How the past year has been all about relationships which kept the startup ecosystem fuelled
A year ago, we connected with you through this channel for the first time. Many of you reading this today may still remember that maiden edition of The Outline, and our promise to get in touch with you every weekend.
Over the weeks and months, this journey undertaken by Inc42 Plus has become an enriching, energising experience dear to our heart. We look forward to it every week, not just telling you the stories that matter but also exploring their impact and implications for making sense of business.
As we celebrate our first anniversary on Valentine’s this year, it is only fitting that we take a leaf out of our very first edition, which was centred around Love.
Over the past year, we have seen our relationship evolve and grow into a collaborative journey based on sound judgement and trust. The bond between us has only grown stronger as we all have been tested in different ways. We are deeply touched by the love you have shown us. Many of you have scribbled notes and sent us messages on how your relationship with The Outline and Inc42 Plus has helped you in the past year.
But it is not just about Inc42 and you, our most valued readers. We all are part of a startup ecosystem built on meaningful and nurture-worthy relationships. And the past year has been a litmus test for all. We are talking about all stakeholders and their interrelationships — between employees and founders, between entrepreneurs and investors, between startups and their customers (which is arguably the most precious one), and between the companies and their partners and contractors. Everyone has stood tall in the wake of an unprecedented global pandemic.
So, this is also the best of times to raise a toast to the various relationships which keep the startup ecosystem fuelled. On this occasion, we present you some little-explored insights into these intricate and intertwined relationships through the lens of past editions of The Outline.
When Our Relationships Helped Us Fight Together
The pandemic had definitely taught us how relationships could help fight even the biggest crisis when we stand together. The year 2020 was all about standing up and being counted as one. While startup founders, investors and techies joined hands during the early days of Covid-19 lockdowns to fight off much of the fallout, gig economy workers made their voices heard during a tough year through various protests. With the new social security code coming into effect this year, this fight has already borne fruit.
We saw the various cogs of the ecosystem come together and fight back against the changes in the market — from Indian companies standing up to big tech’s dominance across sectors to how Indian product makers reacted swiftly to the ban on Chinese apps in mid-2020. To be precise, dozens of homegrown social media apps such as Chingari, Mitron, Trell, ShareChat’s Moj, Dailyhunt’s Josh, Times Internet’s MX Takatak and more flooded the market and filled the vacuum left by TikTok & Co. The startup ecosystem had undoubtedly added value to India’s digital geopolitical battle against China.
Indian apps, including MX TakaTak, Josh and Moj, climbed up the leaderboard for most-downloaded apps. MX TakaTak saw around 50 Mn downloads in Q3 2020 while ShareChat-owned Moj surpassed 100 Mn downloads in January this year (seven months after its launch). In many ways, this happened because the ecosystem braved the lockdown months and emerged stronger.
The success of any relationship mostly depends on being open about the challenges we face and helping people who are going through a tough time. The pandemic brought the focus on mental health and wellness, beyond physical fitness and hygiene. With feelings of isolation and loneliness rising to the fore as people got stuck indoors for weeks, employees and entrepreneurs struggled to cope.
Besides, the looming threat of business closures and the prospect of zero revenue for months turned out to be an enormous burden on founders and business owners. This forced many founders, entrepreneurs and investors to talk about the mental pressure and stress, and find a way to move forward and help others out openly. Nurturing Green cofounder Annu Grover tweeted about his struggles with stress and anxiety.
Former Paytm Money CEO and Wishberg (acquired by Freecharge) cofounder, Pravin Jadhav, also noted that the startup ecosystem collectively needs to do more for the mental well-being of the founders. “Simply cheering up a fellow founder keeps him or her motivated for days. Please do that often,” he added.
All this prompted many founders and investors to come forward and help their peers during the worst crisis of our times. For instance, Snapdeal cofounder Kunal Bahl committed one hour a day for virtual brainstorming sessions with startups facing business challenges. Other founders spoke up about battling stress and pressure while running a startup. And pi Ventures’ founding partner Manish Singhal and his wife Deepti (a psychotherapist) volunteered time to help those under stress.
It is not every day that one sees hard-nosed founders open up about their vulnerabilities. But this time, it made them seem more approachable and strengthened all existing relationships.
When Relationships Become Stronger
The past year also saw the startup ecosystem stakeholders — founders, employees and investors — forge stronger bonds through various steps and initiatives.
While the pandemic changed how we work together, startups still needed to innovate and find ways to fill the gaps in the new normal beside cutting costs to remain operational amid the slowdown. Startup founders knew that the pandemic headwinds would throw up several challenges such as managing employees and securing their incomes. So, we saw the large-scale emergence of employee stock ownership plans (ESOPs) to retain talent and build trust among the workforce in a tough time when the threat of layoffs was very real.
Some of India’s most valued startups such as Unacademy, Zerodha, Firstcry, Swiggy, BharatPe, Urban Company, Mobile Premier League, CarDekho, CRED and Meesho orchestrated ESOP buybacks for their employees in 2020. Swiggy initiated an ESOP liquidation programme worth $7-9 Mn (INR 51-66 Cr) while CRED launched an ESOP buyback scheme worth INR 9 Cr ($1.2 Mn). This is one way for startups to share their wealth with employees who have been part of the journey.
