 Good evening, ladies and gentlemen, and welcome to this amazing session at Entrepreneur Awards 2020. In order to confront the rapidly evolving world around us, you need to have a system in place to adopt the changes. And that's what we are going to do in this session, how business and markets are changing. I have been in an esteemed panel, which are also part of our jury at Entrepreneur Awards. So welcome, Gaurav, Samet, Kathaar, Chama. Good to see you all here. Thank you for joining us today virtually. So we have 30 minutes with us. So let's get started. So since all of you are part of the jury, firstly, I would like to know from all of you, what was that one striking factor which all of you were looking for in the winners while you were assessing the nominations? We can start with you, Samet. I think the common theme across probably to me was innovative ideas. You know, as more and more we see. So my theme for this session perhaps is adapt and innovate. Adapt is mostly stemming from the current or where crisis we are in. So fundamentally, I think adapt and innovate is something that each company needs to kind of invite in today's environment. The common theme to your question is clearly innovation. And ideas are clearly, I would say a majority of them would have ideas which are completely new and extremely something which can be time tested and can make a big impact. So that's something that I think is really common among the ideas, among the entrepreneurs and the deals that you shared. Sure. So you're also an investor and share the same vibe that Samet. So what have been your thoughts? So my thoughts were actually about survivability. I think what Covid has taught all of us right about now is that good times will come to an end and they usually come to an end in a very abrupt fashion. And your ability to actually survive all these crises is something that's a true test of an entrepreneur. One of the things I actually loved about this particular panel and the jury part in particular was the fact that the bootstrap startups actually had the highest number of nominations that we've actually seen. So while the rest of the world actually sort of fetishizes now raising capital multiple times over, the bootstrap entrepreneurs, the person who can actually create it up, create a large business, firm scratch and actually raise it up without getting external rounds of funding. These are the two heroes of the entire startup ecosystem. And these are the people who should also be celebrated when it comes to that as well. And along with this, the fact that traction is something that's proving itself to be great, proving itself to be a comparative mode as of now. Because ideas are great, everyone has ideas, but the ability to translate those ideas into execution and to maintain the speed of the execution is actually what's going to determine the success of a company or not. So that was actually one of the lens I used when I was actually going and reviewing all these companies and actually coming up with the final scores. And like both the panelists said, I think an interesting set of ideas that came out. To me, I think clearly most of these ideas were relevant and of course, that's what I was looking for relevance in some sense. I think there were two other things that I was looking for, just wearing the hat I do of an NBFC that works with many, many new financial institutional models. One was shelf life to say, is this idea really relevant today? But is this really going to be relevant six months, one year, five years, 10 years down the line? Because I think to me shelf life is very, very important. You can have very quick, nice, good ideas that you get off the ground, but the kind of effort it takes to really get a new business off the ground is only worth it if there is shelf life. That's one. The other thing, of course, I was looking for is scalability to say, the model makes sense. Now it's got shelf life, but how big can this grow? So I think those are the two things that I was looking for. And there were quite a few interesting ideas that really fell in these buckets. So indeed, very interesting. As a lot of startups are hearing us today in the evening. So what would you advise them? How can business adapt to a rapidly changing world? I'm sure there must be a lot of industry companies which he was guiding right now. So what are your piece of advice? So the way I see is that, sort of that the broadly what we are seeing is that they're a mixed bag of trends, right? I mean, there's hyper acceleration of certain hypotheses. There's deceleration in certain sectors, then new sectors which are emerging, and there are perhaps sunset of few of them. So one has to now try and focus and pick and choose which are the sectors which are going to be the future sectors in the medium and long term. A few trends that broadly you see is I have about four or five themes in mind, which I'll probably rattle out very quickly. One is some are known and probably some are not as known. So first probably is edtech. So we see a lot of things happening in edtech. I feel very fascinating things. One of the stuff that I saw was VR technology being used by tier two, tier three students to see how a chemistry lab works. That's quite fascinating to me. So I thought that bringing knowledge to cities or students since it is beyond tier one is becoming much more relevant. On the other end, we also see large companies getting a lot of traffic, 95% of which is free and not paid. How do you monetize them? So these are some of the