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  • DHFL Scam – The Complete Breakdown of the Biggest Scam in Indian History

    In the past few years, cases of many banking frauds have been gripping attention. Take the cases of these billionaire entrepreneurs like Vijay Mallya, Nirav Modi, and Lalit Modi, to name a few.

    When most of the investors thought that the economy would be retained and business will run like usual, the Indian economy seems to have been hit again by another corporate bandit. We are talking about what is known to be the biggest scam in Indian History – the DHFL scam after the ABG Shipyard fraud case of Rs 20,000 crore.

    Background of DHFL
    The Reveal of the DHFL Scam
    Breakdown of the DHFL Scam

    Background of DHFL

    Headquartered in Mumbai in the year 1984, the multinational housing corporation DHFL was founded with the idea to allow economical housing loans to lower and middle-income families in semi-urban and rural areas of India.

    The DHFL stands for Dewan Housing Financial Limited, a well-known non-banking financial service provider in India and also the biggest in the sector it operates.

    The Reveal of the DHFL Scam

    All the tension started to begin for DHFL when the Central Bureau of Investigation (CBI) charged them and others for duping a sum of Rs 34,615 crores. There are about 17 banks that have been tricked by home loan provider DHFL. Former CMD Kapil Wadhawan and director Dheeraj Wadhawan are among 13 others who have been booked in connection with the case.

    Kapil Wadhawan
    Kapil Wadhawan

    Let us go through the following points to know the story behind the biggest case probed by the CBI.

    The not-so-famous media house, ‘Cobrapost’ were the first one to reveal such shocking evidence against the DHFL company. They published an article citing the fraudulent activities carried out by the renowned housing finance company.

    They revealed that DHFL has been using the loan money for its benefit by buying personal assets like properties and lands. However, to gain confidence in the eyes of the public, DHFL filed a response with the Bombay Stock Exchange stating there is no proper weightage to the allegations raised by the journalist group and that it was an act of causing damage to the reputation of the company.

    To make the most out of these ‘false claims’ DHFL hosted conferences by inviting several investors/analysts to clarify that the Rs 31,000 crore loan is taken for an upcoming project.

    The matters got off-hand when recently the CBI booked former promoters of the DHFL group for defrauding 17 banks in an amount of Rs 34,615 crore.

    DHFL has borrowed a total of Rs 42,000 crore loans from banks like State Bank of India, and Bank of Baroda and the highest being borrowed from Union Bank of India (UBI), out of which DHFL has not paid a sum of Rs 36,000 crore. The UBI (Union Bank of India) has asked one of the leading providers of risk, financial, and corporate governance, KPMG to look into this matter.

    They have been accused of syphoning off the money to their other companies or Shell companies to buy assets at a cost of public sector lenders.

    The rating agencies downgraded the rating score on commercial paper after the company defaulted on debt payments. It was during this time when rating agencies involving ICRA and Crisil demoted DHFL’s worth of Rs 850 crore on commercial paper to ‘default’ from ‘A4’ because it had a mortgage lender’s deteriorating liquidity condition.

    Breakdown of the DHFL Scam

    The Resolution Plan

    DHFL tried to make an impression in front of the investors that they would be repaying them the full amount. They devised a resolution plan that transformed its debt into equity and moved to the court in the hopes that it would influence their plan.

    Raid by ED

    Following the court case, DHFL couldn’t remain safe as they were raided by none other than the Enforcement Directorate itself. The ED made claims that they found several linkages to money laundering. This money has been used for their advantage, which was intimately associated with the company’s promoters, especially Dheeraj Wadhawan. They also found that this loan money was also linked to the criminal organisation, Dawood Ibrahim.

    Removal of Board of Directors

    By this time, DHFL had no longer had power and control and was bankrupted due to which the Central Bank of India decided to remove its board of supervisors and managers. The decision took place under Section 45-IE (I) of the Reserve Bank of India Act, 1934.

    First Arrest of Kapil Wadhawan

    This created sensational news when the promoter of the DHFL, Kapil Wadhawan was arrested under the Prevention of Money Laundering Act (PMLA). The ED had found out that his firm was allegedly involved in providing loans to the criminal association of Dawood Ibrahim.

    Charge Against DHFL

    Recently, the CBI finally booked DHFL and 13 others related to this case for swindling 17 banks of Rs 34,615 crore. They are undergoing investigation by both the CBI and the ED. The ED has stated that Yes Bank is also involved in this scam.

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    Conclusion

    Scams like this can prove to cause huge damage to Indian investors. What can we learn from this is just that we need to have strong and stringent banking laws and policies. The country can only hope to see strict business and financial advisory groups without corrupted intentions.

    It is quite evident from the above-mentioned facts the DHFL scam remains the biggest scam to date. The case is still undergoing, and we can only wait for the judgment to come out.

    FAQs

    Is the DHFL scam true?

    Yes the DHFL financial scam is termed one of the biggest scams in the banking industry.

    What is the DHFL scam?

    DHFL has been charged for defrauding a total of 17 banks of over Rs 34,000 crore.

    Who is the owner of DHFL?

    Piramal Group is the parent company of DHFL.

  • AI Writing Tools – Will They Replace the Copywriters in the Future?

    Businesses today are trying their best to leverage content marketing to its full potential. However, it is time-consuming and demands hefty budgets to execute the efforts.

    The biggest hit is for lean teams that are short on budgets and workforce. Nonetheless, even bigger companies and their team want to save bucks on content marketing.

    An attractive solution paving its way through the market lately is the AI writing tool. From chatbots to content creation, AI copywriting is changing the way businesses approach written communication. But are AI writing tools effective enough to generate content? Can they help businesses rank on Google? Let us first understand how AI writing tools work and see some use cases.

    What Is an AI Writing Tool?
    Use Cases of AI Writing Tools
    Pros of AI Writing Tools
    Cons of AI Writing Tools
    Are AI Writing Tools Worth Your Investment?

    What Is an AI Writing Tool?

    AI writing tools are software that runs on various technologies like NLP (Natural Language Processing) and GPT3 (Generative Pre-trained Transformer) to produce content as per demand.

    They provide content based upon the cues that you enter into the software. It is gaining momentum, not only due to the ease it provides for content creation. It can deliver a lot of content in a short period which helps businesses save time. Now, let us understand how AI software helps with content generation.

    All the AI writing tools are fundamentally similar, except a few with enhanced utility, such as more formats or a more extensive database.

    They give two basic options: Content generation from scratch or content enhancement/spinning. These options are available in various formats such as blogs, Facebook posts, LinkedIn posts, Instagram bio, tweets, captions, Ad copies, email copies, etc.

    You choose the required option and format. Then, you enter basic details such as title and details regarding the content such as tone, target audience, description, etc.

    AI then goes through the data on the internet and provides content in the desired format within a few minutes. However, the most significant loophole with these writing tools is limited data availability in the software and internet. Being software, it has access to restricted data available on the internet beyond which it can not curate content.

    So, in a nutshell, AI writing tools can curate but not create content for businesses. So, business goals like building thought leadership are not possible. A way to deal with this issue is adding input yourself but that increases the workload. Marketers tried to use AI writing tools on various occasions. The result seems to vary depending upon the use case.

    Use Cases of AI Writing Tools

    Here are some use cases that AI writing tools provide.

    Blog Posts (Short-Long)

    Many companies wish to use AI tools strictly for creating blogs as it is expensive and time-consuming to get it done by a content marketing team. However, it is noticed that these tools are better at curating short form instead of long content.

    Long-form content requires immense effort from the user regarding the blog sections and giving cues. Contrarily, short-form content has better quality but still requires human assistance.

    Product Description

    This is another common use case of AI writing tools. In this case, brands generally put in some keywords and get 200-250 word descriptions that can be added on Amazon or the website.

