India as a nation is going through a difficult time due to the CoronaVirus outbreak. Our whole country is under lockdown since 25th March 2020, it is said that many of the Indian businesses are struggling with blind uncertainty about their future.
Vikram Gupta, founder and managing partner of IvyCap Ventures, strongly believes that synergizing with entrepreneurs and teams can help you overcome this economic downturn.
The Gross Domestic Product data showed a dip to 3.1% in Jan-March. It showed that India’s economy grew at its slowest pace in the last two years in the March quarter since the pandemic weakened the already declining private investment & consumer demand. The revised Gross Domestic Product (GDP) estimates a decline for India by 0.2% points for 2020 to 4.8 % & by 0.5% for the fiscal year 2021 to 6% since the lockdown has caused a severe hit on several sectors such as hospitality, MSME, civil aviation, agriculture & allied sector.
In this initiative, we are catching up with India's leading investors and entrepreneurs of India to know more about survival strategies for businesses during COVID 19 lockdown.
We hope our series will help the entrepreneurs struggling during lockdown and SMEs who are trying to beat the pandemic and do best for their business. So read on to spot the opportunities, mistakes and overall how to correct your course so that the business heads in the right direction.
Since the demand has gone down due to the lockdown and the pandemic. “I think, of course, it is the biggest challenge for the portfolio companies now since the demand for non-essential products has gone down and only the essentials are in demand,” Vikram Gupta says.
He points out how the Healthcare sector also has suffered a hit. For example, people are visiting private hospitals only when in dire need of some of the essential services and are avoiding visiting in order to steer clear of being exposed to the virus. If they have to go for a routine check-up or maybe a blood test, they are generally not opting to visit a healthcare provider. Nobody wants to take any chances right now. So such an impact has occurred across various sectors.
“Like, travel & tourism is the worst hit due to pandemic, as no one is travelling right now and may not for the next couple of months. So in such a case, I think 6-10 companies can come together and brainstorm how to survive this pandemic and come out stronger together rather than doing it alone,” he says. “Fortunately for our portfolio, most of the impact is short term,” says Vikram. His advice to the portfolio companies are:
Focus on core business activities. Cut cost – so as to survive for a long period of time Cross this short term challenge – it will pass. Find synergies wherever possible - Get your teams together and talk to each other and find synergies. Even if the company is not a part of VC funds lookout for synergies.
Since there are issues at various levels related to revenue or fundraising or finding capital and managing cost for startups. Vikram says that he sees this as a good time for those startups to test out the way these entrepreneurs think as there is time.
“Validate how your hypothesis about a particular product survives,” he says. Even the travel & tourism industry has come out with ideas to find & continue to keep going in this pandemic.
“I read about a travel startup which campaigned to put out this message to the people to not step out of their houses, so this shows that they care about the people rather than thinking only about generating revenues. Some went ahead to provide hand sanitizers, so customers do not forget that” he says.
Vikram advises on showing empathy “Do not let people suffer as customers do not forget when you do something differently, care for them and they will come back to you.”
We know that during the lockdown people stopped venturing out of their homes. The revenue to the malls, shopping centres, movie theatres, etc stopped as people wanted to avoid getting infected. So in such cases,
Vikram suggests that entrepreneurs should look at innovative ideas to come out of the current situation and try innovative ways of generating revenues.
It has happened in the past that such crisis conditions have led to innovations & new creations. Hence, these are the times when one can get to see more innovation in new business models coming up. Like Aggregators have come up to provide essential things from stores to homes, a lot of others are inclined towards helping people who have lost jobs and are providing them with food, essentials, masks, etc. ”As they say necessity is the mother of invention. So these crisis situations are the best time for new ideas to form shape,” he says.
With the lockdown has come work from home. In this situation, Vikram has been able to focus more on his personal front and that too positively. He has been spending time with his family, a lot more quality time on himself wherein he is exercising, performing yoga and music. “Since travel has stopped and I used to travel a lot before. In Fact, I was travelling from December 2019- February 2020, so when I came back I self-quarantined for 14 days,” he says. Vikram Gupta feels that due to work from home and no travel, productivity has increased substantially. Going forward as well, since this would become the New Normal people have realized that a two-hour meeting for which earlier people travelled and spent a whole day could happen over zoom calls & webinar thus saving a lot of time.
Vikram finds the Action COVID-19 Team (ACT) initiative, which is a first-of-its-kind initiative by Top VCs and entrepreneurs with INR 100 CR grant, is launched to provide resources and guidance to startup founders and employees to be a great one. “Since the evaluation process is by private professional investors so the process is thorough and the people who are in need are getting benefited by it,” he says.
With the financial Tsunami due to COVID-19, he finds this time to be a good time for investors to invest. “It has definitely softened the way entrepreneurs would negotiate as opposed to in normal condition. So it is a good time to strike good deals to deploy some cash to go on,” he says.