Though laypeople may think that most IT companies were unaffected by the pandemic, that isn’t so. Yes, technology giants such as Facebook, Google, and Apple didn’t suffer any massive losses, and, on the contrary, they manage to turn a profit while most industries plummeted. However, most smaller tech companies felt the full blunt force of the ongoing global crisis, and many were fearful of their survival, as they seemingly faced financial peril.
India’s IT trade association, Nasscom, conducted research before the summer titled Startup Pulse Survey. It examined 250 tech startups over two months (April and May) and concluded that 40% of these companies were on the verge of shutting down. 90% of those surveyed stated that they were facing revenue declines, and 70% of them had funds for three more months of operations.
In November, Nasscom released a follow-up survey titled Pulse 2 and showed that India’s tech startup ecosystem was recovering, as 53% of those surveyed said that they expect to see their revenue numbers get back to where they were pre-pandemic within six months. Furthermore, 25% said that they found new funding and new investors compared to 7% in the previous research. Things are looking up, as hiring rates are slowly starting to increase in multiple IT fields, as demand grows for AI scientists, cloud architects, and product managers.
Jackpot Games Fuel Investments in the iGaming Sphere
While most of the world is investing in iGaming technology, digital real money games of chance, Indian entrepreneurs are held hostage by outdated legislation that does not allow anyone in India to provide such services. However, since there is nothing legally stopping Indians from playing at offshore sites, many do so, and jackpot games in various themes are their preferred gaming option. These are progressive slot titles that payout life-altering amounts. Progressive slots are games where a pot builds from all previously unsuccessful bets until a lucky player hits a winning combo, and the game pays out all the accumulated funds.
Mega Moolah is the most famous such game, and it has made many millionaires. In 2018, it paid out its biggest prize ever, a jackpot worth $21.7 million. Statistics say that, on average, Mega Moolah creates a millionaire every ten weeks or so. Due to its and the popularity of similar jackpot titles, global online gaming revenues are growing at about $8 billion each year, set to hit $93 billion in 2023. The government may not allow entrepreneurs to run online casinos from India, but a lucky Indian player can win a jackpot playing at an offshore site. Once laws change, Indian startups can explore investment opportunities in this booming sector, building Indian-owned gaming platforms. For now, they can focus on game development.
Why Most Indian Startups Fail
According to a 2018 estimate, at that time, India had about 50,000 startups. About one-fifth of these were Indian technology companies. A startup is a company that’s not older than seven years and has a limited operational budget. Every day, around two to three such companies, spring up out of nowhere, and within five years, about 90% of all startups fail. One of the top reasons experts note as to why this happens is unoriginality. Indian entrepreneurs seek to imitate foreign business models instead of innovating their own. Thus, what works in other countries is often not applicable in India. Often, people overrate their ability believing that they can easily copy a winning formula that has been proven successful elsewhere, not being aware of everything that went into that process.
Other factors that lead companies in the world’s third-largest startup ecosystem to fail are pre-mature expansion, lack of market understanding, lack of skilled labor, and lack of funding. Regarding the latter, most companies shut down due to their inability to secure sufficient funds. Lack of talent contributes to this, as many managers do not have the competency necessary to assess the market and where their company fits into it. They do not draw up accurate business plans that factor in unpredictable and marketing expenses.