The term ‘Start-Ups’ has become one of the trendiest words that everybody knows about.
In simple terms, the word ‘Start-Ups’ mean Business. A person with a Business Idea needs resources to bring the idea to fruition.
That’s what the whole Start-Up Revolution is all about
People coming from rich family hardly pursues an idea that brings about a revolution. They tend to be the heirs of First-Generation Entrepreneurs. Hence, they explore opportunities for investment. There are exceptions of course.
At the same time, there’s a smaller audience who are in pursuit of mad ideas. They refuse to accept the mediocrity of adapting to the conventional lifestyle or making peace with their fate.
There have been enough arguments about the poorness of the education system in India. All the arguments are Legit.
This might sound like a bold claim!
But the numbers don’t lie, AMCAT recently conducted a research and found out that 95% of Engineers in India are unemployable and are working jobs that has very little or nothing to do with Engineering.
A person having a Million Dollar Idea in Mind need to have a financier. That’s what brings Venture Capitalists into the Picture.
VC’s aren’t restricted to funding, although that is their core activity. Venture Capitalist is a person or entity having diverse Networks in the Industries.
When a Venture Capitalist invests in a person’s idea, it is not a loan situation. When you take a Loan, you redeem that loan in interest within a stipulated time.
The Bank doesn’t have any interest or affiliation with your Business, they just want their Money Back with Interest.
A Venture Capitalist is an Investor, financier, and a stakeholder.
When a VC invests, he finances the project and acquires a reasonable stake in the Business. Now if the VC has a 2.5% stake in the Business, then that would mean that he has a 2.5% share in the profits of the Business.
Coming to the point, why Start-Ups are failing in India?
Lack of innovativeness:
Consumers would never settle with a static product. Every product that we use from Morning to Night has gone through a dramatic evolution.
That evolution is nothing but innovation proposing value proposition.
Long back there used to be suitcases to carry stuff, quite an innovation. Then one day it began coming in wheels to make it more comfortable. I mean that’s amazing, you need no longer to carry such heavyweight, you can effortlessly drag. We have seen very few startups that are revolutionary.
Wrong Target Audience:
Any Business begins with an idea, and the first factor that idea considers is the target customers.
You cannot establish a Business based on what you ‘Think’ customers want. Doing consumer research is of prime importance.
Your predestined business might have a plan to sell premium products that are too premium even for affluent people.
The likelihood of that happening is too rare in a country like India. In India, people catering to Rich Class are too rare, more than > 55% of the population continues to live in extreme poverty.
The loss-leading strategy doesn’t work in the long-term. People aren’t brand loyal as much as they are price loyal. That’s how FoodPanda is losing it’s grip.
Marketing needs are neglected:
This isn’t a blunder.
This is rather idiotic when people establishing business assumes that they will begin selling right away and people will accept and promote their product.
The very definition of Marketing is quite blurry, there are colleges preaching that marketing & sales are one and the same thing.
Hence, a startup crumbles down even before it is mounted. The way a Marketing funnel works is through Awareness, Consideration & Decision.
Your Business might have to operate on losses for the first three months and you should be willing to make that sacrifice. It’s the incubation period for your startup, your primary focus needs to be on communication.
Let people get to know about your brand, let them get accustomed with your offerings.
Corporate Glitch:
A corporate glitch is a made up term. It happens everywhere, hence these days corporations are establishing “the culture”.
Establishing a culture is immensely important. Your corporate culture is responsible for fostering productivity & proactiveness.
If your corporate culture is a mess, then it works the other way around. Usually what happens in a startup is that the founder is in the pursuit of instant money, hence employees needs are neglected, they are endowed with more and more tasks. This becomes exhausting for the employees. Because their motives aren’t getting satisfied.
Gradually thus being such a feeble factor brings the downfall. It takes just one person to bring the change, you might lose the trust of that one employee who could have had taken you to great lengths, but has now left your venture.
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