GMCS-I

FACULTY: CA PAVANDEEP DUGGAL

SURVIVAL STRATEGIES OF START-UPS

Sir Charles Darwin, a renowned name in the field of human evolution came up with theory of
"Survival of the fittest", which not only stated how humans came into being but also
highlighted the fact - who would ultimately survive.
The current start-up scenario is no different than fight for survival. Cut-throat competition
coupled with ever-dynamic business environment is both an opportunity and a threat for
newbies in the marketplace.
Rich in USPs and never-thought about business models in hands, many start ups are facing
the heat on various fronts. The consequences of business arena difficulties are a grave threat
to survival.
Firstly, one of the biggest hindrances in the survival of any start-up is the issue of funds
generation. An idea to become a successful business model requires capital investment, manpower, feasibility and sustainability of business idea. In order to mitigate this issue, start ups
focus on raising funds through seed funding, crowd funding, venture capitalists, angel
investing et al. One of the recent developments in Capital Gains, which allow investment in
start ups to save capital gains tax can also be used as an additional source of funds by the
ventures in coming years.
Secondly, competitive rivals are also a great threat to survival of new ventures. Classic
example of how to avert competition is given by Paytm's model of business. In the initial
years, the aforesaid business idea did not focus on shelling out exorbitantly on marketing and
used the funds on giving cash-back facility to the users instead. As a result of this gimmick,
Paytm has surpassed other online giants in the race of breaking even in the past year.
Thirdly, it is imperative to quote that more than just a business idea; the success of new
ventures depends on continuous iterations, bench-marking, and hunger for neophility. After
laying of hundreds of employees, Zomato; again an online food-menu portal out-shined it's
contemporaries by breaking even in the year 2015-16 and emerged as a winner in start-up
category to exemplify survival and growth.
Fourthly, the inflow of business ideas is humongous. However, not many of them are
sustainable and hence are destined to die a slow death in near future. Pune based group of
friends launched an online marketplace called Tokri in the year 2015 which failed to prove
itself in testing waters. Unreasonable delays in product deliveries, malfunctioned online

portal, mobile application; which did not support saving user credentials were some of the
many flaws which resulted in gradual decline of business.
Survival strategies are many and so are threats to survival. The billion dollar question is how
to minimize threats and weaknesses by employing right strategies and emerge as a market
leader in years to come!