How COVID-19 impacts the startups in India: Insights from the Indian entrepreneurs

Cybertonica’s Market Development Team in India have had a look at what is happening in the Indian startup ecosystem with the impact of COVID-19.

COVID-19 outbreak has forced a change in the nature of work globally. We are witnessing a digital transformation in the way business is conducted with many companies encouraging their employees to work from home or indeed under government mandate to work remotely. India is no exception. Although adaptation to working from home policies are challenging on many fronts, particularly from a fraud prevention and cyber threat point of view, an up-side to this situation is that it forges a link among us that supports everyone in these demanding times. Many companies in India and around the globe are leveraging their technology abilities to bring optimal solutions to deal with the unprecedented outbreak. Our research team at Cybertonica interviewed 4 key players in the Indian startup community on how they are coping with the pandemic and how the COVID-19 played a role in the way day-to-day business activities are carried out. 

1. upGradupGrad is an online higher education platform which provides remote learning/virtual classroom experience. We spoke to Mayank Kumar, Co-Founder and Managing Director of upGrad, to learn about the effects of COVID-19 on his company and start-ups in India, as well as how they manage fraud threats and cybersecurity risks.

How do you think the coronavirus situation is going to evolve and affect your company in the future?

Interestingly, the current situation has given a positive push to our online learning business. Our lead volume went up by 50% in the last two weeks (between 2nd March to 15th March) as compared to the 2 weeks before that. For the working professionals, the traditional barrier to time management seems to be thawing and as a consequence, it has spurred the idea of utilising the time meaningfully and rethinking  their professional growth at large.

What are the measures taken by your company to adapt to this situation for the next 2 months?

Ever since we have switched to the working from home model at upGrad, the leadership team has been on their toes to make sure that their respective teams are communicating enough amongst their colleagues. We have been actively organising video/audio calls and group conferencing to make sure that everybody stays up-to-date. We have increased the usage of a wide range of collaborative software like Slack, Zoom, and Hangouts. We had already been using Jira, which helps us plan, track, and manage our tech projects. Since it integrates with a software like Bitbucket, that we use to manage our code, and Confluence, that helps us with documentation, it also allows us to customise the workflows, which makes it a powerful tool. 

What is your opinion on the effects of the pandemic on businesses?

The remote working model has indeed brought certain advantages to the forefront. Things like a lesser distraction, more time to think and think innovatively, and introduction of new practices are taking over the system, thus leading towards higher productivity for working professionals. Also, for professionals who have been caught up with long-working hours are finally getting time to be around their family, perhaps restoring the long term work-life balance. To talk about challenges, I believe it’s too soon to jump to conclusions, as we have recently switched to the remote working model. So far, we have not encountered any such concerning or alarming issues coming our way. As long as employee spirit is not dampened, we believe we can continue efficiently . We will adapt as we go along. Talking about the potential communication breakdown that could affect any business in the future includes lack of prompt response and personal contact, and shifting all physical communications to telephone or video is a habit-forming exercise that might take a longer period than expected.

How are you managing your cybersecurity with remote working?

upGrad provides remote learning/virtual classroom experience as SaaS and we use a managed cloud provider AWS. This significantly reduces security risks associated with having self-managed on-premise cloud infrastructure. On top of this, we regularly do VAPTs (Vulnerability Assessment and Penetration Testing) to find and fix security vulnerabilities. We also have preventive measures in place such as keeping production systems up to date, enforced password rotation policies, and account locking policies upon constant failed login attempts.


2. ElementialElemential is a blockchain development platform to design, run and scale blockchain networks. We spoke to Raunaq Vaisoha, CEO and Co-Founder of Elemential, to learn about how his company has adapted to COVID-19 and the future challenges that Indian companies will have to face.

How have you adapted your company to the coronavirus outbreak?

