The past couple of years have seen fiascos such as Paytm's overpriced IPO and Byju's reporting losses in FY21, which were 10 times its loss in seven years. Four Indian firms funded by venture capital giant Sequoia, including Ashneer Grover-founded BharatPe, were found involved in embezzlement and inflating revenues. As one of India's biggest conglomerate faces allegations of accounting fraud and stock manipulation, Infosys founder Narayana Murthy has flagged a lack of quality market research in the country.
Calling 'mera bharat mahaan' a mere slogan, Murthy also said that only hard work and discipline by each citizen, can make India economically strong. The IT sector veteran pointed out how entrepreneurs are overestimating market potential, which also forms the basis for venture capitalists to pump funds into Unicorns. This happens because there isn't any firm in India that specialises in market research, and misreading opportunities later backfires.
The massive losses reported by startups, and the fact that hardly 20 out of more than a 100 Unicorns are profitable, has made investors cautious, leading to a fund crunch for the sector.
Narayana Murthy even went on to admit that he had to shut down his first firm Softronics in the 1970s, because of a lack of market research. He advised firms to earn respect and be free of corruption, to gain support of the government.
