Dauntless! That’s what defines the Indian high-tech startup ecosystem, which continued to develop by a pandemic and propelled the electronics trade to aspire for a brand new purpose—a $300 billion trade by FY26. Realising this bold purpose is not any imply feat because the very drivers of this purpose proceed to wrestle 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 by 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 known as the Startup India Marketing campaign to catalyse startup tradition and construct a robust and inclusive ecosystem for innovation and entrepreneurship in India.
Up 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 Inside 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 an absence of funding, unclear imaginative and prescient, and insufficient assets. 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 the explanation why startups fail, particularly within the high-tech sector.
Traversing by ‘the highway not taken’
Bengaluru is the hub for startups and site visitors, in fact! Proper from selecting the right transportation to factoring within the time taken to e-book a journey, pre-planning one’s journey earlier than heading out is a should. Constructing a startup is akin to planning a journey by way of ‘the highway not taken’ and entrepreneurs have to observe the identical step whereas finalising their vacation spot.
The primary rule to planning the startup journey may be very apparent—a marketing strategy! Far too many startup founders suppose a pitch deck is a marketing strategy, which is a really unsuitable notion. A marketing strategy is a reside doc, which is consistently revised and never one thing with a reasonably ring binder solely to be forgotten about later.
Trudging alone, on the highway not taken, is a frightening job however a companion can certainly make the journey simpler. For startup entrepreneurs, selecting the best co-founder is like deciding on the best life companion. Co-founders with complementary abilities and people who mutually agree on the marketing strategy could make it simpler to navigate by the whirlwind of challenges encountered by a startup.
The co-founders should be clear on the objectives they intention 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 development of a startup.
To achieve success, startups have to converse, work together, and discuss to at the very least 50-100 clients in a selected phase to determine their wants and construct a product that serves these wants and ultimately sells. Asking the best questions that get a buyer to open up about their necessities, permits entrepreneurs to formulate and acquire 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 verify whether or not it meets their wants.
By this time, the ringing query that might come to an entrepreneur could be, ‘How does one collate all that info to know and utilise it?’ Huge producers go to market analysis companies however startups lack the capital to afford that sort of luxurious. So, they will make use of open supply instruments, resembling 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, aimed 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 have to gauge the time it might 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 might face.
Tackling the bull
Product improvement is a long-drawn course of. After crossing a number of limitations, when a startup lastly reaches the product improvement stage, life doesn’t turn into any simpler than it had been earlier. Choices concerning funds and product design could make or break the lifetime of the startup.
Manoeuvring by this battlefield of challenges can’t be executed 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 may be of nice help.
If the startup connects with a startup incubator, steerage pertaining to improvement and enterprise technique shall be readily offered to them. Numerous Centres of Excellences (CoEs) below 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 trade.
Each startup wants funds and help to provide you with a prototype for its clients. Connecting with the right buyers and incubators is just like discovering an escalator to succeed in the following stage of development.
When on the lookout for funding by personal fairness buyers, startup founders ought to select the right buyers who perceive the perils of creating a {hardware} expertise product startup. Searching for funding from ‘actual property buyers’ who need 100% returns inside a yr is identical as ingesting 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, aimed 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 resembling Nidhi Prayas present a grant of `10 lakh (a million rupees) to startup corporations or entrepreneurs. At first, 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 check the market, and after getting the inputs, you’ll have to regulate your marketing strategy.”
To reap most advantages from buyers, entrepreneurs have to have a transparent understanding and deal with what product they will construct. Many of the work is already executed if the innovator has a wonderful marketing strategy. Together with that, the entrepreneur wants to spotlight the innovation and clarify what different choices are already out there out there.
Buyers have to know the explanation they need to spend money on a selected startup. With an in depth however very articulate marketing strategy, startup founders can persuade the buyers to spend money on their startup even earlier than they provide you with a minimal viable product (MVP).
Shifting on from the ideation to an precise proof-of-concept (PoC) part is the following 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 part.
“You’ll want to have a set of particular questions on your clients and always 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 can take one other yr,” cautions Bharat Innovation Fund companion Somshubhro Pal Choudhury.
Choudhury’s warning is additional supported by Maker Village CEO, Nizamuddin Mohammed, who articulates the necessity for fast prototyping. He says, “With each {hardware} product, you want fast prototyping. We name it the fail-fast approach. You’ll want to provide you with a product quick, check 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 begin minting cash. The sustainability of a startup relies upon solely on how a lot cash it has in its coffers and the way it will get the money flowing. Taking eyes off the money stream at any time means a certain demise for the startup.
Choudhury explains how startup founders can do pricing discovery at this stage. He advises startups to have interaction in a repeatable sort of enterprise that ensures recurring income, which might get the buyers excited. “If you do a pilot PoC with the shopper, don’t go for a free PoC. A minimum of get some cash out of the shopper. This manner 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 by the final mile
A couple of years in the past, a telecom infrastructure firm in Chennai deployed the gear for use in a ravishing 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 vary the gear because it had rusted and didn’t work anymore.
Famend electronics trade 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 eventualities and help necessities.
Greater than usually, corporations develop their product in an industrial atmosphere and neglect to account for added help necessities in a distant deployment state of affairs. Too many aspiring {hardware} startups wrestle to distribute their expertise and talent uniformly throughout all sectors of the enterprise. Many occasions, essentially the most environment friendly job drive is deployed in the direction of product improvement whereas the gross sales and advertising segments share the identical destiny because the middle-born in a standard desi household—ignored and left to their very own gadgets.
Electrical automobile 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 entrance, however that was not right. We needed to be taught advertising and gross sales, which was the most important studying wrestle 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, 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. “Model constructing is essential after you have a product, in order that your potential clients can uncover you, by Google, LinkedIn, and even the newspaper. For some, it occurs organically as properly, however it’s at all times good to have some primary advertising in place and a model constructed within the early stage. From thereon, you simply have to 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 position it performs in serving to the startup design its mental property (IP). “Our IP roadmap was purely primarily based on our potential clients with whom we had already spoken and who had been inquisitive about our product. We needed 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 indicate a brand new software software program. India is witnessing a sweeping development of startups within the high-technology sector. Regardless of the plethora of alternatives out there, innovators on this area are dealing with numerous challenges starting from finance to human assets and from launch to sustaining development with tenacity.
It is very important guarantee and assist 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 trade. With applicable help, synchronisation, and mentoring from stakeholders, the federal government, and the electronics trade, startup innovators can simply manoeuvre their solution to success.
