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entrepreneurship courses

Top 20 Reasons Why Startup Fail in India?

Why does the Start-Up fail in India? We have listed the Top 20 reasons for failure.

Indian start-up industry is making giant strides in the present decade. But here’s the shocking statistics. 90% of Indian start-ups fail in the first five years, says a recent study.

So why do startups fail? We have a compiled list of reasons. Read on to prevent it in your startup.

  1. Lack of Need in the Indian Market

A whopping 42% of startups fail due to introducing a product that the market is not enthusiastic about. They are not solving a market problem.

  1. Lack of Money

In a survey conducted, 29% of start-ups cited lack of cash as the reason for their failure. How judiciously you spend your money matters in the startup!

  1. Incapability of the Team

A great team is critical for the success of the start-up. 23% of startups fail due to the lack of a common vision among the team members. Ideally, you need a diverse team that includes people with wide skill sets.

  1. Get Outcompeted

Yet another common reason for start-up failure. Lack of motivation, incapability, lack of expertise, or a combination of these factors will result in getting out-competed in the market. The takeaway is to pay attention to the prevailing competition for your business.

  1. Over-Pricing in India

The product may be great. But the pricing might be far too high. And the customers will be hardly interested to buy the product. And that results in failure of 18% of startups.

  1. A Poor Product

If the product is not user-friendly, it will disappoint the user. Apparently, the success rate will go down. In the survey, 17% of the start-ups fail due to the failure of the product.

  1. Lack of a Proper Business Model

Idea is great. But if it lacks a proper business model, the chance of failure stands high. A scalable business model is critical for the success of your startup.

  1. Lack of Relevant Marketing

For a successful business, you need to figure out your target audience. Then, you should know the means to reach to them. Have to grab their attention. And then make them delighted with your product. Failure of proper marketing became the reason for 14% of the failed startups.

  1. Ignoring Customer Feedback

Nothing is as bad as ignoring user feedback. It’s a tried and tested a way for start-up failure. In the survey, 14% of start-ups revealed that ignoring customer feedback was a deadly mistake.

  1. Launching Product at the Wrong Time

The product should be launched at the right time. Not too early. Not too late. Both can lead to the failure of the start-up.

  1. Losing Focus

Getting distracted from your business is another common reason for start-up failure. Personal problems, too many ideas, changing vision, high self-obsession, and more reason can lead to distraction from your startup.

  1. Lack of Harmony among the Teammates

No matter how good your idea and execution is, a dispute or disharmony with the co-founders can result in the failure of the start-up. Same can happen with the investors too.

  1. Wrong Pivoting

ThePoint pivoted to Groupon. Burbn to Instagram. Pivoting is fine. But it should be worth enough. Never pivot just for the sake of it. It has contributed to 10% of startup failure.

  1. Lack of Domain Expertise

Lack of knowledge in the domain or lack of passion in the area of business can result in the failure of your startup. The survey says 9% of startup failure occurred due to lack of domain expertise.

  1. Irrelevant Location

The location of the business plays a major factor in deciding the fate of your startup. There should be congruence between your startup idea and the location where you start the business.

  1. No Interest from Investor

Sometimes the startup will not be rightly presented before the investors. Or it might not have a scalable future. Investors will show hardly any interest in such cases and start-up may end up in failure.

  1. Legal Challenges

A few of the start-ups may face legal challenges in India which will result in closing down the business.

  1. Lack of Network and Connection

Start-up may fail to gain traction if they lack connection in the investor network. Or sometimes startup founders may not use the networks or connections in the network.

  1. Get Burned out in the Process

A balance between professional and personal life is much essential in your start-up journey as well. Startup founders often get burned out due to poor work-life balance.

  1. Not Pivoting at the Right Time

If you are stubborn or unwilling to admit a mistake, it can lead to the failure of the start-up.  Pivot from a bad product, or a bad decision, as soon as you realise to avoid failure.

Make sure your startup is away from committing these mistakes.

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