India: An Emerging Nation of Unicorn startups

Center for Family Business, Entrepreneurship, and Innovation04 JuneBindu Agrawal

In the venture capital industry, Unicorn’s term is used to describe a startup company with a value of over $1 billion. There are more than 600 unicorn companies around the world, as of April 2021¹. Getting to a billion-dollar valuation is not easy and that too when the market is going through a funding crunch during the time of Pandemic worldwide. These newly-crowned Indian unicorns definitely deserve a big round of applause. With 39 unicorns, India ranks 3^rd in the total number of unicorns globally. India added 2^nd highest number of unicorns in 2020 after the USA. But everyone must be wondering what makes India a hub of unicorns and its record-breaking creation of unicorns every year. As a matter of pride, we can give the credit of this big achievement to India’s changing reforms and policies towards start-ups. In the recent past, various initiatives taken by the government have also favored the Indian start-ups to scale. The most important factor is the zeal of young Indian entrepreneur’s to expand and grow.

By end of 2021, India will be into the 50+ strong Unicorn club. The past record shows that 30 of 38 active Indian Unicorns achieved a $1Bn+ valuation in the last 3 years only. It is a very positive signal for the possibilities of entering new companies into the Unicorn club. We have a pipeline of start-ups with more than $50Mn+ in cumulative funding which is at an all-time high. Even in 2020 majority of those startups reported growth, with a few already marked $1Bn+ valuations in secondary markets. As per the forecast of the industry experts, India is going to add at least 9 to 11 Unicorns in the calendar year 2021 or even more.

Every budding entrepreneur should know some interesting facts about these Unicorns:

The Average time for a start-up to turn unicorns in India is 7-8 years which is at par with the global standards but China leads by having an average time to unicorns of 5-7 years followed by the USA with an average time of 6-8 years.
50% of Indian Unicorns already have a Global market reach. These numbers clearly show the scalability which overseas market has given to Indian start-ups to turn them unicorns.
The Indian startup ecosystem has many Unicorns in the pipeline. There are 55+ start-ups with more than $50 million in total funding out of which 23 start-ups have raised over $100 million in funding deals.
Start-ups in India are showcasing vast diversifications from various sectors like – Automotive, EdTech, Advertising & Marketing Tech, SaaS, SCM & Logistics & Food Tec.
One-third of Unicorns added in 2020 are based out of Hyderabad, Pune, Chennai

The New 13 Indian entrants in the list of Unicorn clubs in 2021 are; Zeta, Moglix, Urban Company, ChargeBee, Gupshup, ShareChat, Groww, Pharmeasy, Cred, Meesho, Infra.Market, Innovaccer, and Digit Insurance

The prominent Investors in these Unicorns are; Accel India, Jungle Ventures, Tiger Global, Sequoia Capital India, IFC, Steadview Capital, Elevation Capital, Vy Capital, Sapphire Ventures, Insight Venture Partners, Charles River Ventures, Helion Ventures, India Quotient, Elevation Capital, Lightspeed Ventures, Twitter, Y Combinator, Ribbit Capital, Orios VP, Eight Roads Ventures, Temasek, Naspers, DST Global, Falcon Edge Capital, Elevation Capital, SoftBank, Naspers are the prominent investors in new Unicorns.

Source and references:

Nasscom startup report
Credit Suisse Report

The Virtual Team Revolution – It’s here to stay!

Center for Family Business, Entrepreneurship, and Innovation, Center for Teaching Research and Learning, Faculty24 JulyAtima MankotiaDistributed Team Structure, Effectively Managing Teams, Industrial Revolution, Post Covid Workplace, Virtual Teams, Work from Anywhere

With the current pandemic situation across the globe, every organization is affected. But has the work stopped? The answer is – No! For the majority of organizations who have successfully established a strong digital culture, it is ‘Business as Usual’. Virtual teams are no more the future. They are here to stay.

Remote Teams – An Old or New Phenomenon?

A virtual team is one whose members are geographically scattered in different locations communicating and collaborating through technology. Are geographically scattered remote teams a recent concept? If you think it is a new phenomenon, you are right but only partly. While technological advances, the Internet and the global workforce have created better conditions for remote teams in recent times, but they have been around for centuries. All kings and emperors such as Ashoka and Akbar and many others in the western world whose empires spread over large areas managed geographically dispersed remote teams. They created efficient and effective processes for communication and implementation to manage their empires through these remote teams, however, some teams worked efficiently while others struggled.

