Startups looking to scale in a post-pandemic world have been focusing more on talent management, customer experience, automation, data security, innovation, and reducing infrastructure costs.
A thriving startup segment drives innovation, disrupts the status quo, provides new employment opportunities, and significantly contributes to economic growth. India's startup ecosystem is currently the third-largest globally, behind the US and China. The country now has 100 unicorns (startups valued at $1 billion or more), a number that is third only to the United States (1036) and China (253).
We spoke with some of India's top tech startup visionaries to understand what they're thinking right now to scale their businesses.
For startups, 2020 was a watershed year. Businesses began operating and functioning differently after the pandemic triggered lockdown. According to a KPMG report, The Indian Startup Ecosystem, this was when a large number of enterprises struggled, with many having to shut shop due to the pandemic. Numerous digital and digitally-enabled startups experienced significant growth during this period. Investors and customers alike have gained much trust in startups that were able to survive the pandemic.
In web-based startups, the CTO is the architect of the organization's vision from a technology perspective and enables the business to connect its unique idea with its users. CTOs are the brains behind almost every idea, process enhancement, and innovation in a startup. From developing products to providing quick and easy user interfaces and developing effective feedback mechanisms, they have a massive role in the success of any startup.
We spoke with some of India's top tech startup visionaries to understand what they're thinking right now to scale their businesses. Based on our conversations, we've compiled the top 7 priorities for CTOs in 2022 to solve business problems and deliver tangible business value.
1. Delivering Exceptional Customer Experience
Customers are the foundation for any business. They are the ones who drive revenue, and if there are no customers, there won't be any business model. Every company understands that they have to treat their customers as a priority and design their strategy around that.
And with the accelerated pace of digital transformation has pushed businesses of all scales and sizes to design every bit of their growth strategies around customer experience (CX). The CX has become more crucial for startups and unicorns since this X-factor has helped them succeed throughout the pandemic.
The foundation of any startup's business model is based on driving loyalty by ensuring a personalized and real-time omnichannel service experience. However, creating this highly tailored relationship with varied customers is not easy. One of the top priorities for startup CTOs is to develop exemplary practices and tools to collect customer feedback in real-time and ensure that their concerns get addressed promptly.
Gaining trust and delivering consistent experience by employing actionable insights, tools, and strategies is the foremost priority for most startups. Most startup CTOs – healthcare, education, automobiles, and insurance – have extensively leveraged new-age tools and technologies such as intelligent chatbots to deliver a stellar user experience.
"Customer experience has to be great. No matter how high our infrastructure would scale, our focus is on giving the same sub-zero millisecond latency and delivering a stellar user experience to our customers. For instance, when the lockdown happened, there was a massive surge in the traffic [of our website], but revenue was not increasing. But culture-wise, we were very clear about the customer experience, and even if the new leads were minimal and no new cars were getting launched, our brand has to commit to the same kind of experience to ensure our customers continue to have a positive impression of our brand," says Naveen Gulati, CIO, Girnarsoft (Cardekho).
The online car marketplace company uses predictive analytics to delve deeper into customers' browsing behavior to deliver a personalized and relevant user experience. There has been a greater understanding among startups that the customer experience is the way to strengthen a business's reputation, increase revenue, and enable product-led growth.
Leading a growing startup can be extremely challenging if there is an evident gap between what the customer wants and what is delivered to him. This is undoubtedly the biggest priority for CTOs as everything ensures that their platforms have a simple user interface, are easily accessible, available in different national languages, are intelligent, and can deliver personalized user experience and effective feedback mechanisms.
For B2B startups, the situation can be more intricate, as capturing timely feedback from their users can be a massive challenge. "We are inherently different from a business to customer (B2C) startup. In a B2C space, for instance, if the user is unhappy, they share quick feedback through different engagement channels (social media, calls, chatbots). If something fails or your quality deteriorates, people know it immediately. But that's not the case in a B2B space where deals take longer, sometimes years, to materialize. This involves a lot of people, processes, and budgets. The implementation cycle is long. Putting together everything takes a considerable time. So, from a tech perspective, you spent two to three months executing the deal and getting filtered feedback [as there are so many people and processes involved]. In that case, you are building something new, which probably was an issue for a customer six months back," says Monish Darda, Co-Founder and CTO of Icertis, a B2B SaaS startup.