problems that companies are facing. And perhaps there could be, of course, they are on problem solution mode and some of them could be charging, token of, let's say, one rupee per session and stuff like that. So something that they'll have to have to figure out. Overall, digital adaption has gone up significantly, but where is affordable cyber security for, let's say, small to medium companies or even households? Households also need cyber security today, which probably wasn't required or even thought about six months ago. Globalization is a theme that I have in mind. Countries are trying to indigenize themselves. There are people who care about the environment. Where are the 100% biodegradable packaging material, for example. And there is another theme in my mind, which is wellness and immunity. But the question is, consumers don't know what to consume and what form to consume. A lot of education is required in a lot of awareness building is required in this sector. So I think it's important to focus on opportunities in the sector that you are in. And there are a lot of that coming to you. What advice would you have for a set of startups in your portfolio and the startups that are coming to us right now? So I think the first and foremost is the fact that what this entire body that everyone is going through now is actually a learning experience for everyone. It's important for everyone to make sure that the hygiene factors in terms of maintaining enough cash in the bank will last out operations for a period of at least six or nine months. And the basic fundamentals of a business that a lot of people have actually forgotten about are everyone's re-learning as of now. They actually continue these particular practices as they go forward. That becomes number one. Number two, when it comes to start of the moment you raise around the funding, that initial exuberance of actually raising that money and starting to spend that money on a larger office, on hiring, on hiring a larger number of people, doing a larger amount of PR, etc. They need to be more muted when it comes to this. They need to be more circumspect about how they actually spend the money as they go forward. Because if anything at all, even the offices are not going to be opening up anytime soon. And they need to actually let go of some of these whatever, what I actually like to call white elephants on your balance sheets or on your profit and loss account. This is something that all entrepreneurs need to actually look at as they carry on business. And the third part about this is the human cost of actually running a business is something that most entrepreneurs aren't aware about until actually becomes a little too late. You've actually seen a spate of very large startups as well who raise billions of dollars of funding, letting go of employees, letting go of employees just because business was disruptive for a period of 30 to 45 days. Now, the question they should have asked themselves is was it important for them to even hire those particular employees in the first place itself? Because moving out, sorry, letting go, letting go of people actually has a dramatic impact on their psyche and their mental health as well. So we need to be more cognizant and sensitive about the hiring and the firing process that all the companies and all entrepreneurs are actually doing it. I think this particular, these are the sort of sobering lessons that people can actually carry forward and go through. Another important thing is if you are, if your entire business model is contingent on one means of engagement and the means of engagement actually goes away. So what we've seen when, it's what we've actually seen as of now was a lockdown and everything that's happened. It's important for you to make sure that you have a plan B, a plan C, a plan D and actually sound all this out with your investors, your board, your advisors. So when something actually goes wrong, you're not scrambling in the draft trying to figure out what we need to do next. You already have a plan in place, can use a particular plan as I'm executing from there on this. Sure. Shama, coming to you as an entrepreneur, how you adapted to the changing times? That's right. You know, so I mean, I operate in the financial services space, that has been collected quite severely as you can imagine. But however, I do feel that you would really see what is the impact on business and markets only after the storm recedes. And that's going to take a little bit of time. So we are not going to see exactly what the consequence of, you know, the current situation is going to be at least for a couple of quarters is my sense. And once that happens, in some sense, we will see who the survivors are. And this is truly going to test the whole thesis of survival of the fittest. So I'm looking forward to the next couple of quarters to see what happens. But clearly, there are a few learnings and particularly when one looks at entrepreneurship, I think some of these learnings are very, very valuable. I think some things will change, some things will never change and some things should never change. And I think there are lessons in terms of what should change and whether lessons in terms of what shouldn't change a COVID or no COVID. And let me just kind of talk to some of those thoughts. I think it's very clear. And, you know, of course, it was very clear to us all along that the world was going the digital way. I was hoping that we would have learned the lessons around demonetization in terms of how important it