Covid19 Tech Impact
Latest updates & innovations, in-depth resources, live webinars and guides to help businesses navigate through the impact of the COVID19 pandemic on India's economy.
The world has turned upside down. We may have wanted India to remain immune to the coronavirus pandemic, but we have not been spared either. The government, health professionals and law enforcement agencies are now relentlessly figuring out ways to tackle the unprecedented Covid-19 situation.
Helping them fight the Coronavirus pandemic in many ways are India’s startups. Be it creating a Covid-19 tracker app or delivering food and essentials, the role of startups across sectors has never been bigger. For instance, with increasing demand for home deliveries of fresh produce and staples, Gurugram-headquartered foodtech unicorn Zomato has introduced grocery delivery services.
Even when India largely remained unscathed to the coronavirus outbreak, with just a few cases in Kerala, many startups started preparing for the worst. From introducing a strict ‘NO handshake’ policy and keeping stock of face masks and paper tissues at the workplace to counselling employees with symptoms, the startups swung into action.
Work From Home And Network Traffic Managed
As the number of cases increased, the next step was to move the employees to work from home. The drastic change in behaviour professionally and personally wasn’t easy for the employees. The founders had to come up with newer ways to ensure productivity is not affected.
Startups and venture capitalist firms had many learnings from the first few days of operating a remote workforce. Moving online meant lesser interaction and bonding with teammates, an important concern of the founders. As Sarita Raichura, principal at Blume Ventures told us, “It’s hard to bond over the virtual world.”
The employee bonding is obviously better when they meet each other, discuss things other than office and share meals together, added Hemant Vishnoi, cofounder of lending startup Enkash.
Another crucial challenge is to ensure good connectivity. The long term solution would be rolling out of faster fibre and fibre-to-the-home (FTTH). Today, fibre-optic internet services are 3x faster compared to the cable network with a speed of not less than 250-1000 Mbps in both directions. “There are multiple new discussions happening to improve the overall network traffic issue,” said Anand Agarwal, group CEO, Sterlite Technologies (STL), an end-to-end network solutions company.
Talking about a short-term and mid-term solution to the network issue, he said that the telcos and ISPs can use tower-on-wheels, wherein they can push localised power and locate closer to the area of consumption in residential neighbourhoods.
Well, if the internet bandwidth issue is resolved, work from home can be a good option for many startups even after the Coronavirus lockdown is over. For instance, usually, if the company is only hiring people in one city, it can only hire people who live in that city or are willing to relocate. “If you can hire people anywhere in the world, you can hire anyone anywhere. This is a massive benefit, as your team is almost always the most important part of your business,” wrote Gabriel Appleton, cofounder of Vumonic Datalabs.
The Sudden Crisis Called For Swift Action
From the time the lockdown was declared, startup founders got together through Telegram and WhatsApp group chats and Zoom meetings. More than 600 startup founders formed a coalition to fight against Covid-19.
For Udhyam founder Mekin Maheshwari, one of the founding members of the group, it all started with a phone call with Indifi founder Alok Mittal who had also been looking to do something for the country and the startup community. “Initially, the idea was to at least set up a group and a daily call to discuss how we can help in fighting coronavirus,” said Maheshwari.
What started out as one Telegram group called “Startups VS Covid-19” is already a coalition with consensus on the efforts to be taken. The group will focus on four main areas — reducing transmission, scaling up testing, planning for Stage 3 or community transmission, and ensuring steady supplies of essentials for healthcare professionals. The group is also growing every day.
Parallelly, some of the most prominent venture capital funds, startups founders and advisors have come together to form the Action Covid-19 Team (ACT) in a bid to support India’s battle against the coronavirus. The ACT is looking to work with the government and other stakeholders to come up with innovative ideas to tackle major challenges that have come up with the coronavirus outbreak.
Headed by the Bill and Melinda Gates Foundation Nachiket Mor, the team has set up an INR 100 Cr ACT Fund which will invest in startups, non-profits, and entrepreneurs with an innovative idea to tackle the coronavirus outbreak. Any startup working on a scalable solution can send proposals through actgrants.in.
Founders Give Up Salaries
To manage cash flows, the first and the foremost thing founders did was foregoing their salaries. Over the last month, several entrepreneurs announced that they won’t draw a salary for the next few months. While some have donated their pay towards funds, others have done it to support the company’s runway issues.
Paytm founder and chief Vijay Shekhar Sharma announced that he will not draw a salary for the next two months to help those employees impacted by the coronavirus pandemic. In a tweet, Sharma said that he is committing the money to any needs of Paytm office help or staff. He said that he was inspired by Marriott International president and CEO Arne Sorenson who also made a similar commitment for the rest of the year to mitigate the impact of Covid-19.
Bengaluru-headquartered cab aggregator Ola said that Bhavish Aggarwal, cofounder and CEO will forgo a year’s salary. Additionally, the company set up a Drive the Driver Fund to offer relief to the driver community, for which the employees have also contributed INR 20 Cr to the fund.
OYO also announced that the founder and group CEO Ritesh Agarwal will not be taking his salary for the year. The company’s executive leadership team has taken a voluntary pay cut starting at 25%, with many opting for an additional uncapped amount, and some going up to 50% to enable building the runway for the company. This would be effective from April 2020.
Additionally, Deep Kalra and Rajesh Magow of MakeMyTrip will not be taking any salaries effective April 2020. Rest of the leadership team have also offered to take approximately 50% in their compensation. “All of the above makes us confident that we would together be able to weather this storm and come out stronger,” MakeMyTrip’s top executives said.
Online food delivery platform Swiggy said that its cofounder and CEO, Sriharsha Majety, has decided to give up on 50% of his annual salary to contribute towards a relief fund for delivery partners. “Our industry is built on the efforts of our delivery partners. It is in times like these, that we come together to appreciate and support those who are putting their lives at risk to serve others,” said Sriharsha Majety, CEO, Swiggy.
Loss For Many, Gain For Some
For travel, this is the toughest time, whereas this could actually be a boost for some. “Startups in sectors like travel, co-working or other areas which rely on the convergence of crowds will face a tough time raising funds. But those in the attention economy – media, content, etc and those in software and productivity tools are seeing their metrics rise and will be well placed to come out of this rut stronger than ever,” said Siddarth Pai, Founding Partner, 3one4 Capital.
For players of the attention economy, this could actually be a blessing in disguise. The countries in which coronavirus pandemic manifested in the second phase including Italy have seen 11% surge in the average mobile usage. In India, audio streaming platforms witnessed a 42% spike in total time spent by users.
As people battle with loneliness, social media also experienced a spike. Facebook saw a major surge in usage in countries that are hit hardest by the virus with a total messaging increase by more than 50 per cent over the last month.
On the other hand, travel startups are trying their best to stay in business. For instance, ixigo’s leadership team agreed on taking a 60%+ pay-cut graded by pay, and for the rest of the company, the mutually agreed pay cut level would be a function of the actual compensation level varying from 20% to 50% pay cuts.
As Kunal Bahl, cofounder and CEO of Snapdeal said, “A nimble startup should have the capability to readjust to new realities and cut burn without losing its footing. A slowdown is a good opportunity to systematically peel the layers of the onion, examine each cost and identify the hidden costs, which while adding to the burn, are no longer creating value.”
Some say that this is when we will get to know the real entrepreneurs with a focus on their mission. Entrepreneur-turned-angel investor Sanjay Mehta sums it up well. “These are hard, unsettling times, full of unknowns, brought to us courtesy of Covid-19. But this is what all entrepreneurs sign up for, knowing that they will have to chase their vision through terrible adversity.”