In an era where digital transformation is reshaping industries across the globe, the financial services sector stands at the forefront of innovation. Gone are the days when banking was synonymous with long queues and paperwork. 

Today, AI is transforming how we interact with financial institutions, making services more accessible, personalised, and efficient than ever before.

The Dawn Of Conversational AI In Banking

One of the most significant advancements in the financial services industry is the integration of conversational AI platforms. These sophisticated systems combine cutting-edge speech recognition, natural language processing, and even 3D visualisation to create an immersive and tailored customer experience. 

Imagine walking into a virtual bank branch, greeted by an AI-powered avatar that not only understands your queries but can also provide personalised financial advice and product recommendations.

Leading banks in India, such as Karnataka Bank, collaborating with DaveAI, have already embraced this technology, deploying virtual assistants that can engage with customers 24/7. 

These AI-driven platforms are not just answering simple queries; they’re assisting with complex transactions, loan applications, and investment decisions, all while learning from each interaction to improve their service continuously.

Enhancing Customer Experience Through 3D Visualisation

Another groundbreaking application of AI in financial services is the use of 3D visualisation technology. This innovation allows customers to explore financial products and services in a highly realistic virtual environment. 

For example, when considering a mortgage, customers can take a virtual tour of properties, visualise different renovation scenarios, and see how various loan terms would affect their monthly payments—all within an immersive 3D interface.

This technology isn’t limited to real estate. It’s being used to help customers visualise their financial goals, from retirement planning to education savings. By making abstract financial concepts more tangible, banks are empowering their clients to make more informed decisions about their financial future.

The Rise Of Emotionally Intelligent AI

While efficiency and accuracy are crucial, the financial services industry is recognising the importance of emotional intelligence in customer interactions. The latest AI platforms are being developed with a focus on empathy and emotional understanding. 

These systems can detect nuances in tone and sentiment, allowing them to respond more appropriately to customers’ emotional states.

For instance, if a customer expresses frustration over a declined transaction, the AI can detect this and offer a more empathetic response, perhaps explaining the reason for the decline and suggesting immediate solutions. 

This emotional intelligence helps bridge the gap between traditional face-to-face banking and digital services, making customers feel understood and valued even in a virtual environment.

Integration With Enterprise Systems

The power of AI in financial services extends beyond customer-facing applications. Behind the scenes, AI platforms are being integrated with various enterprise systems, enabling seamless data exchange and collaboration across applications. 

This integration allows for more efficient operations, from risk assessment and fraud detection to regulatory compliance and financial forecasting.

For example, when a customer applies for a loan through an AI-powered platform, the system can instantly access and analyse data from multiple sources—credit bureaus, internal databases, and even external economic indicators—to make a well-informed lending decision in seconds. 

This not only speeds up the process for customers but also helps banks make more accurate risk assessments.

The Future Of AI In Financial Services

As we look to the future, the potential applications of AI in financial services seem boundless. We’re moving towards a world where your banking app could act as a personal financial advisor, using predictive analytics to help you make smarter financial decisions. 

It might warn you about potential overspending, suggest investment opportunities based on market trends and your risk profile, or even negotiate better terms for your loans and credit cards on your behalf.

Moreover, as AI continues to evolve, we can expect to see even more sophisticated applications. Quantum computing, for instance, could transform financial modelling and risk management, while advanced natural language processing could make interacting with your bank as natural as chatting with a friend.

Conclusion: The AI-Driven Future

The integration of AI into financial services is not just changing how we bank—it’s redefining our relationship with money and financial institutions. By bringing together conversational AI, 3D visualisation, emotional intelligence, and seamless system integration, the industry is creating a more accessible, personalised, and efficient banking experience for all.

As we embrace this AI-driven future, it’s clear that the days of impersonal, one-size-fits-all banking are behind us. The new era of financial services is smart, intuitive, and tailored to each individual’s needs. 

While challenges around data privacy and security remain important considerations, the potential benefits of AI in finance are too significant to ignore.

The transformation from traditional branch banking to AI-powered digital platforms represents more than just a technological shift—it’s a fundamental reimagining of what banking can be. 

As these technologies continue to evolve and mature, we can look forward to a future where managing our finances is not just easier, but also more empowering and aligned with our personal goals and values.

The post From Branches To Digital Platforms: How AI Is Simplifying Financial Services appeared first on Inc42 Media.

Identifying promising startups is like finding a needle in a haystack. It takes immense effort to predict a startup’s future outcome before we make investment decisions. But what really differentiates the promising ventures from flameouts? 

The answer lies not in numbers on a spreadsheet but in a strong company culture! 

The Global Startup Ecosystem Report 2022 states that 90% of startups fail within the first five years. It means the success rate of startups is just 10%. That’s a scary statistic; nevertheless, it highlights the need for a robust foundation that promotes innovation, collaboration, and relentless grit among the workforce. That’s where culture comes in.

A startup’s culture comprises common views, values, and attitudes among those who build the organisation. Simply put, it is your company’s culture that motivates your team to work together and bounce back from setbacks.

So, what are the characteristics of an exemplary startup culture? Let’s find out.

Visionary Leaders

We all love a passionate leader, don’t we? As strategic venture capitalists, we too favour visionary founders who are passionate about their work and can create a picture of the future so vividly that we can practically smell the success. 

They are the ones who not only steer the ship but also inspire their teams to work passionately and become invested in the mission. Such founders are also transparent, share everything they know, and empower their people by setting solid examples.

Open Communication Is Key

Transparency and open communication are critical skills that successful business entrepreneurs leverage to empower their workforce. A study reveals that passionate employees are 12% more productive. 

When every team member in an organisation feels heard and valued, that’s when the magic begins. It drives collaboration and paves the way for a strong, supportive environment. And let’s not forget observing the team itself. The way they interact and treat each other tells you a lot. A team that gels and respects each other is a team that will win.

The Importance Of Adaptability

Early-stage startups are both incubators and hothouses for innovation and creativity. Yet innovation relies on how well teams can adapt to limited resources and to rapidly changing market conditions for success. It is, therefore, important for any startup to recuperate from setbacks and acclimatise with changing market conditions. 

We look for founders and teams who are resourceful and self-driven, who take ownership, and who are always learning and hustling, no matter what gets thrown their way. They should be willing to go the extra mile without constant external motivation. 

Founders who demonstrate a problem-solving mindset and a willingness to adapt their strategies to changing trends when necessary are more likely to emerge stronger amidst challenges.

VCs’ Role In Helping Build A Great Startup Culture

As strategic venture capitalists, we don’t simply invest money and walk away. We understand that the road to entrepreneurship is fraught with hardships, and we want to see our portfolio firms prosper by confidently overcoming all obstacles. 

Therefore, we also assess potential risks associated with team dynamics or a lack of established processes. We next evaluate whether these hazards can be minimised through mentorship. 

For instance, a team of talented individuals who struggle with collaboration might benefit from being paired with a mentor who can provide guidance on communication strategies and teamwork. 

So, we set them up with mentors/ workshops, and even connect them with other founders they can learn from. We also keep in touch, visit them regularly, and see how things are going and how their culture is evolving. We firmly believe that a shaky process can be fixed, but a bad culture can be a tough nut to crack.

A Strong Culture Is A Winning Culture

The bottom line? Venture Capitalists choose startups whose culture is aligned with their vision. Nonetheless, we understand that cultivating a good corporate culture requires time and consistent commitment, but the results of these efforts are monumental. 

It is what attracts the best people and gets you through the tough times besides driving you and your startup towards success. 

So, my advice to all startup founders is to value transparency and agility. Simultaneously, you must take care of your employees and focus on creating something unique. Prioritising openness, adaptability, and the well-being of both consumers and staff can greatly enhance your chances of attracting investment and establishing long-term success.

The post Why Strong Culture Is Key To Identifying Promising Early Stage Startups appeared first on Inc42 Media.

India’s healthcare system is experiencing a financial crisis. A NITI Aayog report revealed that Indians paid over $72 Bn out-of-pocket for healthcare expenses, making out-of-pocket expenditure (OoPE) one of the largest financial burdens for Indian households. 

This high expense frequently pushes families into debt and poverty. Unlike consumer goods, where financing options like “no-cost EMIs” are easily available, healthcare financing has been left behind. This disparity leaves many patients deferring essential treatments due to a lack of financial resources, aggravating health issues and increasing long-term medical costs.

In India, people often rely on savings, loans from friends and family, or high-interest loans to cover the costs of healthcare. Some customers have access to credit cards as a potential solution. However, many are deterred by the high interest rates and fees associated with them, compounded by the requirement to repay credit card expenditures within a 30–45-day window. 

There is an urgent need to fill the gap in healthcare finance choices by making them more accessible and affordable.

Benefits Of BNPL For Healthcare Consumers

With the rise of Buy Now, Pay Later (BNPL) services or affordability financing, a game-changing option has emerged to close this gap. BNPL provides a more convenient and easier alternative for people to pay for their medical bills, without requiring a good credit score or paying excessive interest rates. Lenders have integrated with healthcare providers to build subjection trades providing zero interest models for end consumers. A few of the main advantages are as follows:

Zero Percent Interest Rate Financing: One of the most attractive features of BNPL in healthcare is the 0% interest rate. This makes healthcare financing more affordable, removing the financial strain associated with high-interest credit card payments.

Improved Access To Healthcare: By spreading the cost of treatment over a series of instalments, BNPL allows more patients to access necessary medical services without the need to defer care due to immediate financial constraints. This can lead to earlier diagnosis and treatment, improving overall health outcomes. Players in this sector are now capable of providing up to Rs.10 lakh to patients and families for healthcare treatments.

Increased Financial Flexibility: Patients can manage their finances better with BNPL, avoiding the need to dip into savings or take out high-interest loans. This financial flexibility is crucial in a country where a significant portion of the population lacks health insurance or sufficient coverage, bridging the gap between insurance provisions and treatment costs. 

Enhanced Patient Experience: BNPL services can significantly enhance the patient experience by reducing the stress and anxiety associated with large medical expenses. This peace of mind can positively impact recovery and overall well-being.

Future Trends In The BNPL Healthcare Space

The future of BNPL in healthcare looks promising, with several trends indicating continued growth and innovation:

Integration With Embedded Finance: Embedded finance, which integrates financial services into non-financial platforms, is set to transform healthcare transactions. By embedding BNPL options directly within healthcare providers’ payment systems, the process becomes seamless for patients, enhancing accessibility and convenience.

Regulatory Evolution: As BNPL services grow, regulatory frameworks will evolve to ensure consumer protection and the sustainability of the business model. This could lead to more standardised practices and increased trust in BNPL options among consumers.

Technological Advancements: Advances in technology, particularly in fintech, will drive innovation in BNPL services. Enhanced data analytics and AI can improve credit risk assessments, personalise financing options and streamline the approval process, making BNPL more efficient and user-friendly.

Increased Adoption By Healthcare Providers: As the benefits of BNPL become more apparent, more healthcare providers are likely to adopt these services. This adoption will be driven by the dual advantages of increased patient satisfaction and higher revenue from treatments that might otherwise be postponed or foregone.

Expansion Into Rural and Underserved Areas: BNPL has the potential to significantly impact rural and less fortunate populations by providing financial solutions where traditional credit systems are less prevalent. This can democratise access to healthcare, ensuring that more people receive timely and adequate medical care.

Conclusion

There has been a sea change in the way healthcare is funded in India and it all started with BNPL services. A major issue in healthcare is affordability, which BNPL aims to solve by providing zero-interest financing options. In the future, BNPL will play a crucial role in healthcare financing, caused by the developments in embedded finance, legislative backing and technology breakthroughs. 

While this change guarantees improved health results and a more equal healthcare system, it also increases the financial burden on patients. It has the potential to completely transform healthcare availability and cost as it gains momentum, bringing better medical care to more people in India. 

The post How Affordability Financing Is Reshaping Access To Healthcare In India appeared first on Inc42 Media.

The life of an entrepreneur is defined by time and a constant battle against insuperable odds. Angel Tax best exemplified this statement as it was an albatross across the neck of all Indian entrepreneurs for 12 years.

Introduced in 2012 by Shri Pranab Mukherjee under a series of measures titled “to prevent the generation and circulation of unaccounted funds”, Section 56(2)(viib) taxes the difference between issue price of unlisted shares and their fair market value as income in the hands of the company. Converting capital receipts to income and taxing it is a uniquely Indian innovation.

Over time, this section was used to harass startups who raised capital from investors. Such startups often do so at a premium and obtain a valuation report to justify the issue price. However, the tax department would compare the projections against the actual performance of the startup and tax the difference. Thus, an anti-abuse measure became a tax harvesting section.

These notices have resulted in companies shutting down due to the notices, being unable to raise funds from investors and even entrepreneurs leaving the country to startup overseas.

But at last, this tax has been removed.

The section will no longer be operational from April 1, 2024 (once the Finance Bill gets passed). This means that all startups who raise capital at a premium shall not be subject to this Angel tax from April 1, 2024 onwards (April 1, 2025 mentioned in the Finance Bill is for the relevant assessment year, not the year it goes live).

However, those who have raised capital in previous years may still receive a notice. The honourable Finance Minister must announce that startups in the past will not face Angel Tax notices and those who have gotten notices should see them withdrawn.

