Startups need to make money organically, not by putting ads: Nandan Nilekani

Startups must reduce costs to get customers and must make money organically rather than sprinkle advertisements if they want to face the Winter Funding that is widely discussed, Chairman of Infosys Nandandan Nilekani told Moneycontrol in an interview aired on August 15.

“One thing that is certain is that I can say directly by watching a number of actors-is money has been spent in a fairly generous way to get customers,” Nilekani said.

“If you get a high customer acquisition fee, because you use some advertisements or something, and you have low organic growth, then the eyeball you get is not anything. For every 50 people, someone is your customer. Now from the customers you get, only 20 percent are maintained, so the funnel is very difficult, it is very difficult to make money there, “added Nilekani.

He quoted the example of Edtech Unicorn Physicswallah, and how its founder and Chief Executive Officer Alakh Pandey had maintained a low customer acquisition cost by focusing on homemade videos, unlike some of his colleagues-unacademy, byju, and Vedantu-who had spent millions of people-unacademy, Byju, and Vedantu-who have spent millions of people-unacademy, byju, and Vedantu-who have spent millions of television and other digital advertisements.

Nilekani also said all large consumer internet companies such as Google, Facebook (now Meta), Amazon, Alipay, WeChat, Baidu and Bytedance, among others, are very profitable and therefore startups must reach the point where they get their economic units correctly and correctly and correctly and correctly and true and true and true and true and true and true and true and true and true and their startups to reach their units and units and their units and units and their units and units and units and their units and units and units and their units and units and their economic units and their units and units and units and units and their units and units and their economic units and their units and units and their units and units get their units and units and units and units and their units and units get their units and units and units and their economic units and their units and units and units get units and units and units Eka and their units and units and their units and units and to start making money.

Make money is the best defense against all this (winter funding), “Nilekani said.

Now people say we have to grow very fast, so we will make losses until we grow … okay there are some arguments there, but that does not mean you are not focused on getting the right economic unit at the beginning of the game. It’s also about using your capital very efficiently and very seriously, “added Nilekani.

Infosys’s co-founder comments about profitability for startups and unicorn came when all eyes in the ecosystem were directed at this size.

Venture Capital and Private Equity Companies, Investment and Veterans Bankers such as Nilekani Advising Startups and Unicorn to Prioritize Profitability Rather than Investment After Investment into Indian Startup Ecosystems, currently the third largest in the world, falls significantly after two years in a row AMID AMID AMIDS The third best in the world, down significantly after two years in a row from the weight gathering at Amids Amid slowing down the global financial markets.

Many startups scramble to prepare the runway for the near future. Nilekani, however, said that he hoped that “large companies” were born from this era when he quoted an example of how Facebook came out of the global financial crisis and Amazon rose from Dotcom Bust.

“Large companies will emerge from this situation. This businessman is very smart and extraordinary and ambitious and this VC winter experience will also make them much more aware of the cost of capital and how to stretch the money you have and how to win clients, customers smartly without exploding a lot of money. So I think the lesson will come out and out of this will appear several phenomenal companies. I am very sure about that, “said Nilekani.