‘Work From Home’ (WFH) has become a buzz work in recent times. But the fact is that even the concept of working from home is not new. Historically speaking, for most of the trades, work from home was the common way of working. If we look at traditional occupations such as farmers, bakers, tailors, shoemakers, potters, weavers and blacksmiths etc., – they have always worked from homes.

The first Industrial Revolution extricated workers from their homes and pushed them into factories. With the introduction of electricity and public transport systems in the early 20^th century, workers were further separated from their home as they began working in offices equipped with telephones, telegraphs, and the typewriter. But this concept soon faced a reverse wave in the 1970s because of the OPEC oil crisis that resulted in very high fuel costs and made commuting exorbitantly expensive.

People began looking for solutions for work to go on without workers having to commute. Jack Nilles, sometimes called “The Father of Teleworking” conducted the first formal tests of telecommuting and it soon saw rapid growth. In the 1980s, J.C. Penney began hiring home-based call center agents with the Clean Air Act leading many large businesses to offer telecommuting. The National Telecommuting Initiative created in 1996 in the US, soon flowed to other parts of the world.

20^th century was the era of great technological advances that resulted in increase in telework and virtual teams. Personal Computers, cellular phones, voicemail, and then the internet explosion were factors that paved the way for the virtual workplace as we understand it today. In the year 2020, when organizations are globally affected by the COVID-19 pandemic, working virtually has come to the rescue of many organizations and businesses because they were able to continue their businesses and curtail losses.

The Bright and Dark Sides of Virtual Teams

Several studies have found that virtual collaboration is more difficult than in a collocated environment. The disadvantages include difficulties in communication and coordination, reduced trust, and an increased inability to establish a common ground. Physical teams, on the other hand, have proximity that promotes frequent communication and the development of closer and more positive interpersonal relationships. Regular physical presence of team members helps in strengthening social ties that helps to reduce conflict while the distance in virtual teams decreases closeness and affinity, which can result in increased incidence of conflict. Some other issues of remote teams spread across different geographical locations can be that they have to negotiate multiple time zones that require them to reorganize their workdays to accommodate others’ schedules which may lead to frustration and confusion, especially if coworkers are regularly unavailable for discussion or clarification of task-related issues.

Do Virtual teams have any advantages? Yes, Virtual teams have many advantages too. Remote teams are attractive for companies looking to hire for roles that are hard to fill. They can use remote working as a perk to attract applications for “location independent” positions. These organizations have the added advantage of being able to hire from a larger, more diverse pool of applicants. Then there is cost effective in terms of salaries as they ca hire people at lower salaries when compensation is not connected to living in a big, expensive city.

Other positives of remote virtual teams are that they are less career restrictive for employers and employees with many companies adopting remote as part of their company culture with a work from home option.

Uberization of Jobs

With the pandemic situation looming large across the world and in India, many organizations are actively adopting the work-from-home (WFH) model, and it can be predicted that many jobs could go the Uber way. Uberization of work means that employees can decide which hours of the day they will log in. This is more applicable for tasks that are homogeneous, like that of call centre employees where technological developments are making it easier to monitor remotely.

In India, Axis Bank had been preparing for a WFH model even before the pandemic struck, which made it possible to keep 700 of its call centre executives active even after the lockdown was announced. SBI chairman Rajnish Kumar said in a recent interview that the bank was planning to move to a Work-From-Anywhere model rather than just work-from-home. In the early weeks of the lockdown, HDFC Bank MD and CEO Aditya Puri had said that the bank was going to shift permanently to a WFH model for a third of its employees.

Tech companies, financial services and many other industries are moving towards virtual teams where they will play a large part in the new normal making it imperative for current and aspiring managers and leaders to equip themselves with a new skill – the skill of Managing Virtual Teams. IILM, in step with the current trend, is offering a specially designed course called ‘Managing Virtual Teams’ for its management students and working executives who would like to upgrade their skill. This course discusses how to manage virtual teams so that they can outperform physical or collocated teams. Learning this skill is not an option but a necessity for managers and business leaders today to keep pace with the current world scenario.

To know more about the innovative and industry benchmarked courses, please write to me at atima.mankotia@iilm.edu.

Innovation – An imperative for survival of organizations!

