Magazine : 
Don't be like them! Discover the 6 reasons why Indian startups fail
Not to sound too derogatory, but Indian startups fail too much.
One only need look at the numbers displayed on the internet to understand just how alarming the situation is. Currently, many expert sources are claiming that nearly 80-90% of Indian startups fail within their first five years.
And while you – intending and newly found startup owners – may not be a part of these numbers yet, it’s important that you understand the reasons why the majority of startups in India fail so often.
By knowing why they fail, you can equip yourself with the right lessons so that you don't make the same mistakes that led to their failure.
Why startups fail in India
Lack of an innovative business model
The first and the commonest reason why startups fail in India is because most of them were not forged based on unique and innovative business models in the first place. That is, their products weren't UNIQUE!
And since there was nothing so unique about the products of these startups, it becomes impossible for them to beat off the competition, many of which had already gained the trust and loyalty of consumers.
This is a very common mistake that Indian startups make, and one you should be wary of.
If you know you don’t have anything unique – a new solution – to offer, please halt your plans to launch a startup.
Not researching latest technologies
Another reason most Indian startups fail is that many of them didn't take the time to research how modern techs could be of use to them. They just rely on traditional business systems, many of which are manually run and are unfortunately error-ridden, slow, and off-pace with the modern world.
Take the new Indian GST policy, for instance. Ever since the system was launched, it has created challenges for business owners on multiple fronts. But with tech, many of these challenges had been addressed. For instance, with the introduction of tech tools like Vyapar app – the best billing software for small businesses – business owners are now able to create multiple invoices for varying types of goods having different GST rates, without wasting time or making costly mistakes. With this app, shop owners and entrepreneurs no longer have to face the problem of keeping up with GST regulations or shutting shop because they fall foul of the regulations.
Premature expansion/scaling up
It is the dream of every business owner to grow and expand. But you don’t want to do it too quickly. Strangely, this is exactly what most startups do in India.
After a few months or years of operations that have returned a fantastic level of revenue and an enviable sum of profit, most Indian startups feel they’re ripe for expansion. As a result, they scale up – burning resources in the process – without properly accessing whether they are truly ripe for it.
Lack of market understanding
Boasting unique solutions to the pain points of your audience is not enough to survive in any industry. You need to research and understand the peculiarity of the market too – like when sales are likely to be down/up, what to do when consumers react in a certain way, how people deal with competitions, and so much more.
Unfortunately, not many startups take this phase of their launch seriously.
Let's take the issue of "sales observation," for instance. If you've done adequate research about the industry you're entering, you'd know when to raise your stock and when to lower it. This way, you wouldn't have to lose money for holding excess inventory at the wrong time or holding little inventory when demands are likely to spike.
Remember: Low Inventory = Missed sales; High inventory = More expenses
PRO TIP: Another area where the Vyapar technology finds importance is in the aspect of inventory management. You can use its free inventory management software to keep tabs on your stock so that you don’t run too low on stock or keep too much inventory when sales are likely to be down.
The Indian market is too saturated
For a fact, we all know that India has the population to serve just about any number of startups. Unfortunately, this is rarely the case because most startups don’t even target the whole of India. Most of them just focus on the fraction of Indians living in urban areas.
The result?
We now have a countless number of businesses chasing after a few fractions of consumers!
Don’t make this same mistake. If you’re launching a startup or already have one in operation, you should be aiming for both the urban market and the rural ones. Interestingly, there are as many prospects in those small towns as there are in urban areas.
Inability to hire the right minds
Of course, no entrepreneur can run their business operations all by themselves. They need to hire people to fill important roles. But due to the fact that many Indian startups start their businesses with frugal resources, hiring quality talent and competent personnel becomes a big challenge.
As a result, many of them make-do with incompetent staff, which eventually leads to a drain on the organization’s resources.
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