11 Reasons why Indian Startup Fails ?

Today India has become the 3rd largest startup Eco-system in the World. Over the past decade India has produced Over 100 startup Unicorns.  Do you know- ‘How many other startups had started along with those Unicorns and failed?’    According to the research of  Forbes – ” Only 10% of startups has succeeded. ”  Then what about the remaining 90% ?  Why they Failed?  Where did they lack ? Below are the 11 Most considerable reasons why startups fails !

  • No Market Need 

The very first question you should ask yourself before designing your product is- Does the Customers really need your product?   Is your product suitable for the market ? Therefore at the very Ideaton stage you should research, whether your idea has the potential to fulfill the customer requirements.

Don’t find customer for your product, find product for your customer.

-Seth Godin

  • Run Out of Cash

Running out of cash  has been the biggest reason of failure for most of the startups. It mainly happens when you fail to make a proper financial plan for your Business. To prevent yourself from becoming a victim of this, You must think of a backup plan along with a Properly structured Financial planning.

Recent example is- Yumist , This food-tech based company had to shut the business due to know being able to raise further funding.

  • Not Having a Right Team

Whenever a Battle is won , King is not the only reason behind the winning. A battle is won when there is powerful army with a powerful king. So, If market is a Battlefield, then you are the king of your company but don’t forget to form an  army of Right people.

  • Getting Out-Competed

There is always some competition in the market waiting for your, and to survive their you need to have a firm product to compete. Otherwise you will get Out-Competed.

Below are two of the main factors- why you get out competed

  1. You may have a poor product.
  2. Your product is Mis-timed.
  • Not having a Business Model

First of all, you need to understand- “Business Plan and Business Model is Different” . To Understand it- ‘ If Your Business Plan is you wishlist, Business Model is a RoadMap to that.’ How to create a Successful Business Model   Two most important parts of a business model are – Marketing Model & Financial Plan.

  • Loose Focus

Your positive action combined with positive attitude results in Success” 

And for that you should have proper focus towards your work. As they say –

Love what you do, and do what you love

  • Disharmony between Team and Investors

Have you ever wondered why most of the startups are discarded from market whereas some of them became Unicorns? It s nothing but the bonding between the company, Investors and among the Team. This is what makes a startup ‘A Successful Company’.

Teamwork: Simply stated, it is less Me more We

  • Lack of Passion

People with great passion can make even the impossible happen. Motivation and Passion are two different things. Motivation is an Instantaneous stimulation, which keeps you up for some time but Passion is your inner-positive Instinct which no one can take away from you.

  • Not using your Network

While you are working on your product, you come across number of people with all having expertise in their specific fields. Rather than outsourcing the resources we can use this network which will hardly cost you any amount and it helps you to build a good relation with them as well.

  • Legal Challenges

A Principal consideration for any startup is deciding which entity structure is the most beneficial to use. Common considerations usually involve the number of founders, employees, frequency of equity grants, limitation of liability, tax treatment and whether there is a need to raise outside capital. Having an experienced business attorney discuss your options upfront may help avoid unwanted results down the road , like paying more in taxes or exposing yourself to unnecessary liability.

  • Burnout

Burnout is not a simple result of long hours. The cynicism, depression and lethargy of burnout can occur when you are not in  control of how you carry out your job. When you are working towards your goal that doesn’t resonate with you and when you lack in your social support. If you don’t tailor out your responsibilities to match your true calling or at least take break once in awhile you could face a mountain of mental and physical health problems.


Team : startedindia & Apoorv


Related posts

Leave a Comment