Center for Family Business, Entrepreneurship, and Innovation15 JulySangeeta SumblyChange, Competitive Advantage, corporate entrepreneurship, culture of Innovation, disruptive innovation, innovation, Uncertainity

There is a famous quote – ‘The only thing predictable about life is its unpredictability’. The Covid 19 impact is the most interesting and relevant example of the same. Even the best of minds cannot claim to have planned for the same. Especially from the point of view of the businesses and economy!
As per the Deloitte article (https://www2.deloitte.com/in/en/pages/consumer-business/articles/following-up-on-the-immediat-economic-response.html) the rampant spread of COVID-19 across borders and geographies has severely impacted almost the whole world and triggered significant downside risks to the overall global economic outlook. Due to the lockdown announced by the Indian Government, the Indian economy has also slowed over the last few months. For most businesses, the slowdown has been in the form of supply disruptions, a fall in consumption demand, and increased stress on the banking and financial sectors. However, like the Great Depression (1929), the dot-com bubble bust (1997- 2000), and the 2008 financial crash did in the past, the Covid-19 is changing the way the world works.

Many businesses are changing gears fast and can sustain and survive better than others. They are using innovation and design thinking to adapt to unprecedented times. Organizations, especially in the e-commerce, digital education and related, entertainment, wellness, FMCG industries have adapted to the customer need, the market environment, and its challenges, and have found little green shoots.

As per the Financial Express article dated 19th May 2020, the e-commerce firms that are doing well, are those that found innovative process solutions to the disruption of supply chain due to prohibitions in terms of deliveries across various regions. Amazon and other e-commerce majors tied-up with local kiranas or neighbourhood mom-and-pop stores to fulfil the market demand. Recently launched online store JioMart by Reliance Industries, which went live on WhatsApp in select locations in Mumbai and other locations claims to have tied up with millions of kirana stores. Paytm Mall, meanwhile, announced tie-ups with over 10,000 neighbourhood stores to scale up its grocery delivery services around the country. (reference article dated 6th June in TOI). Similarly, an organization like HUL which has been operating in Indian markets for over 80 years with over 35 successful brands, chose to re-plan their innovations, adapt to the “emerging demand patterns in the short term and prepare for any lasting changes in consumer behaviour.”

New age organizations were faster to innovate due to the sheer nature of their inception and culture. For example- Cultfit, owned by the founder of Myntra, Mukesh Bansal adapted fast to the market realities. They used the market conditions to increase trials of their digital platform of Curefit, further monetizing it to create relevant revenue streams. Lenskart integrated store inventory with Google to ensure that consumers could access products even before they come to the store by just searching on Google or could fix appointments to minimize out of home time. Useful innovations provided solutions to many challenges faced by different organizations during these hard times.

Historically too, it has been observed that the changing economic environment, socio-cultural changes, technological changes, digitalization, caused a profound effect on organizations’ growth. Many world-famous companies like Yahoo, Nokia , Kodak , Xerox, and many others are a patch of what they were earlier, revenues and market share, while some companies no longer exist. Legendary companies like American Motors and AT&T, which were part of the Fortune 500 list have been replaced. In India too, many large corporate organizations have lost their market shares due to the inability to adapt and grab opportunities thrown by the changing markets. A case for example in India would be Meru Cabs. While they were one of the first companies that entered early in the organized Indian Cab Markets, entry of Ola and Uber in the cab market displaced their market share and revenue. Similarly, brands like Airtel, Hyundai, who were strong market leaders in the late nineties and early twenties are now trying to adapt to the dynamic nature of the market to sustain and grow. On the other hand, new companies like Facebook, Amazon, Netflix, Google are prominent in the list of Fortune 500 companies. India has also seen young companies becoming Unicorns – Ola, Quikr, Snapdeal, Nykaa, and 30 others in the last 10 years. A particularly important contributor to these organizations’ reasons for the growth has been their culture of innovation. All these organizations have systematically created an environment to ensure innovation – in product and processes …. Thereby equipping them to perform better even during the trough periods in the economy.

Different organizations have adopted different corporate entrepreneurship models to ensure they invigorate their growth, through innovation. There are organizations like Google, which encourages all employees to have an interest in innovation and motivate them to create new ideas and products to grow business. Employees in Google are allowed to use 20% of the time to think of new ideas, sell their ideas internally to get more team members to work on the idea, to fine-tune their concept and reach till the development of a prototype (i.e a sample model of the final product/concept to be built, created with the objective of testing the idea in the market). Employees, teams can also approach the management for funding the idea. Further, these employee/teams get financially rewarded if the innovation reaches the market and gets acceptance from the customers. At any point in time, Google supports approx. 100 projects with 70% of the projects supporting Google’s core business, 20% representing emerging businesses, and 10% focusing on experimental ideas. (Google case study – Source – MIT Sloan Business Review). This ensures a consistent flow of disruptive innovation.

