The Framework: How Startups Are Honing Survival Instincts In The Times Of Covid-19

Some of the most acclaimed movies of all time — Andrei Tarkovsky’s Solaris, Martin Scorsese’s Shutter Island or Christopher Nolan’s Inception — have interpreted reality in different ways. But even outside fiction, scientists and political leaders have time and again redefined what’s real and what’s not. Some call it ‘alternative facts’.

Albert Einstein too called reality an illusion, but his sentiment was far different than US President Donald Trump’s who until recently called coronavirus a hoax. If Einstein’s explanation says it’s ‘an illusion albeit a persistent one’, in the case of Trump, it was about convincing his voter base with a ‘strong’ albeit misplaced response.

A month after Trump made that speech, despite being the most equipped country, the US is the most impacted country in the world, with around 600K cases and 22.7K deaths.

Understanding the gravity of the situation, followed by timely decisions, therefore, are crucial, not only for countries but for every company, and even individuals.

In the times of a pandemic, with over 2 Mn Covid-19 cases and over 1 Lakh deaths reported so far, regardless of the official interpretation, lockdowns and quarantines as part of social distancing are the new normal.

Microsoft founder Bill Gates supposedly saw this coming, over five years back. In a TED talk, he had said, “If anything kills over 10 Mn people in the next few decades, it’s most likely to be a highly infectious virus rather than a war. Not missiles, but microbes. Now part of the reason for this is that we’ve invested a huge amount in nuclear deterrence and actually invested very little in a system to stop an epidemic.”

While many brave healthcare professionals are trying to save others lives at the cost of their own, and their families due to the unavailability of suitable personal protective equipment, the reality is starkly different for startups and SMEs, which are also fighting their own battles with different perspectives towards the new normal, caught in a world of ‘Work From Home’ and video calls.

For startups, what matters now are the decisions they have taken as part of immediate reactionary measures, their remodelling of short term and long term goals.

While we have been reporting about the immediate steps taken by Indian startups and businesses at large, it’s also about managing productivity overall, even in times of crisis.

Pivoting To Stay Relevant

As part of the crisis management, where supply chain suddenly was reduced to nothing and was forced to come back on a few days later only for essentials and groceries, Indian startups were dealing with a situation they had never dealt with. There was no Uber, Ola, BigBasket, Amazon, Flipkart for the first few days so there was huge confusion in the consumer market. Zomato, Swiggy delivery partners in various parts of the country were beaten by law enforcement

Ecommerce major Amazon and Flipkart were also reduced to a marketplace only for essential goods, household supplies and grocery, and even there the product availability was hugely limited, with many showing delivery time of over a month.

In such a situation, as part of immediate measures, not only Flipkart and Amazon, but also the likes of Zomato and Swiggy shifted the complete focus to the essentials which are allowed during the lockdown. Since most restaurants were closed, Zomato and Swiggy moved into grocery delivery in a big way.

Most of these hyperlocal apps such as Swiggy, Zomato and BigBasket have taken initiatives to offer contactless deliveries to consumers. However, given the nature of coronavirus, it’s not just the hand contact, but the complete sanitised journey of the deliverables is what matters. Zomato delved into the series of precautionary measures it has taken to ensure the sanitised delivery, saying it’s also enabling temperature checks at the time of pick-ups from restaurants.

 

Other grocery hyperlocal apps such as BigBasket, Amazon Prime Now had to cancel all the orders booked for deliveries during the initial days of lockdown, as the duty passes were issued to the delivery boys only a couple of days later.

BigBasket came under fire for locking consumers into their wallet when refunding amount for cancelled orders. It eventually enabled refunds to source of payment, but these were the kind of issues that never seemed like major problems earlier, but with operations impacted even the smallest of obstacles can become a dealbreaker.

In such a situation, BigBasket, Flipkart tried to bridge the gap by utilising third-party services such as Ola and Uber, and was also said to be in conversations with Zomato for delivery.

While the supply chain issues were well-publicised in the days following the lockdown, on the distribution and production side too the situation had turned sour.

Shauravi Malik, cofounder of Gurugram-based food startup Slurrp Farm, said food production was also hampered by the logistics choke. “As a food company, we are allowed to be operational during this difficult time. However, our key challenge is not dissimilar to all companies large and small – logistics are uncertain, and there are several disruptions at this moment. Offline retail is largely closed off to SME companies and has reverted mostly to the larger companies.”

It is an unprecedented time, and the major challenge has been to be ready to face a new unknown challenge every day and think out of the box. “We are collaborating with several other SMEs to think of solutions. At a time like this, we have to come together to do this. We have started thinking of how to manage second and third-order impacts like raw material, packaging, and credit, and how to mitigate these,” she added.

