“The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption.”
– Clayton Christensen, The Innovator’s Dilemma
Over the last few months, it has become clear that the funding frenzy that led to the rapid growth and emergence of hundreds of tech start-ups is beginning to lose steam. The talking points have changed from “large market size” and “growth at any cost” to “profitable unit economics”. Drying up of easy capital has led to several companies scaling back their expansion plans and focusing on profitability. Despite the funding slowdown, India is now home to several tech unicorns (fancy word for a company valued a billion $s or more) which have raised humongous amounts of venture capital funding. However, as the underlying businesses of these unicorns are far from profitable, a weaker funding environment will probably lead to several unicorns being forced into consolidation or risk becoming unicorpses (fancy word for dead/bankrupt unicorns). Continue reading India’s First Unicorpse?