    AI tools do a great job at this. Why? Product descriptions are template-based content. AI can effortlessly adapt to this with basic settings. Hence, it provides quality content that can rank on Google.

    Email Copies

    AI writing tools also help with email copies for onboarding email templates or day-to-day emails. They provide a mediocre copy that might lack the human touch. However, it is great for generating headlines and subject lines for emails.

    Many brands have recorded improved open rates and conversions with AI-generated email copies. But again, it requires a lot of human intervention for segmenting and curating compelling copies.

    Landing Page Content

    AI tools are used to write landing page content. It is so because these tools identify specific words and phrases that can trigger different emotions in the readers. The results generated are viable but need additional editing from your end.

    It offers better results but can not surpass a copy written by an experienced copywriter. Thus, AI caters to businesses aiming at bulk content production where quality overpowers quantity. Nonetheless, it is hard to generate quality content using AI writing tools without human interference.

    Cold Email Messages

    It is crucial to crack cold emailing for companies that reach out to thousands of prospects a month. AI tools and software act as an aiding tool for them by curating a personalized, appealing message with little input.

    AI algorithms study the prospect socials/ website to give a personalized cold email. It has a better conversion rate and saves time personalizing every email/ message.

    There are many more use cases but these are the basic and most common ones.

    AI writing tools try to get an edge by providing more use cases and better utility than other alternatives. Some of the best AI writing tools are,

    1. Jasper (Jarvis)
    2. Articoolo
    3. Copy AI
    4. Anyword
    5. Smartwriter (For cold emails)
    6. Rytr.me
    7. Growthbar
    8. Peppercontent.ai

    Now, let us quickly sum up the pros and cons of AI writing tools. It will give a clear picture of whether AI tools are worth spending on. You need to consider your priorities and make an investment accordingly.

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    Pros of AI Writing Tools

    More Content

    AI writing tools can generate more content in less time. Case studies show that people were able to generate 30,000 words of content per day. It is impossible to generate that much content with normal budgets and manpower.

    Writing Assistant

    AI tools can assist you in researching, writing, and editing your content piece. While they are effective with research and editing, AI writing tools need algorithm updates to be effective. They save a lot of time as compared to the manual effort and improve content accuracy.

    Generate Ideas

    AI writing tools help you generate more ideas and structure your thoughts. You need to add a cue to the text generator and it fills the gap. This content can not be a final draft but gives your thoughts a direction.

    Minimal Errors

    AI tools assure minimal errors on factual or grammatical grounds. Since they operate on set algorithms, there is a little window for errors. However, at times these algorithms might give an incorrect recommendation that requires human judgment.

    No More Writer’s Block

    As mentioned above, AI tools help generate ideas and structure thoughts, it enables writers to leverage it to mend writers’ block. At times it is hard to structure ideas and AI tools help you with that.

    Content Enhancement

    AI tools mean limited plagiarism. Since, the tool work on set algorithms, the content generated is spun in a way that there is zero plagiarism. However, after a point, the AI produces similar content which might be an issue for niche websites/ content teams.

    Cons of AI Writing Tools

    Expensive

    AI tools are expensive. However, if compared to regular budgets that deploy people to do the same job, it saves a lot of money. But provided that AI tools need a human brain to make them useful, their effectiveness is questionable.

    Lack of Human Touch

    A machine can not produce content similar to that of a human. Often the content produced is robotic and does not serve the purpose. Hence, it is a great pick for companies with directory-based content that works on a set template.

    Requires Manpower

    AI tools need the intervention of a human which again adds to the cost. If the aim is to save time and money, there might be other added hidden costs that businesses need to bear.

    Mechanical Content

    AI content lacks a natural flow. No amount of input or algorithm update can add natural flow to AI-generated content. The content is repetitive and needs additional input. It is great for SEO optimization as it seamlessly adds the required keywords and optimizes effortlessly.

    Not Apt for Long-form Content

    AI tools are not effective when generating long-form content. They require more inputs from the user which increases the burden. The AI should simplify the task and not add to redundant tasks.

    Lack of Uniqueness

    Since AI depends solely on data available on the internet to produce the content, the content produced is not unique. It is plagiarism free but has no unique viewpoint. Hence, such content is often hard to rank due to a lack of authenticity.

    Are AI Writing Tools Worth Your Investment?

    AI writing tools are not the best investment for a majority of companies. Well, it also depends upon the need of each business. If you aim at short-form templatized content, it might be the best purchase.

    Also, If you deal with time and money constraints, the AI tools will assist you in writing. However, It cannot generate content at a single command. It needs human assistance in form of inputs, proofreading and editing, and further factual and plagiarism check.

    Alone it can not produce organic content but can work as a great tool to assist and give direction. Also, you can not generate fresh content that is content for news or event-based sites as AI has access to restricted data available on the internet. So, this concludes that AI writers cannot replace copywriters.

    Conclusion

    If you want, you can make the AI tools work for you. But just like any other machine. without input, they are software with no use case.

    FAQs

    Are AI writing tools worth it?

    If you want to write short-form content in a short time then it might be worth it.

    Will AI replace copywriters?

    No, AI writing tools cannot replace copywriters because they can’t understand emotions and they cannot produce content similar to humans.

    Which is the best AI writing tool?

    Some of the best AI writing tools are Rytr, Jasper, Surfer, QuillBot, Grammarly, and CopyAI.

  • What Does the Persona of an Average Indian Consumer Look Like?

    India accounts for 1/5th of the world’s youth market. It means that a majority of buyers in India are within the age bracket of 18-25 which are easy to influence. Many businesses identify this as an opportunity to seize a large market share. However, Indian consumers are hard to advertise to and sell to as there is diversity in cultures, ethics, income groups, family structures, and many other factors.

    Big companies like Netflix, Chevrolet, and Danone couldn’t appeal to Indian consumers and failed miserably. In the 1990s, the main target group for businesses was middle-class consumers which catered to 200 million people. Three decades later, not only did the consumer change but businesses’ approach to the Indian market has also changed.

    Segmentation of the Indian Consumer Market
    Indian Consumer Market Trends

    Segmentation of the Indian Consumer Market

    A crucial aspect of understanding the Indian consumer market is segmenting. Since there is so much multiplicity, it is sensible to segment and then target the consumers.

    There are three major categories to segregate the consumers: family structure, affluence, and urbanization.

    Family Structure

    Indian family structure shifted from joint to nuclear family over the past 2 decades. The nuclear family rose to 70% in the past two decades and is expected to rise to 74% by 2025.

    Another trend is a transition to single households where a majority of people are living alone in cities for work. How does it impact purchases? A nuclear family is bound to spend 20-30% more than a joint family. Also, people who live alone often make purchases driven by lifestyle choices instead of functional needs.

    Affluence

    Indian people can be categorized into 5 groups based on their annual gross household income level:

    • Elite (>$30.8k)
    • Affluent ($15.4k-$30.8k)
    • Aspirers ($7.7k-$15.4k)
    • Next billion ($2.3k-$7.7k)
    • Strugglers (<$2.3k)

    Amongst these, the top consumer groups comprising 40% are – elite and affluent. Their spending was 27% in 2016 but grew at a significant rate. India is witnessing a shift towards materialism and rising affluence. People are focusing on working more and earning more with an average 50-hour work week.

    They prefer to buy an expensive alternative if it is of greater quality. As a result, the elite and affluent categories spend almost ten times more than strugglers on women’s apparel and food & beverage. However, Other groups with middle and low income are dissatisfied with their income which directly impacts consumer behaviour. Nonetheless, aspirers are influenced by social media and trading up.

    Brands like L’oreal, Lakme, and Samsung have been able to crack the code and segmented their product well to set foot in India. They have a wide range of products targeting different sets of income groups. As a result, they capture a bigger market and sustain in India for a longer period.

