Do you know that 80-90% of Indian startups fail within 5 years of their inception? There are many reasons for it. Here we are sharing the reasons in which entrepreneurs could challenge these startup failure situations.
1) Lack of Funds – Most of the startups fail due to the lack of funds. There are millions of startup ideas floating around. But to turn ideas into reality requires finance. Those that do procure funding need scalable and profitable models to form the startup. Lack of funding is one of the key reasons why startups fail.
2) Lack of Innovation – A study conducted by IBM Institute for Business Value found that 91% of startups fail within the primary five years and therefore the commonest reason is – lack of innovation. Indian startups also are known for replicating global startups, instead of creating their own startup models. The startups who take this seriously and well-managed way, become successful. There are many successful startups there like Swiggy, Ola, Shuttl, MobiKwik, etc.
Innovation in business helps in numerous ways. It beat the competition, stands out from the rest, helps solve problems easily, and increases productivity.
3) Lack of Agility – Today, we live and function in an always-on culture. One needs to, always, keep up with the complexities and changes. In such a culture, agility can bring a competitive advantage to startups. Change is inevitable and hence, it is most important for startups to remain adaptive and agile in order to progress. Startups can ensure agility within the organization by practicing Continuous learning, Having a fluid workforce, Research and development, and Be willing to let your ideas change.
4) Product Market Fit – an outsized number of startups fail for the only reason – the consumers haven’t any need for its products. Does your product provide value to consumers? Are there consumers for your product? Is your product aligned with the innovative ideas that your company is predicated on? A lot of times startups plan to quickly develop products that haven’t any demand or attempt to expand the marketplace for a product.
5) Leadership Gaps – Most startups are driven by the vision of its founders and core team members. However, having an honest idea is way smaller than knowing the way to lead a brand, a company, and a team. Lack of vision and powerful leadership is another common reason why startups fail.
6) Business Model Failure – A good product, an impressive website, and huge ad spends- a number of entrepreneurs assume that these factors are going to be enough to attract customers and business. They ignore the very fact that customer acquisition and customer retention come at high costs and therefore the startup needs a foolproof business model to sustain and profit.
7) Ignoring Customers – Quite often startup founders have too much to handle – funding, recruitments, overall management of the organization, and more. Customers might not even feature in their to-do lists. This is an enormous problem, which entrepreneurs fail to understand and may alright be the rationale for why startups fail.
When startups are committed to being customer-centric, their decision-making becomes easy, their focus gets narrowed down and their popularity increases from word of mouth. Moreover, customers know what they need and may help startups better their products and services.
If you are looking to start your new business and need startup office space in Bangalore, we can help you.