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  • 7/27/2023
The pandemic has thrown a spanner into the plans of most #startups all over the world. How will it affect their #business strategies and future funding? And how can they adapt to a changing world, to survive and emerge stronger? To discuss all this and more, @outlookbusiness6124 editor N Mahalakshmi caught up with serial #entrepreneur and founder of GrowthStory, K Ganesh. He is the promoter of several startups including @bigbasketofficial, @PorteaMedicalBangalore, @freshmenu5048, @Bluestonedotcom, @Homelaneinteriors, @HousejoyIndia, @TutorVista and others.

#Masterspeak2020 #COVID19 #KGanesh #Business #OutlookBusiness #OutlookMagazine #OutlookGroup
Transcript
00:00:00 [MUSIC]
00:00:10 >> Welcome, ladies and gentlemen,
00:00:11 to Outlook Business MasterSpeak.
00:00:13 Today, we kickstart a weekly webinar series we have created,
00:00:16 especially with a focus on how to deal
00:00:18 with disruption caused by COVID-19.
00:00:20 COVID, no COVID, challenges are a part of life,
00:00:23 and we bring to you high-quality speakers from the world of business,
00:00:26 who have been through several troughs to guide us
00:00:29 through how to navigate this period of crisis.
00:00:31 Before I introduce today's speaker,
00:00:34 a quick thank you to our partners for MasterSpeak series,
00:00:37 presenting sponsor Hyperlink Infosystems and co-sponsor RR Solutions.
00:00:41 Today, we have K Ganesh,
00:00:43 a serial entrepreneur and a big name from the venture industry.
00:00:46 He's promoted director of Big Basket,
00:00:47 Blue Stone, Porsche Medical, Home Lane,
00:00:50 House Joy, Fresh Menu, Hunger Box,
00:00:53 Clear Out, Bird Loop.
00:00:54 Well, the list is pretty long.
00:00:56 Obviously, he's the best name I could think of
00:00:58 to answer all the questions we have with respect to how
00:01:02 we have to reboot startups that may have completely come to a halt,
00:01:07 as well as people who need to speed up from emerging from the lockdown.
00:01:12 So thank you so much, Ganesh, for joining us on today's webinar.
00:01:18 First off, can you just elaborate on how the startup world
00:01:22 has been disrupted because of COVID?
00:01:25 And what are the big changes you see in the pre-COVID versus the post-COVID scenario?
00:01:31 Yeah, so thanks. It's a pleasure for me to be here.
00:01:37 These obviously are very unprecedented times.
00:01:41 All of us, be it in the startup world, be it in the SME or MSME,
00:01:45 or government, or public sector, or private, small and large,
00:01:51 all of us are struggling to make sense of what's happening.
00:01:55 Firstly, the caveat is we still are figuring out
00:01:58 because the level of impact is still not known.
00:02:02 It's a once-in-a-century pandemic.
00:02:05 I've not seen like this before, nothing of global impact.
00:02:08 So whatever I may say is with a full disclosure that
00:02:13 in four weeks to eight weeks, it will sound stupid
00:02:17 or we may have to revise it completely.
00:02:18 So that's the first.
00:02:21 On the positive side, fortunately, startups,
00:02:24 entrepreneurs and founders being nimble, being flexible
00:02:29 are perhaps the most suited organism to go through this pandemic.
00:02:34 Okay, right?
00:02:35 Just like they say, in evolution, dinosaurs are the worst suited
00:02:39 because of the inflexibility.
00:02:41 So this is the opposite.
00:02:42 So that's the good news.
00:02:43 The bad news is like small babies, they are also the most vulnerable
00:02:48 because they are the weakest amongst all of it.
00:02:52 So that is where we are.
00:02:53 Point number one, based on the sector that they are in,
00:02:57 either they are directly deeply impacted like travel or hospitality
00:03:02 or even physical restaurants or companies or startups
00:03:08 that need a physical presence, which because of the lockdown,
00:03:11 because of social distancing is not possible.
00:03:13 Then you have others who are not directly as much impacted
00:03:17 but there is still an impact that exists.
00:03:19 I would put categories like home delivery of essential,
00:03:23 like food ordering, cloud kitchens in that category,
00:03:28 where there is a reduction for multiple reasons,
00:03:31 but it is not being decimated to zero like the way many industries are.
00:03:37 The third clearly are things which have got tailwinds,
00:03:42 where which are getting impacted positively by the epidemic.
00:03:47 For example, online grocery delivery,
00:03:50 you have seen in the case of companies like we have big basket on the home, which is there.
00:03:54 And fourth is more structural things which have come up,
00:03:58 whether it's companies making masks or making sanitizers
00:04:02 or companies that are making things that help in this.
00:04:05 So I think there are four different categories
00:04:07 and the impact of each of the four has been different.
00:04:11 But short answer, very badly affected.
00:04:14 The reasons are threefold.
00:04:16 One is startup by nature are loss making.
00:04:19 So they don't make profit.
00:04:21 So they burn money every month.
00:04:24 So when you're burning money every month, you need investor capital, risk capital.
00:04:28 Most of the startups are always in a fundraising mode.
00:04:32 Lot of startup are out there raising money.
