains how startup founders can do pricing discovery at this stage. He advises startups to have interaction in a repeatable form of enterprise that ensures recurring income, which might get the traders excited. “Whenever you do a pilot PoC with the shopper, don’t go for a free PoC. At the least get some cash out of the shopper. This fashion their willingness to pay will get examined,” he says.
Choudhury additionally underlines the significance of the founders doing the primary few gross sales, as an alternative of sending in a gross sales consultant, to get the precise suggestions from the shoppers.
Trudging via the final mile
Just a few years in the past, a telecom infrastructure firm in Chennai deployed the gear for use in a wonderful forged iron casing. Whereas the forged was designed to perfection, the corporate made one mistake. They forgot to place powder coating on the forged iron casing. Inside a yr of deployment, the telecom supplier requested them to alter the gear because it had rusted and didn’t work anymore.
Famend electronics business advisor PVG Menon, who chaired the panel dialogue on the IEW 2022, narrated the above story. It was to clarify to the viewers how the corporate had gone forward with product improvement with out understanding their deployment situations and help necessities.
Greater than typically, firms develop their product in an industrial atmosphere and neglect to account for extra help necessities in a distant deployment state of affairs. Too many aspiring {hardware} startups battle to distribute their expertise and ability uniformly throughout all sectors of the enterprise. Many occasions, essentially the most environment friendly activity drive is deployed in direction of product improvement whereas the gross sales and advertising and marketing segments share the identical destiny because the middle-born in a traditional desi household—ignored and left to their very own units.
Electrical car startup Greendzine Applied sciences’ co-founder, Karthikeyan Sundaram, talks about his personal expertise and points a cautionary warning for all entrepreneurs. “We assumed that since our engineering design and product are good, we might loosen up on the advertising and marketing entrance, however that was not right. We needed to be taught advertising and marketing and gross sales, which was the most important studying battle we needed to undergo for a very long time. If I needed to set up a startup once more, then I might focus extra on advertising and marketing, gross sales, branding, in addition to engineering, and never the opposite manner round,” he instructed EFY.
Web of Issues startup Refillbot’s director, Prabhu Stavarmath, elaborates on brand-building and scaling up on advertising and marketing. “Model constructing is essential after getting a product, in order that your potential clients can uncover you, via Google, LinkedIn, and even the newspaper. For some, it occurs organically as nicely, however it’s at all times good to have some fundamental advertising and marketing in place and a model constructed within the early stage. From thereon, you simply must scale up,” he opines.
Including to that, co-founder and director of the startup Silizium Circuits, Rijin John, shares with EFY his expertise with buyer interplay and the function it performs in serving to the startup design its mental property (IP). “Our IP roadmap was purely based mostly on our potential clients with whom we had already spoken and who have been all in favour of our product. We wished our product to be at par or higher than the imports of IPs. We efficiently taped out our first semiconductor IP in September 2022.”
The yr is 2023. Gone are the times when the time period startup would simply suggest a brand new utility software program. India is witnessing a sweeping progress of startups within the high-technology sector. Regardless of the plethora of alternatives out there, innovators on this area are going through lots of challenges starting from finance to human sources and from launch to sustaining progress with tenacity.
You will need to guarantee and support the success of those high-tech startups as they maintain the potential of making jobs within the manufacturing sector and realising India’s dream of attaining a $300 billion electronics business. With acceptable help, synchronisation, and mentoring from stakeholders, the federal government, and the electronics business, startup innovators can simply manoeuvre their solution to success.