On the other hand, there are organizations like Samsung, Cargill, and ITC that follow a focused approach to corporate entrepreneurship and ensure innovations continue to grow and expand the markets. For example, the ITC Research and Development Centre has played a crucial role in sustaining a competitive advantage for the company. Its mandate is to go beyond supporting its existing products and services and create innovations that not only meet but anticipate consumer needs. Many Indian Information Technology firms like TCS, Wipro, and Infosys as well as pharma companies follow this model of the innovation to create products and services that are ahead of the markets.
Each organization identifies and adopts its own model of innovation depending on the type of innovation it is targeting – be it a routine innovation versus radical innovation versus disruptive innovation versus architectural innovation. However, to be successful in its endeavour to invigorate or re-invigorate, each organization needs to build its strategy, internal systems, and the right kind of culture for innovation.

To summarize, as the speed of change and uncertainty in the business environment increases, no organization can afford to be complacent on innovation. And the words of Peter Drucker ‘Innovate or Die’ hold even truer today.

Do share any other interesting examples of process or product innovations that have been adopted recently

Family Business: The Need for Alignment in Times of Uncertainty

Center for Family Business, Entrepreneurship, and Innovation, Events, General Blog, IILM Institute for Higher Education18 MayRahul K.MishraBuilding Airplane While Flying it, IILM Webinar, Webinar organised by IILM

The Corona Virus pandemic has put more than half of the world under the lockdown with practically very limited economic activity. The economic growth rate has slumped into negative and unemployment rate has soared high.

In this uncertain situation, businesses need to adapt and change. Family businesses face bigger challenges for survival. In this context, IILM invited Dr Stephanie Brun de Pontet, principal consultant, Family Business Consulting Group to give insights into challenges that family businesses face in this scenario. Dr Stephanie titled her talk “Building AirplaneWhile Flying it”- the need for alignment in the times of uncertainty.

Provide Stability and Innovation

Dr Stephanie started with pointing out the way people are feeling intense disorientation because global corona pandemic. The life as we know has been disrupted. This has changed many things in the world while lot of things have remained same. There is sense of grief in this loss. In this scenario when it is difficult to predict the future, it remains quite a challenge for businesses to plan and look ahead. Quoting from Charles Darwin who had said “It is not the strongest of the species that survives, nor the most intelligent ones but the most responsive to change”, Dr Stephanie went on to emphasise the need to provide both stability and innovation for family business . Family businesses have strengths as they look at business long term and also they have long term connection with employees, suppliers and customers.

Adapt and Reinvent

The intensity of disruption is quite massive and there is sudden loss of control of everyday life and business. In this scenario of crisis when the future is not clear, there is a need for definitive planning to protect people, and also viable part of business, to adapt and to reinvent the business. There is also a need to try out new things and innovate. Innovation is the least risky option now.

Alignment with Values and Core Purpose

Family businesses need to get aligned to values and purpose. The values and purpose give direction and also meaning to business which everyone shares. Clear values and purpose are great force if acted properly. It makes things simpler for employees, associates.

Family businesses need to look at the core values to protect the business in these uncertain times. Core values are the handful of guiding principles by which a company navigates. Giving an example of Disney’s core values of imagination and wholesomeness that stem from the founder’s belief that these should be nurtured for their own sake, not merely to capitalise on a business opportunity. Instead of changing its core values a great company will change its markets, seek out different customers to remain true to its core values.

Core purpose is an organisation’s most fundamental reason for being. It should not be confused with the company’s current product lines or customer segments. Disney’s core purpose is to make people happy – not build theme parks and make cartoons. Theme parks or cartoons or any other product will flow from the core purpose.

Struggle between Tradition and Innovation

Family businesses normally struggle with the choice of honouring tradition and pioneering change by bringing innovation. A good leadership always find a balance between the two. Few companies manage to do both – they are more stable, and they are more innovative.

Giving example of a company and how it has adapted its business in the current corona crisis by reinventing itself she spoke about J W Lopes, a 4th generation family owned suppliers of produce and dairy to restaurants and institutions. It has changed its business model shifting from institutions to residential distribution by configuring the new way of distribution channel. The company has rightly assumed that people are spending more time trying out new dishes at home and that they would like to have new fresh produce and dairy products. New ideas and experimentation are needed to survive and thrive in the new normal.

Rise of the Younger Leadership

Dr Stephaniebeautifully combined the new ideas and experimentation of rising generation with the experience of the leading generation. The future is going to be different. New ways of thinking and working are needed.
The leadership in this crisis is needed from both the young generation,and leading and older generation. The leaders are expected to do certain things to tide over this massive disruption and crisis. They are expected to figure out the situation and protect and support the team. Leaders also need to provide clarity and guidance and to bring wisdom and perspective. Leadership is also about sharing sacrifices. Dr Stephanie emphasised the action needed from leaders from younger generation. Leaders from younger generation need to gain different perspective on options and future. They need to share ideas on new technology and markets. They are expected to show solidarity and commitment of the family.

