LIVING "THE AMERICAN DREAM" WHY ARE STARTUPS FAILING IN INDIA IN LARGE NUMBERS
Recently India jumped 14 positions to reach 63rd position in the World Bank’s list of ease of doing business, which implies that India as an economic giant is progressing rapidly, but why then a very large chunk of startups in India shut down after its initial phase. India is a country with many powerful business houses and business leaders such as Reliance Industries Chairperson Mr. Mukesh Ambani or Mr. Ratan Tata of Tata Industries or Azeem Premji Wipro Technologies Private Limited, India is also home to the CEO and leaders of the world’s top 10 companies. In short, we can conclude that Indians don’t lack in knowledge and skills in running a business. So, where is the problem, in my point of view, there are many considerations which may or may not collectively result in failing of a startup.
Top Reasons for Falling of a Dream Startup-
- Unrealistic promises- Many startups are giving unrealistic promises to attract customers such as huge discounts or offers. This leads to more investment with low profits. Such kind of startups will more likely to run into losses, which results in shutting down. If the startup is not well funded, the company will lack in keeping up the promises and managing the customer base and give them the service which they are seeking, which is not a very likely scenario that’s why startups fails.
- Copying success stories-Due to “inspirational books/movies”, youngsters just tend to launch startups imitating them, they often don’t have any agenda, any thought or any business structure, they tend to follow the “easy way to earn money”, which is definitely not the case, being an entrepreneur is not everyone’s cup of tea and if you believe there is something which should be and can be changed in the society and you are able to bring that change while forming a model to earn money out of it, than only you should jump to the decision to launch your initiative, one shouldn’t follow blindly startup giants.
- Overcrowded Industry-With the startup boom in India, number of companies in almost every sector has increased in great number which resulted in abundance of goods and services in every sector, and as we know abundance in any industry leads to a loss of most of the companies in that industry, only companies with a huge amount of withstanding funds can pump up their product and function in the industry unlike many startups which are new to the industry, they can’t overcome most of the time and gets shut down or get bought by bigger sharks in the market.
- Lack of funds-I believe a great number of younger people don’t follow their dream or if starts fall in the initial stage, due to lack of enough financial support, Funds are the lifeline of any business, let alone be startup. Before investors come into the scene the initial team has to put their assets into their business, which might get hard to meet in the later time in the business, also investors not always gets on the same page as a result companies fail.
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Source - Edumyra
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