But it is not just about employees and founders. It is also about the trust and support that investors show in founders/companies. Despite the overall economic slowdown, Indian startups raised $11.5 Bn in 2020, which is just 10% lower than in 2019 but across 924 deals, which is 14% higher than the previous year. Plus, seed-stage funding nearly doubled finally after a dark couple of quarters. These were all good signs for the startup ecosystem and reinforced the notion that startup investors are not only in it for the money. Even in the so-called recession, investors continued to support the startup innovation journey.
And it is reaping the results. The market is hoping for better things with a revival in consumer spending. Even though sectors such as media and entertainment witnessed the rise of the attention economy, the likes of ecommerce and hyperlocal services such as food and grocery delivery have picked up pace since April. It remains to be seen whether this pace can be sustained as we move into 2021.
When Relationships Called For Nourishment
Some relationships need a lot more effort than others. While the focus in 2020 turned to Atmanirbhar Bharat, startups feel shortchanged by the lack of recognition after a significant and telling contribution to keep the economy going. This ranges from non-implementation of key policies to the lack of decisive action in the most recent Union Budget, which failed to bring in any startup-focussed changes.
Let us bring back what Anirudh Damani, managing partner at Artha Venture Fund, told us last week: “We thought that the government would recognise how startups led India out of a recession. It was the first time when Indian startups became the flagbearers of an economic turnaround. No one can deny their contribution in the last 12 months. But where is the recognition of that in the (Union) Budget? This really should have been a budget for defining the next nine years of India’s startup journey.”
Another area that the ecosystem needs to work on is its relationship with data and privacy. India is not exactly the beacon or example of stringent privacy laws even though the right to privacy has now been enshrined in the Constitution. The atmosphere of laxity will change this year as the data protection law kicks in. Whether it strains the relationship between startups and customers or between startups and the Indian government remains to be seen.
Finally, The New Rules Of Relationships
As pick-up lines turned into poems, it took more than just the right snapshot to get the attention of suitors on dating apps throughout 2020. The ritual of courtship has made a comeback, albeit in a virtual avatar.
The category is on the rise in India as Tinder turned out to be the highest-grossing app here in 2020. In fact, the number of dating app users in India saw the biggest jump last year, according to data from Statista, and the average revenue per user (ARPU) also clocked a surge between 2018 and 2020. With virtual dates becoming a thing in 2020, dating apps are now something that you open to go on a date instead of finding a date.
It is not just dating. The way we connected online and strengthened our relationships also changed in 2020, thanks to the rise of interactive gaming platforms like Bunch or HouseParty and voice-only social networks like Clubhouse. Even business and workplace relations have changed, given how we meet and interact with our peers through calling apps, virtual events and summits.
As more progress is made on the vaccine front in 2021, many of these relationships are likely to change. We should be back in the office or may even step out for events and large conventions. But for now, we are looking to find new layers within the communication tools we have adopted in the past 12 months.
Talk Of The Town: Twitter-India Relationship
Twitter did give in eventually, but it managed to make a big statement at the same time. The social media platform had finally complied with the Indian government’s mandate to take down certain accounts and tweets related to the ongoing farmers’ protests. But it also said that it had not taken any action against accounts belonging to news media entities, journalists, activists and politicians as complying with such requests is not consistent with Indian law.
Besides, many of these posts are visible outside India. So, there are ways to get around the recent takedowns.
Of course, the government is far from happy with Twitter’s resistance, especially when YouTube did not show any. There are already talks that Koo will be a Twitter replacement, but replicating Twitter is a tall task. It will take more than just a few Indian accounts to drive the same kind of discussions and debates.
The Big Change? Let’s Talk US-India Relationship
The ongoing battle of ‘swadeshi’ and ‘videshi’ lobbies in India’s ecommerce sector has taken an interesting turn with the regime change in the US. In the past few years, Jeff Bezos-owned Amazon and Walmart-owned Flipkart have had a tough time dealing with the country’s ecommerce FDI norms as they have been changed repeatedly to safeguard the interests of homegrown retailers operating offline and online. The FDI rules for ecommerce are under the regulatory scanner again after the 2018 update that severely impacted Flipkart and Amazon.
Donald Trump’s defeat to Joe Biden, who is known to be more open to big tech’s lobbying, has given American ecommerce companies some much-needed leverage and muscle for negotiations. The US trade lobbies, which had already been relaying Amazon’s and Walmart’s concerns to the US government, now have a friendlier ear in the form of the Biden administration, unlike Trump who had even lashed out against Jeff Bezos in the past. The US wants India to take a friendlier stance on global trade. How the US lobbies weigh in will have to be watched, even as India’s own lobbies look to sway the government for more stringent rules targeting foreign ecommerce companies.
Your Relationship With Yourself
But for now, let us put all hostilities on hold. This week is about celebrating the relationships and making the most of them.
The most important relationship we share is with ourselves. Towards this, we need to arm ourselves with the latest skills and focus on self-development. We are all makers of our futures, and this is the era of makers. India has never seen such good times for product makers, builders and creators.
Next month, we are bringing The Makers Summit 2021 in an attempt to help you grow, gain actionable industry insights, and learn about new product and marketing strategies which matter most. Take part in this massive gathering that will bring together more than 10,000 makers like you and be part of India’s journey of becoming a product economy!
Happy Valentine’s Day!