00:04:35 And suddenly now the fundraisers come to a stop,
00:04:38 either because people are waiting and watching,
00:04:41 no investor wants to catch a falling knife.
00:04:44 So they are delayed, put on hold decision making.
00:04:47 In some cases, even going back on the discussions or putting them on hold.
00:04:52 Two, not initiating new discussions.
00:04:56 Therefore, wherever your fundraising was required in order to meet the burn,
00:05:00 that has come to a standstill.
00:05:02 So that is problem number one.
00:05:03 Problem number two, like I mentioned earlier,
00:05:06 many of the startups have seen revenues go down to zero.
00:05:10 So in addition to the normal burn that exists,
00:05:13 today you have a situation there is no revenue.
00:05:15 So the burn has doubled or tripled substantially because the revenue has gone down to zero,
00:05:20 while the cost cannot go down to zero.
00:05:24 That's the second challenge.
00:05:26 And third is some of them happen to be in sectors which will take over medium and long term,
00:05:33 long time to come back to normal,
00:05:37 and which will affect the prospects, not just immediate, but in years to come.
00:05:42 But in months and quarters and maybe years to come.
00:05:45 So all these three have left them the most vulnerable.
00:05:48 Unfortunately, the support announced by the government and all of those
00:05:52 does not apply directly to the startup sector.
00:05:54 So I think, combined with all of it, already uncertain, fragile,
00:06:00 low probability of success sector, which is what startup is, further gets hit by this.
00:06:07 So it's double or triple nominee on top of already a fragile,
00:06:11 which is always a fragile ecosystem in case of startup, given the success rate.
00:06:16 So that's where we are today, not happy situation.
00:06:20 Sure.
00:06:21 Are there any changes that you see as permanent changes that post COVID or post this shock?
00:06:30 Are there any trends that are here to stay?
00:06:35 Yeah. So I think definitely there are going to be a lot of changes,
00:06:42 changes in consumer behaviour, changes in the way people act, the way people spend their money,
00:06:51 and the way people look at the world.
00:06:54 All of it is going to change.
00:06:56 Some of them permanently, some of them drastically, some of them to a lesser extent,
00:07:02 but will take time to come back.
00:07:04 I mean, quite obvious ones are the way we look at social distancing, the way we look at hygiene,
00:07:12 the way we look at safety and protecting ourselves from infection.
00:07:18 All of this is going to change.
00:07:20 Let's take a drastic example.
00:07:22 Are people going to feel comfortable going into a, say, 3,000 people cruise liner for two weeks,
00:07:31 and along with 2,000 people stay in air-conditioned, recycled, recycled environment in a cruise?
00:07:36 That's going to take a lot of time for people to adjust.
00:07:40 Similarly, more closer to our hearts,
00:07:42 if you and I feel comfortable going into an air-conditioned restaurant,
00:07:47 sitting on the table next to 30, 40 other families,
00:07:52 and spending one hour there, going into a pub or a dance floor on a pub on a Friday evening,
00:08:01 and then spending time there, being with people, strangers, very unlikely.
00:08:09 So, that has become one permanent change.
00:08:15 Second change, of course, is the Zoom calls that we do, the video conference that we do.
00:08:20 Just the concept that because we have been forced now to change consumer behavior to
00:08:26 remote working, video conferencing, remote meetings,
00:08:30 getting used to it and seeing the benefits of such a thing
00:08:35 happening without the downsides of having to travel, travel cost and time.
00:08:41 So, I think there will be a lot more of work from home, remote working,
00:08:46 video conferencing that will take place.
00:08:49 We have seen this in Big Basket.
00:08:51 Despite having Shah Rukh Khan as a brand ambassador,
00:08:55 despite having eight years of television advertising,
00:08:59 people did not switch to online buying on grocery.
00:09:03 Big Basket could not have done more to popularize the brand.
00:09:07 But come lockdown COVID, these diehard non-online grocery buyers
00:09:16 have come by millions to adopt online buying.
00:09:21 Like the way demonetization forced digital payment and helped fintech companies, literally forced.
00:09:28 This has forced people to go and buy online, especially grocery and this.
00:09:34 So, we have seen this in Portia Medical, which is a healthcare company for outside of hospital.
00:09:40 People have started taking chemotherapy at home.
00:09:45 This was not, it was not done earlier.
00:09:48 But now it is always possible.
00:09:51 We used to offer it earlier, but the adoption just was not there.
00:09:54 Now we have had people taking chemotherapy at home because A, they cannot go to a hospital,
00:10:00 hospitals are busy.
00:10:02 More importantly, even if they can go, they do not want to go
00:10:05 because they are afraid of secondary infections at hospital, which is always there.
00:10:09 We used to talk about it, but it is not taken seriously.
00:10:12 People will take hygiene, hand washing, infection seriously.
00:10:16 So, these are all going to change permanently, forever.
00:10:21 Some of the people on the fringes will go back to old behavior.
00:10:24 But things like remote working, things like online home delivery of stuff, healthcare
00:10:31 outside of hospital, entire infection management, all of this will change permanently forever.
00:10:37 I can go sector by sector by sector, but this is what this is what is going to be.
00:10:41 Even if you take holidays and tourism, the current thinking, which I feel,
00:10:46 this is in my mind now, I do not know how fast it will change.

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