was really to get the whole digital play, particularly in the financial space right long ago. We didn't get bits and pieces right, but I don't think we got the end-to-end, you know, kind of supply chain as it were in the financial sector correct then. I think right now technology is no longer about efficiency, technology is about survival. And companies that don't really sort of bring technology to the forefront of their business are going to have challenges in terms of survival. And it's very clear, you know, I mean, I'm looking at some of the discussions that happened within my company, you know, I mean, it's just totally amazing how the technology officer today is part of our business discussions. And that's how important technology is going to become. It's not about technology as a supporter or an enabler, but technology as a core of business. I think that's one thing. I think the other important thing and this, what I, as I said, I think that should not change even as we build new businesses, even as we, you know, kind of try the entrepreneur route and strive to quickly succeed or quickly fail. Is the underlying assumption that if I'm spending time, money, efforts, capital, I ought to be building a business for the long run. And if I'm building a business for the long run, if I'm building a business that's really going to significantly scale and give sort of returns over the long run, then the fundamentals of the business are really key. And we are seeing that even in the current environment, I think the flight to quality, the pursuit of high quality institutions, which means institutions that are well governed, which are transparent, which follow all the sort of, you know, I'd say core fundamental pillars of good governance are the institutions, young, old, middle-aged. I don't think this is ever going to go out of flavor. And I think it's even more clearer to me in the last few quarters that, you know, building high-quality institutions is an important thought process for entrepreneurs. And somehow, when one goes on the entrepreneurship path, what happens is that we spend the initial years trying to figure out what the business is and then say, okay, fine, once I'm stable, then I will start thinking of institution, I'll start thinking of good governance. But to me, it's very clear, good governance is the fundamental, it starts with day one or even before if one way. And to my mind, that has been very, very clear in this last couple of months. The last point, I have a lot of things to say, but I'm going to stop here and, you know, so that we have enough time for all the other panelists to contribute as well, is just simply the need for being versatile, the need for really, really having resilience built into your business model. You know, it's never been more evident before. I think whatever kind of businesses we build, they cannot be hard-coded. You know, the fundamentals need to be hard-coded, but around the fundamentals, we should be able to move the bits and pieces and make things work, even in an environment that dramatically changes while the business builds up. So let me take a pause there. So that's coming back to you again. I was moderating another session where we had Mr. Raman Roy, who was saying that as an entrepreneur, he's top-advised for all the investor companies to conserve cash even these times. So with both of you and Shamathu as an entrepreneur, would you guys agree to it? I mean, is it the top-most priority, which as an investor, you would be telling to your investing company and as an entrepreneur, you would be so confident. The moment Govind also hit all the companies, the first thing we did is we actually started phoning a number of them. We started analyzing the finances together, okay, what can you quickly liquidate and how quickly can you actually start accumulating cash on your balance. One of the things we also realized and this is something I think most investors, most investors who are investors and start-ups actually see a number of start-ups are extreme when it comes to sales, but they're really horrible when it comes to collections. I'm sure Shamathu will have some great insights into that since the entire business model is actually built upon the collections part more than anything else as well. But normally what happens in these particular sales is a large amount of money actually sitting as debtors of money that's not been collected or a large amount of some, there are three primary I would call pools of cash that are sort of actually untouched by the entrepreneur of most start-ups. Number one are all the sales that they haven't been able to convert and receive the cash for. These are all the receivables that are actually due to them. Number two is actually due from the government. It's basically either income tax refund, your GSE refund, etc. A number of them have actually misapplied the rates or they haven't followed the best practices that other businesses actually do. Due to which close to about 10% of their gross proceeds are actually stuck with the government and actually needs to come back to them over the period of time. In a certain situation like this, that amount of money actually either makes or breaks the enterprise when it comes to. And number three is usually the security deposits, rental deposits and other money that's actually captured with their vendors and with anyone else as well. The moment COVID actually hit, we actually start down with all our entrepreneurs because we've been tracking tracking their financials and everything