Icertis says that the focus is on innovative and timely measures to capture customer feedback promptly and leverage several technologies to deliver an exceptional customer experience. "We leverage analytics and AI-based tools to analyze customer journeys and usage [such as visitors analytics, heatmap sessions recordings]," Darda adds
2. Attracting, developing, and retaining quality talent
People are the foundation of success for any company. In startups, the CTOs play a pivotal role in hiring, training, and managing a team of developers and effectively enabling them to do their jobs. Since most startups are heavily dependent upon technology to do new and innovative things and outdo their competitors, there is tremendous stress to attract quality talent, especially on the technology side, and then ensure they fit into their company's culture and have enough room to grow.
Unlike established enterprises, most startups operate with limited resources. The disruptive and expeditious environment of a startup may be so demanding for some employees who may not be able to adjust, especially if they get hired from large organizations. And hence it becomes critical for startups to have a solid talent management program – from hiring to onboarding people and do a periodic review of their processes by taking regular employee feedback.
Most startup CTOs would accord that talent management and having the right people by their side is of utmost importance and a big challenge that occupies a significant portion of their time.
"Talent management is undoubtedly one of the most significant factors for the success of any company. There is a scarcity of people who know how to put everything together by leveraging tech and helping businesses solve a particular problem. In today's competitive era, startups need to reinvent their ways of building new products and services constantly. And while technology empowers businesses to do things differently, much time goes into making people productive and then retaining them," says Satya Kaliki, CTO, Infra. Market.
The B2B construction startup company is extensively focused on demonstrating its culture and the value it brings to the economy to the new age generation.
While many strongly focus on market-defining products and services, startups sometimes lack the necessary talent acquisition and retaining skillsets to attract and manage their talent. In addition, talent poaching by competitors and poor work-life balance could be major stumbling blocks to talent management effectiveness in any organization.
"Having a great product or an idea helps generate tremendous interest from investors, but scaling any business requires talented and hardworking people who should also believe in the company's vision. Your talent needs to be groomed regularly and ensure that they learn new things. Technology continues to change; say, when I was a developer, what I would have done may not be relevant now, so that means I need to learn something, so that means I need more people who can do these things," Kaliki adds.
The competitors and large enterprises focus on poaching startup best talent to add agility and innovative mindset to their teams, a trend that has negatively impacted startup companies with limited budgets. "You talk to any CTO of a startup today, and more often than not, he would point out hiring and retaining the right talent as the biggest focus area and a pain point," says Ajay Tiwari, CTO of HealthKart.
To address the above issues, hyper-growth startups focus heavily on leveraging hiring and assessment software tools, developing exceptional employee onboarding programs, getting feedback from new joiners and existing employees, and setting the right culture and talent practices. Some startups are also offering stock options, exciting training and development programs, and term-based bonuses to hire top talent and retain them for a longer duration.
3. Data security and governance considerations
Another top priority area for startup CTOs is to secure data access of their users. Startups are innovators who constantly strive to introduce revolutionary products and services to increase their market share and attract a new customer base. There is so much happening in systems and processes that generate tons of data at rest and in transit.
This data continues to grow exponentially and forms the base for them to drive monetization opportunities. However, most startups lag behind their large enterprise counterparts regarding cyber maturity, leaving them one of the most vulnerable segments to cybersecurity risks such as phishing, ransomware, malware, and data breach. Over the past couple of years, many Indian startups have witnessed recurring data breaches. This has put tech leaders on edge to constantly monitor and implement the best data governance practices and identify who owns data governance to secure data from unlawful access. For CTOs, it has become critical to see the larger picture and redo and redesign their cybersecurity processes by spending quality time with their network engineers and teams.
