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Innovation: The Backbone of a Scale-up Strategy (2/2)
Innovation: The Backbone of a Scale-up Strategy (2/2)

January 25, 2022

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Continuing with our last blog on how Innovation acts as a key catalyst in scaling up a start-up where we discussed briefly “Innovation in Products & Solutions”. Now we will cover another 2 important aspects: "Business Strategy" and "Business Approach".

Innovation in Product & Solutions

Edtech and AgriTech unicorns also benefited from increased digital maturity and time-sensitive needs. While the number of investment rounds and overall investment increased in Edtech, the adoption of digital technologies by end customers and farmers increased in AgriTech (including dairy, horticulture, and meat).

Unicorns and scaled start-ups have also begun to leverage deep-tech to develop their products. Artificial Intelligence (AI), Internet of Things (IoT), Big data and Analytics, and Blockchain are the most popular technologies among unicorns, owing to their viability, talent availability, and knowledge network.

 

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The convergence of technologies is benefiting entrepreneurs in multiple ways. Many scale-ups and unicorns have leveraged deep-tech to build more complex and intelligent solutions across industries. As deep-tech grows, it enables knowledge sharing, expanding talent base, and increasing customer adoption. While AI, IoT, and Big Data Analytics are the most preferred technologies, B2B accounts for 70% of all deep-tech start-ups. Also, the pandemic has resulted in further adoption of AI in various industries like HR tech, Health-tech, Enterprise tech, Ed-tech, and Fintech.

Innovation in Business Strategy

Indian founders have reinvented their playbooks with time to overcome hurdles. The relevance of customer experience and unit economics has increased. According to 50-55 percent of founders, profitability will be given more weightage when determining the valuation. As acquirers gain confidence in the market's trajectory, M&A is also regaining traction. In H1 2020, global lockdown significantly slowed acquisition flow, owing to acquirers prioritising company continuity above everything else. Unicorns have been focussing on B2B and B2C marketing. 70% of purchases were of B2C start-ups, which were mostly led by peers and backed by strong venture capital and private equity investors. EdTech accounted for 20% of all acquisitions, followed by FinTech, HealthTech, Enterprise Tech, HRTech, and Gaming.

The pandemic has created shifts in major domains in the Indian economy. There has been a rapid change in the way we think about building businesses and setting short-term priorities and long-range actions. Geographical location is no more a constraint for enterprises, and with increased digital maturity, entrepreneurs have increased the pace of experimentation. Companies have begun focussing on enhancing employee experience along with customer experience. Collaboration is becoming mainstream, and public partnerships are building fast-growing innovative companies. Other shifts in founder playbook include- the adoption of remote work as a capability, focus on growth with lower investments, emphasis on retention, focus on the global market, etc.  Attracting, Engaging, and Retaining Quality Talent is a priority. Remote work is being considered by founders to prevent burnout, increase the talent pool, and provide better working options to their teams.

Against the backdrop of COVID-19, marketing strategies began to focus on low-cost strategies like social media marketing, content marketing and influential marketing. Unicorns have been building credibility using ads, blogs etc. and evangelising using largely paid modes. Many unicorns used new funding rounds for aggressive marketing and promotions 

Innovation in Business Approach / Success Mantras

  • Focus on shifting processes to autopilot with minimal exceptions
  • The entire organization structure to be equipped appropriately to achieve scale
  • Always go an extra mile to satisfy customers and it will pay off multiple times
  • Customer’s best interest should always be priority even if it affects business, customer centricity is the key which helps in customer retention
  • Nurturing a robust partner ecosystem is the key. Ensure standardizations in the product and create customizations through partners.
  • Priorities may shift from ‘product to sales to engineering to customer support’ as per changing business demand in a scale-up journey
  • Speed is important to compete in the market, be the first one to provide new offerings

 


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