Why do Startups Fails in India? New Ideas & Failure Causes

Hello beautiful souls!

Hope the warmth of the new year celebration is keeping you energetic and enthusiastic! We are back with another blog! And this time covering a very crucial and news-making issue I.e The startup Business! The highly coveted industry of startups is always full of interesting business modules, concepts, beliefs, notions, ideas, etc.

 What makes startups fail in the 21st century. The various categories of startups that have disrupted the Indian startup ambiance and what makes excellent entrepreneurs survive and thrive in a startup ecosystem and many more crucial aspects of the startup ecosystem. So, you better gush out your adrenaline rush and begin reading as this blog has very fruitful insights to offer you!

What is a startup and startup ecosystem phenomenon?

A startup is mainly the birth of any business concept which is conceived to make a business or sometimes made to solve a community problem at a large scale. Startups are usually incorporated by entrepreneurs who has a zest and enthusiasm for making money and catering to the business concepts of their mind. Entrepreneurs are those who conceive the idea of a business at the seed stage and are mainly owners of their business also. Entrepreneurs don't work for other company rather they work for their own business. They generate employment for other professionals, employ them in their startups, and pay them too.

Every startup is initiated with the basic and crucial feature of solving a problem. The problem if solved can be very beneficial for the community and at a later stage might generate hefty revenues and ultimately elevate the startup. There are numerous reasons as to what makes these startups vulnerable to fail and sometimes if luck has it's the way this startup can even disrupt the global business giants too.

Snapdeal, Satyam computers, and many more examples of startups that failed at a later stage in their life. So, what makes them flounder? Is it poor management, poor operations, lack of funds, or financial or social issues that decide the fate of a startup? Well, to explain in a few lines there could be a plethora of choices which an entrepreneur has in his or her mind while undertaking any decision about his or her startup. That one decision can either do everything or nothing. So, the psychological aspects of entrepreneurs also play a pivotal role in shaping the building of a startup. So, first, let us discuss with your audience an apt example of a startup that made its way to the pinnacle of success but could not survive the wrath of changing time, and ultimately, it succumbed. Yes, you heard us right we are talking about Flipkart - Walmart scenario!

"Flipkart - Walmart" (The sweet and bitter cohesion)

Suppose, let us explain this by giving you an example. A  decade earlier when Flipkart was started in the year 2007, it was started as a bookselling site that used to collect old books from customers and resell them to another customer. But slowly and gradually as the Indian consumers started demanding more, Flipkart then started selling clothes on its portal and a decade later it became a full-fledged E-commerce site that sells almost everything including food products, clothes, footwear, electronics, etc. So the model of Flipkart is an excellent example of a startup from rags to riches. 

Flipkart rose to its highest echelon of global e-commerce business while simultaneously competing with Alibaba, Amazon, shein, etc. And a few years earlier it was bought by US commerce giant Walmart. So the startup journey of Flipkart founders was quite tumultuous. What why did their startup failed? Why and how did Flipkart succumbed to the hardships and got itself sold to Walmart? So, this case study of Flipkart and Walmart has a huge impact on the e-commerce and startup community as to what we can learn and unlearn from their startup journey.

Challenges and Adversaries encountered by Startups!

v Lack of financial support -

This is the first aspect usually stated by entrepreneurs that they do not have enough financial support to invest in their startup. Entrepreneurs are unable to pay lump some registration fees which is usually required to complete the registration process.  But nowadays many government loan facilities are available and are highly endorsed by the government of India. Also, many big corporate houses and institutional investors are coming forwards to provide additional seed funding for startups to flourish.

v Lack of understanding and knowledge about the startup -

Sometimes entrepreneurs either lack knowledge of the concept that their startup is founded on, or they have a poor market understanding. Their lack of awareness about the business changes around them makes them more vulnerable to startup crises.

v Mental and Psychological pressure -

The amount of pressure,  stress, and anxiety a startup has on its shoulders is enormous. A startup has to exceed the limits of expectation of its spectators. There are also massive expectations that an entrepreneur has from himself or herself. These expectations make them more vulnerable to stress, anxiety, and tension.

v Lack of social and moral support -

We have witnessed this, especially in Indian society, that parents often expect their children to land a safe job rather than initiating an entrepreneurial journey. They don't want to take the risk of letting go of their child on an unsafe and sturdy risk Road of a startup.

v Lack of Team leaders -

Although you might have successfully launched your startup, you lack teammates and leaders who can successfully represent and complete the endeavors of your company. You might not be able to find suitable employees, interns, candidates who can be take up position roles in your new startups. Thus, poor management can very deeply affect your startup, so do ensure that you hire the right candidate and essentially spend your maximum time in building a good team first.

v Global Market Scenario -

This is another crucial factor that defines the fate of your startup. As the global financial recession also has a breathtaking impact on the startup ambiance. Consumer demand also is a crucial factor in determining what type of startup will be highly amiable by consumers. When the 2020 Covid Pandemic struck the world, then the startup faced immense difficulty in fundraising and reaching the potential consumer market. But, simultaneous some even conceived the idea of mask and hand sanitizer production start-ups. So undoubtedly a recession or pandemic can be turned into an opportunity or a crisis, It just depends on your perception.

Conclusion:

After reaching the endpoint of the blog we have learned the various crucial factors which determine the fate of a startup. Various aspects have to be kept in mind before undertaking any startup journey. An excellent entrepreneur is one who knows the right blend of concept, imagination, reality, money-making formula, and above all patience.  A startup faces both days some are either good and some are even worse.  It depends on how an entrepreneur is riding his or her startup. At last, always remember that  the road to the entrepreneurial journey will be full of road bumps, difficulties, stress but for those entrepreneurs who are willing to push things harder there will be a success, triumphs,  achievements, and celebrations.