The stories of unicorns always motivate people to search for their hidden entrepreneur. One assumes that a unique idea and foundation of a startup is all that needs to be done. And the rest of the path is a cakewalk. However, always remember that every coin has two sides. Similarly, with the startups raising huge funds in the seeding round and becoming unicorns, the menace failing story of startups also exists. Discuss the reasons for the failure.
This question with " Startup failure reasons" can be explored in the following manner by would be entrepreneurs:
1. Explore the Top 5 reasons, why startups succeed, with the research of Bill gross at IDEALAB;
2. In the Millenial and GenZ era, explore "Genepool Engineering, not HR" by vinod khosla. Team failure = startup failure
3. Understand the 3 C's at early stage (Customer > Capacity > cash)
4. After breakeven, quickly Add focus on the 3 P's to the 3 c's (People > Process > Profits).
5. Be lucky :-) no matter what industry you are starting up in.
There have been several unsuccessful Indian startups in recent years, and their failures can be attributed to various reasons. Here are a few examples:
1. Stayzilla: Stayzilla was a prominent online hotel booking platform that shut down operations in 2017. The company faced financial challenges and a lack of funding, which eventually led to its failure. Additionally, intense competition in the online travel industry and difficulty in scaling operations contributed to their downfall.
2. TinyOwl: TinyOwl was a food delivery startup that faced significant challenges and eventually ceased operations in 2016. The company struggled with high operational costs, fierce competition from established players like Zomato and Swiggy, and difficulty in sustaining customer loyalty. These factors, coupled with a lack of proper business model innovation, led to their failure.
3. AskMe: AskMe was an e-commerce and hyperlocal services platform that shut down abruptly in 2016. The company faced a myriad of issues, including a dispute between its major investor and the management team, which resulted in a severe cash crunch. Additionally, the inability to scale the business and create a sustainable revenue model contributed to their failure.
4. PepperTap: PepperTap was a grocery delivery startup that had to shut down its operations in 2016. The company faced challenges such as high customer acquisition costs, low customer retention rates, and the inability to establish a profitable unit economics model. The intense competition in the grocery delivery space and logistical complexities further added to their failure.
5. Fashionara: Fashionara was an online fashion and lifestyle retailer that closed down in 2016. The company struggled to raise additional funding and faced challenges in managing inventory and supply chain. Moreover, they faced tough competition from established players like Flipkart and Amazon, making it difficult to carve out a sustainable market share.
These examples illustrate that unsuccessful Indian startups often face common challenges such as funding constraints, intense competition, failure to scale operations, unsustainable business models, and difficulties in managing costs and customer retention. Learning from these failures can help aspiring entrepreneurs and startups avoid similar pitfalls and increase their chances of success.
Lack of viable ideas, insufficient groundwork to study the marketing possibility, and most importantly, financial issues are the major reasons, in my opinion.