Getting Bigger, Faster
Date: Monday , November 24, 2014
SAP SE (NYSE: SAP) is an European multinational software corporation engaged in making enterprise software to manage business operations and customer relations. Headquartered in Walldorf, the company has a current market cap of $64.1 billion.
India is playing the major role of a dynamic destination for entrepreneurship in the present startup boom. Thousands of professionals are taking the entrepreneurial plunge to pursue their dreams after witnessing the success stories that have emerged around them; highlighting that India has the skills and innovation potential to continue with its tag as the Silicon Valley of Asia. However, the challenges faced by these young, innovative startups in their journey towards becoming a mature and stable organization are numerous.
During the initial period, startups struggle to prove their idea, their business model and their credibility with their target customers in the face of very little funding and mentorship. Once they cross this hurdle, they struggle with problems of scale, namely acquiring more customers, maintaining a healthy working capital in the face of long sales cycles, growing the organization and making investments on technology, infrastructure and others to scale along with the business. The challenges are so steep that according to Statistic Brain, 25 percent of startups will fail within the first year. This rate goes up over time, with 71 Percent failing by their 10th year.
However, true to the spirit of innovation, the startup ecosystem has evolved to address the challenges faced by early-stage startups in order to ensure that innovations move from concept to market. The advent of incubators and accelerators has been one of the models that has responded to these challenges which presents a solution through the introduction of mentorship and experience to startups in their nascent stage. The result is a clear cut refinement of product and business strategy which increases the chances of success of the startup in a crowded and competitive industry. Venture capitalists have also stepped up to support startups which is proven by the fact that technology and tech-enabled companies in India have raised over Rs.4052 crore ($675 million) from venture capitalists and other investors in the second quarter of 2014 which is a 35 percent growth over the previous quarter.
Another recent model is the strategic partnerships between startups and larger corporates. The availability of capital (financial and technological) is a major roadblock to the success of a startup which can be overcome through the partnership with a large corporation which provides for resources and technology. Apart from infrastructure, the partnership also provides for the aspect of credibility startups require in the market in order to increase their visibility.
At SAP, we believe all these different models have their merits in addressing different needs of a startup, and have consequentially, come up with a unique program that combines elements of these different models to help startups succeed. This program, called the SAP Startup Focus, is targeted at startups working in the big data and real time analytics space. It is a virtual accelerator program that supports a startup in the journey from concept to market, providing technology resources, mentorship, go-to-market support and accessto customers and venture capital. The program launched in late 2012 and has seen membership of more than 1500 startups, 117 solutions built on the SAP technology platform and more than �10 million in revenue generated.
Some of the salient features of this program are: 1. Complimentary access to technology resources and mentorship : When the startup joins the program, SAP offers the startup complimentary access to SAP\'s scalable in-memory platform HANA, on a flexible cloud infrastructure to build their products. The benefit of building on the platform for the startup would be inherent scalability, performance and simplification of the technology along with strong support from an established enterprise player like SAP.
2. Complimentary Go-to-market support : Once the startup has their product ready for commercialization, SAP works with the startup in go-to-market activities including marketing and sales collateral creation, deciding on solution deployment models, guidance on pricing, marketing promotion in key SAP events and partner events, providing exposure to the startup through SAP properties and media properties and showcasing startup solutions in the SAP marketplace, an app store for both SAP and non-SAP applications.
3. Access to other services and venture capital : For startups who engage with SAP successfully as part of the program, SAP refers startups to partner venture funding organizations including SAP Ventures.
MIBS Pvt. Ltd (MIBS) based in Bangalore, India is one such example of a SAP Startup Focus participant that leveraged the advantages of the program to address the challenges faced by healthcare industry�s supply chain in the country. MIBS built LogipleX, a supply chain intelligence solution that leverages the real-time operational reporting capabilities of SAP HANA to provide a solution to the problems of timely replenishment of drugs on demand at health centers and the need for an optimized delivery and distribution model. It enables the customer to map drug supply based on actual consumption, to provide real-time inventory access and to ensure effective utilization of warehouse resources and increased supply chain visibility for both vendors and distributors.
Therefore, the program allows for startups to focus on building innovative solutions to real looming problems rather than worrying about managing the underlying infrastructure and the lack of mentorship. Startups can capitalize on these opportunities in order to move from concept to market and grow their business.
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