"People, tools, and processes are the key components of robust cybersecurity architecture. Best security practices are driven by culture and continuous education, whether a startup or a large enterprise. It can not be accomplished in an ad-hoc manner. And that's what we've also learned over the last many years," says Ram Awasthi, CTO, Gaana.com.
Awasthi adds that they have a center of excellence and collaborated with many researchers, who keep on doing vulnerability assessments of the company's applications. "We spend a considerable amount to design and develop strong cybersecurity practices and make our people learn the importance of adhering to it," he says.
CTOs of Fintech startups, in particular, have been spending an enormous amount of time preventing data leaks, information theft, and application downtime. According to The winds of change - trends shaping India's FinTech sector, a report by EY, data leaks, platform downtimes, and information theft has become quite rampant in the financial services space, and developing a reliable mechanism to protect data needs to be taken up as a top priority by startups.
Developing a robust mechanism to secure data has become critical with a massive uptake in real-time payments, on-demand loan disbursement, peer-to-peer lending, and buy-now-pay-later. The fintech CTOs will have to create a clear action plan to control the risk and comply with regulatory data-security requirements, which are becoming tough day by day.
"Data security is the core of whatever we do, and there are many innovations that we are undertaking in terms of data processing, incorporating artificial intelligence, and switching to machine learning technologies. Our business objective is to be the most competent, honest, and transparent Financial Services company in India for individuals and SMEs," says Rachit Chawla, CEO of Finway FSC.
4. Unleashing automation at scale
Process automation is next on the list of priorities for startup CTOs. Automation has many benefits for startups, including executing ideas and delivering results quickly. However, choosing the wrong processes or a lack of goal clarity can lead to a huge failure of automation. The CTOs of startups today spend considerable time identifying the best ways to automate complex processes and monitor incongruities in real-time to get the most out of their digital transformation efforts.
"People, process, practice and platforms are the four critical pillars for any organization. We try to do many things in these four areas. There are a few areas where we need collaboration from others also. So here we are, trying to solve some of the problems from the platform perspective, making it robust in every aspect," says Rana Pratap Singh, VP of Technology and Digital Transformation, Pinelabs.
Singh adds that Pinelabs has been leveraging and embracing Robotic Process Automation (RPA) and BI dashboards to optimize its processes and get holistic insights from its operations.
Most startup CTOs agree that automation gives them greater flexibility, speed, and an opportunity to scale faster. However, the challenge is identifying which part of the [or the entire] process to be taken up on the SaaS platform first and to get their people ready for the transformation. Especially if everything is going well and the startup is in the early stage of the growth cycle, and things are changing quickly.
"Identifying and optimizing the right processes for automation is the most tricky aspect. One of the things that we tried earlier in the cycle was automating key processes. Given our growth, so many changes were happening that it was becoming tough to get anything automated. By the time you automate something, the chances of changes are high, and if there is a lack of coordination, processes look fragmented [after automation] and have no value. So we took a call to solve this challenge by throwing this test at our people. We scaled up every team three times and focused on doing certain things manually in a people-intensive mode for at least a year," says Vineeth Narasimhan, Founder and Director of Kristal AI.
Narasimhan reckons that this experimentation has helped the company see the ROI in a shorter span, and this exercise helped them identify the processes that can be automated cost-effectively.
"Even if there is attrition, changing processes overnight could be extremely cost-intensive. Our teams also identified processes that were getting more complex and expensive through manual means and offered maximum room for growth through automation. So, that's when some of the teams went ahead and moved to the next stage, saying that let us document everything in an unambiguous manner so that we can automate it effectively. We are at the second stage currently, where we are focusing on spending the next six months just documenting, creating Standard Operating Procedures (SOPs), all the process flows across the board, and then one by one, we'll start taking up the more critical ones for automating," he adds.
