Tech-based disruptors looking to modernise a traditional system
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Use technology to address system inefficiencies + time poverty, and build a fair and just ecosystem
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Market creators and value chain enhancers
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Set industry standards
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Elevate authenticity, transparency, productivity, agility, responsiveness
Creative capitalists poised to scale
Carry a strong innovation focus
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For-profit companies with a strong focus on productivity, profit, and growth
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B2B2C / B2B
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Mostly male founders from non-creative, often technology / finance backgrounds
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Have an experiment / expand mindset — similar to mainstream startups
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Likely to build aggregator platforms or disruptive ecosystems while consolidating smaller players / producers
Business Hardships
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Takes time to change the system, build a market, and garner B2B acceptance
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Not mass market and unlike tech startups in other sectors, will not be able to promise acquiring tens of thousands of users
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Adaptability to new tech is slow; even large organisations do not have basic ERP
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Fewer examples of success / failure to inspire, educate more startups
Workforce Concerns
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HCMs need to partner with governments but find it difficult to access that support
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Investors rarely understand the core DNA / value proposition of Process Enhancers since they are seen as foreign to the handmade sector
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HCMs find it hard to find investors willing to invest large ticket sizes in untested terrain; they are forced to reach out to multiple investors for small ticket sizes
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HCMs prefer financing from one or fewer sources to reduce paperwork
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HCMs prefer investors who are involved and supportive at every stage without interfering with the core mission
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Enterprises are also averse to equity because they do not want to lose control; they rarely have access to mission-aligned investors
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Lack access to investors who understand arts/crafts + rural + heritage + livelihoods + appreciate market based solutions in the sector
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Urgent need for and lack of catalytic grants and equity
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Investment horizon needs to be > 5 years but most investors are not so patient or willing to accept lower returns
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Deep tech / IoT is expensive to develop and needs larger ticket sizes. This category of HCMs is working on collecting + analysing data to improve processes and need significant capital for measurement and documentation of impact metrics as well as brand building to help customers, industry and investors see value.
I can tell investors we have a market that will grow 1000x. But I can’t tell them it will happen in 5 years. It may take us a lifetime to do that. It’s very difficult to find investors who are willing to work with ops-intensive craft businesses where you can and will see steady returns over a long period of time.
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— KUNAL VAID, FOUNDER & CEO, RESHAM SUTRA
Skilling & Training
Technology
Ecosystem Building
Working Capital
Measuring Impact
Scaling & Expansion
PE/ VC Investors and Institutional Investors
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Not willing to be patient and / or accept lower returns
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Unwilling to work with a longer time horizon
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Demand quick turnarounds, need clarity on scaling which is not easily available in an untested arena
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Not used to seeing a mainstream, profit-seeking, impact-driven startup trying to make a difference in the handmade sector
Angel Investors
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Lack access to the right investor networks
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May need multiple angel investors to get to the larger ticket sizes they need, further complicating matters
Impact Investors
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Prefer proven terrains and impact metrics that are demonstrable in a short time span
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Less likely to see the strong business centricity of Process Enhancer HCMs; view them more as social enterprises that focus primarily on bottom-of-the-pyramid impact.
Grants
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Allows HCMs to experiment and innovate, build R&D capabilities
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Aids the training / skilling / educating components
Mission-Aligned
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Allows HCMs the freedom to pursue their People and Planet priorities
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Backs solutions that may onboard customers slowly compared to mass tech solutions but are likely to plug ecosystem challenges
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Allows HCMs to command greater premiums in a more equitable manner
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Supports HCMs to avoid mission drift
Patient, Risk-Tolerant, Long-Term
Allows HCMs the time + flexibility required to:
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Test and validate disruptive technology or hardware; experiment → fail → learn → pivot quickly
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Mainstream the solution, ensure its market adoption, and broader acceptance by customers / users
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Solve for market failure at a systems level rather than offer a superficial solution
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Scale slowly and sustainably
Non-Financial Support
Delivers exposure to right networks + partners who understand sector-specific impact + market solutions; enhances HCM learning curve, reduces failure
“When you bring in a partner, it’s not just financing. There's going to be a lot more involvement, which can be good or bad. If we are not aligned in our vision, it can be a bad partnership. Whatever investment is in the pipeline can be a burden. If we are aligned on the vision, then that same investment becomes an asset.”
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— KUNAL VAID, FOUNDER & CEO, RESHAM SUTRA