According to Malik, supplying the goods has been challenging and has required meticulous approvals and permits across the country. However, the police extended a helping hand. “I must commend the authorities in Delhi, who helped us in record time and on WhatsApp to be operational with the passes needed. We didn’t have anyone helping us to do this, and we really saw them come together to make the food sector be operational to the extent they could.”

In short, while the plight of small startups and businesses is easily understandable, big companies including Swiggy, Zomato, Amazon, BigBasket, and Flipkart were neither equipped nor had they prepared to face any such scenario, despite coronavirus having been a reality for over four months.

Remote Working Throws Up New Challenges

Lockdown or not, coronavirus has pushed startups, and most businesses to adopt and adapt to the work-from-home culture.

Speaking to Inc42, Aarin Capital partner Mohandas Pai said, “Yes, working from home (WFH) is going to become a prominent culture in the future, particularly for startups. There are IT tools for tracking productivity, video meetings, and for a host of other operations when working from home. While most cities have robust internet connectivity now, power remains an issue for many homes. However, that is manageable. Now onwards, probably a minimum 25-30% of the entire workforce will be working from home and that will be a new normal. This will not only save the 2-3 hours of every employee’s daily commuting hours but will help them keep healthy as well.”

With WFH, video conferencing tools such as Zoom, BlueJeans, Google Hangout, Skype, Slack, Microsoft Teams and WhatsApp to remote control and monitoring software tools such as TeamViewer and Time Doctor have regained their popularity and market share across the globe.

Remote working is set to boost the digital economy of the country and hence companies are realigning their work culture accordingly.

Even Paytm founder and CEO Vijay Shekhar Sharma has predicted that as part of the strategy, and remodelling, there will be a shift in customer behaviour. There is a fear and this will affect future businesses as well. Therefore, he expected that a lot of people will move to digital platforms inevitably, and there will be new user behaviours emerging from this.

Surviving The Endgame Needs An Escape Plan

For most of the startups, It’s more like “We are in the endgame now”. Endgame, as the funding which was already low, will now be lower. Endgame, as the asset investment and management needs to be rethought and replanned, or in other words, needs to be reduced as much as possible.

But, most importantly, it’s no longer a slowdown but a recession. Experts believe the situation will soon be worse than what we witnessed in 2008-2010 when some of the biggest investment banks and companies became history. So who is standing in the queue this time around as the recession comes around?

While cash burn rate, revenue model, collaborations and partnerships will definitely count more than ever, the companies will also have to devise new sales and marketing plans keeping the digital world and market as part of their plans.

In short, re-alignment of strategy, resources and target modelling will be key to startups and SMEs survival. This includes layoffs and furloughing employees.

Slurrp Farm’s Malik says, “Team size planning was difficult but we took a call to do this ahead of time in mid-March so we could take a decisive stand on bad news instead of doing it as a drip-feed. We are looking at this as a time to invest in planning our team culture, long term company values and building up team morale.”

Well, as the future appears to move toward contactless deliveries. Numerous management decisions will be made towards drone deliveries for hyperlocal needs and mid-distance logistics. However, the government’s job in this regard is long overdue. While numerous companies such as ShopX, Dunzo, Zomato have been given license to carry out test operations, the heart of the entire commercial drone delivery operation depends upon Digital Sky platform which has been long pending since 2018.

Further, while momentarily choked, there are chances that the farm-to-fork model will only grow in such times, cutting out the unnecessary job of middlemen and their profits. The prime minister Narendra Modi has also directed states to incentivise the farmers for direct marketing of farm produce.

As the cost-cutting is happening all around, direct selling in agritech could become the new reality soon where farmers will be directly able sell their products to the consumers. However, this may take some time considering the state of awareness of the agricultural industry at large and the lack of a viable supply chain for such consumer demands, which doesn’t involve middlemen or other moving parts.

Like it or not, changing and adapting to this new world is not a choice anymore.

Economic downturn curbs the competition and churns the market, and hence it would be beneficial to those startups that adapt quickly and weather the crisis. While such startups come out stronger and more resilient, less capable companies will end up shutting down.

Alibaba has published a report on Digital Action for entrepreneurs in the age of Covid-19 stating that its high time for entrepreneurs, startups to redefine their mission and vision separately. “Entrepreneurs need to ask themselves what is their core purpose and reason for existence changed in times of crisis. What then happens to the business model? Do the company structure and strategy need to be changed as well?”

Back to the ground reality. The human race was never equipped to fight a virus. It took world leaders like Trump and many others like UK prime minister Boris Johnson who himself has been in intensive care due to the coronavirus and most importantly the WHO more than three months since the spread, to accept that Covid-19 is a pandemic that needs out full attention.

Stanislaw Lem, the sci-fi author offers an explanation, which we have paraphrased.

“We arrive here as we are in reality, and when the page is turned and that reality is revealed to us — that part of which we would prefer to pass over in silence — then we don’t like it anymore.”