Few common reason why Startup In India Fail.

Many start-up’s in India fail moving to the reasons mentioned below.

As per a recent survey it has come to conclusion that 90 percentage of most Indian startups fail in the first five year of operations this is because of several factors mentioned below.

lack of exact need for innovation

your customers don’t want it, your market doesn’t want it, but you develop product assuming that you will find customers for it, this is one of the main reasons for the failure of startups.

you need to identify
what people want?

what is the gap in the market that needs to be addressed and then find a solution or service for it.

Patent Applied

Another point that I would like to make here is number of patents applied by each countries and if you were to compare, India applied for 5000 patents in 2016 in comparison to South Korea which had filed for 15,000 patents and China at 29000 patents and Japan at 45000 patents, this itself shows the kind of innovation that each country is having and that is what India is missing as well.

Innovative Companies.

the Forbes magazine read recently made a list of 25 innovative corporations in the world and there is only one Indian company that was featured and that was the Asian paints so we need innovation which is lacking in our country.

Copy Cats

We are largely copycats

for uber there was a Ola
air bnb we had oyo rooms
similarly for for Amazon we had Flipkart
For Spotify we have gaana

we are not innovating the way a startup should be performing

Disruptions on the products

we have not created a product or service that can be taken globally that can create disruptions in the market and that can change the way the market dynamics would work, like what Uber is doing to our country

unfortunately India is yet to make any Uber or air bnb by self yes oyo rooms may be a great success and it has gone truly global, yet in comparison then it is again a copy of a model that already exist.

we need innovative thinkers that come with Innovation and solutions that can help people.

India’s leading industrialist Mr Ratan Tata has always mentioned his displeasure over Indian startup not having a disruption model which can change the global dynamics of business.

Busines environment

None of Indian cities are featured among the global destinations for Innovation and research and development the only city in India which comes after 20th position is Bangalore that also is an indicator of how we should improve our atmosphere of startups

What problem in your customer’s life are you trying to solve that they cannot solve by themselves.

what every Indian entrepreneur and startup should ask them self is what problem in your customer’s life are you trying to solve that they cannot solve by themselves if you can find a solution a service and alternative that is what true startup should be doing and forcefully find a solution and then find a customer for it.

Customer money making model.

Innovation should happen around customers needs.

missing innovation around customer money making model is what missing.

Unfortunately in India most entrepreneurs think, how they can make money at the easiest turnaround time which itself is a wrong approach.

I find it like those movies which are made so that they win awards and others which get awards because they made a great movie, we should be in the later category.

Negative cash flows in negative working capital.

Negative cash flows in negative working capital please understand cheque in hand does not meet anything

what really you should be having is cash balances the assumption that you will be paid for the assumptions that you have made a business is not enough you need to see the real currency in your bank accounts that is when real startup will earn money else it will burst in no time.

profit and cash both are important profit in the books of accounts but not having cash does not make any sense therefore we should ensure that we have cash flows and stable steady cash flows.

An entrepreneur should always focus on positive cash flows.

Expansion with negative cash flows is always suicide for a startup.

Many start ups have this thinking of we will acquire the customer first even if we are in the losses for couple of years unless you have deep pockets and good backup having a loss reading strategy would ensure that your startup will terribly fail therefore do not catch a loss leading strategy we need to acquire customers as well as they should not be any gap between the cash flows.

Scaling up

What many of the startups forget is that they do not have a proper organised well planned scaling up chart.

They may be successful they may be profitable they will be a leading player in a particular region Yet they may not have a well sorted well-thought-out scaling up plan without which if the entrepreneur do not know where and how we can expand his business, it will, by all probabilities and its journey, somewhere in the middle or may not grow beyond a particular level.

They were as a startup you should ensure that you have a practical and very sorted out scale up plan.

Talented manpower, Good people Vs Right people.

In many office we employ, people whom we know,but understand you may have good people but you need to have the right people to scale up, you should always have the right people not good people it’s here many of the startups make as a mistake.

second point is regarding the expansion of the market,, always understand you cannot scale up with the same team that made you 1 million cannot help you make it 10 million therefore as we grow we need to change our key people. This includes your auditors as well.

Employ people who can question you. Who can say you are wrong.

Always ask yourself if you want to expand if you want to scale up do you want good people or do you want the right people and the answer should be you want the right people

The good people help you reached 1 million however this good people may not be accurate in terms of qualification in terms of exposure in terms of experience to teach you or to make you reach 10 billion target that you would have, therefore always remember to employ the right people

You should employ people who can question you, who have the guts to say that you are wrong who can correct you if you are wrong therefore we should ensure to have a team of people who motivates you to achieve your goal and who have the same vision as yours who has the same direction as yours.