For years, this Angel tax section saw numerous changes, modifications, carveouts and exclusions. Those failed to create actual impact on the ground as the conditions were onerous, resulting in many startups giving up the exemptions. The extension of Angel tax to foreign investors in 2022 resulted in any investors choosing to pause on investing in India.

The fact that Angel tax was removed without any conditions is a huge boost for Startup India and investors.

After 12 years, the battle is finally won. Angel Tax is dead.

The post Elegy On Angel Tax appeared first on Inc42 Media.

The rise of mental health issues in the workplace has made Employee Assistance Programs (EAPs) increasingly influential. Seeking help needs to be normalised and EAPs play a crucial role in this mission.

The startup culture in India has picked up at a good pace, especially with the maximum youth force entering the workspace at a higher frequency than in the past. According to Inc42 data, total funding reached $10 Bn+ in India in 2023, both from Indian and international investors. 

Fostering a healthy work atmosphere is essential in today’s competitive landscape. According to an article in the Economic Times, Indian employees spend 52 hours a week at their workplace and 59 minutes daily commuting from work.

As work culture evolves, creating a positive environment to attract and keep talent is crucial. Hustle culture is common in startups, with employees striving to do more in less time. 

This may start as Eustress and when the purpose of their passion gets drained out in the league, it leads to stress. In such a scenario, the prevalence of employee assistance programs (EAPs) enables employees to receive holistic benefits and make corporate social responsibility more inclusive. 

A survey by the American Health Association revealed that 51% of employees remain in their jobs due to solid relationships with coworkers. 

What Are Employee Assistance Programs?

An Employee Assistance Program (EAP) is a wellness initiative taken by companies for their employees designed to boost their performance by offering confidential and short-term support for resolving personal issues. 

EAP counselling has been proven to assist employees in having a positive mindset and become the vehicle for them to work efficiently and achieve their goals. The program covers a wide range of issues, such as those about finances, law, physical health and mental health.

With the emergence of mental health awareness in workspaces, the relevance of Employee Assistance Programs (EAPs) has garnered interest among today’s youth. By normalising the idea of seeking help, the prevalent stereotypes on mental health have slowly begun to take a backseat and we are approaching the establishment of a new, brave future for India. 

Furthermore, the perks of EAPs and services frequently cover spouses, extended family members, and dependents of employees. Providing counselling for employees is a game changer for opinion/thought leaders to start teaching in their business to become catalysts of hope and encourage employees to seek help when available.

What Are Some Of The Benefits Of EAPs?

Increased Productivity

EAPs are potent tools for enhancing workplace productivity and performance. Research shows that employee well-being can boost productivity by up to 25%. These programs, through workshops and counselling, alleviate stress, promote physical and mental health and increase engagement and morale. 

By demonstrating a company’s care for employee well-being, EAPs motivate employees to put in more effort, fostering a more productive work environment. 

Reduce Absenteeism 

High work stress can lead to poor work-life balance, a lack of motivation and innovation, and defensive behaviour in employees. Employee Assistance Programs (EAPs) can reduce absenteeism and associated costs by providing support to help employees cope with stress and personal difficulties. Access to EAPs leads to 4.8-6.5% fewer sick leave hours taken by employees.

Attracting Talent With Wellness

EAPs attract new hires by displaying a company’s commitment to employee well-being. Including an EAP in the benefits package demonstrates the employer’s commitment to addressing employees’ emotional and professional issues. 

Employee care is like a cornerstone that connects with the emotional side of a new joiner and provides them with more profound job satisfaction. The proactive strategy boosts the company’s reputation and gives it a competitive edge in the labour market.

Lead To Increased Employee Retention

Creating a positive work atmosphere is essential for retaining talented employees. Benefits such as mental health support, financial planning and legal assistance can help employees manage stress and personal challenges, increasing workplace satisfaction and loyalty. 

Employee assistance benefits can boost productivity and morale and reduce turnover by addressing issues proactively. Including these benefits in the offer letter or employee policies is also beneficial to promote transparency and trust. 

According to an American Health Association poll, 51% of employees stay at their jobs due to positive interactions with coworkers. Furthermore, this program is particularly effective at attracting and retaining younger personnel, such as generation Z and millennials. Mental health services are highly valued by generation Z, with 73% of them taking mental health support into account when choosing a career.

Employees are the vehicles of an organisation and they identify as the critical lever to any business functions and as employers, inevitably are responsible for presenting them with opportunities to help create a collaborative and thriving workplace and induce profitable growth by adopting holistic wellness programs.

The post How Employee Assistance Programmes Can Help Your Organisation appeared first on Inc42 Media.

In today’s competitive job market, employer branding is critical. According to LinkedIn, 72% of global recruiting leaders see its significant impact on hiring costs and time to hire. As we look ahead, upcoming trends will reshape how companies project a resilient employer brand to stay relevant to the evolving workforce.

Trend 1: Championing Diversity, The Key To Innovation And Profitability

McKinsey found that companies with diverse executive teams are 25% more likely to achieve above-average profitability. Google and Microsoft are boosting underrepresented group representation; Google’s 2023 diversity report shows 48.5% of new hires were from these groups, enhancing their employer brands and fostering innovation.

Trend 2: Remote Revolution, Embracing Hybrid Work Models

A Gallup poll found that 45% of full-time employees worked from home either all or part of the time in 2023. The COVID-19 pandemic sped up remote work adoption, a trend now entrenched. 

Companies are enhancing remote infrastructures and flexible policies to attract talent. Salesforce, for instance, embraces a hybrid work model, offering choices between home, office, or a mix to enhance satisfaction, productivity and widen the talent pool.

Trend 3: Prioritising Wellness, The Rise Of Employee Mental Health Support

A 2023 NIMHANS report found 43% of Indian employees face significant work-related stress, underscoring the need for mental health support. Employee well-being is now crucial for employer branding. 

LinkedIn’s mental health initiative provides resources, flexible schedules and paid mental health days, enhancing its reputation as a supportive employer.

Trend 4: Going Green, Sustainability as a Workforce Magnet

According to Deloitte, 42% of millennials choose employers based on societal impact and 44% align their work with personal ethics. Tata Group exemplifies this with initiatives in clean water, education and healthcare, ingrained in its corporate ethos. This resonates with environmentally-conscious Gen Z employees and consumers, reinforcing Tata’s reputation for prioritising sustainability.

Trend 5: AI-Powered HR, The Future of Recruitment and Engagement

By 2030, AI could add $15.7 Tn to the global economy, reshaping the job market. AI and analytics transform HR, making recruitment more efficient, less biased, and improving candidate experiences. 

Unilever uses AI for hiring through games and video interviews, cutting time by 75% and boosting satisfaction with faster, engaging feedback.

Trend 6: Radical Transparency, Building Trust Through Authentic Employer Branding

Glassdoor says 79% of job seekers consider a company’s mission and purpose before applying. Zomato practices radical transparency by publishing both successes and challenges through CEO messages on LinkedIn or career blogs thus enhancing their reputation and appeal in the talent market.

Trend 7: Learning For Life, The Importance Of Upskilling In A Rapidly Evolving Market

World Economic Forum predicts 50% of all employees will need reskilling by 2025. Amazon’s “Upskilling 2025” initiative aims to upskill 100,000 employees through training programs in cloud computing, machine learning, and software engineering. 

This program enhances Amazon’s employer brand by demonstrating a commitment to employee growth and future-proofing its workforce.

Trend 8: Embracing Generational Diversity, Integrating Gen Z, Gen Alpha, And A Multigenerational Workforce

By 2025, Gen Z will make up 27% of the global workforce. The workforce of the next decade will be more diverse in terms of age than ever before, with Baby Boomers, Gen X, Millennials, Gen Z and the emerging Gen Alpha all working side by side. 

PwC’s “New world. New skills.” initiative focuses on upskilling employees of all ages, ensuring that everyone from seasoned professionals to new graduates can thrive in a rapidly changing digital landscape. 

Trend 9: Global EVP And Local Execution- Balancing Consistency And Customisation

A Universum study showed 82% of talent leaders believe a strong Employer Value Proposition (EVP) is essential to attract and retain talent. However, a one-size-fits-all approach doesn’t work globally. 

Nestlé focuses on improving livelihoods in local farming communities to appeal to Indian talent wanting to make a difference. While in Middle East, Nestlé tailors its employer branding to promoting women’s empowerment and entrepreneurship through programs like the Nestlé MENA Youth Initiative and offers flexible hours during Ramadan. 

These targeted strategies demonstrate Nestlé’s ability to be a globally attractive employer. 

The post Employer Branding Trends To Watch Out For appeared first on Inc42 Media.

The post-Industrial Revolution economies have been adopting a ‘take, make, dispose’ model to achieve the goals of modernisation faster. The agenda for growth in those times was to burn through resources without considering the damage it was doing to the environment. But things started to change when countries began noticing the damage caused by such unsustainable growth models.

The circular economy seeks to address this by doing away with trash completely. It aims to extend the life and use of resources, materials, and goods, rethink products and business processes, create creative solutions and service models and promote more sustainable consumption patterns. 

The circular economy is projected to help reduce emissions by 40%, generate nearly 2 Mn jobs, and become a $2-3 Bn market in the coming years, according to the Circularity Gap Report 2024 released by Deloitte and the Circle Economy Foundation.

A core tenet of circular economy is the conversion of a linear supply chain to a closed-loop structure. This entails using strategies like durable, modular, and simple disassembly product design, which facilitate the recovery and reuse of materials and components. 

It also entails putting in place effective reverse logistics systems to make it easier for things to be returned and refurbished when their usage is finished. A key role for startups can be played in completing these tasks.

Key Reasons For Surge In Circular Economy Investment

In line with the circular economy model, emerging startups in India with the latest tech advancements drive the industry towards sustainability. Close to 400 such startups in India are working on areas ranging from sustainable waste management to green technology. 

Despite being in its early stages, India’s circular economy had drawn $1.8 Bn in investments between 2016 and 2021.

The government of India has always encouraged these startups. For example, to facilitate India’s shift from a linear economy to a circular economy, NITI Aayog has recommended specific actions to address issues with using waste as a resource and provide a thorough legislative framework for developing an advanced recycling sector in India. 

NSRCEL, the leading incubation centre for startups, emerging businesses and women entrepreneurs in India supports early-stage startups dedicated to creating a climate-positive, low-carbon world.

Here are some areas where we can expect to see a surge in investment for Indian circular economy startups:

1. Investors will be drawn to startups that emphasise cutting-edge recycling technology, especially for e-waste, plastic garbage, and building and demolition waste.
2. To meet the growing demand for sustainable products, eco-friendly, biodegradable, and reusable packaging solutions must be developed. Startups focusing on this area can expect to get a fillip in the coming years.
3. There will be a strong need for platforms that link customers to companies that provide repair services or that re-manufacture products.
4. There is a lot of potential for sustainable fashion startups that offer clothes rental services, repurposed apparel, and clothing take-back programs.
5. The other sectors where startups can implement cutting-edge, climate-mitigation techniques include agriculture and animal husbandry, particularly technology-driven water management and scientific bio waste disposal. Goods made of sustainable materials, such as edible silverware, will also guarantee the viability of startups.
6. Carbon capture is a rapidly expanding field that offers substantial investment prospects in India as a means of reducing climate change. Leading the way in Direct Air Capture (DAC) technology is the development of sophisticated capture materials and scalable, modular systems by startups. 

DAC technology removes CO2 directly from the environment. To guarantee carbon-neutral operations, these systems can be coupled with renewable energy sources.

Furthermore, strategies for carbon sequestration and storage, which entail burying captured CO2 underground or utilising it in industrial operations, are drawing more attention. As these firms tackle the twin problems of lowering atmospheric CO2 levels and advancing sustainable industrial practices, investment in them is essential.

Additionally, startups can combine circular economy lifestyle habits with climate action programs to conserve and preserve natural resources. Using cutting-edge models and technologies, those involved in climate action can reduce carbon emissions significantly while also lowering the cost of renewable energy for consumers. 

Across the textile and apparel value chain in India, a variety of businesses are developing with the ability to provide creative solutions to address the major industry concerns and hasten the sector’s transition to circularity. 

These businesses are focussed on creating novel products, processes, and service offerings, or combinations of them, at crucial stages of the value chain. Many of these ideas have the potential to upend current linear approaches to manufacturing, retail, and consumption if they are widely adopted and implemented. 

In Conclusion

The adoption of the seven principles of the circular economy – Reduce, Reuse, Recycle, Redesign, Remanufacture, Refurbish, and Repair – is encouraged by the circular economy movement, which believes that it is an urgent necessity.

Business parks, industrial clusters, and new initiatives should all be designed with these ideas in mind. India can be a manufacturing powerhouse and meet its climate change pledge if it has a stable and encouraging policy environment for a circular economy.

The post The Future Of Circular Economy: Startup Investment Trends And Predictions appeared first on Inc42 Media.

Building a startup is hard; building one that weathers a downturn can almost sound mythical. It is akin to bare hands rock climbing, one slip and…

The entrepreneurial journey is fraught with challenges, from finding the right product-market fit (PMF) to acquiring paying customers and securing funding.

Often, startups face the challenge of identifying and matching the market demands until they find the right formula. Even with the right product line, retaining customers becomes a challenging task. 

Furthermore, acquiring funds from investors, particularly in a competitive market where investors are apprehensive. Economic downturns intensify these challenges, increasing the pressure on businesses to adapt and survive. 

