Startups are referred to as the ‘backbone of economies.’ And with Sri Lanka gradually emerging from its economic crisis, the need for startups has never been greater.

“Startups are becoming more and more globally relevant, the Co-Founder of Hatch Works Jeevan Gnanam asserted, in a recent LMDtv interview.

The local startup ecosystem has become more robust against the backdrop of the economic crisis. “Interesting startups have started to arise, form, find a product-market fit, scale and grow,” he explained, adding that some Sri Lanka-based startups have even set foot beyond the shores of the island.

He explained that “Sri Lanka is a very small market. [Some] startups figured out a solution that works locally and they’re starting to apply that local technology on a global scale.”

“This is the brightest kind of spark that has formed during the economic crisis. And with a small ignition, which is capital market access, I believe this can grow to a global scale; it can be one of the things to come out of the crisis that ignites growth and recovery for the country,” Gnanam declared.

The recent budget included proposals for concessionary loans to SMEs. Gnanam believes that while this will help startups scale, it won’t change the setup much since “most startups don’t rely on debt – they rely on equity.”

Nevertheless, he added that the proposals, availability of loans and falling interest rates are very encouraging.

He also spoke about startup cultures, mentioning that they’re driven by entrepreneurs and not enterprises: “The entrepreneur or founding team sets the culture of the organisation at a very early stage in a startup.”

“Most startups [consist of] only one or two people so [startup culture] is definitely entrepreneur driven; and that’s why it has a heavy bias towards doing and collaboration,” Gnanam elaborated.

He continued: “I think that doing, collaborating, and being open-minded and able to change are characteristics present in the startup ecosystem, which you do not have in typical corporates.”

The startup culture is more a mindset than a certain point in time. To this end, Gnanam stressed that this culture changes at each stage of an organisation’s journey. He explained that while people drive the business in its formative stages, with growth and the introduction of systems and processes, the culture “has to change to become systems-oriented rather than leader-oriented.”

Gnanam emphasised the need for entrepreneurs to understand what stage their organisations are in, and “when you have to let go for others to take the leadership and run with it.”

Around the world, there’s a growing trend of traditional and established companies beginning to embrace startup cultures. Hatch Works’ Co-Founder believes this is possible but emphasises that a startup culture “can’t exist within the current corporate structure.”

He highlighted the need for corporates to adopt new ways of thinking and embrace open innovation. However, many corporates struggle with time management and prioritisation issues.

Commenting on this, Gnanam explained that many businesses are pressured to manage their day-to-day operations – and therefore, “having to look at something new that could possibly disrupt your existing business” is problematic.

In view of this, he recommends corporates that are eager to embrace startup cultures “not to do it inside your existing entity.

“Create a new enterprise outside, work with partners who understand startups and build it like you would a business from scratch. Find someone who can take leadership of that enterprise, and provide market access, funding, scale and product-market fit,” he urged.

He also said that “we really need the startup culture to permeate across the nation.”

Gnanam concluded with an encouraging message to future entrepreneurs: “There’s no better time than now if you’re looking to create a startup – this is the time to do it.”