With 2020 gone long away, and the cliche of the “new normal” finally fading away, startups are focusing on the 2021 outlook.
However, while ‘20 went away, it did leave a few valuable lessons for all the entrepreneurs and small business owners out there. The unprecedented situations called for dynamic problem solving, and the ones who were able to do that survived the pandemic.
The situation brought a sense of volatility and disruption in a startup’s functioning, however, the Indian startup ecosystem was quick to pivot itself.
With some key lessons in every startup’s kitty, the year 2021 is something that will test the resilience and other elements for every startup. The year will carry forward a few elements of the previous year, and include some normal to unforeseen experiences.
So, here are a few trends and external factors which will shape up startups and SMEs around the country in 2021.
New Focus Areas
Many entrepreneurs and small business owners will have to identify the untapped potential for different areas. Focusing on a specific niche and solving a problem in it, might turn out to be the key to growth for many startups.
What 2020 made many people realise was the importance of dynamicity and spontaneity in a business. Expanding and venturing into newer verticals might help startups and small businesses sustain in the longer run.
Emerging Startup Hubs in India
It isn’t something new to identify that the startup hubs of India are limited to the metros. The cities of Bengaluru, Delhi NCR, Mumbai with a combined share of 90% share in total funding between 2014 and 2020.
With a large scale internet adoption, tier 2 & 3 cities have joined the startup bandwagon. Most of the cities from tier 2&3 cities have emerged as a startup hub.
According to an Inc42 report, cities like Chennai, Ahmedabad, Hyderabad and so on have secured substantial fundings. This trend wil[l go on in the year 2021, with startups and SMEs focusing their products more and more around tier 2 & 3 cities.
Welcoming AI
Artificial intelligence has arrived and it is here. Most of the companies have already realised their potential and startups and SMEs are starting to tap into it’s potential.
While there have been some naysayers who have been refuting the scope of AI as a ‘job stealer, things have started to look pragmatic. Proper implementation of artificial intelligence, can help a startup or an SME to scale new heights.
Work From Home
The work from home culture entered our lives in 2020, and it is here to stay. Startups and SMEs which have been able to pivot their HR strategies accordingly have been able to succeed the previous year.
What this year proved was that work from home is equally as productive as working from the office. Startups are more interested in following this model considering the lower costs.
Gig Economy
Continuing the previous point, the gig economy will benefit a lot from the remote working culture.
The gig economy has opened itself up to opportunities during 2020 and startups have taken note of that. Decentralised teams, flexibility, reduced costs and more have compelled the startups and SMEs to opt for gig economy workers.
According to a report by ASSOCHAM, the gig economy of India is expected to touch a size of $455 billion by 2023.
Digital Adoption
Digital is the new traditional. Most of the startups and SMEs realised the potential of digital last year. Utilising assets like social media and adopting newer technologies will be the key for many startups to grow in 2021.
Saas Startups Will Rise & Shine
The software as a service (SaaS) ecosystem of India has grown manifolds in the last few years. The last few years have given us a total of six unicorns in the SaaS sector.
This sector will deepen, broaden and diversify in the coming years, making them a probable contributor to the B2B sector.
E-Commerce & Ed-Tech Startups Will Continue To Grow
Even when the world stopped, two particular industries were working tirelessly and generating amazing revenues.
Ed-tech and e-commerce have proven out to be highly adaptable and dynamic and hence have been able to garner good investments. While the industries might ask for a substantial initial investment, the investors are keen on investing in these sectors.
New Team Management Models
While the work from home has its own sets of perks, there are certain cons that might make startups and SMEs ponder upon much more on these.
Ensuring consistency, high morale and aligning with an organisation’s value is going to be key for startups to ensure.
Newer methods of team management will be able to ensure some positive feedback and efficient work culture in any organisation.
Lookout For IPOs
As startups accelerate their growth, more and more of them will aim at scaling up. Initial public offerings will mark a new era in the Indian startup ecosystem as the government regulations pivot towards the newer strategies.
What To Expect? | Startup Trends 2021
The Indian startup ecosystem will move ahead in 2021 and turn out to be more agile and innovative. As digital penetration reaches tier 2 & 3 cities, the startup ecosystem of our country will experience democratisation in a variety of sectors.
This democratisation is only going to bring in more and more players and provide a more level playing ground for the newer entrants. While the existing startups will be required to amp up their operations and the fight for the ‘unicorn stature’ might just intensify.
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