Published On: July 7th, 2020
The socio-cultural trend of opening a startup or joining an existing one is booming globally, especially in India. Individuals and fresh Indian graduates are the ones who have the blood to start something new that benefits them as well as the society/economy.
Our startup India ecosystem is the 3rd largest on earth. Even ‘Vijay Shekar’, the Founder of ‘Paytm’ says, “What is the new big idea? The new big idea is India!”
But, what do successful startups do differently than the ones that fail?
However, on the flip side, the count of failed startups is increasing exponentially!
The data from the “IBM Institute for Business Value and Oxford Economics” supports the statement mentioned –
“It was found that 90 percent of Indian startups fail within the first five years. And the most common reason is lack of innovation…”
The major reason why many Indian startups drop-down is because of the mismatch between your expectation (innate improbable advantages) and the reality (macro market shifts). Understanding this junction and executing the necessary steps towards the same, is what a few companies and brands nail! ‘N. R. Narayana Murthy’, the co-founder of Infosys stresses on the same as “Progress is often equal to the difference between mind and mindset!”
When this intersection is not attended to, then companies should turn resilient to meet failures on their entrepreneurial path!
How do successful startups really act differently from the ones that fail?
Let’s get into the Big Picture of what and how startups perform to acquire success from the rest of others.
SUCCESSFUL STARTUPS AVOID OVERESTIMATING THE MARKET/INDUSTRY
Your startup has a higher chance to win the industry if you’re not overreporting things. Presenting the scenario as they are and not imbibing conditions as they wish to be, lies the success for many startups. Even startups outside India have failed due to the same reason – overestimation of the market needs.
BELOW IS A FAILED INDIAN SCENARIO OF A PROFOUND STREAMING CHANNEL:
- Opening their gates on 26th October 2015, “Vio” is the Hong-Kong-based OTT-streaming platform that has significant roots in the Middle East, Africa, and Asia but failed in India. Vio expected good video-streaming stats for the Indian borders. Till date, the team has not shut-down streaming but is settling to wind-up its market soon in India. On the other hand, their underestimation of their competitors and streaming giants like Amazon led to the shut-down of operations in India!
So, always remember that a crowded marketplace will not only have good growth perks but also possess a punishing business effect through tough and unique competitions. Even though your industry might have a limited business consumer base, you can still prosper with accurate and professional market research results that are truly based on reality.
SUCCESSFUL STARTUPS HAVE ENOUGH CAPITAL TO LEAN BACK
- The depletion of the capital is the most-observed reason for startups to fail. Many good and unique-minded startups had no other Go, besides shutting-down their business due to the inability to raise investment capital or follow-up with their funding procedures.
- Particularly in the Indian startup scenario, industries such as social impact, food tech, logistics and supply chain management, consumer services, and clean energy are some of the majorly-failed business sectors.
The deal-sourcing Indian research startup ‘Xeler8’ deemed for tracking prospective minds and identifying 500+ startups per week failed miserably, due to 1 reason – lack of capital funding!
Snapshot Taken From – Xeler8 acquired by ZDream Ventures
- “Xeler8” was a popular Market Intelligence platform founded by ‘Rishabh Lawania’. Due to the lack of capital funding and sufficient investment, Xeler8 was entitled to a Chinese Venture Capital Firm ‘ZDream’. In his words: “Since 2015, as many as 1,503 startups have closed down in India. And the major reason is due to the replication of Western business models, and not lack of subsequent funding from the investors…”
Successful startups will focus on sharing their capital to other high-level Grassroot innovators from other domains in the same market.
SUCCESSFUL STARTUPS HAVE THE RIGHT TEAM WITH THEM
Simple and straight as that your team members are the golden birds to business success. If you are a person thinking of opening gates for a startup venture, all by yourself (1-person business), then it is high time to think about it. Because studies prove that:
- “Individual founders (Solo) take 3.6x longer time to outgrow their startup phase.”
- A balanced and perfect team, with the presence of an experienced Hustler and a professional Hacker, has 2.9x increased user-growth compared to an unbalanced business team.
Even the Founder of Zoho, ‘Sridhar Vembu’ promotes the culture of working as a team by saying: “Startup founders should learn not to impress others but learn to make a business work and work with other employees!”
FIND OUT THE SUCCESS STORY OF SWIGGY’S FOUNDERS FROM A SHORT DESCRIPTION GIVEN BELOW:
- While Flipkart took 6 complete years to reach the ‘Unicorn’ level of business, the partnership of Rahul Jaimini, Sriharsha Majety, and Nanda had only 4 years for making Swiggy a hit! They are 3 simple IIT graduates who had to overcome a big failure once in their business venture with ‘Bundl’. With the capital support of Accel and SAIF Partners worth $2 million, the trio struggled and somehow managed to convince a few restaurant owners to join their startup over others. The time of getting their idea on-ground was late but they caught the right time for their startup to rocket. And now, Swiggy has outsourced many competitors in the market, has built a new system to Indian food delivery services and the co-founders give attribution to their vision, team, and sustainable business model!
Finally, it is understood that many successful Indian startups were possible because of 2-3 heads and not simply by 1. No doubt in the fact that individual startups are the major backbone for Indian startups that experienced a bumper hit. Otherwise, we won’t be having HCL from ‘Shiv Nadar’, Zomato from ‘Deepiner Goyal’, or ‘Sheroes’ from ‘Sairee Chahal’!
The only point lies in the timing of nailing certain corporate things before others take the path. In the presence of a good team and supportive employees, your startup has a higher chance to win the business game with a quicker turnaround. However, choose your partners wisely as situations of disagreement and reputation damage can also arise.
Bhavish Aggarwal, the Co-Founder of ‘Ola’ gives importance to working with the right team in his way as – “Raising capital is not the toughest part. The toughest part is building a great team and making sure it’s growing with the company.”
LAST OF ALL, HERE ARE THE TOP 20 REASONS WHY A STARTUP WILL FAIL (FROM THE ANALYSIS OF 101 STARTUP POSTMORTEMS).
Having an eye over this can help avoid those mistakes occurring (even without your consciousness) for YOUR startup venture, whether you are aiming for the wellness of India or expand to International borders too!
Even something that you consider ‘less-important’ would play a crucial role inside the entrepreneurship of startups. Yet, don’t take everything as big and important too. The Indian business magnate and the largest shareholder of Reliance Industries Ltd.
‘Mukesh Ambani’ once said, “I don’t think that ambition should not be in the dictionary of entrepreneurs. But our ambition should be realistic. You have to realise that you can’t do everything.”
Having said this, holding multiple things into your bucket makes it difficult to proceed in the long-run of the corporate industry. Streamline your ideas for 1-2 niches and nail it big!
As we now know what do successful startups do, you will agree that making mistakes is fine in business. Being a successful professional or a student entrepreneur might be daunting at first, but once you hone the required skills and learn from the failures of others, you are sure to achieve something new and big! Also, make use of the campaigns like Make In India, to give only the best for your business operations!