Has the startup bubble affected PR business in India?
The arrest of Stayzilla founder, Yogendra Vasupal, is a sign of the current turbulence in the start-up sector. From stratospheric fundings to downsizing, the PR business in India has been a key part of pushing the great Indian start-up story. Firms had sprung up literally overnight that catered to the start-up boom and now are facing tough times.
Udit Pathak, founder and director, Media Mantra, says “The current industry scenario can be segregated into three sections: early Stage start-ups with minimum cash flow, mid-sized start-ups who have the basic Series-A funding and the well established one’s who are financially strong in their game. It is evident that largely early stage firms, who perform relatively less well, easily get affected in this churn up, running pillar to post in search of a comprehensive PR solution. Therefore, small PR firms who deal with such early stage start-ups are facing impairment, big time.”
Sources told PRmoment India that even some of the stable and larger PR firms are facing the prospect of unpaid dues. In fact, a proposal was mooted to PRCAI for sharing an open blacklist of clients who have not paid up. While, sources said this proposal was shot down, the issue will continue to be of concern.
How to pivot as a start-up PR firm
Some PR firms have already begun the process of evolving with the market. Says Pathak, “One and a half years back, when start-up ecosystem was notably changing, we at Media Mantra, took a conscious decision to focus on B2B clients, since the impact was less in B2B as compared to B2C, owing to their niche business model. Hence, we and our clients were least affected and were successful in making the best out of this difficult situation.”
Value 360 Communications, another leading specialist start-up PR firm, has meanwhile tied up with LEWIS to set up another company called LEWIS Value 360 to expand its’ footprint globally as well as acquire a client base that is not heavily dependent on start-ups.
Communications professional and former journalist, Aditya Kshirsagar, says that PR firms will also have to look strongly at measurement as B2B firms will be more concerned than B2C firms about PR measurement.
Says Kshirsagar, “ PR firms should stop kidding themselves and call themselves influencer relations and not public relations.” The reason being B2B start-ups are highly focused on lead generation and will look at PR for support for that.
Shilpa Mahna Bhatnagar, CEO and co-founder, Evoxyz Technologies, does hint at that saying “PR should demonstrate on how we want to impact lives as well as justification on why we feel we can make that happen. This is irrespective of the fact on how the ecosystem is shaping up or how the investors think about us. We focus on our end customers and how they derive the value out of our offering. We feel that if we communicate this well, everything will fall in place to make it a thriving business for the right cause.”
Kshirsagar says that PR as a business generator means PR consultancies will need to come to grips with platforms such as Reddit and Quora which can generate leads and with content marketing that is lead generation oriented.
Kshirsagar also flags off Fin-tech as an area of potential growth for start-up PR in the B2B space, but suggests that PR firms look beyond mobile wallets and consider analytics, insurance. Onboarding solutions, enterprise software are other areas of interest.
The PR and media start up relationship
At the core of the India start-up story has been a strong PR push and a matching and very legitimate rise in coverage. Newspapers such as ‘The Economic Times’ devoted entire pages to start-up news and digital media organisations like ‘Your Story’ grew exponentially on the back of the start-up boom in India.
However, communications professionals like Kshirsagar are sharply critical of both the start-up PR business as well as the start-up journalists phenomenon for having contributed to the lack of analysis around start-ups. The former for pushing primarily funding based stories, the latter for not asking enough tough questions about the start-ups being covered. Kshirsagar shared how a mainstream media organisation covered a start-up he worked with, without once talking to anyone in the organisation.
This is now changing. Pathak says, “Media has definitely adjusted to the demands of these start-ups. With progress of time, knowledge and opportunities, their perception has changed to the extent that they have set up diverse criteria, ranging from funding to sustainability of business models, while selecting start-ups to cover.”
Some media organisations, for example, no longer cover start-ups that are not funded. Organisations such as News Minute and CNBC have begun to cover the challenges faced by employees who have been let go and unpaid vendors.
This News Minute article for example talks about the issues NFN Labs faced with recruitment firm start up PiQube.
The Stayzilla vs . Jigsaw Advertising face off has seen strong coverage of both sides of the issue.
Return of talent to PR consultancies
Some of the most badly affected group by shutting down start-ups, are naturally the employees. However, Pathak attempts to put a positive spin on this saying, “ With rise of start-ups, eminent PR professionals got a reason to branch out into the freelance mode to capitalise on the free-flowing expenditure of cash, which early stage start-ups were willing to spend.However, due to unfavourable market conditions freelancers could not harness the benefits of robust revenues in trade, even after gaining continuous investments. Hence, it was natural for them to go back to their roots and rejoin the earlier PR firms.”