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    20-30% of startups to disappear; India managing COVID-19 crisis well: John Chambers

    business | IST

    20-30% of startups to disappear; India managing COVID-19 crisis well: John Chambers

    Economies worldwide should prepare for at least nine months of economic pain as they deal with the coronavirus pandemic, former Cisco boss & now venture capitalist John Chambers said.
    In an interview with CNBC-TV18's Shereen Bhan, John Chambers Founder & CEO, JC2 Ventures, and Chairman Emeritus at Cisco, said that the health and economic crisis will take three to five quarters to run its course, and any green shoots will emerge only later in the year and a full recovery is unlikely until early 2021.
    In fact, a survey of the top 286 early-stage founders and 114 venture capitalists about the future by leading VC firm NFX shows that about 40 percent of VCs see a recovery only between April 2021 and April 2022. The study also found that the biggest worry for founders right now is venture capital funding drying up, as sales decline.
    On which companies will survive the crisis, he said: "I have been through 5 economic downturns, 5 various healthcare crisis, 3 supply chain issues and each of those we played through over time well. Many companies adjusted quickly to it and then positioned themselves for the future."
    "What is different this time is, this is probably the quickest economic downturn we have ever seen," he added.
    He, however, noted that governments, central banks, businesses and citizens have responded quickly and came together to deal with the coronavirus crisis.
    "I think the US is navigating through it, it is very likely we will flatten the curve," Chambers said, adding that on the economic side, "you are beginning to see huge emphasis from the Fed and from the treasury to put money into the system, to keep job growth and to maintain jobs."
    India is doing one of the best jobs in the world under Prime Minister Narendra Modi, he said.
    On the future of venture capital funds and startups, he said that "probably 10-20 percent of the venture capital funds and 30-40 percent of the startups would disappear over the next 2 years."
    His advice: "Startups should picture what they have to do to survive. Position yourself to protect your employees and your customers, get closer to your employees and your customers and communicate constantly on how you are going to navigate through this and your progress."
    "Then prepare for the upturn and then prepare for how you are going to break away during the upturn, what you are going to do differently, how are you going to take these terrible events that are in front of us, deal with the world the way it is and then position yourself for the future," he said.
    Chambers added that "we will come through this well but the next 12-18 months will be very bumpy and the next two quarters will be very tough."
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