Why do 90% of Indian startups face their doom faster?
It is well said that those who think aloud and are determinative enough to be out-of-the-box thinkers are successful entrepreneurs. Do all of them retain the zeal, energy, and determination to let their startups sustain and grow at a fast pace, particularly while they are bound to face numerous challenges in today’s cutthroat competition? The common phenomenon is that while too many risks are involved, the rewards of incepting and running startups are equally intrinsically high at the top of the prism, allowing us to write success stories that are lauded by all and sundry. 90% of Indian startups fail within 5 years of inception.
Looking at the other side of the coin is equally crucial. Undoubtedly, startups fail all over the world, and India is no exception. Starting something up is hard, but it requires lots of extensive effort and careful planning to take that successful path while facing innumerable known and unknown hurdles. It should be noted that successful entrepreneurs always learn from their own mistakes and even from all the mistakes that others make by trying to avoid them. They never repeat their mistakes and also ensure that the blunders of others that cause doom for them aren’t incorporated in others’ cases while striving to escalate their startups to greater heights. Do you want to know why 90% of Indian startups fail within the first five Years?
A study by Oxford Economics found that 90% of Indian startups fail within the first five years of their inception. Of late, India has emerged as the third-largest startup ecosystem in the world today, but it still lacks successful innovation, skilled workforces, adequate funding, inadequate formal mentoring, and poor business ethics. All such factors play a key role in inviting the doom of India’s failing startups.
Here we have enlisted the most common reasons for the failures of startups in India
1. Identify the Market Problems at the Right Time
The saying is true that ‘Time is Money’. You need to find out the markets’ unsolved problems at the right juncture, and your ideas should fulfill all those unsolved problems that invite unnecessary hindrances in business operations. By implying promptness and ensuring that time is valued, you can start to attain success and thus make decent money in the process while getting recognized too.
It should also be kept in mind that ‘identifying the correct market problem is not as easy as it seems’. The need is to develop a strong team of your dedicated workforce that should have solutions for each problem handy. There should be strong willpower to take on the responsibilities with a zeal that nobody has or is insignificant.
Timing plays a greater role in bringing startups on a successful path. For example, if the promoters of Netflix had launched it in 2009 while Internet and smartphone use were negligible, it would have inevitably died naturally. Identifying the market problems and providing the exact solution for them is one of the main reasons 90% of Indian startups shut down within 5 years.
2. Have Digital Marketing Strategies in Place
The latest digital marketing strategies for startups can also help them find new customers with ease. Professionally created digital marketing strategies are always helpful in creating brand awareness, generating traffic, and therefore boosting sales. With the increased use of the Internet and smartphones today, online avenues for marketing have become a must for every entrepreneur. Let them understand this crucial element to give wing to their startups, thus maintaining distinction in their respective genres.
3. Run Out Of Cash
Financial stability is one of the most important aspects for a startup to retain its stand and, therefore, keep businesses alive to counter subsequent challenges. If you don’t have a smooth cash flow, then your ideas will gradually start to fail as the enthusiasm will ultimately die down. No matter how passionate you are, or perhaps you are a creative doyen willing to prove your mettle through a team of professionals with great creative ideas, often a lack of funds makes it impossible to let the ideas materialize. Funding is one of the easiest yet essential means to let a company remain financially sound, thus establishing itself with innumerable support from whichever marketing avenues you are going to explore with a backup resource.
You may Also Like: 10 Things to Know Prior to Investing in Startups
4. Lack of Vision
Whether you are bootstrapping or raising external funding through all possible means, the first task is to have a clear understanding of your goals and also to have a focused idea of how to achieve them. The founders of a startup are not only required to have a vision but also a bigger goal that people can look up to, especially if things are not going in the right direction. Employees and partners should be motivated toward their goals. The lack of vision of founders can ruin any startup in the long run.
Lack of vision is one of the main reasons 90% of Indian startups fail within 5 years of inception.