for a long period of time. We actually started working with them to help liquidate some of these particular pools of capital there. So they actually start sitting and convert all that to cash. So as much as conservation of cash is important, the thing is even the conversion of any of your assets to cash actually becomes a very essential component of your business as it goes about. Because I think what it's or what since demontization, what everyone's actually realized is the moment any of these shocks actually happen, the moment you're sitting on a large amount of cash and talk about cash in the bank or cash in the hand, demontization, I think taught us all that that's a horrible, that's a horrible thing to have. The moment you're actually sitting with cash in the bank, then you would be able to weather almost any single crisis that actually comes up. Because when everything, because when everything actually hits, when everything actually hits the roof, like that point of time when you're actually just grasping and everything, the entire world's collapsing around you, that cash actually becomes the most effective buffer for you to actually continue operations and for you to actually survive the particular period of especially on these endemic shocks. But the entire system is actually in a state of shock and nothing's actually happening. It took the government and the RBI have done some bold measures in terms of trying to get liquidity the entire system. It's debatable about how effective that's been witnessing the effects of that play out over time as well. But this essentially converting whatever assets you have to cash as quickly as possible and making sure that learning and making sure that whatever you have to realize in cash, you realize in cash at the earliest. This in turn will actually help your business to scale up to a much, much longer period. Yeah, so you know completely agree with the thought that cash needs to be conserved. So what's really happened in the last six, eight funds is that a large number of companies in the startup space didn't have a sufficient cash runway. Which can give them security of sustainability, keeping their initiatives on. And that has really hit them very badly. So you know companies had runway of three months and no companies had runway of you know probably two months and so on and so forth. So then they had to sacrifice on their revenue initiatives and new initiatives for growth. But what has happened is that it's opened up minds of entrepreneurs to looking you know thinking laterally and saying that look how can we really still survive manage this situation and period amount of its strong. And that's the beauty of entrepreneurship. I mean I would say COVID has been one of the problems that the entrepreneurial team has faced. Perhaps they face this kind of situations maybe with less intensity, day in and day out. Generally there is crisis, especially in the early stage startup of one kind of the other or the other. So PK, people have raised money in these situations also of course there are less willing investors if it's the first time institutional raise and stuff like that. But people with you know investors on the cap table have been able to raise money because they know each other well. So I think it's opened up multiple ways of thinking and alternate ways of surviving for the entrepreneurs. Of course I do think that maintaining reserves of cash is extremely important. And particularly in the financial industry, I mean most NBFCs and financial institutions operate on leverage. And leverage of course in some sense has a direct impact on your harrowing. So the more levered you are the more you're sweating your equity and the better your harrowing will tend to work to look. And hence it is very very attractive at some stages to really sort of push on that leverage pattern and operate at the best or the most efficient leverage. But to my mind is seeing that there are institutions and particularly younger institutions, you know younger organizations who have managed to go through this current situation fairly well. And I think we can stand out for them. One is that they were conserving liquidity. They were not aggressively leveraged. Part of it could also be because the financial industry has been going through a bad time. There has been a liquidity crisis. So even if they did want to lever perhaps they wouldn't have been able to. So that was the situation. But you know maybe it's been a boon and disguise for the industry. So I think and institutions that were not very very highly levered were in a better position because you know the moratorium was implemented. There was no choice in terms of providing moratorium to your borrowers. But it was not always very clear that your lenders would provide you that moratorium. So it was not a mirrored moratorium in that sense. So liquidity was very important. Maintaining cash reserves was very important. And I think the next important thing was really making sure that you're operating at the optimum optics. And I can't underestimate the importance of optics not during the times of crisis but during the times of normal operations of business. I think optics is something that one looks at when in steady state. And I think in today's world no organization can really effort periods of time when they don't really worry about optics. Opics is the stuff that you need to worry about every day. And it's really sort of top of mind as far as you're concerned as an entrepreneur in particular because you may not always