Preparing for consolidation of the IT industry

The Indian IT industry market, just like the global IT market is full of start ups- brilliant minds, entrepreneurs, fast buck seekers, frustrated IT professionals fed up with routine tasks etc etc. Many of them fail, others give up unable to take the pressure of building a company, some continue and overleverage themselves getting into severe debt, a few succeed and build an Infosys.

In the hugely competitive IT industry opportunity and technology growth is being matched by numbers of entrepreneurs. In such a scenario, the big will eat the small fish and the law of jungle will prevail.

As India develops and more opportunities for better employment and business become available in diverse sectors the fittest will survive. Consolidation is inevitable. Some of this will happen naturally often the big guys will force this to happen through poaching of the best in a company, outcompetiting the smaller companies with niche technologies and using their brand as a sledge hammer to secure business.

Survival will require companies:

To build durable assets
To focus on sectors and technologies
Resist over leverage pressures
Hold onto quality manpower by adopting people friending practices

 

Brand building for mid sized companies and startups

Brand building is at the heart of expanding a corporate business. More often than not companies look to only business growth to increase top and bottom line.

Focus only on top and bottom line often leads to managers seeking to cut corners to improve project profitability. This opportunistic model of growing a business rarely leads to long term and sustained growth.

Brand building is all about building customer trust. Trust generates repeat business. Companies that feel for their customers and go the extra mile are able to win customer trust and build their brand.

Brand building entails taking a company's value system to the market. If the company ethos is to make a fast buck this will rarely lead to building the brand. Often company's seek brokers to fix deals for them. Word travels and impacts the brand leading a company to either stagnation or downward growth path.

Company vision and ethos are not just holy statements that are put out on the front page of a company web site but it is a window to the entrepreneur's thinking.
 

Why start ups are unable to grow

I notice a lot of start ups desperately looking to establishing themselves and make a mark for themselves. The entrepreneurs invest a lot of their time, treasure and energy into making their companies successful.

Finance seems to the most common perceived challenge to start up growth. They look to Angel investors, friends, relatives to support them in their formative stages. While the need for money cannot be wished away, I believe that there are other more important contributory factors. Let me list a few of them:

1. Inability to keep cost under control
2. Absence of long term vision, strategy and plan
3. Focus on immediate revenue gain
4. Unwillingness to invest time and energy on building the brand name of the company
5. Resorting to short cuts, using brokers to win jobs etc

A start up who takes care of not committing the above mistakes repetitively has a greater likelihood to grow and mature into a full fledged sustainable business.