Honest and Transparent communication

The webinar was followed by a lively and robust question answer session where Dr Stephanie emphasised the need for honest and transparent communication during the period of crisis. She also went into great detail in bringing professionals in family business and keeping family members in the Board and the Management.At the end it is all about emotional resilience to bring change and adapt and survive.

The webinar organised by IILM that offers several courses on Family Business and Strategy as well as Management, was well received by the listeners. It gave insight into how family businesses need to tide over this current crisis that was informative for the students and faculty members of IILM as well as the for the guests who attended the webinar.

Watch on Youtube: https://www.youtube.com/watch?v=uYtmeedo2V4

Professor Rahul Mishra
IILM

Campus Venture – a win win situation.

Center for Family Business, Entrepreneurship, and Innovation30 MarchSangeeta Sumblycorporate entrepreneurship, entrepreneurship

Bill Gates dropped out of Harvard to start Microsoft, just 2 years into his college education. This business that made him a millionaire by the age of 26 years. Mark Zuckerberg launched Facebook in his second year at Harvard. Steve Jobs conceptualized Apple Computers after dropping out of college ….. Back home Ritesh Agarwal, founder of Oyo Rooms –started his first venture Oravel Stays Pvt. Ltd in college. A number of the leading entrepreneurs launched their start-ups in college days, and many of these had to drop out of their education to achieve what they planned. They had the entrepreneurial spirit, the innovative idea, but not a supportive ecosystem. They had to choose – to complete their education or work towards their dream

However today the times have changed. Now a budding entrepreneur doesn’t need to choose one over the other. Now is a great time to be a student who wants to start her own business while studying. Some interesting reasons why a student should start her own venture while she is still studying in a university.

Collaborative Environment – A successful start-ups are often backed by founders working together from diverse background to create radical innovations. A university offers an unmatched platform for students to interact, ideate and collaborate with students across different streams, which often results in the development of innovative business ideas /solutions.

Campus Resources – Universities are creating an extremely supportive ecosystem to encourage students who want to start their venture. In the current scenario, they are willing to help students with free infrastructure, in terms of space to operate from, wi-fi, electricity cost, etc. which dramatically reduces the fixed cost of running the start-up. More often than not, the universities are also connected to their alumni and venture capital funds, who are willing to give a window of opportunity to the budding entrepreneurs to showcase their business ideas and generate funds

Additionally, in Indian, if an Atal Incubation Center (AIC) or Atal Innovation Community Center (AICC) has been created in the said educational institutions, the students also get innumerable other advantages including

Ø access to sectoral experts for mentoring

Ø support in business planning and development,

Ø seed funding from the University’s AIC or AICC on a case-to-case basis

Ø access to an ecosystem that increases the success rate of the start-up

Ø access to financial and tax consultants for regulatory compliances, IPR attorneys and such professionals

Captive Customer Base– Universities have a young, large population and offer a captive audience for any budding entrepreneurship to test market an innovative product or service. Herein the start-up doesn’t need to spend money to reach customers to validate their minimum viable product or service. Trials are fast, feedbacks are honest and the customers are forgiving. In addition to the above, the university campus offers a more accepting micro-market, wherein a start-up gets another chance.

Faculty Guidance – It is only a campus venture (a start-up incubated in the university) that has the advantage of getting guidance from professionals across multiple –functions. It is one place where faculty members with multiple skillsets are always available to guide the students across functions, whether it is creating a business plan or a low –cost marketing plan to launch the product. Niche industry experiences, multi-domain knowledge of faculty members is easily accessible to the students, putting them on a steep learning curve and guiding them till they are ready to move out on their own.

Young, energetic, enthusiastic interns – Start-ups need all hands on board, and yet they have limited paying power. At their university, student entrepreneurs get the chance to invite their peers to work as interns with them. This allows the peers to get valuable experience of working in a start-up, while the campus venture get interns for helping them.

A Win-Win Situation– University students normally have limited responsibilities during education, in terms of the need for a stable monthly income to support a family. Hence their risk is limited. If the start-up launched by them becomes successful, it gives them unmatched financial rewards and recognition. However, even in the failure of their start-up, they win. Launching their start-up gives them an unmatched advantage offering them valuable, holistic learnings and experience of managing a business. The practical experience gives them an edge during the campus placement process, wherein they are the preferred choice by most recruiters.