Here are a few top-of-mind thoughts that can improve the chances of your start-up weathering a storm:

Are You Solving A Large Enough Problem?

The key to a successful startup involves addressing a bigger and more important problem. Startups that tackle large issues have a bigger market and can attract more customers, even during tough times. India is a large market, with a growing economy and complex distribution. 

India is a ~$1 Tn retail market, out of which 85% still flows through mom & pop stores, only 2% of this market is digitised. By 2030 this digitised market is supposed to reach ~$127 Bn suggested by various reports. 

In every market research lies an opportunity to find out the main pain points affecting a lot of people. By making sure your product or service solves a critical need, you position your startup as essential, which helps keep demand steady during economic slumps.

Does Your Solution Give You The Right To Exist?

In a competitive market, your solution not only must stand out but also solves a real pain point. Information asymmetry in any value chain gives a large scope to create a valuable solution.  

It should offer clear and compelling value to your customers. This distinct value proposition not only validates your startup’s existence but also fosters consumer loyalty. Keep getting feedback from users and refining your offering to make sure it stays relevant and better than alternatives. 

Standing out is crucial for maintaining a strong market position, especially when customers are more careful with their spending. Moreover, the online shoppers in India are expected to reach 220 Mn by 2025, this indicates the potential startups have to reach the masses in the online buyer segment.

Do You Have Multiple Revenue Streams?

Relying on just one source of income can be risky, especially when the economy is unstable. Look at large successful startups like Zomato or Ola, they have diversified strategically building on their core strengths and now have multiple revenue streams. 

To make your business stronger, try to have different ways of making money. Look into new products, services, or markets. 

By offering more services, entering new markets, or creating new products, you spread the risk and keep cash flow steady. Relevant Diversification not only protects your business but also opens up new growth opportunities.

Tight Control On Unit Economics

With growth, it is also imperative to keep a check on unit economics that includes the cost of production and delivery to remain profitable. Regular cost checks and optimisation without hampering the quality helps to keep the business profitable and ensure that the operations run smoothly. 

Know Your Operational Leverage

Identifying operational leverage points can have huge impacts and it can vary from managing supply networks to improving consumer acquisition techniques. Emphasising on these points can improve efficiency and save costs. Such practices help to scale the business sustainably and make timely strategic alterations in response to market change. 

Have A Culture Of Frugality

The culture of frugality encourages the staff to be mindful of the budgets and look for cost effective solutions. It ensures efficient utilisation of resources which has a positive impact during economic downturns. Encouraging remote working, outsourcing on non-core services and negotiating with the suppliers, a frugal mindset builds a sustainable business model. 

Have A Minimum Of 24 Months Cash In The Bank

Maintain a cash reserve that can cover at least 24 months of operational expenses, this allows the founder/s to focus on experimenting or creating more value for the customers it helps pull through the economic downturn period. 

This ensures that the operations are not pressured by revenue cuts and buys time to strategise. To maintain this buffer, evaluate your financial estimates regularly and alter spending accordingly.

Do Not Overlook Compliance & Governance

When starting a new business and juggling multiple roles, compliance and governance sometimes are overlooked. However, having robust rules in place is crucial. They help you avoid legal issues and build trust with investors, customers and other important people. Setting clear rules and reviewing them often ensures that they are adhered to. Good rules also improve your business’s reputation, making it more appealing to investors and partners, especially during difficult times.

Build A Team That Is Flexible & Resilient

The team is the biggest asset of any company. Creating a conducive environment for the team and ensuring that the workforce is dynamic as well as resilient to changes and confronting issues straight on. 

Encourage a culture of open communication, constant learning and collaboration. Enhancing skills that help employees push through difficult times. A robust, adaptive staff can develop and propel your startup forward amid economic downturns.

Have A Network Of Mentors

Build a group of mentors and advisors who have experience navigating through economic downturns. Their advice can help make good decisions, avoid common mistakes and find new opportunities. 

Keep in touch with the mentors, seek their advice on important issues and use their connections for help and resources. A strong mentor network can give you the guidance and confidence you need to lead your startup through hard times.

Above all: Have a Purpose. This purpose should be the driving force behind every decision, action and most importantly what opportunities to say ‘NO’ to. It gives your team a clear direction and a reason to push through tough times. A strong sense of purpose can inspire and motivate your team, attract like-minded customers and differentiate your brand in the marketplace. 

Regularly revisit and reinforce your startup’s mission to ensure it remains aligned with your goals and market needs.

The post Building A Resilient Startup: Strategies For Surviving Economic Downturns For Indian Startups appeared first on Inc42 Media.

In India’s crowded D2C landscape, customer acquisition has long been the prime focus for brands battling for market space and longevity. However, the sobering truth is that acquiring new customers can cost up to 5 times more than retaining existing ones. Remarkably, a mere 5% increase in customer retention can boost profits by a staggering 95% (Bain & Company). 

While brands relentlessly pursue that coveted first purchase through targeted ads, landing pages and conversion funnels, customer acquisition is a leaky bucket. Overemphasising acquisition is a recipe for a haemorrhaging bottom line. The tide is shifting, with increasing conversations around customer retention. 

Forward-thinking D2C brands now embrace a customer-centric approach, prioritising retention alongside acquisition. They acknowledge that loyal customers are the lifeblood of their brand, recognising the importance of solving for retention within their organisations. 

Why Retention Matters More Than Ever?

The magic happens on the 2nd purchase. Today’s consumers are bombarded with choices and brand loyalty cannot be taken for granted. This, coupled with rising customer acquisition costs (CAC), creates a precarious situation for D2C brands solely focussed on acquiring new customers. 

Imagine your brand spends $100 to acquire a customer who makes a one-time purchase of $50. In a purely acquisition-centric model, for every customer acquired, it’s another $100 spent, without the guarantee of that customer’s purchase even covering the CAC (much less turning a profit). The real magic happens only with every subsequent purchase of a previously acquired customer. 

With a retained customer, the possibilities are endless. With effective retention strategies, you can nurture brand loyalty, encourage upselling and cross-selling and ultimately increase customer lifetime value (CLTV). 

Infact, CLTV : CAC is an important metric all brands need to chase. CLTV to CAC ratio of 3 or higher is considered healthy and can be achieved only with high quality retention strategy. In short, a retained customer is a gift that keeps on giving! This, in turn, allows you to invest more in providing a superior customer experience, further solidifying brand loyalty and creating a virtuous cycle of growth. 

Building A Customer-Centric Retention Strategy 

So, how can D2C brands shift their focus from acquisition to retention? Here are some key strategies to consider: 

Personalisation Is King

Today’s consumers expect a tailored experience. Leverage customer data to personalise product recommendations, offers and communication. Go beyond basic demographics and understand individual preferences and purchase history. This is possible using hyper segmentation while building the communication plan. For Example, MyGlamm saw 135% uplift in purchases by users who got personalised communication. 

Loyalty Programs That Motivate

Reward repeat customers with loyalty programs that offer exclusive benefits such as discounts, early access to new products and personalised rewards. 

Content As A Conversational Tool

Create high-quality, informative content that goes beyond product promotion. Establish yourself as a thought leader within your industry and build trust with your audience. 

Community Building

Foster a sense of community around your brand. Encourage customer interaction through social media, user-generated content initiatives and exclusive online communities. For example, Sephora’s Beauty Insider Community has forums, galleries for sharing makeup looks, review sections and even features exclusive content and early access to sales for its members. 

Seamless Customer Experience

Optimise your website and mobile app for a frictionless purchase journey. Make customer support readily available and prioritise fast, efficient resolution of inquiries. 

The Power Of “Thank You”

Never underestimate the power of a simple “thank you.” Show your customers you appreciate their business with personalised thank-you messages after purchases or interactions with customer service. 

The Feedback Loop

Actively solicit customer feedback through surveys, social media interactions and email campaigns. Use this feedback to continuously improve your products, services and overall customer experience. 

The shift towards a retention-centric mindset is not just an imperative for D2C brands, but one that is necessary for any brand across any sector that has its sights set on sustainable growth and profitability. 

A recent report titled ‘State of Careers in Retention Marketing’, which is a reflection of an industry-wide shift towards retention marketing for profitability. From a sector perspective, the report suggests that a majority of the respondents belonged to the ecommerce and D2C sector (35.8%), but the data also shows that other industries like ed-tech, BFSI and media & entertainment, are also gradually veering towards it with 17.9%, 10.5%, 8.4% respectively. 

Additionally, it was found that retention marketers are some of the most early investments they make in the team. 

In an increasingly crowded and competitive landscape, the brands that prioritise cultivating long-lasting customer relationships will be the ones that thrive. By implementing personalised experiences, rewarding loyalty programs, engaging content strategies, community building initiatives and seamless customer experiences, D2C brands can create a loyal customer base that serves as a bedrock for long-term success. 

Retention is no longer an afterthought; it is the foundation upon which the future of direct-to-consumer brands will be built.

The post 7 Strategies To enhance Customer Lifetime Value For D2C Brands appeared first on Inc42 Media.

Over the last decade, India’s startup ecosystem has transformed remarkably, evolving into a dynamic global player despite regulatory hurdles, funding constraints and market fluctuations. Initially, in the early 2010s, it operated within limited resources but gained substantial momentum in the mid-2010s, fuelled by widespread smartphone adoption and the booming ecommerce, fintech and edtech sectors. 

The “Startup India” initiative of 2016 further bolstered this growth trajectory. As the late 2010s transitioned into the early 2020s, the ecosystem matured and diversified, focusing on addressing real-world challenges in sectors like healthtech, agritech and clean energy. 

While presenting challenges, the onset of the COVID-19 pandemic also acted as a catalyst for digital transformation, showcasing the resilience and adaptability of Indian startups. According to a Tracxn report, top-funded sectors such as retail, enterprise applications, fintech and transportation tech witnessed substantial growth from 2014 to 2023. 

Additionally, emerging sectors like deeptech, spacetech, AI and EVs are gaining traction, with deeptech securing $2.1 Bn in funding in 2022. 

Resilience Amidst Challenges

India boasts the world’s third-largest startup ecosystem, a testament to its burgeoning entrepreneurial spirit. Over the years, the number of registered startups has surged dramatically, skyrocketing from a mere 75 in 2009 to an impressive 127,433 by 2024 (as per DPIIT, April 2024 report). 

Within this dynamic landscape, the narrative has shifted from mere pursuit of high valuations to a deeper quest for resilience and sustainability, resonating profoundly in today’s rapidly evolving startup culture.

The incredible growth of startups with billion-dollar valuations, called unicorns, has been impressive, increasing from just one in 2011 to a whopping 115 by 2024. This journey from small startups to huge successes is like going from small animals to unicorns. Unicorns have an impact that goes beyond just their valuations. 

However, focusing only on unicorns doesn’t show the full picture of India’s diverse startup world. The startup ecosystem has a variety of animal-themed terms, such as rhinos, camels, cockroaches, zebras and unicorns that offer valuable insights into what makes a startup successful. 

These diverse animal analogies help us understand the unique approaches and qualities contributing to a startup’s success.

Sustainability As A Competitive Advantage

The ecosystem isn’t just about unicorns; it’s also about the resilient cockroaches that flourish amidst challenges and emerge stronger. Whereas camels prioritise steady growth and conserve energy during their journeys, these startups move forward with careful planning. 

Rhino startups, on the other hand, secure significant funding and gain substantial market visibility without the mythical rarity of unicorns.

These startup animals represent the spectrum of startups in India, each contributing uniquely to the ecosystem’s vibrancy. Meanwhile, Zebra Startups, embodying sustainability, balances profit with purpose, focusing on long-term viability and societal impact. 

India’s journey forward in the startup realm requires a nuanced approach. By embracing sustainability as a fundamental principle, these startups are not just building businesses; they’re building legacies. It’s not just about chasing valuations or replicating Silicon Valley success stories. 

The right way forward involves a blend of strategic foresight, adaptability and a strong focus on sustainability. According to a report, India is predicted to surpass China in terms of the total number of unicorns by 2025.

In the tapestry of entrepreneurship, bear startups symbolise ventures that have faced setbacks and adversity. Yet, like the bear emerging stronger from hibernation, these startups learn, adapt and thrive in challenging environments. They embody the spirit of resilience that defines successful ventures in today’s dynamic landscape.

Startup founders often get swept up in the allure of high paper valuations fuelled by promises of exceptional future performance. Instead of cautioning against these inflated figures, stakeholders in the startup ecosystem often celebrate them as a mark of success. 

This celebration creates unrealistic expectations and pressures, leading to adverse outcomes for founders and their ventures when the ambitious goals aren’t met. While valuations are important for gauging investor sentiment and marking milestones in a startup’s journey, they shouldn’t be seen as the ultimate goal. The ecosystem should prioritise and celebrate real, tangible metrics like revenues, margins, return on capital employed, profits and growth.

As India targets to expand its economy to $7 Tn by 2030, startups will be at the forefront of this growth trajectory. However, to realise this vision, they must be more than just unicorns chasing valuations. 

Imagine startups as resilient camels and adaptable rhinos, with the endurance of cockroaches and the ethical drive of zebras, navigating the business landscape and, creating sustainable value for stakeholders, and contributing positively to society.

