October - 2016 - issue > CEO Insights
Growth Pacing Startups
Rahul Garg, Founder & CEO, Moglix
Start-up ecosystem in India has seen an unprecedented growth in the last five years, particularly in the technology sector. Due to abundance of funds, not only did the existing start-ups have a shot in the arm but also more entrepreneurs got the required courage to take a plunge. The last two financial years, 2014 & 2015 have been the most glorious times in the history of the start-up ecosystem in India. The Indian startup ecosystem has witnessed close to $13 billion funding only into tech focused startups where 50 percent of this fund has been pumped into fresh start-ups with less than five years of incorporation!
This tide of growth has helped many startups mushroom at almost every nook and corner of the country leaving the density in the three top metros - NCR, Mumbai and Bangalore the highest! 80-90 percent of the startups are just the clones of the bigger ones who have successfully moped up huge funding and majority of them sparked the growth by utilizing the funds and creating quite an unsustainable growth model across the categories of startups. The moot question that everyone has remained elusive to, and silent about, is-what should be the best sustainable way to pace the growth? Be it boom time or doom time? The question finds relevance now like never before when the 'start-up dead pool' rears its ugly head around the corner. So what should be the growth hacking and pacing strategy for startups in different situations and SWOT segments?
Time: Boom Time or Doom Time?
Startups in boom time like 2014 & 2015 have risen to a level just by the sheer market wave, positive sentiments by the investors, unquestioning customers and curious employees. Market expansion in four metros in less than three months, growing number of people from 50 to 500 in less than two months, all has been signs of boom-time growth with or without a synchronous growth in topline. But shaky corporate governance, weak organization culture in a hyper growth period can lead to poor foundation for a sustainable growth! But, a calculated step in footprint expansion or increasing resources during doom time will make the foundation a stronger one which will provide the necessary support for sustainable growth for years to come! There is a popular quote: Best startups begin during the bust period
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