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Issues, Challenges, and Expectations From The Indian Startup Ecosystem
By SIDHARTHJAIN 1,664 views

Issues, Challenges, and Expectations from the Indian Startup Ecosystem

Local businesses have been mushrooming all over India with impactful startups for the past few years. Startups in India are rocking the web with their problem-solving ideas and skilled staff.

Whether we talk about web and mobile app development company or eCommerce ventures, Indian startup’s top-notch approaches attract every investor and foreign client.

The Indian startup ecosystem has evolved dynamically, especially over the last two decades. Due to less active investors, startups that began before 2000 could not really take off but the startup ecosystem has gotten mature with time.

With innovative ideas and scalable technologies, Indian startups are raising eyebrows by setting a milestone every year and 2020 alone marked a significant shift in investor interest across sectors.

Indian startups like Zomato, Ola, Paytm, Cure.Fit are some of the famous Indian startups that created a win-win situation for every being.

How do these startups become so successful?

What were the struggles and challenges they had to face?

Let us go through every aspect and uncover the current state of the Indian startup ecosystem.

What Challenges do Indian Startups Face?

On the surface, every startup idea sounds promising, cracks begin to appear when we scratch and dig a little deeper. It is always best to go for qualitative research about every challenge that might come your way before kickstarting your new startup venture.

Challenge #1: Business Funding & Cashflow

One big challenge that every entrepreneur faces is- How to deal with expenses?

For shaping a business idea, funds are needed.

It is important that you have a cash flow layout prepared in advance that goes in accordance with your savings.

It is important to find investors to make the ends meet by planning your finances with no delayed invoices. Here are 5 accounting tools to start financial planning for your startup.

1. Due- For creating customized and branded invoices with numerous templates.

2. QuickBooks- For accessing reports like profit & loss and balance sheets.

3. Wave- For tracking your spending and managing your money.

4. Zoho Books- For automating banking processes such as scheduling for bills, and reminders.

5. Invoicera- For managing cash flow, control expenses, and receive online payments.

Challenge #2: Skilled Employees

Selecting a skilled candidate that fits your budget is a common challenge every entrepreneur faces. Building a close-knit team initially takes up a lot of energy but it’s worth your while if you select the right candidates. You can look out for candidates all over India and provide them remote working opportunities that will benefit both of you.

According to Alan Hall, writer of Forbes, have identified seven categories which he refers to as – 7Cs for finding the best employees-

1. Competent: Looking out for people with relevant skills.

2. Capable: Looking out for people who are capable of delivering fruitful results.

3. Compatible: Looking out for people who can get along with potential clients.

4. Commitment: Looking out for people who are passionate & committed towards their work.

5. Character: Looking out for people who are loyal & honest when it comes to their work.

6. Culture: Looking out for people who can follow the company’s culture & policies.

7. Compensation: Looking out for people who are satisfied with the offered package.

Challenge #3: Marketing Strategies

India is a highly diverse country and one market strategy cannot work for every region. You should have a good marketing budget that is different from your company development budget. Most startups don’t feel the need for marketing, but we are living in a digital era and marketing is the king. If you have a great product, you will need a great product marketing strategy too to bring audience attention to your product.

One such brand that took off just by amazing marketing is Spotify. Thanks to social media, this Swedish brand conquered the world by creating effective marketing strategies and targeting music lovers all across the globe.

Challenge #4: Mentoring

Establishing a successful startup isn’t a single-handed process. Looking out for people who have gone through a similar process will help you understand the process and start off with some valuable inputs. An honest, unbiased and good business mentor is hard to find but once you do, you will be able to see the huge difference it brings out to your vision and work implementations.

Bill Gates considers Warren Buffet a mentor, Steve Jobs considers Ed Woolard and John Sculley as his mentor.

Did You Know?
According to the Kabbage report, 92% of small business owners agree that mentors have a direct impact on the growth and survival of their business.

Challenge #5: Time Management & Risk Taking

Pursuing a job is easy, you have plenty of time for yourself and your family. The scenario changes when you start your venture. You get less time off work and even lesser time for yourself. Managing teams and clients need ultimate focus and great time management skills.

Most Indian families don’t encourage the idea of leaving a stable job and get into something which is so unpredictable. No monthly salary credits are a point of concern for every mother and wife and hence, startups in India are considered risky as well as unpredictable.

Tip- Prepare a to-do list for every single day so that you can prioritize your work and never miss out on anything important.

Several entrepreneurs advised that at the early stages they use to maintain a calendar. That not only helps them to manage their time but also helped them to finish their daily pre-planned work on time.

What are the expectations from the Indian Startup Ecosystem in 2021?

According to Padmaja Ruparel, Co-founder of Indian Angel Network, the Indian startup ecosystem has dealt with the pandemic very maturely by bringing out the best problem-solving ideas.

Innovators now look at Indian startups with the hope of solving real-world problems and building local solutions for every global crisis.

The Indian Startup Ecosystem is expected to these 3 tenets in the year 2021-

1. Innovative and Resilient Collaborations

Dedicated and innovative Indian startups will be looked upon for collaborations overseas. They will be expected to be more agile with a constructive and disciplined approach.

2. Technology-driven Startups

Technologies like artificial intelligence, IoT, data analytics, machine learning, etc have taken over the world and Indian startups are expected to shift their focus to these technologies considering how easy these technologies make a life for everyone.

3. Solution to Unpredictable Problems

With India moving towards digital transformation, the IT sector is expected to be more prepared for future issues that may arise. Algorithms that work for humanity and mankind are much needed to prepare the nation for what’s coming next.

Final Thoughts

Although the pandemic put everyone through a lot of ups and downs, Indian startups proved their problem-solving skills throughout the pandemic and emerged out as saviors. The challenges every startup faces are quite similar but how they deal and succeed makes a difference. Investors can now rely on Indian startups whether it is IT ventures or eCommerce Businesses. Indian ecosystem is evolving and will prove its worth in 2021.


Proud founder of Graffersid | Website and Mobile App Development Company | Trusted by startups in YC | Harvard | Google Incubation | BluChilli | 80% clients raised funding.