My startup is in a unique place where we employ a subscription based model for our products hence we are not financially impacted. Our employees can continue working from home. The biggest damage is the psychological impact. We always talk about how remote working is the future, but now I’m not sure. It is hard to work in isolation and do check-ins. Moreover, culturally, it is really hard to keep your employees motivated during this time, as Indian workplaces provide more discipline. The second factor is Indian households, where most of the company employees live in a small two-bed apartment with a family of 6, which makes it difficult to function. This causes them to have focus issues compared to the people in other countries who tend to live alone. We use Zoom call for our stand up meetings in the morning, Jira for engineering tools and overall management coordination through Asana. Finally, we have assured our employees that they will receive salary on time, and will also extend a line of credit to them if needed. These are small measures but I don’t know how it will curb the panic, which is the greatest challenge. 

What challenges will the Indian start-ups face in the coming future? What are your predictions?

At a broader scale, opportunities will come up from this, for example remote working solutions will sell. It has become the need of the hour rather than a lifestyle. Better insurance policies for employees and crisis situations like this will also come up. For my company we are going to stagnate for the time-being. It is not the best time to launch a product and acquire users, and it is better to focus on marketing and branding at the moment.


3. 
CalamusCalamus is the creators of the world’s safest and most advanced electric bike. We spoke to Huzaifa Hararwala, Co-Founder and CTO of Calamus, to learn about the effects of COVID-19 on his manufacturing and sales, and what his company’s response to the situation.

How do you think the COVID-19 is going to affect your company? 

The first issue due to coronavirus is the closing down of the office in Mumbai, due to the lock down and government restrictions. My company’s entire production is in China and we didn’t face much issue as factories were only shut for about ten days and everything was back on running at full capacity afterwards. The major issue is getting orders for sales as we are a luxury product. For the manufacturing and technical side there hasn’t been much of a problem. We are also concerned regarding funding in the face of coronavirus.

How your company responds to the situation? 

One of the biggest points of a startup is the talent and we cannot let our talent go. Hence, to keep up with the salaries, we will have to head towards taking more funding. Initially we did not plan to, but the situation has made us take this decision. Running costs is also an issue, following which we may consider salary cuts. 

Our entire team is working from home, only the staff that can travel by car to work will be allowed to come in. In order to manage our data security and to protect our employees from phishing emails, we use a G suite account which it provides employer warnings, at times it even blocks emails. We also use Google Drive to store our documents and use Slack for team meetings and video chatting. No communication is done outside Slack.

4. AtAt is a social media and business solution company that customers can afford and most importantly trust. We spoke to Armand Poonawala, CEO of At, to learn about the effects of COVID-19 on his company and start-ups in India.

How do you think the COVID-19 is going to affect your company? 

We are going to see how the situation pans out in the coming future. We will not make any redundancies however we will surely consider salary cuts as we cannot let the company suffer due to this. Since we are a social media company, our employees are designed to work remotely. The good part about this situation is that my company is designed in a way that 90% of the employees can work remotely and do not need to come into the office. We were not required to comply with the government regulation of the alternate days of working, as employees were already working from home. To facilitate remote working, we use Instagantt. The aspect of our business that has been most affected is from the clients end due to lockdowns and closures. Also, it is difficult to conduct photoshoots for social media in this situation.

Through these interviews, we have come to the conclusion that the very nature of business has been challenged, due to the virus, lockdown and panic. Those start-ups that require a physical element have either slowed down or are stagnated, whereas online businesses have benefited from the unfortunate COVID-19. Every company we have talked to is dealing with the working from home situation in the same manner. The outcome of the remote working situation also depends on how your company has been designed to function. A common measure being taken by the companies we have talked to is salary cuts in order to mitigate the losses. Our key takeaway is that resilience and talent retention are at the centre of the top managers’ considerations, and that each type of business has taken actions to support their staff as much as possible. There are optimal and creative technology solutions employed by these Indian start-ups operating in different industries in order to stay productive during COVID-19. All have acknowledged that this is just the beginning and how the long term will play out is yet to be seen. 

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