The Ministry of Science and Technology announced it will be investing $749,500 over the next few years…Under a new program, Promoting and Accelerating Young and Aspiring Innovators and Startups (PRAYAS), the Ministry will be providing grants of up to $149,900 to each startup to encourage innovators.* However, free flow of funds alone does not ensure success. Indian startups and SMEs have to bring about radical improvement in costs, quality, service, and other critical avenues to stay ahead of the curve.
Times have not been better for Indian startups and MSMEs. Volatile policies in foreign lands, government initiatives to propel growth, and an ambitious young generation spell good times ahead for these sectors. Reduction in corporate tax and soon-to-be implemented GST will add to the optimism. India is also poised to become a $5 trillion economy by 2025, for which the backbone is the MSME sector. MSMEs and startups are touted to spur jobs, entrepreneurship, innovation, and disposable income.
However, the picture is not all rosy. Over 40% startups have failed since 2014, according to startup tracker Xeler8. The average age of these ventures is just over eleven months. Kishore Biyani stated that 90% startups he has seen have no meaning. Kris Gopalakrishnan observed that around 70% startups will fail and 20% will remain as small enterprises—far from promising numbers for a country which boasts the highest youth demographic in the world.
So, where are startups and MSMEs going wrong? We can attribute their failure to many factors. However, the Pareto Principle can be applied here too. Almost 80% failures occur due to 20% reasons.
The gravest error is business modeling, or the lack of it. Businesses try adopting ideas from the West without understanding what their customers want. Or they fall hook, line, and sinker for motivational speakers who dish out mountains of wisdom, but skip out on steps to implement those. This absence of a business model also causes startups to burn cash fast. Eventually, funds dry up sooner than anticipated, resulting in failure, according to Rishabh Lawania, founder of Xeler8.
What can be done to develop effective business models? How can startups and MSMEs grow larger by design, with owners guiding them skillfully like Captain Spock?
the propel excellence method
This method for fundamental rethinking addresses the most important components of a business:
Esta historia es de la edición May - June 2017 de The Smart Manager.
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Esta historia es de la edición May - June 2017 de The Smart Manager.
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Building A Quality Culture
A strong company culture defined by its values, beliefs, and behaviors, has a profound impact on its products and services. More so in today’s VUCA world, where to stay relevant and maintain a competitive edge, it is critical for organizations to build a culture that focuses on quality. Suresh Lulla, author of Quality Fables, elucidates through significant examples how creating a culture of quality is imperative to driving success and productivity.
Customers For Life
The history of General Motors in India can be traced back to the 1920s, when it became the first automotive company to set up an assembly plant in the country. The relationship since then has not been as fruitful as GM would have hoped. GM’s flagship brand, Chevrolet, was introduced in India to build upon the success of the popular Opel marque. However, success has been fleeting at best—an issue that GM India is determined to rectify. It aims to do so by adopting a two-pronged approach: using customer feedback to influence product development, and delivering a superior sales-to-service experience.
The Digital Shift
… technology will radically disrupt HR in the near future. Indeed, it is already changing the way HR works and the role it plays and opening the door to a new type of “digital HR” function.1 The rise of digital and social media is changing the dynamics of HR and creating new ways of hiring, engaging, and retaining employees.
The Story Of Telling
“The best brands are built on great stories,”* this remark by Ian Rowden best captures the strategy of diligent brand building. Much more than attractive logos or the products themselves, what builds a brand is how successfully a story is woven around it. Brand marketers have to be good storytellers indeed.
Complexity Is Simpler Than You Think
Kay Kendall and Glenn Bodinson, authors of Leading the Malcolm Baldrige Way, shatter myths about excellence models such as Baldrige and EFQM.
Proponents of Isolation Never Become Victors
Multilateralism in the political and economic space has always led to frameworks that favor the mighty. WTO was no exception. With agriculture kept out of its purview, it could never become a truly fair and free trading system. China was the only large emerging economy that exploited relative openness in low-cost manufactured goods to take full advantage of the system. Other emerging economies could at best garner minor gains.
A History Lesson (From Year One) for Trump and the Brexit Crowd: Isolationism Has Never Worked!
Professor Stephane Garelli on growing isolationism.
A Win-Win Game
Business is not a sport where some stakeholder has to lose or fare badly for others to do well. Building an atmosphere of trust and transparency between all stakeholders will help companies retain them even during adverse times.
A Sustainable Model
With a total market value of $4.3 trillion and an employment base of at least 1.3 million direct employees and millions of others indirectly employed, platforms have become an important economic force.*Companies today are constantly looking for ways to build platforms—Infosys Ltd announced its plans of monetizing its platforms to make them a $2 billion business by March 2021. But are all platform businesses successful?
Custom Made
…three in four consumers said they receive too many emails from brands, and one-fifth said they could not handle the current volume…69 per cent have ‘unfollowed’ brands on social media, closed their accounts or cancelled subscriptions.*In these times, when the market is flooded with products and services, the most efficent way to engage customers is to offer them customized content. To achieve this, brands need to focus on observing the nuances of individual preferences.