Conclusion

In conclusion, as Indian startups progress, they are moving beyond mere valuations to embrace resilience and sustainability, marking the evolution of a mature ecosystem. In the ever-evolving landscape of startups, the relentless pursuit of innovation not only unlocks transformative value for burgeoning ventures but also serves as the dynamic engine propelling nations like India towards unparalleled growth and prosperity. 

The journey from small beginnings to becoming a global player showcases the entrepreneurial spirit that drives innovation across diverse sectors. This shift reflects a strategic focus on enduring businesses capable of withstanding challenges and making a lasting impact. 

The journey ahead entails not just growth but the cultivation of a sustainable and resilient entrepreneurial environment, crucial for India’s continued rise on the global stage.

The post Beyond Unicorns: The Rise Of Resilient Cockroaches And Sustainable Zebras In India appeared first on Inc42 Media.

Entertainment is no longer a byproduct of human creativity only. Today, what we have is a unique ‘creative collaboration’ between humans and artificial intelligence (AI) that redefined entertainment to become immersive, captivating and above all, more personal.

Time and again, man feared the machines he made—of taking his job away. That did not happen. Automation has never been dehumanising. Rather, it freed up man-hours that used to go in mundane works, giving people the time and option to be more productive, more creative.

Yet, there has always been resistance to technology adoption, more after computers came. Truth is, the resistance was because of the fear of progress. The fear was more because technological advancements forced humans to update and upgrade themselves like never before—to stay relevant.

For entertainment, too, it has never been different. But, generative AI has just put fuel into the fire.

However, in reality, generative AI emerged as a blessing in disguise for the entertainment industry as a whole. It simply flipped the concept of ‘garbage in; garbage out’ to ‘garbage in; treasure out’.

Creative Collaboration

For writers and storytellers, it enhances efficiency and accuracy, eliminates confusions with grammar and spellings, detects possible plagiarism, among others. Writers are known for their style of writing. Only a few could write in more than one style and language. 

Today, with the help of AI, it’s pretty simple and quick for any writer to juggle between styles and languages. In other words, writers can now be more productive than ever with ‘creative collaboration’ with AI tools which is getting better every day.

Before generative AI came, it was a herculean task for a writer to turn his story into a full-blown audio-visual show. The production process took away a lot of time from writers, which simply was a waste.

Another important contribution of AI to entertainment is its ability to augment human creativity. AI can assist writers by suggesting plot twists, generating dialogue, or creating entire scripts based on a set of parameters. 

Even it helps writers to add local flavours to their original story to make that more relevant for a particular geography or a language.

Musicians can use AI to compose melodies, experiment with new sounds, or remix existing tracks. Visual artists can leverage AI to design graphics, animate scenes, or enhance visual effects.

Elevating Experiences

In the past few years, especially after Covid-19 pandemic, entertainment has become more personal. Here, AI has the potential to play an active catalyst to ensure every audience is served with the most personal experience that he desires. It’s not just recommendations of content. 

Any content can itself be customised, characters and plots can be tweaked to suit the individual tastes, which was unimaginable before the advent of the tech’s latest darling—artificial intelligence. 

Personalised experience increases engagement which, in turn, could potentially turn into revenue for companies and creators of entertainment.

Truth is, while AI can mimic many aspects of human creativity, it certainly lacks emotions, nuances, local cultural contexts and depth that comes with lived experiences. 

What AI can do is help humans to work better, work faster and enhance creativity, but not be original enough to replace humans.

Let’s not forget that it’s called ‘artificial intelligence’, not ‘authentic intelligence’. Naturally, AI only acts as an enabler, while the essence of creativity remains a human endeavour that can certainly be augmented with the help of AI.

The post Humans And AI: The New Power Couple Redefining Entertainment appeared first on Inc42 Media.

In a landmark move for the banking, financial services, and insurance (BFSI) sector, Muthoot Fincorp recently acquired a 54% stake in Paymatrix, a Hyderabad-based rental collection startup. This acquisition is a prime example of corporate venture capital (CVC) in action. 

By strategically investing in Paymatrix, Muthoot Fincorp not only expanded its product offerings but also ventured into new markets and customer segments, leveraging Paymatrix’s advanced digital payment solutions.

For Muthoot Fincorp, this investment is a significant step in extending its existing lending business. It provides a competitive edge in the burgeoning digital payments space and aligns seamlessly with the company’s commitment to fintech innovation.

Paymatrix’s journey began at Ecosystem Enablers, where the startup had the opportunity to experiment, iterate, and refine its business model. This foundational support enabled Paymatrix to grow into one of the largest property rent payment and collection platforms in the country.

Successful CVC partnerships create a win-win scenario for both parties. Large corporations adapt to market disruptions while startups gain access to the resources they need to accelerate their research and development efforts.

Why Big Companies Need Startups to Stay Innovative

The rapid advancement of disruptive technologies such as generative AI, Web 3.0, Industry 4.0, and quantum computing will further necessitate corporates to shift towards embracing a startup mindset within their traditional corporate structures. 

These cutting-edge innovations are revolutionising customer service engagements by enabling more personalised and efficient interactions, enhancing data analytics for better decision-making, and fostering a culture of rapid innovation and adaptability. 

Corporations that leverage these technologies can create more agile and responsive business models, allowing them to stay ahead of competitors and meet the evolving needs of their customers. 

For example, generative AI can revolutionise customer service by providing swift, personalised support through smart chatbots and virtual assistants while Web 3.0 offers decentralised solutions that increase transparency and security in transactions. Industry 4.0 integrates smart manufacturing processes, boosting productivity and reducing costs, and quantum computing provides unprecedented computational power to solve complex problems more efficiently. 

Beyond these transformative technologies, corporates are drawn to partnerships through their CVC outreach primarily for the potential long-term strategic benefits. A survey by McKinsey found that 75% of corporate respondents were motivated by the desire to gain market insights and cutting-edge ideas, 55% by access to new products, 45% by the opportunity to build important capabilities and participate in a broader ecosystem, and 25% by the chance to secure strategic options. 

Only 15% cited the opportunity to make money through their CVC efforts; the primary aim is value creation and identifying new markets. Companies that take an enterprise-wide innovative approach are far more likely to successfully implement new ideas. Innovation can’t just be an experiment; it must be culturally embraced from the C-suite down.

By adopting a startup mindset, large corporations can foster a culture of continuous learning and experimentation, breaking down silos and encouraging cross-functional collaboration. 

This approach not only accelerates the development and deployment of innovative solutions but also enhances the ability to pivot quickly in response to market changes. Ultimately, the integration of these disruptive technologies, coupled with a startup mindset, positions corporations to thrive in an increasingly dynamic and competitive landscape.

Corporate Venturing Is A Disruption Insurance Policy

To stay ahead of the disruption curve, big companies must aggressively engage with startups through partnerships, investments, and acquisitions. This proactive approach is driving a corporate venturing boom, as industry giants tap into innovation ecosystems beyond their own walls. 

Over half of big company CEOs now rank ‘new business building’ and managing disruption among their top three priorities, making corporate venturing their disruption insurance policy.

Consider Coca-Cola’s Founders platform, which mentors and funds startups aligned with the beverage giant’s strategies around sustainability, innovation, and consumer engagement. Similarly, Google’s venture arm, GV, has backed game-changers like Uber, Slack, and Nest. These strategic startup investments provide legacy players with a front-row seat to breakthrough technologies and business models.

For tech titans, corporate venturing is not just a hedge against disruption—it’s rocket fuel that propels them into new markets and verticals at a pace that startups can only dream of. Engaging with startups allows these corporations to innovate rapidly, stay competitive, and adapt to an ever-changing market landscape.

Overcoming The Corporate-Startup Divide

When corporations venture into the startup world, they often encounter a culture clash. Rigid corporate structures and risk-averse mindsets can stifle the agility and innovation inherent in startup life. However, many corporates are successfully bridging this divide by embedding a ‘startup mindset’ within their organisations and making necessary changes to their organisational behaviour.

Traditional giants have recognised that partnering with startups requires them to be more agile and responsive to market trends. This shift has led these companies to undertake extensive training programs for their employees, focusing on developing an entrepreneurial mindset and enhancing their well-being. 

By fostering a symbiotic relationship with startups and adapting their organisational behaviour, these corporates are not only overcoming cultural divides but also leverage the strengths of both worlds to drive innovation and maintain a competitive edge in a rapidly evolving market.

Getting Radically Collaborative

Going forward, corporates won’t just write checks – they will pursue radically collaborative partnerships with startups. In fact, big companies will get their hands in the cookie jar through co-development projects, commercial pilots and knowledge sharing. 

Corporates may also start playing a more active role as anchor tenants of broader innovation ecosystems by partnering with universities and incubators to cross-pollinate ideas and commercialise breakthroughs.

Of course, aligning the interests of a hungry startup and a corporate behemoth is inherently challenging. While the big companies must immerse themselves in entrepreneurial hustle to stay innovative; startups need to cosy up to corporates for funding, scaling, and distribution. 

The future demands disruptive collaboration between corporates and startup disruptors. Maintaining too many degrees of separation is a dead end for both.

The post Corporate Venturing: How Big Companies Are Shaping Startup Innovation appeared first on Inc42 Media.

Fans of ‘Game of Thrones’ are well acquainted with the phrase ‘Winter is coming’ symbolising impending hardships. A similar chill is currently sweeping through the Indian startup sector. 

Reports of startup collapse, fundraising challenges, and underperforming venture capital (VC) funds are becoming commonplace. 

Yet, amid this gloom, there is a silver lining: the very discussion of a ‘startup winter’ indicates the maturity that our startup ecosystem has started to attain. 

From Nascent Beginnings To Seasonal Cycles

Unlike Silicon Valley, which is around 50 years old, India’s startup ecosystem is relatively young. While VC firms began establishing themselves in India in the mid-2000s, the real surge in startup culture has occurred only over the last decade or so. 

In this short span, the number of startups has skyrocketed, covering diverse sectors and with the evolution of a comprehensive financing food chain. The fact that we’re now discussing seasonal metaphors like Winter, Spring, or Summer reflects a level of maturity akin to developed financial markets. 

If our ecosystem were still in its infancy, we’d be talking about the end of startup culture, not its cyclical nature.

Today, over 117,254 DPIIT registered startups (as of December 2023) are pursuing innovative solutions in sectors such as ecommerce, fintech, SaaS, GenAI etc. 

A decade ago, the number of startups was less than 3,000! And more importantly, despite the overall funding slowdown, early stage startups continue to attract investor interest; driven by the evolution of the financing food chain.

Evolution Of The Financing Food Chain

A strong sign of the maturity of the Indian startup ecosystem is the evolution of the financing food chain. Today, a diverse set of investors backs startup ambitions:

1. Ultra-High Net Individuals (HNIs) and unicorn founders as Angels
2. Angel Networks syndicating financing among HNIs
3. VC Firms
4. Corporate Investors
5. Government Grants
6. Incubators and Accelerators

Government initiatives deserve the highest credit for rapidly strengthening the startup ecosystem. Programmes like the Startup India initiative, Seed Fund Scheme, and Atal Innovation Mission have institutionalised the startup culture through startup incubators and provided crucial financial support through grants. 

Through various schemes and initiatives, the government has enabled funding of INR 960 Cr to startups and sanctioned INR 828 Cr for infrastructure support. 

Additionally, the Credit Guarantee Scheme for Startups (CGSS) aims to provide collateral-free, fund, and non-fund-based credit support to startups, benefiting over 7,500 startups in three years. 

The success of these initiatives is evident in the cultural shift towards entrepreneurship. This transformation is epitomised by the popularity of shows like ‘Shark Tank’, which have sparked a wave of interest in startups.  

Path To The Best Startup Ecosystem

Despite the progress, challenges remain as the ecosystem continues to emerge. Here are some significant areas that require attention:

Role Of Startup Incubators And Accelerators

Currently, there are over 300 incubators of various types across the country. These institutions play a crucial role in supporting founders in their journey from zero to one. However, there’s a noticeable gap when it comes to fine-tuning product-market fit and scaling up. 

Unlike the abundance of startup accelerators like TechStars, Y Combinator, and Plug and Play in the US, we lack sufficient similar platforms here. What we need are more startup accelerators which adopt a verticalised approach to startup scaling. 

These domain-specific accelerators have the potential to bring together specialist mentors, corporate partners for market access, and investors focused on specific domains. This convergence of expertise and resources creates a flywheel effect, propelling startups from their initial stages to significant growth.

Mentors

Mentoring remains a nascent area within our startup ecosystem. While it’s encouraging to witness founders like Anupam Mittal and Aman Gupta providing advice to startups, the reality is that we face a severe shortage of mentors to meet the needs of the 110,000+ startups in India. 

This shortage stems from the fact that we haven’t produced enough successful startups to build a substantial mentoring pool. Consequently, many startups seek guidance from corporate executives within their industries. 

However, many of these executives lack the necessary experience with startups or the understanding of startup cycles to effectively guide founders. It is quite common to see startups give away advisory equity in exchange for limited value. Given that quality mentoring can be the determining factor for startup success, addressing this shortage is crucial for the growth of our ecosystem.

ESOP

At the heart of every startup lies a promise – a promise to revolutionise the world and offer substantial rewards to founders and key employees who embark on the challenging journey. ESOPs stand as the cornerstone of a startup’s ability to attract and retain top talent. 

