Why startups fail? Was the most goggled keyword in 2015! But wait, what exactly are startups?

Startups are generally technology oriented with high growth potential.

In the last decade, Indian startups grew by leaps and bounds but most of them saw a down trail. Statistics tell that 85% shut down their operations within 3-5 years, 10% within 1-3 years while only 5% survived significantly and enjoyed the limelight.

The attrition rate seems to be high in case of Indian startups and the major reason stands out to be lack of clarity in business plan.

Other reasons too, contribute to the rising attrition rate.

Let’s jot down the factors to know ‘why’ Indian startups shutdown soon and what should be the right way to avoid such situations.


A business idea is worth starting.

When? When you have a full research on the areas you wish to serve.

Many business owners jump enthusiastically with a solid idea but fail to mark the start and end line of competition.

Today, nearby every idea is tried and tested before implementing. Gone are the days when businesses survived for decades enjoying the monopoly! Presently, the market is loaded with ample of alternatives and we just need to have the right selection.

Being competitive means staying resourceful. Until and unless you have the right resources you haven’t defined the competitive edge. Entrepreneurs must set a standard margin for self and others to get the most out of competition. This is where most entrepreneurs land into situations by being unaware of the actual competition.

Business Model:

Another reason for failure of business – A poor business model!

Starting a business without plan is just like hitting the nail without hammer. A business plan contains particular stages whereas business model constitutes an entire business environment with understanding on fixed and constant dynamics.

When you jot down a business idea, creating a business model is essential too. The high attrition rate calls for a sustainable business model.

Try and gather resources and information to know what other startups are doing to improve business efficiency.

Imitating their ideas isn’t recommended instead try to consider them as a source of inspiration and observe their preparations; lookout for a particular alliance if you aren’t sure about your business model for the moment. So when preparing a business model ensure backup plan too!

Neglecting the Potentiality of social media:

In the era of digital media, we have enhanced marketing tools with a wide visibility. The third major reason startups fail is they negatively acknowledge the power of social media.

Displaying and delivering assurance in open forum is a big risk.  Amateur entrepreneurs try permutations and combinations instead of planning something solid and concise. Sometimes, they succeed but most of the time success isn’t ensured.

To neglect the potential of business through social media is one of the biggest mistake entrepreneurs make. Those who work inch by inch towards a bigger picture stay ahead in the competition whereas those with little patience never even stay longer.

Therefore, having self-trust and confidence is the only key to deliver a solid social media strategy.

Wrapping up,

Indian startups have a lot of potential if they think about creating a business ecosystem. Fulfilling the market gaps is agreed but what important is how innovative are the ideas. Indian startups need not imitate silicon valley ideas but believing in creative and innovative ways of delivering technology to fulfill market gaps can help changing the face of Indian startups on national and international levels.

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