Of Unicorns and Cockroaches – Why ambition without focus drives valuation but fails to create value?
Ambition, as per the Oxford English Dictionary, is a strong desire to do or achieve something. It is the wings that hard work requires to be successful. As said by John D Rockefeller “the man who starts out simply with the idea of getting rich won’t succeed, you must have a larger ambition”.
In case of new age Indian businesses this is even more true. The Indian companies are now fixated on being the next Unicorn, a mythical animal, whose name is also given to companies who are valued at a billion dollars before going public.
In case of ‘Unicorns’ in India, their ambition is presumably to be in the Unicorn club to attract the nth round of funding…show more content… Snapdeal came a long way from being a deals website to be an e-tail behemoth. The company was valued at $6.5 billion last year. Snapdeal was a contender to dominate the Indian e-commerce sector. It had successfully tapped the market 11 times to rake in $1.7 billion. The brand today is facing an embarrassing merger with its key rival Flipkart. With Snapdeal valued at $1 billion, a steep fall from its earlier $6.5 billion valuation. What is more rattling is the fact that this merger is engineered by one of Snapdeal’s investor. So what has caused Snapdeal’s steep fall from glory?
There are a variety of reasons that are attributed to Snapdeal’s fall. The Amazon threat, a very expensive rebranding exercise which left the company gasping for funds, missed sales target, exodus of senior management, goal setting with zero accountability etc. One major reason towers all. And that is, the brand lost its focus from its core, the ecommerce business.
Snapdeal acquired 13 companies, all from different categories from logistics services to payment wallet to ad targeting to grocery marketplace, probably in hope of synergy. But it certainly backfired. The brand failed to develop any USP for its e-tailing business which is arguably its calling card. This lost focus has caused the excessive cash burn and credibility loss for the founders, so much so, the founders have little say in the…show more content… It would be interesting to know about two Indian unicorns who are in the greens. Despite an internal turmoil within the senior management at the company, Mu Sigma, an analytics service provider is posting robust business growth with a revenue of INR 810 cr and a PAT of 463 cr (reported March 31, 2016). It now aspires to go public in the next 5 years. While InMobi, a global mobile advertising platform, which competes with the likes of Google and Facebook, posted profits for the first time in the Q4’16. InMobi’s decision to drop the non-core businesses buttresses the point of focusing on the core to create sustainable business with strong