However, the current tax laws present a significant hurdle for startup employees. In some form or shape, employees are required to pay perquisite tax upon exercising their ESOPs, regardless of whether the startup ultimately succeeds or fails. 

Why can’t we have a simple rule of tax obligation at the point of sale or transfer irrespective of ESOP duration? 

Consequently, despite the allure of potential rewards, many startup employees find themselves unable to rely on ESOPs for wealth creation, enduring the arduous journey with uncertain prospects.  

Looking Ahead: Navigating The Winter And Beyond

So, while the Indian startup ecosystem faces a challenging winter, this period also signifies a stage of maturity and resilience. The evolution from nascent beginnings to a dynamic, cyclical ecosystem showcases the remarkable progress made over the past decade. 

Despite the hurdles, such as the need for robust mentoring, improved startup accelerators, and more favourable ESOP tax laws, the future remains promising. 

Government initiatives, the growing interest from diverse investors, and the increasing aspirational value of entrepreneurship continue to drive the sector forward. By addressing these challenges head-on and leveraging the existing strengths, India’s startup ecosystem can emerge stronger, setting the stage for a vibrant summer of innovation and growth. 

As we navigate through this winter, the collective efforts of all stakeholders will be crucial in shaping a resilient and thriving startup landscape.

The post The Startup Winter And Beyond appeared first on Inc42 Media.

I have been a techno-functional business leader in the retail/brand intersection with modern technology and I have seen how GenAI can bring transformation in digital commerce. 

The digital commerce industry is witnessing a major transformation caused by ageing platforms, tech innovations and economic model disruption due to ever-rising customer acquisition costs (CAC). 

In this article, I will discuss the GenAI stack to lay bare where the major opportunities lie and outline a strategic roadmap for their adoption to create a significant impact on digital commerce.

The GenAI Stack: Four Essential Layers

To navigate the complex landscape of GenAI, it is crucial to understand the four layers that comprise the GenAI stack. These layers, namely chips, models, infrastructure, and applications, work together to drive advancements in artificial intelligence. 

Upon closer examination, it becomes evident to an AI expert that certain areas of GenAI are experiencing overcrowding and excessive hype. These areas include models, infrastructure, and point solutions. 

While models, infrastructure, and point solutions are undoubtedly important components of the AI landscape, it is equally important to acknowledge the untapped opportunities in comprehensive business solutions. 

These solutions have the potential to revolutionise industries and drive significant growth and innovation.

Chips

At the foundational layer of the GenAI stack, we have Chips. Nvidia’s advanced GPUs have revolutionised this layer, making it possible to run complex AI models efficiently. 

These powerful hardware components serve as the bedrock upon which the entire AI ecosystem is built. Without the advancements in chip technology, the rapid progress we have witnessed in artificial intelligence would not have been possible.

Models

Moving up the stack, we encounter the ‘models’ layer. This layer is dominated by sophisticated AI models like OpenAI’s GPT-4, which have set new standards in natural language processing and other AI capabilities. 

However, it is important to note that there is a sense of overcrowding and hype in this layer. Competitors like Claude and Llama3 are rapidly advancing, expanding the range of available AI tools. 

While this competition drives innovation, it also contributes to overcrowding and hype, sometimes leading to inflated expectations.

Infrastructure

The Infrastructure layer plays a crucial role in supporting the deployment and scaling of AI models. Major cloud providers like AWS, Azure, and GCP are prominent players in this space. However, the overcrowding and hype in this layer are evident as well. 

While these cloud providers offer robust infrastructure solutions, numerous specialised infrastructure providers are emerging, offering tailored solutions that cater to specific needs. 

This overcrowding can make it challenging for businesses to navigate and choose the right infrastructure for their AI projects.

Application

Finally, we reach the topmost layer of the GenAI stack, Applications. This layer is where AI’s potential is realised through practical, user-facing solutions. Despite its fragmentation and the influx of point solutions, this layer holds the most promise for transformative business opportunities. 

However, it is disheartening to see that comprehensive business solutions are not being harnessed enough. The overcrowding and hype in the lower layers of GenAI often overshadow the potential of comprehensive business solutions, which have the power to revolutionise industries and drive significant value.

By shifting our attention and resources towards comprehensive business solutions, we can harness the true power of AI. This entails developing AI systems that not only excel in specific tasks but also possess the capability to integrate seamlessly into various business processes. By doing so, we can unlock the full potential of AI and create transformative solutions that address complex challenges faced by businesses today.

The Fragmented Application Layer: Challenges And Opportunities

The application layer, though brimming with innovative solutions, presents both challenges and opportunities. The proliferation of point solutions has led to underutilisation and redundancy, creating a “graveyard” of SaaS products within enterprises. 

To unlock meaningful business opportunities, the focus must shift from isolated functionalities to comprehensive, integrated solutions.

Deep Understanding Of Business Processes

The journey begins with a deep understanding of specific business processes, challenges, and economic dynamics. This insight is crucial for crafting solutions that address real pain points and deliver tangible value.

In the context of digital commerce, this involves understanding the customer journey from awareness to purchase and beyond. GenAI can be harnessed to optimise each stage of this journey, ensuring that customers have a seamless and personalised experience.

Holistic Problem-Solving

Rather than offering isolated functionalities, it is essential to develop solutions that address business problems holistically. This involves integrating various AI capabilities to create seamless, end-to-end workflows.

Businesses today are increasingly recognising the importance of adopting comprehensive AI solutions that go beyond individual features. Instead of relying on piecemeal applications, organisations are seeking integrated AI systems that can tackle their challenges from start to finish. 

By holistically harnessing the power of AI, businesses can unlock new levels of efficiency, productivity, and innovation.

Seamless Ecosystem Integration

Effective solutions must integrate seamlessly within existing business ecosystems. Compatibility with current systems and processes is vital for adoption and effectiveness.

For instance, many retailers have invested heavily in their ecommerce platforms. GenAI-powered solutions should integrate effortlessly with these platforms, enhancing their capabilities without requiring a complete overhaul. By offering plug-and-play solutions that work with existing systems, we can minimise disruption and accelerate deployment.

Leveraging Enterprise Data And External Intelligence

One of the most powerful aspects of GenAI is its ability to process and analyse vast amounts of data. By leveraging enterprise data and external intelligence, we can enhance our AI models and deliver more accurate insights.

For example, understanding customer preferences and behaviours across different touchpoints allows AI to generate more relevant content and product recommendations. By analysing data from social media, browsing history, and past purchases, AI can create a comprehensive view of each customer and tailor the shopping experience accordingly.

Speed And Scale

In the fast-paced digital commerce environment, the ability to quickly adapt and scale is a significant competitive advantage. GenAI-powered solutions should be designed to be rapidly deployed and scaled to meet the evolving needs of retailers and brands.

For example, during peak shopping seasons like Black Friday, retailers need to handle a surge in traffic and transactions. A GenAI-powered platform can dynamically scale to accommodate increased demand, ensuring a smooth and seamless shopping experience for customers. 

This scalability is crucial for maintaining high levels of customer satisfaction during critical periods.

Real-World Impact: Transformative Solutions For Digital Commerce

To illustrate the transformative potential of GenAI, let’s explore a few real-world examples of how these technologies can drive meaningful business impact for digital commerce in each stage of the customer journey.

Top of the Funnel (TOFU): Relevant, Contextual, And Shoppable Content At Scale

At the top of the funnel, the goal is to attract and engage potential customers. GenAI can create highly personalised, relevant, and contextual content at scale, ensuring that each piece of content resonates with the target audience.

For instance, an online fashion retailer can use GenAI to analyse browsing patterns, social media activity, and fashion trends. Based on this data, AI can generate personalised blog posts, social media updates, and product recommendations that align with each customer’s interests. This personalised approach increases engagement and drives traffic to the retailer’s website.

Middle Of The Funnel (MOFU): AI-Powered Landing Pages

In the middle of the funnel, customers are actively seeking information and considering their options. AI-powered landing pages can provide personalised experiences that address specific customer needs and concerns.

For example, an electronics retailer can use AI to create dynamic landing pages that adjust based on customer behaviour and preferences. If a customer has shown interest in a particular type of gadget, the landing page can highlight relevant products, customer reviews, and detailed comparisons. 

This personalised approach helps customers make informed decisions and moves them closer to purchase.

Bottom Of The Funnel (BOFU): Dynamic Collection Landing Pages

At the bottom of the funnel, customers are ready to make a purchase. Dynamic collection landing pages can use AI to present the most compelling product recommendations based on customer behaviour and preferences.

For instance, a beauty retailer can use GenAI to analyse a customer’s past purchases, browsing history, and product reviews. Based on this data, AI can create a personalised landing page that highlights complementary products, exclusive offers, and tailored recommendations. 

This personalised approach increases conversion rates and ensures a seamless transition from consideration to purchase.

Strategic Roadmap: Building A GenAI-Powered Platform

For startup founders, venture capitalists, and established retailers and brands, understanding the strategic roadmap for building and leveraging GenAI-powered platforms is crucial. Here’s how to approach this journey:

Collaborative Development

Collaboration is key. By partnering with retailers and brands, startups can gain valuable insights into their unique challenges and opportunities. This collaborative approach ensures that solutions are tailored to meet the specific needs of clients.

For instance, working closely with an ecommerce retailer to develop personalised content solutions allows for better integration and more relevant features. Understanding their customer base, inventory management practices, and marketing strategies helps create a solution that integrates seamlessly with their existing systems and delivers real value.

Continuous Innovation

The AI landscape is constantly evolving, and staying at the forefront of these advancements is essential. Continuously integrating the latest AI technologies and models ensures that clients benefit from cutting-edge capabilities.

For example, as new AI models are developed, evaluating their potential to enhance platform capabilities is crucial. Whether improving natural language processing for better content creation or leveraging advanced machine learning algorithms for product recommendations, continuous innovation is key.

Focus On User Experience

User experience is at the heart of successful AI solutions. Creating intuitive, user-friendly interfaces that make it easy for retailers and brands to harness the power of GenAI is essential.

For instance, a platform’s dashboard should provide clear, actionable insights that are easy to understand and act upon. Simplifying complex AI processes empowers clients to make data-driven decisions without requiring deep technical expertise.

Scalability And Flexibility

A successful platform must scale with the needs of clients. Whether a retailer is a small boutique or a large multinational, solutions should be tailored to fit their requirements.

For example, a dynamic collection landing page solution should handle the needs of a single store or an entire chain of stores. Flexibility ensures that the platform can grow with clients and adapt to their changing needs.

Security And Compliance

Security and compliance are paramount in the retail and brand sectors. A platform must be built with robust security measures to protect sensitive data and ensure compliance with industry regulations.

For instance, implementing advanced encryption techniques safeguards customer data and ensures compliance with data protection regulations such as GDPR and CCPA. This commitment to security and compliance builds trust and provides peace of mind to clients.

Conclusion: Transforming Digital Commerce With GenAI

In conclusion, the future of digital commerce is undoubtedly being shaped by the transformative power of generative AI. By understanding the GenAI stack and strategically positioning within it, stakeholders can unlock meaningful business opportunities and drive significant impact. 

However, it is important to approach generative AI as part of a broader digital strategy, taking into account other crucial factors. By doing so, businesses can harness the full potential of generative AI while ensuring a seamless and secure digital experience for their customers. 

The possibilities are endless, and those who embrace this technology will undoubtedly thrive in the ever-evolving digital landscape.

The post Harnessing GenAI For Transformative Digital Commerce Solutions appeared first on Inc42 Media.

The customer experience (CX) journey of the present does not follow a single, linear path anymore. The interactions between modern consumers and brands have become multichannel and it includes visits to websites, using applications, posting comments on social networks, etc. 

The explosion of touchpoints creates intricate journeys across various industries, each with its unique complexity. Each sector, from BFSI to travel, also has its nuances and complexities that need to be addressed in a vertical-first manner. 

For Chief Experience Officers (CXOs), navigating these diverse touchpoints and crafting personalised and contextualised experiences at each stage is paramount.

The power of technological innovation is the major catalyst for success in this new reality. By considering the following, CXOs can utilise cutting-edge solutions to transform CX management:

Empathy Driven Personalisation

Consumers demand experiences that are catered to their particular requirements as well as tastes. Gone are the days when a one-size-fits-all approach was used, ignoring contextual nuances. 

While AI-powered platforms can offer personalised recommendations and solutions, advanced analytics can be used to understand customers’ preferences and behaviours. However, it’s important to note that empathy is still considered very pivotal; thus, it should remain a core value of the CX system. 

The CXOs should deliver personalisation at scale without losing a sense of humanity. A balance between automation and human interaction will mean that customers feel valued and understood. 

Experience Via Omnichannel Consistency

All channels that the customers interact with such as websites, mobile apps, social media platforms and even face-to-face physical interactions should provide the same, consistent customer experience. 

An omnichannel ticketing dashboard gives CXOs this capability by centralising all customer interactions. This allows for a seamless handoff between channels so that customers can avoid repeating themselves or facing delays.

AI-Powered Personalised Solutions

Different customers require different CX solutions; for example, a traveller planning a romantic weekend versus another reporting stolen credit cards will need distinct approaches. 

However, horizontal solutions often fail to pick up on these nuances and subtle differences between various types of consumers, rendering them inadequate at providing the right resolution for each customer. 

