Let us imagine you are a superhero for once. You are starting your own unique adventure in a world full of challenges and opportunities. The only difference between you and a superhero is that you do not necessarily have a fancy costume or superpowers, instead, all you have is a brilliant idea and a burning desire to make it a reality. That is what a startup is all about.
However, sometimes these great ideas tend to fail and not do as well as one would expect them. Superheroes tend to fight villains but startups try to solve real-life problems and obstacles with creative innovative solutions.
The main reasons why startups tend to fail are as follows:
- Lack of market need: Many startups fail due to the basic economic principles of demand and supply. There is a mismatch between what customers demand and what is being produced. These startups tend to fail to address the genuine market need at hand. Just like the online grocery delivery startup PepperTap which had to shut down in 2016.
- Insufficient funding: Limited access to capital can be a major reason why any startup goes downhill. Startups require funds to support their growth as well as scale their operations. For instance, the online furniture startup Furlenco faced financial difficulties and had to downsize its operation
- Lack of business planning and execution: Work done without planning is an effort made in vain and set for failure. It is important to have adequate planning as poor strategies, and lack of focus can lead to failure. Just like the startup Fashionara failed due to poor execution.
- Regulatory and legal challenges: Startup culture is a comparatively new and emergent trend in India. Startups tend to face regulatory hurdles and complex legal challenges. Non-compliance with legal formalities can lead to operational disruptions for startups. Such hurdles were faced by Ola in certain cities.
- Lack of experienced talent: The sort of human resource a startup has is vital to its success. Finding as well as retention of talent is a persistent challenge for startups in India.
There are many other reasons that can cause a startup to fail. Sometimes startups tend to fail not due to one single reason but a combination of multiple reasons. Successful startups in India are backed by strong research, market analysis, securing funding and effectively executing their business plan. Only after all these back-end developments can a startup truly see success.