    Urbanization

    40% of Indian consumers are urban people which accounts for 60% of consumption. Nevertheless, the emerging cities are growing at a fast pace and increasing their expenditure at a 14% per year rate.

    The restricted growth is the result of a value-for-money mindset, conventional financial perspective, and local cultural association. Even though they have the will to purchase but do not have a market catering to their needs and purchasing power.

    All these categories highlight the heterogeneity in Indian markets. Hence, businesses need to segment their offering and capture the Indian market tactfully. It is crucial to understand the customers and their buying choices.

    Buying choices depend upon 3 factors: product penetration, frequency of occasion, and spending per purchase. As a brand, you need to look into these three factors that directly impact buying choice and segment accordingly.

    The Indian consumer market evolves daily. In fact, a consumer choice might vary depending upon the product category. For instance, a consumer might splurge on the hotel while travelling but have a saving mindset for transportation. Similarly, a consumer might save on food and beverage but spend more on cosmetics.

    Here are 7 trends influencing Indian consumers.

    Time Compression

    India witnessed a rise of 30% in the ready-to-eat meal in the last few years. It is the result of two factors. One is the transition in family structures and the other one is time compression. People are choosing time and convenience over money and are willing to pay extra to receive an end-to-end solution.

    Omnichannel

    Consumers are opting for omnichannel shopping. Consumers, depending upon the product category, opt for a mix of both online and offline touchpoints. Fast-moving consumer goods reported an entire offline or online purchase. Nonetheless, businesses need to focus on providing exceptional online and offline experiences to their customers.

    Materialistic Youth

    As mentioned above, a major of the Indian market is young people in the age bracket of 20-35. This group focuses on lifestyle purchases and spends on premium goods. It is also characterized by single adulthood and nuclear family which impacts buying choices.

    Instant gratification

    Impulse buying is rising as people are moved by instant gratification. People are influenced by social media and often purchase to fulfill gratification. Impulse buying accounts for 40% of purchases. PVR India makes up to 54% of its market share by impulse buys solely. No wonder, Swiggy and Zomato were able to set their market share in India.

    Value conscious

    People are becoming value-conscious where they focus on product quality. As a result, brands that cater to affluent or elite markets are able to capture a larger audience. If the perceived value is low the brand might flunk. Another reason is the dominance of youth in the Indian market that aims for the value and longevity of products.

    Emotional appeal

    Brand recognition and emotional appeal are crucial for Indian consumers. This is the reason that Maggi wasn’t wiped out from the market even after the allegation was raised against it. Also, brands like McDonald’s and Dominos monetize on emotional appeal instead of other factors like premium quality ingredients. Indian consumers are driven by emotions and make emotional purchases.

    Digital Footprint

    COVID had a huge impact on consumer purchase trends. People shifted to online markets for the majority of purchases. Even though offline stores still have a fair market share, online channels impacted buying decisions and impulse purchases.

    Social media and other digital channels significantly shape buyers’ purchase choices. Online purchases are predicted to rise from $90 million to $350 million by 2025.

    Also, eCommerce boomed online purchases which lead to rising impulse purchases. People switched from window shopping to strolling on eCommerce websites. E-commerce markets are expected to grow from $50 billion to $500 billion by 2025.

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    Conclusion

    Businesses need to aim at a larger market by segmenting their target market and placing products at various price tiers. If they wish to capture a larger market, they have to create multiple offerings catering to diverse groups.

    The best example would be Samsung which offers both low-mid range phones and expensive phones covering a larger market. This is why it tops the market share in the Indian smartphone market with a 22% market share. Consumption will rise to $25 trillion by 2025. Brands should clearly study their audience and target accordingly.

    FAQs

    What are the types of buying behaviour typical of Indian customers?

    The types of buying behaviour are Extended Decision-Making, Limited Decision-Making, Habitual Buying Behavior, and Variety-Seeking Buying Behavior.

    How has the Indian consumer changed?

    Indian consumers have become more aware and conscious of quality. Many consumers have shifted to online markets for the majority of purchases

  • How to Use Instagram for Business?

    With the advent of social media and the kind of popularity it holds today, it would be extremely beneficial for a business to create a strong social media presence. Instagram falls among the most widely-used websites and applications that help in creating a strong buyer base, especially if the target audience for the business is millennials or Gen Z buyers.

    The Facebook-owned platform, Instagram boasts of having around 1 Billion (2022 reports), active users per month, and 500+ million daily users. While the young adults (between 18-24 years), and the adults (between 25-34 years) are found to be the most active on Instagram, the platform is also used by people below and above the margin.

    Instagram Users and their Age Groups
    Instagram Users and their Age Groups

    Moreover, recent reports state that the brands have seen a 4% of average engagement from their followers on Instagram, which is much more than the followers’ engagement rate on Facebook or Twitter, which happens to be around 0.1%. In fact, brands get 10x more engagement on Instagram from all around the platform than they get on the other social media platforms. In other words, Instagram is better for the visibility of the brands.

    With an Instagram business profile, you can see real-time data on how your stories and promoted posts perform, get insights into how followers are interacting with your content and unlock features only available to businesses that make it easier to get noticed and drive sales. Creating a business profile on Instagram is free and can help you a lot to understand your audience.

    So, let’s talk about how you can use Instagram for your business, and all the aspects that you need to keep in mind for working out your plan that way. It will help you understand the features of Instagram for Business as well.

    How to use Instagram for Business?

    Tools Provided By Instagram To Monitor Outreach
    Benefits Of Using Instagram For Business

    How to use Instagram for Business?

    So, now that we are all aware of how big is Instagram and how important the platform is for businesses, it is obvious that you would also want to leverage the popular social media platform to grow your business. If you are interested, then let’s dive into the primary steps that will help you use Instagram for your business here:

    Create an Instagram Business Account

    If you already have a personal account. Moreover, if the content of that profile is engaging and appropriate for your brand, then you can simply convert that into a business profile. After that, you will be able to access all the features and tools that are available only for Instagram business accounts.

    You can easily convert your personal account into a business account by following the below steps:

    • In the Instagram Mobile App, go to your Profile.
    • Now go to “Settings“
    • Go to “Account“
    • Tap on “Switch to Business Account” or “Switch to Creator Account” as you like.

    This will convert your profile into an Instagram Page. It is a really helpful feature of Instagram for startups and entrepreneurs, who are looking forward to using Instagram for their businesses.

    Make Your Feed Visually Appealing

    Example of an Appealing Instagram Profile
    Example of an Appealing Instagram Profile

    The users of Instagram are groups of people from the new generation. As Instagram is mainly an app to share photos, users need to see your product before they even visit your website. Thus, it is important to upload photos of your business and products in a way that is eye-catching and stands out from the plethora of content that is thrown at users today. Besides, it is also essential here, to maintain a proper colour scheme and aestheticism that makes the grid layout visually appealing.

    When users find a post or image that is appealing, the key instinct is to open the profile and check out further products. A typical user views an image for about 3-4 seconds and on finding it interesting, takes 6-7 more seconds to skim through your profile. So, it is important to make these moments count.

    One should market their products keeping in mind the current trends, i.e., the viral happenings around the globe because they bring viewers easily. People tend to be engaged more with the posts related to the latest trends in the world of marketing and beyond it, which in turn, helps brands get more shares from their followers. This is why it is essential to monitor these trends, which include technology trends, marketing or general trends. Though the videos can provide more information than the photos, they are mostly considered less engaging for the users when compared with the images. Putting up photos, especially of high quality, will increase your engagement. Typically, users view about 10-20 seconds of a video. So when uploading one, businesses should try to put more colourful content at the beginning of their videos, and try to keep the viewers engaged throughout.