GenAI platforms, on the other hand, are capable of grasping inherent subtleties. They carry out detailed data mining to determine customers’ intentions and sentiments, offering personalised resolutions to their problems more efficiently and accurately.

Self-Service 2.0

Empowering customers to help themselves and thereby reducing the agent workload is key to a successful CX strategy. Self-Service 2.0 goes beyond traditional FAQs and knowledge bases. 

It offers features like conversational chatbots, voice bots, FAQs etc that can answer queries, deflect tickets, and streamline the self-serve experience. This frees up agent time for handling complex issues and providing personalised support to customers who need it most.

Real-Time Insights

While executing the right CX strategies is crucial, it’s imperative to track their impact via real-time insights. GenAI-powered natural language analytics can analyse customer interactions across channels, identifying sentiment and potential areas of concern. 

Additionally, Auto QA features can evaluate agent performance, ensuring consistent quality of service and providing valuable coaching opportunities.

By strategically implementing these technological advancements, CXOs can elevate customer experience from a cost centre to a revenue-generating powerhouse and a key competitive differentiator. 

Creating exceptional customer experiences fosters brand loyalty, drives business growth, and secures a competitive edge in today’s crowded marketplace. The future of CX leadership lies in leveraging the power of technology to understand customer needs better, personalise interactions, and deliver seamless experiences across every touchpoint. 

The time to invest in these innovations is now, as customer expectations continue to evolve and the companies that prioritise CX will be the ones that stand out from the crowd.

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Imagine you are an ecommerce entrepreneur who just hit the jackpot. Your products are flying off the shelves and people from all over the world are queuing up to buy your latest releases. 

Thanks to the marvels of modern logistics technology, you’re no longer limited to a nationwide customer base. Expanding beyond borders has helped you outgrow competitors but the challenges that come with cross-border shipping can make you feel like you’re playing an endless game of ‘whack-a-mole.’

According to Technavio, the cross-border supply chain market will reach $67.22 Bn at 12.54% CAGR by 2027. This exponential increase will indicate top-shelf supply chain service providers alongside the obstacles in their journey. 

So, what are these bottlenecks and why are they unfavourable for B2B, B2C, and D2C brands? 

Challenges And Solutions Of Cross-Border Logistics

Challenges abound in cross-border logistics as they occur due to several reasons but one can overcome these by counting on the fruitful solutions listed below.  

Challenge 1: Custom Obligations

Customs have a set of meticulous rules and laws with which they operate. Think of them as the gatekeepers of everything that goes around. Managing customs well requires an in-depth knowledge of the regulations and prerequisites and a knack for handling complex documentation for faster clearance.

Solution: Tie-ups with customs officials can save time, effort, and money. They are well-versed with international laws and compliances and have experience with paperwork. Many B2B companies automate customs clearance to speed up the process and get things right every time.

Challenge 2: Reverse Logistics

Reverse logistics can be nerve-racking as it necessitates a smooth backward supply chain process for an order. A report by Straitsresearch states, the global reverse logistics market is expected to hit $831.3 Bn by 2030, meaning, brands must pick up the pace to better manage returns.

Solution: An automated returns process is the name of the game for businesses looking to strengthen reverse logistics infrastructure. They are unlikely to jump ship looking for alternatives when they can benefit from an all-inclusive dashboard to view order information in real-time. This gives complete control of the process to the manufacturers.

Challenge 3: Unserviceable Locations

Within the labyrinthine algorithms of every cross-border logistics partner’s network, lie unreachable geographies that affect the respective businesses associated. Customers seeking deliveries from remote locations undergo delays due to maps that are not easily recognised. For example, Australians are highly receptive to shipping challenges because of belonging to remote locations.

Solution: To solve this problem, brands must turn to robust overseas networking with multi-modal shipping and efficient visibility technology. They should also use GPS and RFID systems to connect with customers in the most unfindable places. Based on the report from the Material Handling Institute, supply chain companies with RFID support gained 100% accuracy in shipping tasks.

Challenge 4: Currency Exchange 

Currency exchange is a concern and a formidable challenge for businesses. Currency rates keep changing and merchants often struggle to retrieve the accurate transfer of funds from a secured framework. Moreover, various risks accompany international transactions.

Solution: Diversify currencies and offer multiple payment gateways to enable customers to make secure payments. Let them choose from options like credit cards, bank transfers, or facilities like PayPal that fall under financial frameworks and follow compliances for worldwide transactions. Some financial institutions also automatically process currency conversions so users can perform transactions in their local currency.

Challenge 5: Disparity in Shipping Data Visibility

Moving goods across borders can be tricky. Brands have to manage transportation, and inventories, and coordinate with internal teams. All this becomes difficult and inefficient without accurate order data and visibility. Not to mention the delays and lags it creates.

Solution: Use unified dashboards and dedicated portals for a holistic order journey. These portals provide rich insights on routes, rates, and loads, and offer an intuitive experience and control to plan and coordinate smoothly. Brands can look at this information on a single interface and send real-time updates to customers about their packages travelling across countries.

Wrapping Up

We have uncovered five challenges and their solutions to help buyers and sellers navigate the complex landscape of cross-border logistics. Understanding these obstacles and leveraging the right solutions are key to successfully managing the constant demand and supply of goods to cross-border territories. 

In addition to that, brands must look towards establishing a solid international base and build lasting business-customer bonds to ensure repeat sales. From elevating overseas logistics efforts to creating a global presence, they can go shoulder-to-shoulder with cross-border competitors. 

The post Navigating Challenges Of Cross-Border Logistics appeared first on Inc42 Media.

As an experienced researcher with two decades of guiding enterprises and startups in building user-centric products, I can confidently say that integrating user research is not just beneficial but essential for the success of any new product. 

For first-time founders and innovators, understanding how to incorporate user research effectively can be the difference between a product that merely exists and one that truly resonates with its intended audience.

Understanding User Research

User research is a systematic approach to understanding the behaviours, needs, and motivations of your target audience. It involves gathering and analysing data about users to ensure that the products you build are tailored to their needs. For startups, user research can help validate ideas, refine product features, and ensure that the final product solves real problems for real people.

Why User Research Is Crucial For Startups

• Validating your ideas: Before investing significant resources into product development, user research helps validate whether your idea addresses a real problem. This is vital for startups, where resources are often limited.
• Understanding your ideal customer profile (ICP): Identifying and understanding your ICP is fundamental. User research helps you define who your ideal customers are, what they need, and how they behave. This understanding is crucial for creating products that are not just usable but desirable.
• Building a minimum viable product (MVP): User research informs the development of your MVP. By focusing on the core features that your users need, you can build a product that is both functional and appealing, reducing the risk of building features that users do not want or need.
• Enhancing user experience: Continuous user feedback through research helps in refining the user experience, making your product more intuitive and engaging. A seamless user experience is often what differentiates a successful product from a failed one.

How To Integrate User Research Into Your Startup Process

Define Your Research Objectives

Before you start any research, clearly define what you want to learn. Are you testing a hypothesis, validating a concept, or exploring user pain points? Having clear objectives will guide your research efforts and make them more effective.

Identify Your Target Users

Use your ICP to identify who your target users are. Segment them based on demographics, behaviour, and needs. This segmentation will help you tailor your research methods and questions to gather relevant insights.

Choose The Right Research Methods

Depending on your objectives, select appropriate research methods. Common techniques include:

• Interviews: One-on-one conversations that provide deep insights into user attitudes and behaviours.
• Ideation and concept evaluation: Gathering feedback on early ideas or product concepts to determine their viability and appeal. This can involve brainstorming sessions or concept testing with potential users.
• Contextual inquiry and immersion: Engaging with users in their natural environment to understand their context and workflows. Methods like contextual inquiry and user shadowing allow you to observe and understand how users interact with their environment and your product in real-time.
• Usability testing: Observing users as they interact with your product to identify usability issues.

Incorporate User Feedback Early and Often

Start gathering user feedback as early as possible, even during the concept phase. Use this feedback to iterate on your product, making adjustments based on real user needs and preferences.

Create A Feedback Loop

Establish a continuous feedback loop with your users. This can be through regular check-ins, beta-testing groups, or user communities. The goal is to keep refining your product based on ongoing user insights.

Analyse And Act On Your Findings

Once you have gathered data, analyze it to identify patterns and insights. Prioritize changes based on the impact they will have on user satisfaction and product success.

Validate Your Product With Your ICP

Before launching, ensure that your product meets the needs of your ICP. Use your research to fine-tune features and address any outstanding issues.

Fostering A User-Centric Culture

It is a common misconception that user research is solely for building and fixing products. In reality, a robust user research approach should be embedded into the core of your business strategy. User research should influence decisions across all verticals—product development, marketing, sales, and even company culture.

• Product strategy: User research provides the insights needed to make informed product decisions, ensuring that every feature and function aligns with user needs.
• Marketing strategy: Understanding user preferences and behaviours can guide your marketing efforts, making campaigns more targeted and effective.
• Sales strategy: User research can identify optimal sales touch points and methods for engaging potential customers, ensuring your sales strategy is aligned with user preferences and behaviours.
• Pricing strategy: Insights from user research can help determine the most effective pricing model, ensuring that your pricing is competitive and aligned with what users perceive as value.

Integrating user research into your startup’s culture and product development process is not just a good practice; it’s a necessity. By understanding your users deeply, you can build products that truly meet their needs, enhancing your chances of success in a competitive market. 

Start with clear objectives, choose appropriate research methods, and continuously integrate user feedback into your development cycle. This user-centric approach will not only help you create a product that users love but also pave the way for sustainable growth and innovation.

The post Integrating User Research In Innovation & Startup Product Building: A Guide For First-Time Founders appeared first on Inc42 Media.

Objectives and Key Results (OKRs) have been embraced by many companies to establish high-level measurable goals based on ambitious trackable targets. Pioneered by Intel’s former CEO Andy Grove, OKRs have since evolved and become popular across various industries, enabling companies to streamline their work, increase transparency and adopt more effective goal-setting practices.

Reputed organisations like Google, LinkedIn and Netflix have credited Objectives and Key Results (OKRs) to boosting their growth. These companies have used OKRs to launch innovative products and to improve their customer satisfaction, which has helped them in achieving their business milestones. 

To learn more about it, let’s dive into the content and explore how OKRs can be used as an effective tool for empowering businesses.

Promote Understanding Of OKRs

The first step towards implementing OKRs should start with enlightening the organisation about its usage and function. Training sessions and workshops should be organised with the motive to educate everyone about the basics of OKRs. 

Additionally, the difference between objectives (what the organisation wants to achieve), and the key results (the parameters set for measuring progress that aligns with the objective) should also be specified by providing real-life examples.

Align OKRs With The Company’s Vision And Mission

Aligning objectives and key results with the company’s mission and vision should be kept in consideration. This will ensure that all the efforts are directed towards a common goal. To achieve this, start by defining high-level objectives that have a direct association with the company’s strategic goals. To make it more achievable and easier to monitor, break these down into smaller, department-oriented OKRs.

Set Ambitious Yet Achievable Objectives

Setting ambitious goals that are realistic and attainable is necessary for every organisation and is one of the foremost principles of OKRs. Many organisations that set highly ambitious and unrealistic goals don’t provide a clear picture of the organisation’s progress. 

Therefore, it is advised to use the 70% rule, where objectives are set with the expectation that if 70% of the results are achieved, then it means that the objective has been achieved. This encourages the team members to be creative in their approach and aim high without the fear of failure.

Create Measurable Key Results

To ensure that the objectives are effective, their progress must be measured. Specific key results that can be measured and are time-bound can significantly provide more clarity in defining what success looks like. 

For example, instead of setting the key result to “improve customer service” make it more specific as “increase the Net Promoters Score (NPS) from 60 to 75 by the end of Q3,” which can help define success.

Encourage Transparency & Communication

Transparency is a crucial aspect of the OKR framework which enables collaboration and fosters accountability in the organisation. Implementing technology such as advanced OKR software and dashboards can help to monitor progress in real time. Scheduling regular check-ins and review meetings will also benefit in discussing progress, undertaking the challenges and adjusting OKRs as necessary.

Integrate OKRs Into Performance Management- 

OKRs can be used to provide a holistic performance review of the employees and the teams. Thus, integrating OKRs into the overall performance management system of the organisation can aid in providing a holistic view of the employee’s performance, his focus on long-term goals and his efforts in achieving them.

OKR is a powerful tool for setting clear and aspirational objectives that empower businesses to unlock their full potential. Implementing OKRs in an organisation can drive exceptional performance and growth. Therefore, one needs to make great use of this tool to provide clarity, focus and direction to the organisation. 

The post How To Effectively Implement OKRs In Business For Optimal Performance appeared first on Inc42 Media.

Shared services have long been a cornerstone of operational efficiency, centralising functions such as accounting, procurement, IT and HR among others to reduce redundancy and achieve economies of scale. However, the advent of generative AI is set to disrupt this established model, ushering in a new era of innovation and transformation.

Historically, shared services focussed on transactional tasks that were labour-intensive and prone to human error. Centralisation helped but did not fully eliminate inefficiencies. Generative AI, a subset of artificial intelligence that produces human-like outputs such as text and images, is changing this landscape. 

According to Gartner, 70% of organisations are expected to integrate generative AI into their shared services by 2025, with a projected increase in efficiency of up to 40%.

