Nearly 74 per cent of founders upbeat as productivity doubles during lockdown

Despite the economic downturn and the strong blow to revenue, 74 per cent of start-up founders are optimistic about the future of their venture and are gearing up for a post-lockdown economy, shows a study conducted by IIM-Bangalore. The study collected responses from 37 entrepreneurs associated with the IIMB-NSRCEL incubation centre in Bengaluru.

In absolute numbers, India has the highest number of technology start-ups in the world, second only to the US. Start-up founders have captured India’s imagination, inspiring and serving as frontline warriors in our economic story. Start-up success stories quickly become the talk of the town, lifting the general sentiment in the market and pushing the economy up. So how are start-up founders feeling amidst the Covid-19 lockdown and enforced social isolation?

We asked start-up founders to keep a daily journal for a week, reporting significant events, interactions and mood. Thirty-seven founders took up the challenge. These entrepreneurs were from the field of education, health and wellness, rental, food and beverages, agriculture, dating, manufacturing, electric vehicles and IoT. The results show that founders are using the time afforded by the lockdown to strategise, identify weaknesses and explore new opportunities. Founders report a productivity boost working from home. While they used to work five-nine hours a day, during the lockdown they have been able to work between 10 and 18 hours. The start-ups are benefiting from the absence of lengthy and unproductive meetings, and long travel time.

Increase in productivity

The increase in productivity is despite some of the negatives that founders report, including interruptions by kids at home, additional housework, and reliance on text messages leading to unfortunate misunderstandings. Despite these, there is a clear bump in productivity. “So far it has been a great time to rethink strategy, check resources, and get a tonne of work done,” says the founder of an IoT start-up.

This optimism is in the face of odds. International expansion and growth opportunities have disappeared. Most start-ups are burning cash to keep themselves afloat in the absence of revenue. The lockdown will “impact not just this month but at least one full year’s operations,” says one founder. Many with offline retail elements are experiencing a big drop in businesses and their payments are being pushed back. “Payments blocked, but expenses are on,” summed up one founder. For software development and marketing start-ups, new projects are on hold as their clients are cautious about spending. Founders report being anxious about how they will pay salaries and bills.

Despite these setbacks, founders are keeping a positive outlook and exploring new opportunities. “The impact is big. But I will be positive, and this will pass,” noted one founder. On a daily mood indicator, 66 per cent of start-ups reported “not feeling great”, but also reported reminding themselves to focus on the positive. “My business, except for a few orders, is in a complete standstill. But this is not something in my control. Either I can feel sad and depressed or make the best use of my time. Choice is mine,” says one journal entry. And founders are choosing to remain positive and using this time to strengthen back-end and IT systems, upskilling themselves, and reaching out to old friends and colleagues.

Some are pivoting and exploring new business opportunities. For example, the founder of a travel start-up, which is in one of the worst affected sectors, said he is working on new categories like essential daily supplies.

Offline services

Others are finding ways to keep their customers by moving their offline services to new online offerings. Among the start-ups which are purely online, the entertainment segment has benefitted the most. Founders report an uptick in the number of interns and the time they can devote. Thanks to this positive focus, founders report optimism regarding the future, “I am taking it one day at a time and feel that good times are coming soon.”

Our own advice to start-up founders is to think about new opportunities in a post-Covid market. The pandemic is sure to affect the behaviour of people and might bring a drastic change in consumer demand, with new ways of working, interacting and learning, and might offer new opportunities.

Overall, start-up founders are living up to their reputation, inspiring and undaunted in the face of odds. If start-up founders are indeed the bellwether of sentiment, then the future looks hopeful.

(Dahlia Mani is a faculty and Sneetha Saji a doctoral student, in the entrepreneurship area at IIMB. Views are personal.)

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