    Marketing On Instagram

    Keep in mind, that your page is not isolated on Instagram. So, keep it up to date with the latest hashtags, trends, and content that may help sell your products/services, and gain mass approval for them. Some of the biggest worldwide trends were “Fidget Spinner” and “Mature Bag” and then the social media trend based on iPhone 11’s design came, and it continues in much the same way. When users come across your page, catch their attention by producing content that is both relevant and contributes to your business.

    • Write grabbing captions
      The captions of your Instagram posts, stories and videos are really important because it is the caption that the readers read first to check if it is of any interest to them. So, you should not miss out on this opportunity to score.
    • Keep your posts formal and your stories casual
      The stories come and go, so a more formal tone would only bore your potential customers. However, here if you pour some nice and grabbing casual content, then you might still have the opportunity to hit them!
    • Use hashtags
      A major way of attracting users is by using hashtags that are widely used, and viewed by many users or those which are relevant to your business. This helps your page be visible to a greater number of viewers. Never forget the caption of your photos or don’t take it lightly, describe your images and videos creatively, use hashtags or ask the viewers questions, and use the caption to keep viewers engaged. An inspirational quote or a pop culture reference helps you score extra points.
    • Stories
      Use Instagram stories effectively to display new additions to your product line or promote your business. Be creative, original, and crisp with Instagram stories.
    • Story highlights
      Maintain clearly defined important highlights as a part of your profile as they are the first to attract the audience’s attention. Make them seem interesting and use these to especially highlight any offers or competitions that your brand is holding.
    • Add relevant CTAs
      If you want the users to click on your website or the products and services that your brand offers, then you need to tweak your content in such a way that it drives the customers’ attention, and leads them to click on the link you want to.

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    Write An Interesting Bio

    The first thing that users will view in your account when they visit your profile is the bio. Keep the bio crisp and to the point, describing your business, but do so in a creative manner, one that shall intrigue users to further explore your account and your website. Add a link in your bio, it could be the link to your website or one that features your latest or most popular product. This makes your business easily accessible to the community. Use points to give information about yourself and use attractive emojis. You can also go in the extreme opposite direction and give a one-line introduction if you’re daring to be pretentious and if it works with the aesthetics of your product and/or services.

    Make the logo of your company your profile photo instead of changing it with each new product to give your brand space to become known and recognized by users. Often seeing the same logo, again and again, may instil a feeling of familiarity amongst the users.

    Use Geotagging

    Geotagging is a feature on Instagram. With geotagging, you can tag the location of each of your images. You can also tag your work address or the address where your business is headquartered. This further makes it easy for the followers and the customers of your brand to know the location of your business. To use geotagging, you can simply press the “add location” button, and then you can type an address or select one from the selected Instagram list of addresses.

    Tools Provided By Instagram To Monitor Outreach

    Instagram Business Account Insights
    Instagram Business Account Insights
    • Actions taken from the story: You can view the number of people who visits your profile through your stories by swiping up and checking insights. This helps you view the nature of content that attracts users, which would help you gain more insight into the factors that will help you gain more popularity. You can also promote the stories as your post so that a larger audience views your content.
    • Post insights: You can check the number of people that view your page, know how many among them already follow you, and the number of people you have reached through the explore page or the tags you have used. This will help optimize your business, brand, and Instagram account to produce content that is mass-approved and will help you increase sales.
    • People Visited your Page: Instagram also shows how many people have visited your profile in one week on your home page.

    Benefits Of Using Instagram For Business

    • Your audience is already there: In June 2018, Instagram reached one billion monthly active users, up from 800 million in September 2017. Instagram has become one of the most popular social networks in the world. So, if you have a proper Instagram strategy then there is no limit to success for your business. This is the best platform where any quality service or product can go viral within a short period.
    • Build your brand reputation easily: No matter how big or small your business is, if you have confidence in your product or service, then you have the key to success. Instagram has allowed businesses to grow freely, with equal opportunities for every one of them. You just have to take advantage of the built-in features at the right time and you are well on your way to success. Interact with more and more people, try to post quality content regularly and make sure the images you are using are in HD. Instagram prefers quality more than quantity, so make sure your content is visually appealing.
    • Generate revenue directly from Instagram: A few years back there was a limited opportunity for businesses to get success on Instagram. But now, Instagram has allowed businesses to earn money directly from the platform itself. There is a new feature Instagram has launched that is the shoppable post where you can add tags to the products in your photos with links and that will include product description, price, and the “shop now” button or link. Your audience can directly buy the products from your online store.
    • Show your creativity on Instagram: Instagram is the best place where you can show your creativity and also how attractive your brand is. Show your enthusiasm while posting content, and make it as much appealing as possible. You can also organize some contests, giveaways, special offers, and many more. This will help you to attract more and more visitors to your profile and also to your online store.
    • Promote through influencers: Influencers are the people who have a big following on social media and other online platforms. When you start a venture and you want to market it to a large audience, influencers are the people who can help you out with this. Many influencers promote brands and products to take them on the growth path. They have an audience who follows them from the heart and is also loyal to them. So here, you have the opportunity to build the reputation of your brand.

    Conclusion

    Keeping in mind all these points will help increase outreach and drive sales of the products and services you offer. Instagram is a crucial marketing tool for startups. Using Instagram for business will help gain your brand publicity and a larger market to establish itself. Many businesses are solely based on Instagram at this age, and are reaping all the benefits that the platform has to offer. Using a platform that is this popular will add to the marketing of your startup.

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    FAQs

    What is Instagram for business?

    Instagram is a popular social media platform that can serve as a valuable marketing tool for your business. You can create a business account on Instagram by first creating a personal account and converting it.

    What are the benefits of Instagram for business?

    Some of the Benefits of Using Instagram for Business are:-

    • You can learn about your customers
    • Presentation of products and services is easier
    • Customer engagement can be maximised this way
    • Instagram helps in building solid customer relationships
    • It helps in driving website traffic
    • Reaching new audiences is easier
    • You can go for prominent influencers and make them brand ambassadors

    What are the advantages of using Instagram?

    The Advantages of Instagram are:-

    • It is a popular media
    • It has a wide scope for everyone
    • Instagram offers spaces for each content creator
    • Marketing opportunities galore on Instagram
    • Instagram optimising, and marketing on Instagram is cost-effective
    • Instagram prioritises security
    • Instagram helps both celebrities and fans
    • Instagram has numerous tools to make effective marketing possible
    • Building engagement is easy

    How to use Instagram for business?

    If you want to use Instagram for business, then first you need to ensure that you have a proper profile, with a decent profile picture as your business logo. If you don’t initially have a business account on Instagram, you need to make your existing account into an Instagram business account. Some more things that you need to follow to successfully start using Instagram for your business are:

    • You need to chalk out a foolproof business strategy
    • You should optimise your profile to the fullest
    • You should keep in mind to share good quality content
    • You should focus both on attracting new audiences and engaging the old audiences

    How to create an Instagram company page or a company business account on Instagram?

    If you are looking to create a company business account on Instagram, there here are a simple set of steps that you can follow:

    • Visit your Instagram profile and click on the top-right corner
    • Now, click on Settings
    • Then, tap on Account
    • Now, chose Switch to Professional Account
    • Next, tap on the Continue option
    • Now, choose the right category for your business, and click on Done
    • Tap the OK option
    • Click on Business
    • Select Next
    • Now, add your contact details, and go for Next
    • At last, you need to tap on the X option to exit

  • Why Outsourcing Is Important for Growing Business?

    Expanding your startup could be tricky. If you serve in a cutthroat market or on a low budget, figuring the money and energy required to build your firm could seem unlikely.

    Solving problems can consume a large portion of a manager’s day. This gives no time to complete critical functions, find new customers, or maintain a healthy work-life parity.

