Startups are no more cool

Cool dudes attending the Town Hall meetings of startups are fast losing their cool as their promoters are under stress, stretching for funding which is hard to come. Likewise, the much hyped companies and their founders no more attract awe in the campus recruitments at the prestigious engineering and business schools like IITs and IIMs. Some of the poster boys of home grown e-commerce firms continue to hog the front pages of the pink press, but for wrong reasons. Unlike the heady days of 2014 and 2015 when the media splash was all about fancy and self-discovered valuations, stories about heads rolling and job cuts have become common place. Be it online grocers, fashion, food or transportation, the sales volumes are nowhere near their unrealistic targets with the result that the funding ventures have either stopped or slowed down additional cash burns as the horizon looks hazy.

The media narrative, mostly in the business papers and TV channels, has also shifted from one extreme to the other. In a way, as the NDA government was in its honeymoon period, it too got carried away by the startup stars. While programmes like Startup India, Standup India are well meaning and should be supported by all means, they are heavily focused, at least from the build-up, on Apps aggregating services, mostly used by the middle class. The traditional sectors like the good old neighbourhood kirana stores or roadside eateries or for that matter low-end city transport were left out from the App-maps. Of course, there have been some initiatives by the likes of Shop Clues which are focusing on the traditional merchandise stores helping them upgrade their business models. The weakness to fall for catch words and slogans on the part of a large number of aspiring entrepreneurs in the name of startups has hit them as they realise it is no more a game of make-believe valuations and rush of angel investors. At the end of the day, hardcore business ideas in terms of product or process innovations with the help of technology would only succeed.

But it is not to suggest as if the game is up. Churning is taking place at the level of both the entrepreneurs and funding angels who thought they could make some fast bucks, betting on the startup hypes. Thankfully, Indian consumers who are large mass of youth and aspiration have neither dumped e-commerce nor any other smart business ideas. The popularity of Ola and Uber is an evidence of the continuous support from the consumers. They would surely support well-grounded business ideas as long as they are not fancy.