Enhanced Automation And Cost Reduction

One of the primary ways generative AI is revolutionising shared services is through enhanced automation. Generative AI can take over routine tasks such as report generation, data entry and customer service interactions, executing them with greater speed and precision. 

This reduces the need for manual intervention and allows staff to focus on higher-value activities. McKinsey & Company estimates that generative AI can reduce costs by 30% to 50% in shared services operations.

For instance, a leading global bank implemented generative AI to automate its financial reporting processes. The bank reduced the time required for report generation from several days to a few hours, resulting in a 40% reduction in operational costs and significantly improving data accuracy.

AI-Driven Analytics For Better Decision-Making

AI-driven analytics provide deeper insights into operations, enabling more informed decision-making. Generative AI can create complex data models that predict issues before they arise, allowing for proactive management. 

According to Forrester Research, organisations using AI-driven analytics report a 20% improvement in decision-making accuracy.

For example, a multinational consumer goods company uses generative AI to analyse supply chain data, identifying potential disruptions and optimising inventory levels. This proactive approach has led to a 15% reduction in inventory costs and a 25% increase in supply chain efficiency.

Personalisation At Scale

Generative AI also enables personalisation at scale, customising services to meet the specific needs of different departments or users, enhancing the user experience and overall efficiency of the shared services model. 

A Deloitte survey found that 56% of companies implementing generative AI in shared services reported higher customer satisfaction due to increased personalisation.

A large ecommerce platform, for example, leverages generative AI to personalise customer service interactions. By analysing customer data and interaction history, the AI provides tailored responses and solutions, resulting in a 30% increase in customer satisfaction scores and a 20% reduction in service resolution times.

Significant Cost Savings And Strategic Reinvestment

By automating tasks and improving operational efficiency, generative AI can lead to significant cost savings. These savings can be reinvested into strategic initiatives, driving further innovation and growth. 

Accenture’s research indicates that generative AI can reduce operational costs by up to 30%, allowing for substantial reinvestment into core business areas.

A large healthcare provider automated its revenue cycle management using generative AI, which reduced operational costs by 35% and allowed the company to reinvest the savings into developing new patient care programmes.

Unlocking Insights From Data

Shared services often grapple with mountains of data associated with tasks like HR onboarding, finance processing, and IT support. These tasks, while crucial, are often repetitive and heavily reliant on data manipulation. 

Generative AI represents a paradigm shift. By leveraging advanced algorithms and machine learning, generative AI can ingest, analyse, and automate these data-driven processes with unprecedented accuracy and speed.

For example, a large professional services company implemented generative AI to automate the processing of supplier invoices. This resulted in a 50% reduction in processing time and a 40% decrease in errors, significantly improving the overall efficiency of their accounts payable process.

The power of generative AI extends beyond structured data. Shared services often struggle with a vast amount of unstructured data—emails, customer feedback forms, and internal communication channels. Generative AI can analyse this unstructured data, identifying patterns and extracting key insights that would be impossible for humans to glean efficiently.

For instance, a telecommunications company uses generative AI to analyse customer service emails and identify common issues. This has allowed the company to address recurring problems more effectively, reducing customer complaints by 20% and improving overall service quality.

The Future Of Shared Services With Generative AI

Forward-thinking organisations are already leveraging generative AI to revolutionise their shared services. Generative AI Agents—intelligent software programs that perform tasks autonomously—are increasingly used to streamline various functions. 

These agents manage everything from IT support requests to HR inquiries, providing rapid, accurate responses and freeing up human resources for more strategic work. A report by IDC highlights that enterprises using generative AI Agents have experienced a 25% reduction in response times and a 30% increase in overall productivity.

As generative AI continues to advance, its integration into shared services is not merely an option but a necessity for organisations aiming to thrive in an increasingly competitive landscape. 

Companies that leverage this technology will not only achieve significant operational improvements but also unlock new avenues for growth and innovation, setting themselves apart as leaders in their respective industries.

According to PwC, AI adoption, including generative AI, could contribute up to $15.7 Tn to the global economy by 2030, underscoring its transformative potential. The future of shared services is undoubtedly intertwined with the evolution of generative AI, heralding a new era of efficiency and strategic advantage.

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In the ever-evolving landscape of entrepreneurship and investment, traditional paradigms are being challenged by innovative approaches that prioritise both financial returns and societal impact. 

As startups continue to disrupt industries and redefine markets, investors are exploring novel models to capitalise on emerging opportunities while aligning with their values. 

From impact investing to micro VCs and beyond, this article delves into the diverse range of innovative startup investment models shaping the future of venture capital.

iSAFE

As investors, we see that the iSAFE (India Simple Agreement for Future Equity) model is gaining traction in early stage startup funding due to its numerous advantages. 

Unlike traditional equity financing, which demands extensive legal documentation and negotiations, the iSAFE model employs a standardised agreement, significantly reducing legal complexities and associated costs.

One of the primary challenges in traditional equity financing is setting a company valuation upfront, which can be difficult and contentious for early stage startups. 

The iSAFE model defers this valuation to a future equity financing round, alleviating pressure and minimising conflicts over early stage valuation. This flexibility allows startups to focus on growth without the immediate burden of establishing their worth.

iSAFE investments convert to equity during a future financing round, typically at a discounted rate or subject to a valuation cap, protecting investors and ensuring favourable terms. And unlike convertible notes, which accrue interest, iSAFE agreements do not involve interest payments, simplifying financial calculations and reducing the financial burden on startups.

iSAFE agreements allow founders to retain more control initially, as equity dilution occurs later, during a future financing round. 

Revenue And Outcome-Based Financing

We also see that revenue and outcome-based financing (ROBF) models are increasingly favoured by startup founders due to their adaptability to modern business environments. 

Revenue-based financing (RBF) ties repayments to a portion of a company’s revenue, offering flexibility and lower risk for investors. Meanwhile, outcome-based financing links funding to achieving specific milestones, encouraging sustainable growth, and supporting ventures with social impact goals.

In practice, investors evaluate a startup’s compatibility with ROBF, considering sectors like SaaS and ecommerce known for generating consistent revenue. 

Investors analyse the sustainability and scalability of the business model, assessing past revenue performance and projecting future earnings based on historical data and market conditions. 

Financial statements, including cash flow and profit margins, are scrutinised alongside key performance indicators reflecting operational efficiency and customer satisfaction.

Investors then define the revenue percentage shared and set milestones triggering repayments. A manageable cost structure is essential to allocate sufficient revenue towards repayments, with the founding team’s expertise in executing plans and achieving revenue goals. 

Detailed forecasts and data on customer acquisition costs, lifetime value, and operational efficiency metrics provide additional insights into the startup’s potential.

These models provide strategic advantages like non-dilutive capital, aligning investor and entrepreneur interests, and expanding funding opportunities for diverse startups.

Corporate Venturing And Crowdfunding

Moving to the corporate world, strategic corporate venture (SCV) entails established companies investing in startups aligned with their strategic objectives. 

This trend is rising because SCV provides corporations access to cutting-edge technologies and ideas, diversifies their portfolio, and aligns investments with long-term goals.

Investors analyse each startup’s unique value proposition, seeking how it complements their business and provides competitive advantages or market entry. They assess alignment with the corporation’s strategy and potential integration within specific units for co-development.

Unlike traditional VC firms, corporate investors prioritise long-term strategic partnerships, valuing collaboration and leveraging resources for mutual benefit. But the due diligence mirrors traditional VC practices, evaluating technology, market potential, team capabilities, IP, and financials. 

Risks, including market, technology, regulatory, and competition, are scrutinised alongside track record and scalability to ensure sound investment decisions.

On the other hand, we have crowdfunding, encompassing both concept-to-prototype (C2P) and equity crowdfunding, which are increasingly favoured for startup funding for accessibility, diverse funding sources, and market validation potential. 

These platforms offer startups access to a wide array of investors, reducing dependence on single backers. Successful campaigns not only secure funding but also validate market interest, attracting early adopters and fostering community engagement for brand building.

Before launching a crowdfunding campaign, founders must meticulously prepare by crafting a compelling business plan, financial projections, and a persuasive pitch deck to convince investors. 

Successful crowdfunding campaigns necessitate effective marketing strategies, leveraging social media, email marketing, and other channels to generate excitement and attract potential investors. 

Conclusion

Networking plays a crucial role in both concept development and equity crowdfunding. Establishing relationships with mentors, industry experts, and potential investors can provide invaluable guidance and support throughout the process.

In today’s rapidly evolving startup ecosystem, new founders and investors must educate themselves about emerging funding models. By easing legal complexities, these models enable startups to focus on growth and provide adaptable, sustainable options that align the interests of investors and entrepreneurs. 

They open up new opportunities for strategic partnerships and diverse funding sources, fostering innovation and community engagement. As these models continue to develop, they have the potential to unlock unprecedented opportunities, driving a future where entrepreneurship and investment create lasting value. 

Therefore, for the next generation of startups, staying informed about these new avenues and selecting the right model will be essential for success.

The post Delving Into Innovative Startup Investment Models appeared first on Inc42 Media.

The concept of the one-man army, capable of simultaneously battling multiple enemies, is far-fetched and fantastical. But is this sustainable or even perfectly executable? According to the WorldMetrics’ 2024 report, a significant 30% of disruptions in the supply chain can be attributed to human error. 

In reality, the one-man army is simply a point of contact in the larger scheme of things. Their effectiveness relies on support and recognition from others. How can a one-man army truly exist in the complicated, chaotic universe of shipping and remain beyond the scope of human error?

The answer lies in tech-driven logistics. (No, we aren’t talking about the famous DeLorean from Back to the Future!)

AI-fuelled tools are entering every possible realm from art to medicine, often accompanied by a flurry of controversy. While some innovations occur purely to test the boundaries of human imagination, others follow the true path of design – to find a creative solution to a problem. 

We cannot deny its impact on bettering the qualitative nature of certain things. One such undertaking is the crafting of necessary keys to overcome the obstacles in the supply chain journey. 

Is There A Need For Intelligent Intervention?

According to Research&Markets, AI-enabled supply chains are 67% more effective than their non-AI counterparts, thanks to reduced risks and lower overall costs.

Much like the journey of Hercules to his ‘twelve labours’, the supply chain highway that gets goods from ‘point A to point B’ is vulnerable to challenges en route. Multiple pitstops require monitoring & management such as service operator switches, metamorphosis of goods, and changes in route & delivery deadlines. 

This path is paved by information. Human data entry is prone to mistakes and oversights. And so, getting the data right so the package gets delivered at the right place and at the right time is a herculean task.

According to G2, Excel spreadsheets are the primary operational tool for 46% of supply chain experts. This 46% is vulnerable to the 30% of human error mentioned earlier, which can impact customer experience, in-house operations and relationships with vendors and businesses. As a result, customer retention rates, shipping costs, warehousing costs, committed SLAs, and even inventory can be negatively affected.

AI-driven shipping management solutions allow businesses to operate with a lean and mean logistics team. Once the configuration and setup are complete, their presence is required only on critical issues that need a touch of human interaction. 

So, with the possibility of >60% savings in shipping costs, why the hesitance? 48% of businesses say cost is the main obstacle to technology adoption, followed by return on investment (ROI) estimates (40%) and not knowing where to begin (35%). 

Where Does One Begin?

Seemingly straight out of Jetsons, intelligent AI & ML systems help accelerate three major components – pre-dispatch, post-dispatch, returns & exchanges. Automated AI-driven pre-dispatch tools cover all operations from the time an order has been placed at a store, all the way till the carrier partner picks it up from the hub. 

This eliminates the time-consuming manual processes of the Flintstonian Age, such as allocation of the right shipper, notifying the shipper about the pickup, generating documents necessary for the passage of the package, creating airway bills and even reminders to the shipper if the scheduled package pickup has failed.

Automating pre-dispatch tasks significantly improves order-to-dispatch TAT; particularly useful during the festive season and for businesses dealing with products that are ordered/created/customised on demand.

Post-dispatch tools cover all aspects of order status and related alerts once the package has been picked up by the shipper. These include API-based real-time shipment tracking on a service provider’s platform, delay prediction, milestone-based alerts to shoppers and non-delivery resolutions.

These configurable functionalities can be automated to run like clockwork to ensure the logistics team and shopper have visibility of the package. This set of features helps boost customer experience and improve the in-house team’s control over orders in transit.

Returns and exchange portals can be intelligently automated to process and accept or reject, shopper-initiated requests according to preset rules. The entire logistical aspect of returns & exchanges can also be configured similarly to the pre-dispatch journey with the pickup location being the customer’s address and the drop location being the business’s hub.

The bonus of a tech-boosted returns & exchanges module lies in the capability to monetise them, enhance shopper experience with speedy processing, and let automation deal with the logistics of it all.

What About The Cost & ROI?

Rather than considering the cost unilaterally, one needs to look at the impact of AI tech on business operations holistically. For example, intelligent logistics platforms enable visibility to all in-house teams through accessible digital data. 

The real-time notifications sent to customers reduce order-related queries, ensuring only a bare-bones support team is needed for sensitive issues such as that crazy watermark on Dunder-Mifflin paper.

AI-driven shipping solutions also help cut down NDRs and RTOs by over 50% ensuring profitability for tech-aided businesses. The swift resolutions also help brands garner positive NPS and improve brand perception in the market.

