Startup is sort of an innovation in business where new ideas and plans are brought into verisimilitude to solve some of the major problems that today’s society is facing or rather to extend the comfort zone of human beings. In western countries this concept dates back to the early 1800’s, but India has only recently seen an innumerable growth in the number of startups. But the question that dangles in our mind is, are all the startups successful and if not what accounts for the reason of its failure despite the dedication and diligence of its co-founders? Let’s explore the answer to these questions.
According to a survey conducted by the RSA, 90% of the startups fail even before they start and in the remaining 10%, 50% of them fail to stay afloat beyond a stretch of 5 years. The reasons to this are innumerable.
Entrepreneur:
An entrepreneur himself plays a vital role in the success of his enterprise. He must have a very clear vision of his own thoughts and ideas and also he must assess his own weaknesses and try to swamp them up. If he himself lacks self-confidence, he is destined to failure.
Also Read: 8 common qualities shared by every successful entrepreneur!
Ideas:
Ideas must be such that it serves a specific purpose to the society. An idea may be exclusively out of the world but if its implementation is very impractical or it does not serve a particular purpose, it is simply rendered bootless. A business idea without a demand is like providing diamonds to a starving kid. Diamonds won’t quench his hunger, will it?
Team:
A proper and working team is a group that is capable of turning a mediocre plan into a successful venture. Proper understanding and analogous mind set amidst the members leads to a definite success.
Also Read: 4 reasons why you should start looking for a co-founder!
Time:
Thorough research and assessment of the best time for the launch of products and services is very very essential. The products may merely seem worthless for today, so the sole onus to be taken up for this is to amend the products such that it suits the present scenario. It’s about staying alive and being relevant till the market is ready for you.
Marketing:
Lack of planning and understanding the amount of resources and time to get profitability can drastically hamper the future growth of the firm. Ideas must be morphed as per demands. A mere innovation can never bring success. The implementation and real time application is something really important. The initial product can never be 100% correct, but what really matters is the customer feedback and amendments in accordance to those feedbacks to create a better product or service.
Capital:
Undoubtedly the assimilation of capital from potential investors is essential for the take off of any firm. A proper revenue model can always compel the investors to invest in your startup.
Here are a few startups that suffered a failure due to some of the aforesaid reasons.
Dazo
Food is an inevitable part of man’s diurnal curriculum. And in a country like India where food lovers are always found in abundance, services and systems must be ensured so as to provide the most desiderate food to the crowd but at an optimum rate. With this essence in mind the Bengaluru based food tech startup, Dazo founded by Shashaank Shekhar Singhal was launched on 29th April, 2015. It had managed to raise an undisclosed armamentarium from Google India chief Rajan Anandan, Amazon’s country manager Amit Agarwal, Commonfloor founder Sumit Jain, TaxiForSure founder Aprameya Radhakrishna and former FreeCharge chief executive Alok Goel. Started as a “food on demand” servicing company, that can be viewed as an internet based kitchen, Dazo provided facilities for its customers to book food online via an android app. But unfortunately this company failed to survive the battle and collapsed within a year of its launch. As stated by Mr. Singhal, “We were scaling up and were looking to get into more cities, but were short on capital. At some point we felt we were lagging behind other players and decided to quit.”
Owing to the stiff competition in the food tech market, the company had to look to invest in more capital to aggrandize their menu options, chef’s availability, outlets and on time delivery services. But its investment started draining off and no new investors were ready to invest. Therefore the curation of menu which the company had taken at its onset, could not successfully fulfill its motive, thus dissatisfying the customers at large.
Lumos
Lumos is a hardware based startup started by Yash Kotak, Pritesh Sankhe, and Tarkeshwar Singh, three B.Tech students from IIT Gandhinagar in the year of 2014.Its idea was something fabulously innovative. Their plan was to develop smart switches, capable of automating all electronic appliances and systems used for our household purposes. The entire database for the switches were incubated and maintained through user’s behavior which tracked ambient conditions to take automation decisions accurately. Despite such an admirable idea the implementation and business modeling of this plan suffered from certain loopholes. They can be listed as follows:
1. The founders themselves were unaware about the appropriate usage of such automation products as they themselves weren’t the users. Also they lacked expertise in loT sector which induced wrong judgment in the pricing of the hardware.
2. They did not do the due diligence on the idea before implementing the project. Neither did they understand the market and competition well nor did they understand the perspective of their prospective buyers.
3. Well, due to lack of funding, a startup generally has an insight of solving fewer problems and then gradually wend with entire lot. But they kept their automation focus far beyond feasibility which made the product and pitching very difficult.
4. Last but not the least, it’s worth mentioning that starting a hardware firm is far more an arduous challenge than that of any other startup. So, building a prototype is a child’s play but the product design its manufacturing, distribution and maintenance is what is called a mammoth task which needs adequate time, infrastructure and funding to build.
A true entrepreneur is one who does not take failures as lukewarm. Rather as the saying goes, ”Failure is the stepping stone to success” which if treated as a sign of weakness prompts reticence. Whether you learn from your own mistakes or from those of others is your choice but what really matters is learning and bringing innovation and amendments for greater profits and benefits to our society.
