The coronavirus pandemic continues to ravage the world economy. Markets are down, funding is on the low, and there is a lot of uncertainty and anxiety around money reserves.
In our new series Money Matters with Shradha Sharma, we talk to experts, entrepreneurs, and investors to break down what it means for investment opportunities, savings, spendings, and more.
In its fifth episode, YourStory Founder and CEO Shradha Sharma is joined by Mohandas Pai, Chairman of Aarin Capital and Manipal Global Education, and Siddarth Pai, Founding Partner of 3one4 Capital, to discuss how India can create 100 unicorns to propel the growth of the country’s economy in order to realise our dream of achieving a $5 trillion economy.
Watch the whole episode here
“All of us should be on survival mode for the near future because we have to make sure we get over this crisis,” says Mohandas Pai, adding that nobody in the world really knows how to do so as there is no cure for the novel coronavirus.
Emphasising on the uncertainty of the disease, he advises individuals, startups, and companies to keep their money ‘safely’, i.e. in an AAA-rated bank. The next step is to cut down on costs and elongate the need for money as you cannot be sure of incoming revenue for the next few months.
Last but not least, keep your team together. He advises companies to not let of go people in these times of crises, saying that it shows the strength of character.
According to Mohandas Pai, this is the perfect time to pivot or rethink the business model in order to be sustainable. “COVID-19 has taught us that we need to have cash in the bank, unencumbered, for the next 18 months,” he says.
Saying that 3one4 Capital has asked all its portfolio companies to follow the same guidelines, Siddarth Pai adds, “We are working with the government to make sure there is some form of relief for startups to survive these unprecedented times.”
100 unicorns by 2025
Despite these current challenges and an uncertain road ahead, Mohandas Pai believes that the Indian startup ecosystem can still grow and have 60+ soonicorns will attain unicorn status by 2025.
“India is a country constrained by supply and not demand; supply at a price. We’re a growing economy,” he explains.
Unlike the US or Europe, our market is not saturated, and has plenty of room for growth. These soonicorns, he says, have good technology, business models, customer outreach, and have grown while raising capital at the right time.
But how can these soonicorns overcome the current crisis and remain on their path to becoming India’s next unicorns?
“First, they must use this opportunity to build a viable business model. Second, improve processes to make sure your customer service works. Third, use data and analyse what worked, what did not work. And fourth, make sure that you build a good team of people by allocating the right duties, and analyse who can last till you reach $1 billion,” says Mohandas Pai.
Saying that while startups need to talk to their investors more, he urges entrepreneurs to send one-page reports to their investors every month, and keep in constant contact with them to make them feel wanted.
If you can create the image of growth, and show investors that you are the next big bet, the market and investors will both reward you.
After all, every investor wants to know the next unicorn.
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