    This issue can be fixed through outsourcing. Businesses can explore expansion opportunities by employing a cost-effective staff. This article will focus on why it is crucial for business advancement.

    Let’s dive in.

    What is Outsourcing?
    Advantages of Outsourcing
    Disadvantages of Outsourcing
    Why Is Outsourcing Important for Your Business?
    Frequently Outsourced Tasks
    Should You Outsource for Your Business?

    What is Outsourcing?

    When a company opts for outsourcing, it chooses to assign a business project to an outsourcer rather than performing the task itself. As a result, it allows you to delegate ownership, management, and delivery of the task to someone else, ideally to the approved standard.

    It’s now fairly prevalent. Most brands, for instance, would not like to deal with the shipment and logistical support of reaching their goods to customers, so they entrust them to specialized providers.

    Likewise, because many companies lack the skills or potential to handle all of their very own customer services, they entrust them to specialized help desk operators. External expert services are frequently used in the domain of IT and software solutions. For instance, to handle servers and cybersecurity.

    So it is fairly prevalent and is the result of a choice. The firm must identify what it wants to do on its own and what it wants to outsource to other companies.

    Advantages of Outsourcing

    • You can gain direct exposure to skilled providers with better prowess and reliability.
    • Lowers costs if the outsourcing provider can offer them at a cheaper price (e.g., via synergies)
    • Concentrates the business on its key areas that can add value.
    • Increase operational flexibility.

    Disadvantages of Outsourcing

    • There’s a chance that the outsourcer won’t reach benchmarks or won’t meet deadlines.
    • The business may lose expert knowledge.
    • There is no assurance that the expense will be lesser.
    Common Objectives of Outsourcing
    Common Objectives of Outsourcing

    Why Is Outsourcing Important for Your Business?

    The following are the significant reasons why it might enhance the company:

    Helps in Focusing on Your Basic Tenets

    Outsourcing your non-core functional areas will spare time for managing your company’s key functions. Monitoring of non-core tasks such as call center activities, project planning, etc is delegated to your specialist.

    Lastly, your firm enjoys the benefits of your strategic utilization of economic, individual, and operation resources to enhance service delivery effectiveness and efficiency.

    Helps in Gaining Access to Valuable Skillsets

    You wouldn’t have instant access to professional staff if you are a startup. Even large corporations are affected. As workforce costs rise, outsourcing might be your company’s best buddy.

    Saves Money

    The chief factor why businesses outsource is to save money. Based on one’s objectives, it can provide short-term to long-term perks. Beginning with the potential to scale activities that it provides, it allows your business to grow. Then there’s the advantage of lowering capital and repetitive costs. It saves money due to lower wage costs, price stability, and generous tax breaks. It also has the potential to enhance the customer experience.

    Aids in Customer Satisfaction

    Global corporations are increasing their demands to keep up with a better business service standard protocol. Outsourcing can help to improve customer experience by being open and creative. Businesses that outsource can now provide longer & more dynamic work hours, even operating 24 hours a day, seven days a week.

    Allows You to Use New Tech

    Entrepreneurs and local firms can turn to outsourcing for keeping up with the emerging technological changes. Apart from the expense of outsourcing, your outsourcer is generally the one who puts money in and possesses modern tech assets to suit your client’s revenues and industry standards. Often the outsourcer outperforms its clients in terms of keeping up with and incorporating new systems.

    Frequently Outsourced Tasks

    Only the founder’s dream limits the tasks that can be outsourced. Consultants are now better to access and employ than before. Here are some of the tasks you can outsource.

    Bookkeeping

    Naturally, every entrepreneur must have a thorough understanding of his or her finances. That isn’t to say the person must devote the time necessary to complete multiple accounting tasks. Outsourcing of accounting, taxes, salary and other services is common. It’s so prevalent that it’s spawned an overall market of small-business payroll management firms.

    Help with Administration

    Admin duties can consume a great deal of your focus and effort, detracting from your strategic plan. A digital agency can help you with admin work like sending emails, and calls, setting meetings, and making schedules. They’re readily accessible, and they’re often inexpensive to hire.

    Technical Assistance

    For tech-savvy entrepreneurs who wish to create & operate their site, there are a whole range of options. These companies facilitate for beginners to have an official website, but they’re often not the ideal option for businesses. Outsourcing your digital footprint, technological channels, & other tech employment can save you energy/cost while producing great returns. Allow a specialist to assist you in putting your best digital foot forward.

    Content Creation

    Every company receives a large number of official correspondence daily. Your company’s interaction plan includes blogs, social platforms, promotional items, news items, and emails. Somebody with extensive experience is required. Don’t put your marketing message in the palms of someone who isn’t familiar with designing successful, high-quality content, such as oneself.

    Should You Outsource for Your Business?

    The essence of your business determines whether you’d be a fine fit for outsourcing & what processes you must outsource. The trick is to look at most of your tasks and figure out which ones represent your crucial corporate objectives and which ones aren’t. It may profit from incidental tasks if others can do them quicker, better, and in an economical way.

    For certain tasks, the response may differ significantly from one company to the next. A firm whose primary task is creating, for instance, may outsource the design process. A firm that concentrates on layout or technology may outsource the manufacturing operations. While the software is a key strength for a tech firm, it is simply an executive process for several other firms.

    In certain cases, outsourcing only a portion of a task may be relevant. Several businesses, for example, consider advertising to be a company’s core task, but they may outsource specific attributes, like PR or social platforms.

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    Conclusion

    There’s no denying that outsourcing is a good means to boost growth, but most folks don’t comprehend how it allows a firm to thrive. Outsourcing could be beneficial for your firm in one way or another so make sure to make better use of it.

    I hope, this article has clarified the importance of outsourcing for growing business.

    FAQs

    Why is outsourcing important for a business?

    Outsourcing can help in running your business more efficiently, saves costs, helps your internal team focus on their tasks, and helps you gain access to valuable skillsets.

    What is an important advantage of outsourcing?

    Outsourcing can save costs for your business, make your business flexible and leverage the knowledge and skills of top talents.

    How does outsourcing help a business grow?

    Outsourcing helps you leverage technology and streamline workflows. You can outsource top talents while your internal employees focus on the important work.

  • Why Semiconductor Production is Hard and Only a Few Companies Produce it?

    You all know that semiconductor chips are used in nearly every electronic device that we buy. They go into computers, smartphones, gadgets, cars, aircraft, medical equipment, military systems and whatnot. The world is facing a global semiconductor chips shortage at present which has raised the question of why can’t more companies get into the production of semiconductor chips. Let’s dive into the semiconductor industry through this article to know what are the complexities which don’t allow many companies to enter the industry.

    Why are semiconductor chips in the news?

    In 2021, the global chip shortage was much in the news and companies like Apple, Tesla, Tata Motors and Samsung Electronics had to starve for semiconductor chips. A total of 169 industries were impacted by the shortage, the auto industry being the worst hit.

    There were several factors which led to such a global shortage. Some of them are:

    • The surge in demand for electronics required for work from home during the pandemic
    • Labour shortage due to lockdown restrictions
    • Drought in Taiwan
    • The Trade war between the U.S. and China.

    Semiconductor chip storage has made countries realise that the manufacturing of chips is concentrated in a few east Asian countries only. So, this year countries around the world are coming up with plans to build production capacity for these semiconductor chips so as to become self-sufficient and reduce import dependency. India is going to spend around $30 billion to develop the semiconductor supply chain ecosystem. The U.S. is also considering implementing the CHIPS for America Act to provide $52 billion for chip manufacturing and government support to semiconductor giants. The Act aims to provide financial assistance for the construction, expansion, or modernization of a semiconductor fabrication plant in the United States.

