The year 2022 was a mixed bag as far as the startup ecosystem is concerned. While, on the one hand, we heard of layoffs and funds drying up, on the other hand there was an increase in the number of startups in India. Recently, Som Prakash, Minister of State for Commerce and Industry, stated in the parliament that the number of recognized startups in India have increased from 452 in 2016 to 84,012 in 2022.
The Minister further went on to unveil an action plan for Startup India that will further lay the foundation of Government support, schemes, and incentives, which will help to create a vibrant startup ecosystem in the country. Simpliﬁcation and handholding”, “Funding support and incentives” and “Industry- academia partnership and incubation” are some of the steps that are included in this action plan. That said, experts from the startup industry have also shared their views on how startups will fare in the year 2023.
Current Environment Apt for Startups that are Agile
Khadim Batti, Co-founder and CEO of Whatfix, is of the view that startups will be able to thrive if they take into account the challenges that 2022 brought about, and if they are able to work their way through it. “India’s digital transformation journey has witnessed remarkable growth in the past few years, largely contributed through multiple factors such as affordable smartphones, internet connectivity, massive adoption of digital services across consumers, corporates government bodies, etc., specifically during COVID-19 outbreak, and it will continue to evolve with time. Unsurprisingly, the uptake of digital adoption also contributed to India’s start-up ecosystem growth. India stands in the third position globally in the start-up ecosystem and also in terms of the number of Unicorns,” he said.
He further added that: “In 2022, challenges such as budgetary constraints, shortage of skilled workforce, the relevance of the product, and market fit should be taken into consideration by current and aspiring entrepreneurs. The current environment is apt for start-ups that are agile, nimble enough to adapt to changing dynamics, hold a sustainable business model, and are futuristic.”
Stronger Economy Expected in Upcoming Years
Puneet Maheshwari, Director, Upstox says that India has displayed modest growth this year. “This year India has seen modest growth. In July to September there were six major economies – Malaysia, Greece, the Philippines, Israel, Colombia and Argentina with growth higher than the 6.3 per cent, which India achieved in the April to September quarter of this fiscal. Growth by the year end is unlikely to be vastly different. Few of the macroeconomic factors for this include inflation, fear of recession, and volatile markets.”
On a positive note, he added: “However, we witnessed some positivity after nearly two years of social, financial and economic uncertainty and we expect that with more financial power in the hands of citizens will lead to surging equity participation and a stronger economy in the coming years. According to reports, by 2027, India’s economy will rank third in the world, and by the end of the decade, its stock market will rank third. Economic growth will be more robust, equity participation will rise, and citizens will hold more financial sway (according to a Morgan and Stanley report), and this is a very positive indication of where the future of India is headed.”
Despite Uncertainty, Be Optimistic About 2023
Ashish Bhatia, Founder, India Accelerator says that startups should look forward to 2023 even though the previous year was full of ups and downs. “The year 2022 is almost through, and so far, the year has turned out to be an up and down one for the Indian startup ecosystem. Startups profited from 2021’s boom, but they also had to deal with a funding crisis and a slowing global economy. However, the year also witnessed the emergence of a large number of new startups and 2022 marked the year with the most mergers and acquisitions in the Indian startup sector, 9% higher than 2021. With the significant growth of startups, the year also marked the introduction of many new startup programs that further helped in the development of this new breed of startups and entrepreneurs.
Despite the threat of uncertainty still looming over, we look forward to 2023 with full optimism. Positive development, innovation, and investment prospects for the Indian startup sector appear to be abundant in the future. Thus, a new development phase in the Indian Startup ecosystem is anticipated to begin in 2023, supported by increased opportunities by 5G and a large number of focus will be on climate, education, and health among others,” he said.
Startups Need to Follow These 4 Ps
Vikas Bhonsle, CEO, Crayon Software Experts India says that startups need to take the following 4Ps to sail through in the upcoming years:
“1. People: is the first, and this includes our own employees, our customers and everyone we are dealing with on a daily basis. As far as our people are concerned, we need to hire the best and offer them the best culture, the perfect training and the best compensation possible. When it comes to customers, offer the best possible experience because if there are no customers, there is no business.
2. Processes: As you scale, start looking at how you can automate the processes. Automating repetitive tasks will help bring in a lot of efficiency into the workforce.
3. Purpose: Purpose stands for what we believe in both internally and externally. Internally, purpose translates into what we believe in when it comes to team work, collaboration and all the people associated with it. The purpose externally stands for the problem that you hope to solve through your startup.
4. Patience: It truly is a virtue. Startups must not be in a rush, and instead build it brick by brick. They need to be conservative, as nothing happens overnight. And last, but certainly not the least, startups need to stop worrying about valuation and instead focus on value creation.”