Why do start-ups fail? A must read article for every entrepreneur.
Indian economy is growing at a very faster rate. Recently Prime Minister of India Mr. Narendra Modi has launched its scheme focussing young entrepreneurs “Start Up Indian, Stand Up India”. India is ranked 3rd globally in number of start-ups according to recent Nasscom reports. Recent Nasscom report says that India has around 4200 small and big start-ups registered in recent times. But do all these start-ups succeed? Absolutely not! Not all gets their big billion dream success. There can be various reasons for the failure of these start-ups. I have done some post-mortem of some start-ups to find out the reasons of their failure.
- No market need: Some entrepreneurs launch their product in the market without analyzing its need. There may be well some established business that is already doing the same thing perfectly and has an epitome of quality. Entrepreneurs make mistakes in choosing the right product. The major reason of making this mistake is lack of market analysis. So I would recommend each and every entrepreneur to do some research before launching your product into the market. This can save your start-up.
- Ran out of cash: I know a lot of CEOs whose so called successful start-up failed because they ran out of cash. This impecunious stage is one of the most deadliest stage in every start-up. Entrepreneurs make a huge mistake by spending a lot of money on necessary things like renting a fully furnished office in a city like Bangalore or Mumbai. Joining hands with various other start-ups to work together on equity sharing basis might be a good option but it is very risky because if your partner’s business is going down than it will take you down too. Entrepreneurs must look for seed funding instead of working on equity sharing basis with other start-ups.
- Not the right team: May be you are the best entrepreneur in the world, but do you thing you can do it all alone? Are you a superman? Absolutely not! If your team is not highly motivated and dedicated like you are, you are not going to make to fortune 500. Now you must be wondering “How can I choose the right team?” Look inside you, find out what kind of person you are and you will get your answer and finally you will get your team.
- Poor Quality Product: Is your product an epitome of quality? Are you delivering what you are promising? If not than your start-up is going to be in the list of failed start-ups soon, not immediately but definitely. What do you think why Amazon is going to be world’s No. 1 E-Commerce portal soon? Exactly! You are correct because they are delivering what they have promised its customers’. Doing a business to customer deal is like doing a referral business, if your product is good, you will be definitely referred to other people by your customer and if your product is not is not of that quality than also you will be referred you know in what way I am talking about.
- Ignore Customers: May be your start-up has reached a milestone of $1million and you are feeling proud of it and of course you should be. But who bring you that success? Your investor? Yeah obviously but who is more important than investor? Yes your customer! Treat your customer as your wife. Don’t cheat on them otherwise you are going suffer a lot!
- Poor Marketing: And last but not the least. Poor marketing. You are delivering a top notch solution to a problem but what is the benefit of it if it is not reaching your customers. Who is responsible for that? Yes your marketing is definitely responsible. Marketing team plays an immense role in the development of a start-up because they are the only one who are representing your company in the unknowns.
This was all about why do most of the start-ups fail. I will be posting more articles like this in coming week. Keep sharing and help the unknowns.
Writer: Saurabh Deswal
Visit my website: www.uedeveloper.com the known land of unknown entrepreneurs….