There is no doubt that businesses have taken a huge blow in the last two months, with some being forced to temporarily halt operations or shut shop. Mid and early stage startups have adversely felt the impact of the lockdown, with 70% of them having a cash runway of less than three months.
While the situation has forced businesses to adopt, many have used this time as an opportunity to finetune and improve products, maximise efficiency, and trim fat.
TNM spoke to a few startups across industries to understand how startups made the best out of an unprecedented situation, and some of the major lessons they learned.
Innovation and new opportunities
Amuleek Singh Bijral, Co-founder CEO, Chai Point, which saw its business plans being derailed for a while as it had to shut stores and had no deliveries for a while, says that though there was a decrease in revenue, work actually increased in finding new ways to service customers.
â€śWe have launched more than 8 products including biryani, pav bhaji, bread omelette etc. in the last one month to cater to the needs of the customer and incorporated new safety norms. We also took the opportunity to extend our paratha range which received great response and got into paratha and curry to cater to all-day breakfast and mini meals to serve the work-from-home needs of the customers,â€ť Amuleek says.
Chai Point was also able to accelerate its digital adoption, under which contactless ordering and contactless vending machine dispensing came into play.
Nexrea, a Hyderabad-based startup that develops AR and VR-based sales, training, marketing and servicing solutions for the healthcare industry saw this pandemic as an opportunity to ensure its created products that would be must-haves for companies.
â€śThe business was impacted, but in a very balanced way. I would say itâ€™s only a shift of fulcrum. Some clients pulled out because ours is a good-to-have product rather than a must-have. But it turned out to be then an important catalyst for our growth. Now we have reworked our products that no enterprise can afford to not have,â€ť Ramya Gujjula, co-founder of the startup says.
Meanwhile, bike-taxi platform Rapido which saw customer bookings completely stop, used the pandemic to build on its B2B logistics business, which earlier wasnâ€™t a major focus area for the company. â€śDuring the lockdown, we scaled the logistics business and began working with grocery delivery platforms as their last mile logistics partner. Earlier we were majorly a bike taxi platform and only 10% of our business came from logistics. But with the lockdown, this is set to increase to more than 25% of our business,â€ť Aravind Sanka, co-founder of Rapido said.
Apart from scaling up products and innovating, startups also explored new opportunities. Rapido, for example, launched Rapido Local, which is a customer-to-customer delivery service. This was a service it was able to launch and run during the lockdown.
Adonmo, an outdoor digital advertising startup whose business came to a standstill due to the lockdown, says that it was able to use this time to identify new verticals for business. â€śWe identified verticals we didnâ€™t pay attention to earlier and were able to see how they can be valuable to us. Since there wasnâ€™t much we could do without stepping out, we did a lot of work on product development and improvement and new ways of customer engagement,â€ť says Sandeep Bommireddi, co-founder of Adonmo.
Rapido says it worked on a lot of pending product pipelines with a focus on efficiency, while managing with a smaller team. â€śWhile we havenâ€™t seen a situation like this before, in the past five years we have gone through a lot of ups and downs, and have always been frugal, running operations in a lean manner and that really helped us,â€ť co-founder Aravind says.
This pandemic, he adds, helped the company learn making work from home more efficient, an area that was very new to it. Aravind says that Rapido also built a lot of products from a business efficiency point of view, relooked all costs, and renegotiated costs and terms with all vendors to increase efficiency and be able to run a tight ship.
For Adonmo, the pandemic helped it understand to what extent a calamity can bring a business to a standstill, even though the startup was prepared for a 12-15 month runway before things could get back to pre-COVID levels.
â€śWe have done a lot of work to cut down on costs, without having to impact human resources and laying off employees,â€ť Sandeep says.
While those who could volunteered to take a pay cut, Sandeep says that the startup worked on making each unit cheaper, identifying where wastages were happening and cutting down accordingly, especially in terms of real estate costs. The startup worked to conserve more cash and make the business model more optimal.
Nexreaâ€™s Ramya says that it was surprising to see how efficiencies build over a crisis. The startup learnt to use manpower and money more wisely. â€śAgreed certain industries are sailing through the crisis more easily than others. But, it is the right time for the companies in these industries to get on top without spending too much. Since we operate in both healthcare and K-12 Education, itâ€™s working out well for us,â€ť she says.
Chai Pointâ€™s Amuleek says that while one key learning from the pandemic was that people can actually work from home, he also says that this pandemic has taught both startups and corporations the value of cash flow and working capital management.
The COVID-19 pandemic has also made one new aspect new important, especially for customer facing businesses: Safety.
Amuleek says that with the number of cases increasing, Chai Point went back to the drawing board and introduced a whole new system of ensuring safety and contactless exchange between staff and customers.
It even launched a new program where it re-designed store for a safer service, introduction of gloves, masks, temperature check for staff and customers, e-bills with staff temperatures, physical distancing markers, plexi-glass at billing counter, sanitized tray foot operated sanitizers etc, among others.
Rapidoâ€™s Aravind also says that companies will now have to factor in a new cost arising out of safety, which will now become paramount to any business.