have those deep pools of capital to tap into at all points of time. You control your optics and you're in a much better position to ride situations like this where you don't have to do crazy things like letting go of thousands of employees just because you can't survive for the next three months or so. So I think these are two really, really important factors that are showing up well for companies that are really managing to try this current situation rather positively or rather, I would say, strong. So Siddharth, this question you can answer, I know that you can also question. This question is from Manikant Singh. He's asking, during this cop period, we all have a perception that only necessary products will be consumed by the consumers. And all the other requirements will be postponed for some months. So what do you think about the same and how the business and the luxury segment should market? No, not true. So I think, see, essentially, like at the very inception of COVID, I think everyone has gone and stopped to open their doors and their supplies and festivals and everything during that. But the thing is that especially spend also had taken an initial hit, but the moment things started getting better and people started getting accustomed to the entire COVID situation, then the spend started actually increasing over time. One of the parts should also be looked at. Some of the consuming pattern of most of the consumers have actually dramatically changed as opposed to making a very large percentage upfront. A number of people are now getting more comfortable about the fact of actually taking EMI or other sort of financial products in order to subsidize their spends. So the consumer behavior right now, because it's coming from a place, it's coming from a place of shock, it's coming from a place of fear. It's actually conserved as much cash as possible. So it might take a small amount of cash for the longer period of time. So anyone who's actually working in the consumer good space or working with anything that's considered as part of your tax collection expense, it's going to be important for you to actually align and actually create some sort of financial products so that your customers can actually still utilize your products while actually paying a large upfront fee at the very starting point. I think this has been one of the greatest changes we've actually seen. And we've also noticed this, even when it comes to the consumer goods, like even when it comes to something like a car, when it comes to an e-bike, when it comes to anything else like this, for example, it comes to a TV, etc. People's preference now is to actually look, either go for bargain herb, and for bargains, actually hunt for financing options as part of that entire piece as well. So I think most of the people who are actually looking at this who are in the particular sector, these are going to be important points to keep in mind as we navigate this current crisis. Sure. Sunam, would you like to add to it? Yeah. So I think the way I am looking at these, this is to look at the sectors which will come back earlier than the sectors which will come back later. So sector, for example, Apparals, Color Cosmetics, and stuff like that, they seem to be coming in later in the chain. Sectors which are more like wellness, health, and hygiene are certainly up front. So I think everyone has to look at it from a more holistic point of view. Things which were working six, eight months earlier may not be working today. So one has to spot those trends and opportunities before kind of deciding that, look, I want to go this way. Plus there have been changes in terms of the approach of companies, for example, companies who are completely D2C now are willing to work with marketplaces because a huge kind of trust is kind of, we see a lot of demand coming on the marketplaces also. And hence there will be a combination of channels. So only channel is something that people need to look at because there are revenue streams in each of these channels. Of course, how do you pace ourselves is a different matter. But I think it depends on how the demand patterns are going to come back. And that's something that we are watching very carefully. Okay, sure. So with this, we'll just take one last question and Shama, we can have your perspective quickly on this. The question is from Amrita, she's asking how are NBFC businesses transforming in times of COVID? Just a quick interesting perspective to the comments by the two panelists. Prior to COVID happening, consumer finance and lending to consumer purchases was always considered a highly risky business. And I just want to share some numbers that seem to be coming out of the collections. If you look at the collections today, a lot of moratorium has been provided to all kinds of loans across the sector. So whether this is housing loan, microfinance, small business loans, vehicle finance and so on and so forth. Consumer finance has also been provided moratorium. But the best collections that are coming from the field as we see today are coming from consumer finance borrowers. So people who borrowed to buy a television refrigerator, whatever else, other ones who are really showing very, very high collections are making the repayments very well. So I think this will show as good track record going forward, whichever way, whichever field sort of takes up in terms of the first, in terms of recovery. I think from a financing perspective, I think consumer finance has come turned out to be quite the hero, I must say.