Small Digital Start-ups Identify Raising Fund As Biggest Challenge

Ahead of the release of Government of India’s Start-up Policy, the Internet and Mobile Association of India [IAMAI] and IMRB International conducted a first of its kind survey of 785 small digital start-ups across the country. The purpose of the Survey was to identify their challenges in the next one year.

14 jan 1

Base=785: Source: IAMAI-IMRB Start-up Survey

Growth, Talent Management and Fund Management are the top three challenges perceived by the small start-ups.

The larger parameters of the challenges included the following subcategories:

Key Business Challenge Sub Categories
Growth Growth of the sector vis-a-vis the economy
Growth of your company vis-a-vis the sector
Growth in terms of market-share
Talent Management Lack of skilled personnel
Attrition rate/latent retention
Managerial skill vs. Technical skill
Funds Management Challenges in raising fund
Revenue expenditure mismatch
Challenges of monetisation of business model
Excessive competition crowding out funding
Competition Increasing customer/client base
Creating value which has relevance in the market
Concentrating on innovation
Technology/Design Ensuring optimum use of technology
Balancing Quality and Growth
Using contemporary technology in an efficient way
Regulatory Framework Lack of reforms in regulatory framework
Present regulatory framework is market distortionary
Regulation has loopholes/is inconsistent
Intellectual Property Rights Patent/Copyright protection

 

Base=785: Source: IAMAI-IMRB Start-up Survey

In order to get a better understanding, respondents were asked to rank these challenges. A break-up of the larger parameters indicate the following top 10 challenges.

14 jan 2

Base=785: Source: IAMAI-IMRB Start-up Survey

While challenges in raising funds remain the primary concern, innovation and lack of skilled personnel are major pain points for all of them.  Interestingly, while all companies are concerned about raising funds, issues such as regulatory framework and monetisation of business model is not much of a bother at this stage of their operation. This is reflective of the fact that the government’s move to boost funding and develop a robust ecosystem through a series of programmes is a step in the right direction as far as supporting the small digital start-ups are concerned.

The survey was conducted across the startup innovation corridors in India. The sample break-up of the cities is given below:

14 jan 3

Base=785: Source: IAMAI-IMRB Start-up Survey

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“Thinking Aloud” reflects the emerging trends and varied outlook of the rapidly evolving internet and communication sector. An IAMAI publication, this is a part of the market education initiative of the association.


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