The cost? Compared to the amount of in-house tech businesses would need to build to match their speed of scaling, the constant tweaking, the tech team, and the expense of it all? Negligible. Plus, it’s always best to rely on expert solution providers rather than risk experimenting with the heart of any business, i.e. logistics.

The Final Word

Remove the tech, and Batman is just a sad, angry individual trying to fight injustice, limited by his human capabilities. Add in tech, and this vigilante becomes the one-man army capable of defeating a legit superhero. 

This euphemism perfectly sums up an article advocating the possibility of making logistics the job of a one-man army, backed by the incredible tech available on the market today.

The post How Logistics Can Be The Job Of A One-Man Army appeared first on Inc42 Media.

In the digital age, brands are continuously seeking innovative ways to connect with their customers and provide exceptional support. With 2 Bn+ active users worldwide, WhatsApp has emerged as a game-changer in the realm of customer engagement and support. 

This cross-platform messaging service has transformed how businesses interact with their customers, offering a seamless and convenient communication channel.

The ubiquity of mobile devices and the increasing demand for instant gratification have led consumers to expect real-time interactions with brands. WhatsApp’s widespread adoption and user-friendly interface have made it an indispensable tool for businesses looking to meet these evolving customer expectations. 

By utilising the power of WhatsApp, brands can establish a more personal and responsive connection with their customers, fostering trust and loyalty.

The Rise Of WhatsApp Over Time For Customer Interactions

WhatsApp’s versatility, ease of use, and high open rates make it an attractive choice for brands seeking to personalise their customer interactions. According to Sanuker, 68% of users surveyed called WhatsApp the easiest method of contacting a business, underscoring its popularity among customers. By using WhatsApp, brands can not only enhance customer satisfaction but also differentiate themselves from competitors by offering a more personalised and convenient experience.

WhatsApp For Customer Support

WhatsApp’s capabilities extend beyond simple messaging, offering a range of features that enable businesses to provide efficient and effective customer support. With the WhatsApp Business API, brands can automate messages, integrate with CRM systems, and handle larger volumes of customer inquiries efficiently. 

This API also provides features like message templates, chatbots, and analytics, enabling businesses to scale their customer engagement efforts effectively. For instance, KLM Royal Dutch Airlines successfully uses WhatsApp Business API to make booking effortless for customers, sending all booking details and e-boarding passes directly to customers’ WhatsApp numbers.

Personalised Communication

Personalisation is key to effective customer engagement, and WhatsApp offers a more intimate and conversational platform for engaging with customers. Brands can use customer names, reference past interactions or purchases, and provide tailored recommendations to enhance the customer experience. 

This approach not only fosters loyalty but also encourages customers to share their feedback and preferences, helping businesses refine their offerings. For example, banks can use WhatsApp to offer personalised financial advice based on individual financial goals and preferences, understanding customers’ financial needs and risk tolerance to provide tailored investment and savings recommendations.

Automotive Customer Engagement Through WhatsApp

Automakers are increasingly leveraging WhatsApp to enhance the customer experience and drive engagement throughout the purchase journey. Unlike the traditional ecommerce order placement process, automotive brands are using WhatsApp chatbots to provide customers with a more immersive and personalised digital experience.

Customers often face challenges when navigating the wide array of vehicle options and features. The process of visually discovering differences between car variants and accessories can be cumbersome on traditional digital platforms. 

WhatsApp chatbots offer a more intuitive interface that allows customers to easily compare models, explore customisation options, and even book test drives – all within the familiar WhatsApp messaging environment.

This streamlined approach helps automakers address common pain points, such as lost website traffic, high drop-off rates in form fills, and a need for more coherent communication between showrooms and customers. 

By integrating WhatsApp into their digital strategy, automotive brands can craft more compelling and cohesive customer experiences, ultimately driving higher engagement, lead qualification, and sales conversions.

The Current Landscape: Embracing WhatsApp For Customer Engagement

1. Efficient And Cost-Effective Communication: WhatsApp offers a cost-effective alternative to traditional communication channels like phone calls and emails. With its free messaging capabilities, businesses can streamline their customer support operations and reduce operational costs. Furthermore, the platform’s ability to handle multimedia content allows for more efficient problem resolution, minimising the need for lengthy back-and-forth exchanges.
2. Automated Conversational Experiences: Using the power of artificial intelligence (AI) and natural language processing (NLP), brands can create automated conversational experiences on WhatsApp. Chatbots and virtual assistants can handle routine inquiries, provide instant responses, and perform basic tasks, freeing up human agents to focus on more complex customer interactions.

According to a report by Grand View Research, the global chatbot market is expected to reach $102.29 billion by 2025, with a significant portion of this growth driven by the adoption of conversational AI on messaging platforms like WhatsApp.

1. Analytics and Insights: The WhatsApp Business API provides brands with valuable analytics and insights into customer interactions. By analysing metrics such as message volume, response times, and customer sentiment, businesses can identify areas for improvement and optimise their customer engagement strategies.

A recent study by Gartner found that businesses that effectively utilise customer analytics experience a 25% increase in customer retention rates and a 20% improvement in cross-selling and upselling opportunities.

1. Conversational Commerce: As the adoption of messaging apps continues to grow, the concept of conversational commerce is gaining significant traction. Brands are exploring ways to integrate commerce capabilities directly into WhatsApp, enabling customers to browse products, make purchases, and complete transactions within the messaging interface.

According to another report by Insider Intelligence, global conversational commerce sales are projected to reach $290 billion by 2025, with messaging apps like WhatsApp playing a pivotal role in driving this growth.

Conclusion

As the digital landscape continues to evolve, brands that embrace innovative technologies like WhatsApp will gain a competitive edge in customer engagement and support. By utilising WhatsApp’s features and integrating them with their existing customer service strategies, businesses can provide personalised, efficient, and cost-effective experiences that meet and exceed customer expectations. 

The future of customer engagement lies in the seamless integration of messaging platforms, artificial intelligence, and omnichannel support. By staying ahead of the curve and embracing these emerging trends, brands can foster stronger customer relationships, drive loyalty, and ultimately achieve long-term success in an increasingly connected world.

The post How Brands Are Using WhatsApp To Enhance Customer Engagement And Support appeared first on Inc42 Media.

Online gaming in India is on a rapid growth trajectory, largely driven by widespread access to smartphones. With a user base estimated at 570 Mn and nearly 9 Bn gaming app downloads in 2023, the sector has witnessed a remarkable Compound Annual Growth Rate (CAGR) of 28% since 2020. 

This exponential growth has attracted significant domestic and foreign investment. Affordable data rates and the COVID-19 pandemic have further boosted the popularity of mobile-based gaming, creating numerous opportunities for skill enhancement through online platforms.

Government Policies And Investment Potential

The Indian government permits 100% Foreign Direct Investment (FDI) in the online gaming sector, making it an attractive proposition for investors. Prestigious international events, such as the Commonwealth Games 2022 and the Asian Games 2023, have included medal events for e-sports and competitive gaming. This inclusion has granted legal recognition and boosted the sector’s credibility.

India contributes 1.1% to global online gaming revenue. The country’s technical workforce is well-equipped to develop, innovate and launch new online games, with its strong animation capabilities. This ecosystem not only encourages developers and entrepreneurs but also makes India an attractive destination for both domestic and foreign investors.

Regulatory Challenges

Despite the sector’s growth potential, regulatory ambiguity poses significant challenges. The Ministry of Electronics and Information Technology (MeitY) has only partially streamlined the regulatory framework for the online gaming industry through amendments to the IT Act 2000. However, the lack of clear parameters distinguishing games of skill from games of chance has led to policy uncertainties.

Along with the formation and establishment of three Self-Regulatory Organisations (SROs), the industry has been enforcing a code of conduct that mandates Know Your Customer (KYC) protocols and adherence to advertising standards to prevent misleading messages. Furthermore, the industry has also implemented analytics to prevent platforms from being used for money laundering. 

However, MeitY has yet to constitute a regulatory body to oversee and enable the registration of online gaming companies involved in skill-based games. Conversely, those involved in chance-based games register under the Indian Gambling Act in respective states. This fragmented regulatory approach has caused concern among investors, especially concerning online platforms.

Taxation Issues

Additionally, the recent government decision to increase the Goods and Services Tax (GST) on skill-based games from 18% to 28% has further complicated the regulatory landscape. 

Although the decision was made in 2023  the tax was instead applied retrospectively from July 1, 2017, thereby negatively impacting the online gaming industry. Adding to the industry’s woes, GST was imposed on non-goods and services activities, such as the money on the table in real-money games, which is merely a conduit to pay the winner after deducting direct tax. This has led to litigation and uncertainty, affecting further investment in the sector.

Potential And Future Prospects

India has significant potential to become a hub for developing and providing platforms for online gaming. The country has a robust base of clientele using gaming for both learning and entertainment. The government of Tamil Nadu has recently established a regulatory body to address concerns about addiction, as the reported incidence of internet gaming disorder among school and graduate students ranges from 1.3% to 19.9%.

Technology requirements include implementing filters to control the amount of money and time spent on gaming. Warning signals alert players, and persistent problematic behaviour is monitored using analytics and AI, supplying regulators with valuable data.

Technological Integration And Cultural Opportunities

Furthermore, technological integration such as using blockchain technology for data storage and the adoption of advanced analytics can further empower regulators to monitor abnormal behaviour among players. Thereby helping to identify addiction or laundering activities and enabling corrective legal measures.

India’s deep connectivity, penetrating even remote areas, and the rapid increase in smartphone penetration (currently at 60%) underscore the country’s potential. Additionally, India’s rich cultural heritage offers opportunities to develop local content, making online gaming an informative and educational tool.

Conclusion

The online gaming industry in India is poised for significant growth, driven by technological advancements and increasing smartphone penetration. However, to fully realise this potential, clarity, consistency, and coordination among various government agencies are essential to build investor confidence. 

By establishing a comprehensive regulatory framework and integrating advanced technologies, India can become a global hub for online gaming innovation, providing a platform for both entertainment and education. It’s time for decisive action to secure the future of this burgeoning industry.

The post Impact On Investments In The Gaming Industry Amid GST Uncertainties appeared first on Inc42 Media.

In recent years, the private equity and venture capital investment landscape in India has witnessed substantial shifts. Despite a decline in the overall deal value of investments in India, the number of deals in the startups has seen a considerable increase. 

May 2024 saw Indian startups raise $657 Mn through 100 deals, up 11% month-on-month (MoM) and 25% year-on-year (YoY)., However, this growth is not without its challenges.

The Rise of Governance Concerns In Startups

The surge in investments has been accompanied by an uptick in reports of regulatory non-compliance, impropriety and operational lapses. In 2023 alone, reports emerged highlighting governance lapses in at least five sizable Indian startups operating in areas such as edtech, multi-brand car servicing, technology and commerce, partner-model hospitality, food delivery etc.

To navigate the complexities inherent in the investment landscape, it has become essential for investors to effectively employ pre-investment forensic due diligence measures.

Corporate governance-related issues not only pose challenges for the businesses themselves but can cause significant financial and reputational loss to investors and other stakeholders associated with the businesses. To navigate these complexities, a majority of investments usually go through due diligence measures, before investors deploy funds.

Why PEs and VCs Must Prioritise Pre-Investment Due Diligence

In response to the evolving risks, investment committees have started demanding thorough pre-investment forensic due diligence to be conducted for internal compliance and to identify critical risks relevant to the target’s operating model and financial performance.

A forensic due diligence enables investors to identify areas of risk and obtain answers to questions which would typically not be addressed or may remain unidentified from other types of due diligence, such as a review of financial information and operating data. This is particularly true in the case of early-stage businesses, where such information is limited and not readily available.

Identifying Red Flags In Startups: A Due Diligence Checklist

Some key risks for early-stage businesses include reputational risk, risk of unknown political exposure, governance risks – such as the sanctity of numbers, unreported related party transactions, overstatement of financial and operational performance, and risk of unknown or unreported regulatory exposure.

Some indicators that should be checked in a well-executed pre-investment forensic due diligence include:

• Ambiguity regarding the sources of seed capital
• Understanding if the founder/promoter has a pattern of excessive control, weak interpersonal skills and rejects any advice given (including that provided by partners or investors)
• Changing industry or economic conditions
• Intense recent regulatory action in the industry
• Delays in the filing of financial statements / corporate records with the relevant authorities
• Frequent changes in statutory auditors or qualified opinions of auditors
• Availing statutory audit services from audit firms with limited experience, track record and reputation
• Appointment of family members and friends in important management positions, and second-tier management personnel lacking the necessary expertise, qualifications and experience
• High attrition of newly appointed senior executives (particularly in the first two years of employment) 
• A high degree of reliance on very few customers coupled with a high volume of related-party transactions
• Disproportionate concentration of business in certain territories or regions; and
• Any governance/ethical concerns associated with past business ventures or past employment of the founder/promoter 

In addition to protecting the financial interests of investors, proactive forensic due diligence also protects investors and their stakeholders from any reputational or financial damage arising from a sunk investment. 

In a market where information on early-stage businesses can be limited, pre-investment forensic due diligence acts as a sound safeguard, offering a comprehensive understanding of potential risks. 

At such a time, staying vigilant by using thorough due diligence for decision-making, is crucial to ensure the long-term success of investments in young businesses.

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