    Semiconductor Chips Industry- The History & The Present

    Jack Kilby - Inventor of Semiconductor Chips
    Jack Kilby – Inventor of Semiconductor Chips

    In 1958, Jack Kilby, an electronic engineer at Texas Instruments, created the first integrated circuit which is the ancestor of modern-day microchips. It was a great and revolutionary invention of the 20th century. The semiconductor industry started around 1960 and sales revenue crossed the $ 1 Billion mark by 1966. In 2022, the global semiconductor chip industry is expected to reach about US$600 billion. But very few companies in the world can make semiconductor chips, and even fewer can make them profitably at that. Let’s understand why it is so by delving into the semiconductor chips industry and its manufacturing process.

    The Model and the Major Players of the Semiconductor Industry

    Countries dominating semiconductor production.
    Countries dominating semiconductor production.

    The semiconductor industry is dominated by companies from Taiwan, the U.S, South Korea, China, Japan and the Netherlands where semiconductor manufacturing has government backing, developed infrastructure and economies of scale.

    The industry is based on a model that fabrication, design and development is distributed among different companies and their subsidiaries around the world. Foundry companies like TSMC and GlobalFoundries are involved in manufacturing only. Fabless semiconductor companies like AMD, Nvidia outsource production to a third-party fabrication plant and only design the device. Integrated Device Manufacturers (IDMs) such as Intel and Samsung manufacture (in-house), design and as well as sell integrated circuit products.

    Major players in the industry are TSMC (Foundry), Samsung Electronics (IDM), Intel (IDM), and Qualcomm (Fabless).

    Table representing top 8 semiconductor companies, their type and country.

    Name of the Company Country Type
    Intel United States IDM
    Samsung South Korea IDM
    TSMC Taiwan Foundry
    SK Hynix South Korea IDM
    Micron United States IDM
    Qualcomm United States Fabless
    Nvidia United States Fabless
    Infineon Germany IDM

    Taiwan’s TSMC alone manufactures a great percentage i.e. more than 50% of semiconductors in the world. It is the world’s largest foundry. Apple, which is the biggest consumer of chips and the two major fabless semiconductor companies, Nvidia and Qualcomm, are the clients of TSMC only. Samsung, the rival company of TSMC, has announced to invest $355 billion to manufacture 3nm chips to beat TSMC.

    The process of manufacturing Semiconductor Chips

    Semiconductor chips are made using a semiconductor, silicon. The process of making semiconductor chips involves more than 59 types of equipment and different steps which are required to be repeated to create layers in a chip. A chip  can consist of as many as 100 layers which means that the steps have to be repeated in the same number.

    The wafers of silicon extracted from sand are transformed into transistors that form the base of a group of circuits called chips. The following steps outline the process of creating a layer in a semiconductor chip-

    • The first step is to coat the wafers with photosensitive chemicals and light resistant materials.
    • Then there’s lithography performed at the second stage where coated silicon wafers are exposed to UV light inside a lithography machine. The light is passed through a mask containing the chip’s blueprint onto the wafer to print the pattern.  This process makes it possible to build hundreds of chips on a single silicon wafer.
    • The area exposed to light then gets hardened and the unexposed soft areas are etched away by hot gasses.
    • The next step involves the use of ionic gasses to modify the conductive properties of the layer created by adding some impurities and then finally the metal links are laid down between transistors, thereby creating one complete layer.

    All of these steps are to be repeated to create subsequent layers.

    Why can’t we just produce more chips to meet the soaring demand?

    If there’s a chip shortage then why don’t more companies get into semiconductor chip production and reduce this gap between demand and supply? Well, to know the answer to this question we need to first understand the complexities of making chips and the semiconductor industry.

    What makes manufacturing semiconductor chips so complicated?

    Though the chip is a tiny thing in terms of size, it involves the most complicated and expensive processes. Here’s the list of factors which makes it difficult for any company to enter this industry-

    • It requires land, permits, natural infrastructure, electricity, complicated machines and a lead time of more than 2 years to set up the mega-expensive fabrication plants and factories that build these chips. In 2021, Samsung announced plans for a 17 billion dollar chip plant in Texas to be opened in 2024.
    • Manufacturing a chip is also a complex procedure which takes a considerable amount of time. It takes almost 3 months to turn the raw silicon into that final chip which is put into devices.
    • The manufacturing process is atomic level and requires expensive factory equipment.
    • Also, the rooms where silicon is put into chip-making machines are required to be absolutely dust-free. A single speck of dust can waste all efforts and millions of dollars.
    • Semiconductor chip production involves a complex network of companies that produce or design them, along with those that supply the technology, materials and machinery required.

    How did the Russia-Ukraine war impact the Industry even more?

    Participation of Russia and Ukraine in the global supply of Palladium and Neon respectively.
    Participation of Russia and Ukraine in the global supply of Palladium and Neon respectively. 

    Neon is required for lasers used in lithography for producing chips. Last year, the global consumption of neon for chip manufacturing was around 540 metric tonnes. The Russia-Ukraine war has worsened the global chip shortage because more than half of the world’s neon is produced by two Ukrainian companies only- Ignas and Cryin who had to shutter their operations. So, this will have an intense impact on the semiconductor industry. Moreover, Russia’s palladium supply can also be affected due to the war. The shortage of palladium which is essential for catalytic converters applied in exhaust systems of automobiles can indirectly have a potential impact on the semiconductor industry by way of less demand of chips by automakers.

    Conclusion

    Semiconductor foundries need a huge capital investment of billions of dollars and a considerable period of time to set up. Moreover, these foundries cannot produce chips at a very fast pace because the manufacturing process also takes time and requires expensive equipment. All this makes it difficult for any company to get into the industry and even if any company does so, it becomes difficult for them to compete with the big fish and make profits. That’s why when it comes to semiconductor chip manufacturers, we get to hear only a few names who have acquired a huge market share in the industry over time.

    FAQs

    What are semiconductor chips made of?

    Semiconductors also referred to as integrated circuits (ICs) or microchips, are made from pure silicon.

    Who is the largest manufacturer of semiconductor chips?

    Taiwan’s TSMC is the largest manufacturer of semiconductor chips.

    What are the best 5 semiconductor companies to invest in?

    Taiwan Semiconductor Manufacturing Co Ltd (TSMC), Intel Corp (INTC),  Nvidia (NVDA), Advanced Micro Devices Inc (AMD), Micron (MU).

  • How to Manage GenZ Employees – A Detailed Guide

    GenZ employees make up about 25% of the workforce across the globe and the figures are expected to go up to nearly 30% by 2030. These tech-savvy individuals are considered to be the most diverse set of professionals to enter the workforce.

    As these individuals are entering professional life, companies need to buckle up their seatbelts in creating an environment that suits their moods.

    Which Generation of People Fall Under Gen Z?
    What Makes Gen Z So Different?
    What Does Gen Z Expect in the Workplace?
    How to Manage Gen Z Employees?

    Which Generation of People Fall Under Gen Z?

    GenZ is the generation of people born in the mid-90s who have grown up during the swiftly changing times over the last two decades. They have witnessed the Great Depression, the ever-growing danger of environmental crisis as well as the recent global pandemic due to Covid 19 to name a few. They are also called the internet generation or iGeneration.

    If compared with the previous generation, Gen Zers have a totally different perspective on life. What makes this iGeneration different from the other generation is their behaviour. Their interest isn’t focused on how much they are going to earn or what others think of them but is worried about work-life balance and mental well-being.

    In the part where the previous generation always focused on working late till it drained them, Gen Zers are more attracted to having a paid leave from their organisation, and a day off for a mental break.

    What Makes Gen Z So Different?

    There are several characteristics of a Gen Zer that makes them unique from the others, especially from a millennial. These people love to have their own working space and do not like sharing it with others.

