Assignment-3

Roll No. Name

S004 ALOK KUMAR
S010 APOORV SARVESH
S035 JAIBIHARI SINGH
S067 PRATYUSH KUMAR
S084 SHAILY GOGIA
S092 SUMANA BISWAS
S104 VIKASH KUMAR JHA

Q. Where have the startup hedgehogs gone? Prepare a one pager group observation
relating it to marketing.

The article discusses the rise and fall of startup companies in India, particularly in the tech
industry.
The era of easy money signalled by IPO euphoria of 2021 brought two fatal errors in
judgement in the market: First was the mistaken belief that the ubiquity and size of a
problem was all it took to rapidly build large and profitable companies, and second was an
over-reliance on ‘growth-at-all-costs’. This era of easy money was both good and bad for the
startup ecosystem. On one hand, it inspired young professionals to try their hand at
entrepreneurship. On the other hand, many ill-conceived ideas were funded and valuations
were highly inflated.
To set the context, the article begins by comparing the market capitalization of top IT
services companies with that of unicorns. Despite the fact that these unicorns were having a
lot of cash-burn, their collective valuation in 2022 was roughly the same as that of the top
10 IT services companies.
The article also highlights that tech solutions to big problems in education, healthcare, real-
estate, and financial inclusion were hastily deployed without a careful assessment of
whether they were really innovative enough to get customers to pay. While customers may
not be completely satisfied with the current solution, dissatisfaction alone does not mean
that an alternative solution is worth pursuing.
A key factor that emphasis must be put on is the ratio of the lifetime value (LTV) that any
one customer generates for the business to the cost of acquiring the customer (CAC). If this
ratio remains low or negative for extended periods of time, it is a big red flag that should not
be ignored.
Towards the end, the article suggests that instead of appealing to the top 100 million
consumers in India with marketing gimmicks such as the unsustainable 10-minute delivery
promise, startups need to nurture a deep understanding of the problems of the 400 million
Indians who are just below the top of the pyramid. This population along with the bottom
portion remain under-catered and represent the biggest market for companies that want to
unlock their next level of growth.
Overall, the article provides valuable insights for startups looking to succeed in the Indian
market. It discusses the challenges faced by these companies and offers some suggestions
for how they can navigate the transition from private to public markets, as well as how they
can address the needs of a broader segment of the population