Pune startups ‘zoom’ in to not go viral, but get ready for the pivot
PUNE Covid-19 (coronavirus) has infected 21 Pune residents as of March 20.
As of March 21, the state government has shut down Maharashtra, apart from banks, essential services and 25 per cent of government offices.
The work from home, WFH, in essence began in Pune at the top of this week.
We at HT Pune like to define a startup as, five years old or less; 100 employees or fewer; and still having started on initial funding reserves, still operating to draw investment.
That organisation, of which there are at least 2,000 in Pune alone, faces a unique challenge in these times of a pandemic. Let’s meet the protagonsits, and their overseers.
The macro view
Vineet Patni, VP, TiE Pune
This epidemic has forced startups to do business differently.
In the short term there are:
Operational challenges – how to manage work from home, how to prevent infection from hitting your employees. Many companies have already operationalised work from home or are managing with reduced staff. In fact, sales calls are quickly moving to virtual calls. I think even customers would prefer doing a meeting over Zoom, rather than meet in person.
However all this is in the short term. The long-term impact of this in my opinion will be positive, even though there will be some hiccups along the way.
There is a move to put in huge stimulus by governments around the world. You will see a lot of businesses become self-reliant. Of course, this might lead to different business models, a rethink on supply chains and dependence on certain products and countries.
Startups will pivot on the back of changed scenarios.
Manufacturing will get a big push and that will lead to more employment.
Abdulla Hassan, CEO, Dhow Capital
We are sitting on an ailing economy.
In 1929, that saw the Great Depression, there was a fall of 36.3 points in 16 days; in 2008, indices fell 25.2 points in 16 days; the coronavirus hit the stock markets with a 20.7 point fall in just four days.
The UK has announced a stimulus of $300 billion
President Trump announced a $1 trillion stimulus package.
What can the Indian government do?
While work from home is all fine, what it essentially is - is a culture. How many founders are ready to let people work from home? Yes tech companies can do so, but not all startups are tech startups. You have food, logistics, healthcare and so on. Are they geared for this challenge?
At a startup, founders are used to seeing their employees in front of their eyes and getting their money’s worth. Will they be able to adjust to remote working? And for how long?
Startups will see a huge challenge raising funds as VCs will let more time elapse to get a better deal. With no stimulus and changed economic scenario founders in seed funding or even Series A or B stages will be forced to change their valuations.
Earlier epidemics saw economic damage, this one will change our social structure.
On the shop floor
Akshay Mehrotra, founder, Early Salary
Since Pune is affected, we have implemented a few rules to keep our entire office running remotely.
Luckily for us all our operations are on a cloud so we don’t need to run servers, it is possible to work from anywhere. We have mandated every employee to carry their laptop back home.
And 50% of our employees are working from home.
Every person is part of a Team A or B so in case any one person gets infected, the other half will always be available to work from home.
Team A and B: at no given time can the two teams meet. In fact, just yesterday, we did 3,000 disbursals, 573 customers took money from us and there were 2,500 repeat customers. However, while operations are moving along just fine, we are seeing a drop in about 20-25% of new feature development.
Since we keep talking to our customers and keep developing new features to our app, this work has been affected since remote collaborations are not as effective as face to face.
The long-term scenario is different. In the finance world generally when the market sentiment for risk goes up, the demand for cash too goes up. Sentiment goes down, the demand for cash goes down.
Businesses will need more money, but spends at home will drop down to the necessities. The impact of this epidemic is still unknown. One can see that e-commerce and logistic companies are facing difficulties.
Demand is not being serviced. On the risk side we don’t know if the financial markets will remain stable or not. Yes Bank has triggered many things. We have to be careful of how liquidity pans out. We are fortunate as we are hyper-capitalised and do not burn cash.
Soham Chokshi, founder, Shipsy
We have a digital platform that simplifies all the paperwork and logistics for import and export houses. We process more than 10% of international trade in India. We started our business three years ago, with Rs 1 crore turnover; then Rs 6 crore in the second year; and Rs 24 crore in this year.
What worked for us in these Covid times is that we are a cloud-based company and even now our staff all work from home. However, we have daily video calls and EOD reports online. Also, we give a weekly sheet of tasks to be achieved for each employee.
Our growth has been impacted by this epidemic. Port workers in Italy, China and elsewhere are in a lockdown and there is a huge pile up in locations like Turkey, Spain, Colombo, and even JNPT is affected. This has resulted in a slowdown for my business of about 18% to 20%.
China has restarted production and is now up to 70% of its original numbers.
People are not buying luxury goods. I hope they will soon.
Aman Singh, founder, Bareek
There’s definitely going to be a home advantage for brands that “make in India”. Bareek has seen a sharp increase in online sales over the last two months. We manufacture and source locally.
We source handloom fabrics from weavers and weaving societies across the Indian subcontinent. Inventory and stock isn’t a challenge for us. We’re more agile and we don’t follow the traditional retail format. Rather, it’s important for our team to stay in fit condition going forward so we’re going to take necessary steps. We see it as an opportunity in the long term, so long as Covid-19 abates and the situation stabilises.
Kriti Tula, co-founder, Doodlage
The coronavirus outbreak is going to be tough especially for bootstrapped home grown brands. Keeping production shut, paid holidays, work from home... is a luxury that small labels hope to be able to provide the team as we go deeper into the global pandemic. It might mean a start over for some of us if the city reaches a state of complete shut-down. We are currently taking the necessary precautions to keep and our workers safe by increasing our attention to sanitisation within the studio and self-quarantine for those not keeping well. We are also working to find ways to test working remotely and running some operations through a shutdown with a focus on increasing online sales, as store walk-ins reduce.