    As mentioned earlier, this group was born during the recession time, which makes them more realistic and practical. Gen Zers are also believed to prefer learning through different educational platforms such as the live-classes, online tutorials or receive on-the-job training classes.

    What Does Gen Z Expect in the Workplace?

    The hype created because of these Gen Zers is what puts a lot of companies in a tough situation of hiring them. But why should organisations hire them? That is because they are young and smart, and believe in innovation and creativity.

    GenZers are very expressive about their feelings and aspirations, so they usually expect lucid and transparent communication from the leadership.

    Organisations need to put control and policies in place which ensure clear messaging across the hierarchy. They need to focus beyond traditional benefits and form a culture where they embrace Gen Zers as a whole person and not judge a person for what they can accomplish in eight hours a day.

    How to Manage Gen Z Employees?

    Here in this read, let us figure out an in-depth understanding of how can organisations manage GenZ employees.

    Build a Sense of Community

    One of the most important aspects of keeping a Gen Z employee is to give them the liberty to interact and communicate with one another on a digital medium. They are born in the digital age and love to be connected 24×7 through the internet.

    Gen Z carries its smartphone everywhere and utilises social media in every way possible. They prefer communication through texts, video calls, and phone calls to face-to-face interaction.

    They develop a platform or community where they discuss and share ideas with like-minded people who feel their effort has a purpose and work-life feels more enjoyable.

    Accordingly, they expect the workplace to support them in working with innovative technologies. Research shows technology will be a crucial factor that Gen Z will consider while deciding on a job offer.

    Reward Them for Their Hard Work

    Gen Zers are true performers as they put a lot of effort into getting work done. For them, their hard work must be paid off. They expect at the workplace that whatever work they have carried out should be worth their effort.

    They are not someone who will accept any amount of reward if it doesn’t match their performance. Organisations need to put in mind the negotiation part while hiring a Gen Zer.

    They crave independence and like it under their control

    Let Them Work Independently

    When it comes to handling a project or any kind of work, Gen Zers expect their managers to listen to them. Since they have a knack for creativity, they want their ideas to be heard.

    These young employees want managers to give them work without any help or support from other teams. Being one of the most self-sufficient employees, Gen Zers like to keep things under their control.

    Embrace New Technology

    Organisations must change themselves in the way they operate to meet the expectations of GenZ. They must indulge in launching such initiatives that reinforce the company assignment, and employees’ roles in achieving goals and permitting people a chance to speak up their minds.

    They look for a platform that gives them easy access to information and resources. Two-way dialogue with leadership fosters a way for a greater understanding of expectations in the workforce for these young employees. To think that they were born during challenging times, these youths stand up for what they believe in.

    Prioritize Mental Health at Your Workplace

    These energetic individuals do not like stress at all. For them, mental health is an essential factor to stay productive and successful.

    In a competitive world, these young employees find themselves lost most of the time, which is why their focus is on overall well-being to lead a happy and fruitful life. Moreover, they like to choose those organisations that are diverse and have an inclusive work culture.

    Conclusion

    Every generation is different from the other. It is time for companies and organisations to incorporate the things and adapt to the flexibility that these Gen Zers have been asking for all these years.

    For a company to have high-performing results, it must indulge in the above-mentioned measures to manage these young employees properly.

    FAQs

    How do you motivate Gen Z workers?

    Appreciate them for their efforts, Provide regular feedback, create a sense of community, and Provide growth opportunities.

    What do Gen Z employees want?

    Gen Z employees want a better work-life balance, growth opportunities, great work-life balance and improved mental health and wellness support.

  • Why Do Investors Invest in Loss-Making Startups?

    The number of startups grew by 8971% from FY 2016-17 to 2021-22 with 65,861 startups in 2022, mentioned Commerce and Industry Minister Piyush Goyal. But are all these profitable? Nearly 95% of these startups are loss-making and significantly burning a lot of cash. Yet, there is something surprising about them. Many of these loss-making startups were able to raise funds and become an IPO.

    Earlier SEBI didn’t allow loss-making companies to go public and raise funds to save investors. It traces back to companies that were making losses, raised funds, and ran away leaving investors dismal. However, this drove these companies to go public in other countries.

    The government did not want these startups with future potential to move out of the nation. So, they enabled unprofitable companies to raise funds limiting them to only 10% of share capital. However, why would investors invest in loss-making startups? They are neither generating any tangible or intangible assets nor do they have guaranteed future profits. What do investors bet on?

    In July 2021, Zomato became an IPO whilst it had losses of ₹63.2 crores. There are many other companies like Paytm and Flipkart that were able to raise money even though they had losses in crores.

    In fact, the well-known eCommerce platform Amazon was in losses for the longest time and sustained solely on investments and raised capital. It was only until the last two decades that it became profitable and is now one of the top 10 biggest companies in the world. The bigger concern is why so many startups fail before or after raising the investments? Let us look into that first.

    Why So Many Startups Fail and Incur Losses?
    How Do Investors Valuate Loss-Making Startups?
    What Attracts Investors to Invest in Loss-Making Startups?

    Unlock Your Startup’s Potential with Our Exclusive Investor Lists and Resources

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    Why So Many Startups Fail and Incur Losses?

    A startup tends to burn initially for any reason; but what keeps it flunking year after year? It could be any of the following reasons:

    Talent Acquisition Cost

    A startup needs people to build the product and run the business. Generally, it is difficult to attract and retain them due to competitive salary standards in the industry. As a result, businesses often burn their pockets while acquiring employees.

    Marketing Cost

    Startups invest a lot in marketing to build a customer base. Again this leads to negative cash flow and thus leads to losses. Zomato itself spends nearly 9 crores on advertising.

    Acquiring Technical Competent Tools

    Startups invest a lot to automate and streamline processes with tech stacks. Again it adds up to the recurring costs for the business. Oftentimes, businesses do not assess the usability of these products and end up wasting more money as well.

    Not Targeting Customer Needs

    Many startups are coming every day with the hope to make millions of dollars and exiting. Unfortunately, they do not cater to any specific need and end up creating a product with null demand. As a result, they have a hard time getting users.

    An issue in Business Model

    Many young entrepreneurs jump in to start a startup without assessing the environment and building the right business model. It leads to many issues and friction amongst the teams.

    There could be many other reasons for a startup to be in losses for a longer duration. Initially, every startup makes losses, which is normal, especially for SaaS or tech startups. But if they continue to incur losses repetitively then they need to look for the reason. But the question arises that when these startups are already in losses; how do investors evaluate the worthiness or their valuation?

    How Do Investors Valuate Loss-Making Startups?

    Investors need to assess the company’s valuation before investing. Generally, a company is evaluated based on profits generated. However, when the company is not making profits investors generally look for other key metrics while investing.

    Customer Base

    The first metric is “customer base”. Investors look into the current customer base and estimate the growth thereon. The user must be dependent on the product to generate consistent profits or monetize them. If the user is not mentally invested, it is hard for a business to become profitable.

    So, investors generally invest in the growth potential of the startup and not the profits per se. They look into customer retention rates and other criterions such as CAC and LTV of the business. This gives them clarity regarding business growth potential in the true sense.

    Marketing spend return

    The next important indicator is marketing spend return. Is the company able to generate back the marketing cost? Generally, business investors study the startup market, environment, future growth prospects, and other indicators to understand the true valuation of the company.

    Business management and Moat

    Lastly, investors look into business management and moat. Is business management efficient, suitable, and sustainable? Does the business have a moat to leverage? There are 100s of startups targeting similar problems with identical products.

    Investors generally put their money on the ones that distinguish themselves. But what exactly drives investors to invest in unprofitable startups? Why do they spend millions on a startup that is in losses for years? Why do investors at times end up buying loss-making units? There could be several reasons. Let us dive right into them.

