We’ve all heard stories about businesses or startups failing. We all recall our parents reading newspapers and hearing about how many businesses had failed. But, the opinions of successful enterprises are heard as well. What are some firms’ pain points?
At the end of this blog, we should have the answers to the questions. Because they lack a sustainable model, 90% of businesses fail within 5 years. There are a variety of reasons why these businesses are losing money.
The Journey of Startups in India so far:
- The Journey of Startups in India so far:
- What are the Business Failure Reasons?
- Final Thoughts
The path of a startup It felt like being on a rollercoaster in India. The journey was not without its difficulties. While some of them enjoyed the journey, others did not. However, we believe they will return with a better strategy.
Some firms became unicorns, while others simply failed. That’s how the economy works. It’s unpredictably unpredictable. Some firms received money but failed, while others that were bootstrapped became unicorns.
2020 was a lucky year for some entrepreneurs. They expanded their company a year ago, and boom! They discovered their growth hack and were successful.
Covid-19 Pandemic has given a boost to online startups. The successful startups were able to establish a market for their products. In the following part, we’ll go into the many reasons behind failing startups.
What are the Business Failure Reasons?
In this section, we’ll learn about the main reasons why some startups fail. Their failure could be due to a variety of factors. But we’ll talk about the things we can control.
Either the model or the product would not be scalable or viable. The main arguments will be discussed in 8 points. Ready! Set! Go!
1) Lack of Creativity and Innovation
Nowadays, there is so much rivalry that it is difficult to stand apart. It’s difficult to get that level of difference. Humans rarely attempt to innovate. They believe they will fail, but they do not believe it is worthwhile to attempt. I never fail to remember a great phrase by Thomas Alva Edison. I just discovered 10,000 techniques that don’t work.
Nothing is permanent in this world. Markets and economies are rapidly evolving. What is effective today may not be effective tomorrow. That is why Innovation through Creativity is the answer. The failure of Nokia is a fantastic example to grasp this. They were usually hardware oriented. They never paid attention to what customers demand. As a result, other mobile phone firms emerged as new victors with touch screen phones.
2) Lack in Marketing
Any company’s secret sauce is marketing. Every business must sell a product. So how will the product be publicized? What’s more, why will people purchase the product? All of this is achievable thanks to marketing tactics and plans. It is critical to market your product. Its absence results in a lack of trust and faith in the product. Effective marketing is the only way to let people know your product exists and is the best on the market.
3) Lack of Adequate Funds
Now, this is where the interesting part comes. People say that your startup can’t survive without Funding. This is not true. Of course, some startups need adequate funding to start their operations. But as online businesses are booming up, SAAS (Software as a Service) based Startups comparatively need less funding. This is because it requires less expensive compared to Product-based Startups. A great example to justify this fact is Zerodha. Yes, you heard it right. It’s a Unicorn. This means it has achieved 1 Billion Dollars in valuation. It is an Indian Stock Trading Platform. Now you might be wondering about the amount of funding taken by them? Well… It is completely bootstrapped. This means the profit which they gained was again invested and so on.
4) Not Understanding the Competitors
Your competitors are those who are in the same race as you and want to win. Do not be envious of or enraged by your competitors. Rather, learn from their errors. Learn from their successes and try to apply them to your own business. There are two ways to construct a tall structure. Either break everyone’s building or create the tallest skyscraper. Pick the latter. If you work sensibly, your competition can assist you in getting success. You must realize that in order to achieve massive success, you must either be the best or the first in your profession. Best of luck if you are the first in your field! You currently have no competitors. Yet, in order to become the best in your industry, you must stand out from the crowd.
5) No Focus on Customer Feedbacks
Consumer feedback is the most effective technique to make your product better. Believe Me! Customers who are willing to provide feedback do not despise you. Instead, they’re simply making an improvement recommendation. Several startups make this error by failing to pay attention to customer feedback. It is always better to think and act from the perspective of our users. They provide us with a different perspective on things. Consumer feedback can assist startups in establishing trust and confidence early on. Apple, which was founded by Steve Jobs, places a strong emphasis on customer feedback. It contributed to Apple’s improvement. That also helped people gain confidence in Apple. Apple is now adored by its customers.
When you think about or value someone, they believe you care about them. Create an impression on someone.
6) No Scalable Model/No Large Ecosystem
Any successful startup you see has a significant user base or a scalable business model. Scalability is essential in business. There’s no point in running a business if you can’t scale it. Which option would you pick? Would you be willing to make X amount of money from just one office? Or would you make ten times as much from ten different offices? Isn’t it the latter that you prefer?
That’s fantastic. We both have the same options. Growing a business is a difficult task. That happens gradually. This takes time from 1 to 2 to 3.
Amazon has a vast user community. Buyers are willing to spend money on anything that will help them make money. Their large user base allows them to generate revenue every day. As a result, scalability is a long-term consideration.
7) Not Understanding the Target Market
Most startups make this mistake. They don’t identify their target market. Whom do you want to offer your services to? Who is interested or might be interested in your product? There is a specific group of people who will be your target market. Everybody might be interested in your services. There would be a group of people looking for your product. Most startups don’t identify it and randomly start marketing products. Now if you are in the Finance sector, school-going children are not your target market. The same way startups need to identify their users.
8) Lack of Adequate Business Model
Every successful organization has a business model that includes many income streams. It contains profit-making tactics, to put it simply. It is hardly worth launching a business if you do not know how it will make money.
Strategies and tactics are included in an adequate business model. It’s a road map or blueprint. Things will go smoothly if you stick to the roadmap and execute the appropriate activities. It is critical to be aware of your surroundings before beginning your journey. This is why profit planning becomes so crucial.
Also Read: Explanation Of Cryptocurrency’s Future
We see startup failures a lot. Of Course, it’s true. It is not that easy to start a Startup. In this blog, we talked about all these negative points. But there is always a positive ray of hope. There is a statistic that 90% of Businesses fail and don’t succeed. There are only 0.001% of startups that make a huge success. The percentage might shock you but this is the truth. We mentioned some startup or business failure reasons in this blog. We want you to consider this and not commit this if you are starting your startup. This is because we don’t have time to commit mistakes that others have already committed. Life is short, so learn from people. We hope this blog was able to add a certain amount of value to your startup journey.