5. Lack of Market Understanding
Before launching the products and/or services into the market and before the target consumers, you need to understand that particular market sector thoroughly as well as keenly whether your willingness to target that sector is worth of it or not. Knowing the market where your products and services stand would be a crucial phase of energizing motivation. Thus, you would be on the right path to overcome the issues that are bound to occur in the targeted market. You will be able to know how you need to reach your goals as important ones in the capacity of a founder achieving the big dream—incessant success.
Once you launch your products or services, there is a maximized possibility of you starting to receive multiple types of feedback from potential customers. Some of them would have a positive tone, while a good number of others might also harshly criticize your attempts. Apart from maintaining the quality of your products and services, you must also carefully check the associated services, including shipping, timely deliveries, etc. You need to remain a troubleshooter at every point in time.
6. Not Having a team of professionals
The team of your company can establish your startup or break it, so you must be careful while hiring people. The right professionals work to archive the long-term and short-term goals of the firm. The talented workforce works to accomplish the mission and vision of the organization and try their best to help the founders achieve their dreams.
You may Also Like: Inspire and Motivate Your Employees to Achieve Your Company’s Goals
Benefits of hiring a talented workforce for a startup:
- Exceptional work output
- Positive work environment
- Lower training costs
- Innovative ideas
- Quick learning environment
So, if you want to avoid one of the main reasons why most startups fail in India, hire a quality and talented workforce.
7. Doing it All Alone
Do you know why so many startups are failing in India? There is a term in India for solo founders. It is not a good idea; you need teamwork and cooperation to serve your customers with perfection. Establishing a business is a difficult task, so you need a team of professionals in order to survive in this competitive industry. It requires hard work, dedication, and planning.
Apart from getting new customers, you should also be well-armed with ways to transform your unhappy customers into valuable resources. This is because, once you have many customers, some won’t be satisfied with your products and services.
Some benefits of teamwork:
- Get new and innovative ideas
- Diverse perspectives help you resolve hurdles
- Get even complex work done with ease
- Keep your team motivated
- Sharing the workload eases burnout
- Dividing the work lets your other members grow their skills
8. Legal Aspects
If you think about “why startups fail in India,” then legal aspects may be one of the reasons. There could be many legal issues when you start increasing your wings. So, you need to have proper legal assistance.
In addition, your website should have mentioned all terms and conditions, privacy policies, etc., among others, which will save you from legal hurdles. It is also one of the reasons 90% of Indian startups fail within 5 years of inception.
9: Save your products and/or services from Getting Outcompeted
While launching your startup, you need to observe your hard-core competitors and be prepared to change your strategies in order to meet the expectations of your customers. In addition, you should also be ready to tackle any disruption caused by your competitors.
Not only improving features in your products but also improving your services is a key to survival. Keep your eyes open and reach your existing customers to get their feedback. If you take feedback positively, then your startup will succeed in India.
You may Also Like: Word-of-Mouth Marketing Strategies to Increase Sales
10. Convert Feedback into Feed-Forwards
Whether it is negative or positive feedback, reply to each with a solution. When you receive negative feedback, try to find the root cause and repair the loopholes in the process. If you ignore the feedback and complaints of your existing customers, they will switch to your competitors. Giving priority to the customer’s feedback and complaints is what helps you make appropriate changes to your products and services.
You may also like: How Negative Reviews Can Impact Online Reputation & Organic Ranking?
Summary: Why do 90% of startups fail in India?
The points that have been mentioned above are primary reasons for being the ones having a practically causal relationship with most startups in India facing failures. If you are a founder-entrepreneur, you should take the above-mentioned points into consideration to overcome all such hurdles and gain irrefutable success in your endeavor as an entrepreneur.
However, keep your minds open to adopting the newly introduced developments to establish and flourish your startup without lagging. A startup always seeks patronization from a mentor who guides the founders in the long run.
Whether you need website content writing or SEO services for your startups, we are available round the clock to serve you with the latest and most advanced strategies to help you escalate further.
If your startup deals in many products, then you need our product description writing services. It will improve the ranking of your products and thus you will get traffic as well as sales.
Suggest your ideas on how to take a startup to the next level, or why 90% of startups fail in India. Comment below.