    What Attracts Investors to Invest in Loss-Making Startups?

    Startups today raise funding even with losses by selling their organization’s goal. They aim to scale the business instead of restricting themselves to minimal profits. Investors bet on the company’s vision and future growth possibilities when they are at their loss-making stage.

    Amazon is one of the biggest trendsetters to bring this revolution. Also, the fact that 70% of investors today are below the age of 30 justifies the risk appetite. Now quickly look into the scenarios and reasons why these investors invest in loss-generating businesses.

    Future Growth Promise

    Many investors don’t find other options such as mutual funds and savings accounts lucrative and move to other options with higher return opportunities. Generally, these startups offer the potential for the future even though they are in losses. Hence, they attract young or big investors to invest with the promise of future growth.

    Recovering Money

    Many big investors invest in loss-making startups because they can recover their money even if any one of the loss-making startups blows up. It is more like gambling intended to back the net investment gains.

    Vision and Mission

    Other sets of investors wish to invest in the business’s vision and mission instead of looking for profitability. In fact, many investors are driven to invest in tech startups to promote ‘Digital India’. Also, many startups, especially tech startups, are hopeful for success based on innovation. So, If they resonate with the business idea and see opportunities, they do not shy away from putting their money into the startup.

    Brand Value

    Often investors look for brands that are making losses but still raising money. They bet their money on the brand value instead of other metrics. One of the biggest examples of the same could be Paytm, Zomato. These loss-making companies raised funds only due to brand image.

    Exiting with Profit

    In some cases, instead of investing, investors directly purchase a startup even with the losses. Why? They speculate on opportunities such as mergers and acquisitions with a big player to exit with immense profits. Alternatively, oftentimes they purchase these units to create a profitable alliance.

    India’s best fintech entrepreneurs & a stock market expert, Mr. Vivek Bajaj once quoted that

    “Valuation is not a reflection of the earning, it is the reflection of future potential earning”.

    Investors run by this rule and focus on growth and scalability instead of immediate profits.

    FAQs

    Why do VCs invest in loss-making startups?

    VCs invest in loss-making startups in the hope of a profitable future, even though the startup is in loss but it might turn profitable in future.

    Should you invest in loss-making companies?

    Investing in loss-making companies is like gambling either you’ll lose all your money or will exit with huge profits.

  • Us Government Asks Google and Apple to Remove Chinese App TikTok – Will TikTok Survive Now?

    A popular social media app, Tiktok allows its users to create, watch and share short videos that are created on mobile devices or webcams. The app has taken the digital world by storm as users create videos of different genres like pranks, games, entertainment, etc. It owes its popularity to its ease of use, high levels of engagement and addictive quality.

    What is TikTok?
    The Downfall of TikTok
    Will Tiktok Survive in the US?

    What is TikTok?

    Douyin is a short-form video hosting service created and owned by a Chinese Company called ByteDance. It was originally released in September 2016.  The international version of Douyin is called Tiktok, which was launched in 2017 in most markets outside of mainland China for iOS and Android platforms. However, it was only after it merged with another Chinese social media service, Musical.ly in August 2018 that it became available for use worldwide.

    Since its launch, Tiktok has rapidly grown and gained popularity in almost every part of the world. By October 2020 Tiktok was downloaded in excess of 2 billion times, making it the third fastest-growing brand of 2020.  Growing further, it became the most popular website of 2021, surpassing Google.

    Top Downloaded Apps in 2021
    Top Downloaded Apps in 2021

    The Downfall of TikTok

    Although successful and globally popular, Tiktok has had its share of controversies. Through the years, it has been subjected to bans in countries like Indonesia, Bangladesh and Pakistan which have cited reasons like inappropriate content.

    These bans, however, were lifted within a short time as the company took proactive steps to take down offensive material as well as set up local offices to monitor and sanitize the content posted on its app.

    India Banned TikTok

    March 23, 2020, will always be remembered in history as the day the world literally came to a standstill.

    • China came into sharp focus as the epicentre of the dreaded COVID-19 virus.
    • India banned 59 Chinese apps including Tiktok in June 2020 citing reasons of security of the state and public and prejudicial to the sovereignty of India.
    • In January 2021 this ban was made permanent.
    • India was Tiktok’s largest market with over 200 million users just before the ban.
    • The Tiktok app was downloaded more in India than anywhere else in the world between July 2019 and June 2020.
    • In February 2021 Tiktok announced a layoff of 2000 Indian employees.

    US Government planning to ban TikTok

    The app’s struggle first began in August 2020 with then President Donald Trump.

    • Trump signed an order to ban all Tiktok transactions in 45 days if it was not sold by ByteDance
    • Within days, Trump issued a second order giving ByteDance 90 days to sell the US portion of its business to US companies. This was done citing reasons for national security. The Trump administration was concerned over the privacy issues of the app users.
    • There were talks of Oracle and Walmart buying a stake in Tiktok. This was done to alleviate fears of the misuse of the private data of US citizens.
    • These tentative deals have been blocked by numerous court challenges and it remains uncertain.

    The fight continued with the Joe Biden Administration.

    • The new administration has yet not set any new policy on the app.
    • It claims to be evaluating the risks to USA data and will deal with it decisively and effectively if required.

    On June 30, 2022, Brendan Carr, one of the commissioners of the U.S. Federal Communications Commission (FCC) renewed the call to remove the app from Apple and Google’s App Store.  

    He has written to these companies strongly advocating the removal saying,

    “It is clear that TikTok poses an unacceptable national security risk due to its extensive data harvesting being combined with Beijing’s apparently unchecked access to that sensitive data”.  

    The letter also refers to the numerous controversies that the app has found itself in, over the years. The ByteDance-owned Tiktok however firmly denies sharing user data with the Chinese Government.

    The Drastic Downfall In The Google Play Store Rating Of TikTok.
    The popular Chinese application ‘TikTok’ is now getting a strong negative reviews and negative publicity. Let us see the complete report on the drastic downfall in the Google Play Store rating of TikTok.
    StartupTalkyYash Gupta

    Will Tiktok Survive in the US?

    This begs the question – Will Tiktok survive if the US succeeds in convincing Apple and Google to remove the app from its stores?

    The statistics of Tiktok users

    • Tiktok has over 138 million users in the US alone.
    • The age demographic ranges from 13 to 60.
    • In terms of revenue, the app earned in excess of 500 million dollars in 2020.
    • The number of users of the app is consistently growing.  Even among the adult users.

    So yes, if the USA succeeds in convincing Apple and Google to remove the app from its stores, it will certainly be detrimental to the business.

    However, the app is still active and growing exponentially around the world.  The marketing of the app, although in its nascent stages, is growing in demand due to its vast audience access.  There are agencies which are eager to help brands create quirky content that garners eyeballs on Tiktok.

    Brands have also joined the app by opening user accounts which are used to create and post mini-videos for promotions.  Tiktok offers them the option of promoting their videos to other users for a fee.

    Tiktok also makes money from in-app purchases.

    Its easy accessibility, high engagement and deep penetration in different markets globally make it the world’s most popular app ever.  It is available in more than 150 markets in 75 different languages.

    Conclusion

    Even if the US market shuts down for this app, the likelihood of the business shutting down is slim. The app is like a multi-headed giant that just grows a new head when an existing head is axed. Having said this, it is imperative for the app to put measures into place that ensure the user of their privacy as well as have a strict policy about the content being posted on it.

    FAQs

    Is the FCC banning TikTok?

    Yes, the FCC has asked Google and Apple to remove the Chinese app, TikTok from their stores.

    Is TikTok banned in the US?

    No, TikTok is not banned in the US but might be soon banned over privacy concerns.