Building teams are very important for entrepreneur growth do not forget that

Result oriented people.

Ensure that you employee result oriented people and not hard working people it has been observed that many companies have a good employees who come on time who does the job who does what you ask them to do and who do a brilliant job

You should employ people were result-oriented who have entrepreneur zeal inside them who are go getters and not yes boss people therefore ensure that you employ result oriented people.

Result oriented people are simply those boys or girls men or women those executive who bring quantifiable results to your organisation the results should be measurable in terms of sales volumes or in terms of revenue models ensure you have that kind of people.

Delegation.

most of the time meaning of the entrepreneurs do not delicate with authorities they want to do everything they do not trust or ensure that their employees are not trustable enough to do things within their scope and imagination if you do not delegate you cannot grow delegation with authority is the fundamental of business success and delegate with athority you need to develop a trained team bring in systems in such a way that there is no chances of falter ensure your team follow system in such a way that even if you go for a holiday for one month your organisation will still work with as much as a precision as it would work if you were physically present. Be a master artist in delegation.

Make your why very clear.

You should have absolute clarity on why do you get up everyday morning and that will be the answer to several of your questions on your entrepreneurial journey.

your vision should be in tag and you should always ask yourself why do I get up everyday in the morning what is my purpose of getting up in the morning everyday what is my vision and am I attaining it?

Wrong or confused product positioning.

Another major reason for the failure of startups or wrong positioning.

You cannot make a product for everyone.

You should know what is your products identity.

You should clearly know who are your customers always remember you cannot be a product for everyone you cannot be everybody product you cannot design a product for everybody therefore you should have a clear understanding as to the psychographic and demographics of the market and it is only based on that you should do product,pricing,packaging,branding marketing and communications.

You should also know your position well you should know whether you are the best whether you are the cheapest if you are the best or if you are the most valuable if you have the maximum features you should know where and what you stand for.

What products and what schemes that has to be introduced to introduce your product in the market is based on the above mentioned understanding of your product and services in the market.

Therefore positioning is a key important function of a startup.

Entry barriers

Have you created entry barriers to save yourself and your startup like patented technologies scale of operations economies of scale IPR before do you have any such things that can save you and your company from immediate competition.

Feedback

Always remember your first product is not your final product how much every effort you put into making the best product you may still have to change as per the customer of market requirements therefore do not fall too much national in love with your product or service the willingness to change and accepting feedbacks critical to a startup.

finally it is a product that people wants not what you think people would want therefore we should be very adaptable and welcome to any suggestions and changes and if practical and if what they are saying make sense we should change ours, this does not mean that you changed as per what people say if you have a clear idea of what you are doing then you should not change your plan as well.

Author: Hisham Kabir
An MBA with 18+ years of experience, spanning senior roles across multiple industry verticals as an account manager with B2B Sales & Business Development in Events and Marketing, Food Buying sourcing and procurement, FMCG, New Product Development, F&B, Catering & Banquet, End to End Event Operations Management. LinkedIn sales navigator expert. LinkedIn helper2 sales automation and Zoho CRM. Extensive functional expertise in successfully managing end-to-end aspects of F&B operations spanning the front and back-office operations within budgeted guidelines and to the highest standards. People Management – Experienced in recruiting, training and managing F&B teams - Most recently managed a 50+ strong cross-functional team. Proven track record of managing 400+ catering events including numerous high-volume corporate and social events with more than 5000 pax. Further to MBA, completed a Management development programme in sales management from IIM which is among the leading business management school in India. Later ventured into independent entrepreneurial business by launching and retailing a ready-to-cook food gravy paste brand using retort technology called freedom kitchen. With significant insights into front-end retailing and a strong background in the Retail Industry, I shifted to Corporate Path by joining a food-based FMCG company as part of their rural market expansion.  My expertise is in operational excellence, channel sales development, team management, client relationship development, and Event Operations Management. large ticket banquet Management, Menu planning, costing and P&L, and people management. Driven by a passion for advertising have conducted an exhibition titled walk through the history of Volkswagen beetle. where I showcased several print ads released by Volkswagen Beetle in North America from 1958 to 1971. You can follow blogs on www.buyologist.in dealing with trends in marketing and advertising and behavioural economics.

Leave a Reply

Your email address will not be published. Required fields are marked *