In addition to the above example, the startup CTOs are conscious of the fact that fear, regulations, and preparedness are the other factors that can break any organization's automation journey, and hence the focus and priority are on driving the culture change proactively, defining the ownership of the project and clarity of objectives for implementing any automation in their ecosystem
5. Unlocking the power of data and emerging technology
Businesses compete on data today because data is the most coveted currency. Data analytics and tools based on emerging technologies such as artificial intelligence (AI) and machine learning (ML) help businesses give the much-needed insights to identify consumer preferences, understand problems, spot trends, and make themselves future-ready for any crisis or an opportunity.
For startup CTOs, investment in data and emerging technology has always been one of the top priorities. Startups such as Licious, Shaadi.com, Byju's, and Moglix, among others, have been building their exclusive business models by tracking and monitoring customer feedback and analyzing their user behaviors.
"The focus is on how do we assimilate data. There are different stakeholders involved in a particular transaction. There are customers, suppliers, and internal teams sourcing data, and then financial data moving to and fro," says Puneet Kumar, Vice President of Products, Moglix.
"We have given a lot of ownership and responsibility to individual product owners to drive adoption and solve problems in their cohorts. There are products on the customer and pure supplier sides, and some solution has to be deployed on the warehouse side and logistics front. The key questions for any startup while building their data strategy are: how to bring all of that data together; how to generate insights to go to the next level?; and how to leverage those data insights and consolidate them? That's the challenge and the focus area," Kumar adds.
The Noida-based B2B startup is experimenting with various technologies to manage data and the spikes between the business cycles while providing a consistent user experience.
Besides AI and ML, some startups such as Pepperfry are also increasingly focusing on technologies such as augmented reality and virtual reality (AR/VR) to enhance the shopping experience of digital consumers.
6. Product innovation and diversification
Throughout the pandemic, every company learned how important it is to keep on innovating and diversify their product and service offerings. Many businesses now realize that if they want to stay in the game for the long haul, they must develop new, differentiated ideas faster and diversify. Startup CTOs are concerned with visualizing and constructing the future for their digital businesses.
"For the next year, if we look at growth, we are focusing on creating a new brand while at the same time scaling the current brand that we have. So obviously, we'll keep increasing the top funnel, focusing on conversion, creating new brands, and diversifying our growth offerings," says Ajay Tiwari, CTO, HealthKart, India's largest omnichannel specialty nutritionist platform.
The company says that it is adding new products and services by encouraging an entrepreneurial mindset. HealthKart has an Entrepreneur in Residence (EIR) model under which a designated brand head acts as an entrepreneur and is responsible for building a product or a service. "We've created this framework so that until your [of EIR brand heads] hypothesis is proven to a particular level, we won't encourage them to have an in-house technology team. Under the EIR model, we'll not invest in having an in-house technology team and infrastructure and ask the responsible teams to use as much as low code and no code and SaaS software first to prove whether their brand or strategy will work," Tiwari adds.
Indian start-ups in numbers
Source: Indian Tech Start-up Ecosystem: Year of The Titans, Nasscom-Zinnov
7. Reducing infra cost
Cloud platforms offer an excellent opportunity to grow, gather much-needed intelligence through specialized intelligence tools, extract operational efficiencies and deliver value to the end customer. However, their [IT] maintenance cost can prove costly if not monitored or judiciously. In the age of rapid innovation and re-invention, the CTOs of startups focus on diversifying their revenue streams while also linking their infrastructure cost with performance.
"We've to reinvent ourselves during the whole COVID period. For instance, our primary business was offline, which suddenly became zero. So, we built a complete online digital fitness solution. Now, this is a monetized service, and the goal is to make fitness accessible to everyone, say to a homemaker who can't go outside their house. And it would be best if you made it very engaging, and that's where the whole technology comes into the picture," says Kunal Chourasia, Head of Engineering, Curefit.
Chourasia adds that while scaling up, the company realized that it has to keep the price low, say, Rs 99, for which a consumer buys the paid subscription of an OTT platform. "Bringing down the infra cost is my key focus area to make my service more accessible to a more extensive set of people," he adds.
Startups with an expanded horizon of services emphasize the transition from monolithic to microservices architecture. CTOs would continue to develop effective cloud strategies tailored to their specific business needs in the year ahead.