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Sunil Gupta.

Sunil Gupta is founder and director of, often referred to as India's largest searchable B2B marketplace.

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How Startups can Live on Little to No Capital

With the greatest numbers of incubators and accelerators in the world after China and the US, the Indian startup ecosystem is rapidly evolving due to the availability of talent, government initiatives, and the support it is receiving in terms of infrastructure and investment.

India’s startup sector is a thriving one and rated as third in the world, according to a report by Nasscom. With the greatest numbers of incubators and accelerators in the world after China and the US, the Indian startup ecosystem is rapidly evolving due to the availability of talent, government initiatives, and the support it is receiving in terms of infrastructure and investment. However, its not long before many startups find themselves struggling to convert their potential into reality, and often end up draining too much of their funding to certain aspects that have poor returns. When startups aren’t judicious enough in their approach, they often burn all their funding and are left in the lurch by investors, often forced to cut short their entrepreneurial journey. This is one of the reasons why the Indian startup ecosystem is full of examples of incredibly promising startups facing an ignominious end.

Here, let’s take a look at how startups can survive by utilizing the resources judiciously and flourish without burning the funding received:

a) Developing a customer-centric model: Developing a customer-centric model is crucial to the growth of a startup. Every startup should be clear about what they have to sell, the target audience and why consumers should opt for their product or service. They should work on their positioning statement and then quantify it in terms of business outcomes to reach out to their customers. The firms should make sure that every product/service is designed with marketable value for their customers. They should also create a mechanism to consistently gain customer feedback so that it assimilate pointers to guide their strategy. This is crucial for the growth of a startup.

b) Setting benchmarks for the firm: Ask an entrepreneur about his biggest challenge while running a business and he would immediately say, retaining customers and ensuring client satisfaction. While attracting customers to a new product or service is hard, maintaining them is an equally if not more challenging task. By setting benchmarks for their business, entrepreneurs will be able to measure success and learn about the company’s progress in a better way. They should also have their goals laid out in the business plan along with a clear and concise strategy that actively pursues customer retention as a metric for their success.

c) Managing expenses and reserves: Even a seasoned entrepreneur can face difficulty in managing expenses and maintaining reserves of his firm. That being said, with proper planning and execution, managing the cash flow of a startup can be done with a more long-term perspective. Apart from focusing solely on profit making, it is important to look into managing the cash flow, i.e. the total sum of money used for business and other expenditure incurred. Also, maintain a cash reserve to utilize the funds at the time of an emergency or to meet short-term expenses. 

d) Setting realistic targets: Often startups get highly ambitious and do not set realistic goals, but its not always wise to shoot for the stars. Therefore, before goals are set, ensure they are well-defined, realistic and measurable. Let the teams know about the firm’s targets beforehand and let them be prepared to work for long-term success. Share the vision and ensure the team knows exactly what the firm is aiming for and chart out parameters and metrics for them to measure their success against.

e) Thinking out-of-the-box is essential: There will be multiple startups offering the same product or services. But how differently you plan to reach out to the customers makes the difference. There may be barely any difference in the product/service, but the success of a firm lies in coming up with out-of-the-box strategies and offering innovative solutions to consumers.

f) Evolve and adapt to the changing environment: Every business needs to continuously evolve and transform to thrive. In a technology-driven era with many new and disruptive developments, constantly emerging competition, it is essential for startups to innovate, evolve according to changing trends and requirements and stay on their toes to attract buyers. Entrepreneurs need to keep themselves updated about what’s happening across the globe and understand the trends. If the firm’s business does not adapt to the changing environment, then there are the chances that the model won’t last long. Its important to be open to taking a step back if it saves nine in the wrong direction. Think of the future if you want to survive in the long run.

g) Turn inward: In the highly competitive world of startups, it is impossible for firms to stop comparing their offerings and services with other firms. However, to be successful, every firm needs to first look inwards, analyse feedbacks, refine internal processes, rework the services, learn from their experiences and surge ahead with more vigor. Every firm should learn to deal with competition, focus on developing more products and learn to be lean and nimble, in order to survive even without funding.

h) Focus on human resource management: Often, attracting the right talent is a major problem faced by several startups. Having an efficient HR team in place, who understands the firm’s business well, will help to tell if an applicant means business or is just looking for a raise. The survival of a startup depends upon the ability and skills of its team members so it needs a healthy mix of experience and fresh talent. The apt human resource pool at work is an investment with high returns.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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