Dear Start-Up Founder in India, It is Not the End

Dear Start-Up Founder in India, It is Not the End

Rajh V Iyer 28/07/2018 6

A large percentage of Indian start-ups stare failure in the face within months or years of launching. The money has run out or the co-founders disagree or the investors are backing out because of the lack of profits. The list is long and dark with lots of scary statistics and unseen pitfalls but we do have miles to go before the end. Miles in which we will see the what, why and how of failing start-ups and look for sunshine and hope in the darkness of these challenging times.

Keeping Fit and Lean - Being fit is not just a term that applies to fitness. In the start-up environment, it refers to keeping your team down to what is necessary. A mistake that is often repeated is over-hiring. It is understandable to be enthused but keep your hiring spree to a bare minimum. It’s like going to the market and realising you want everything in sight. But do you buy everything? Of course not. The same is true while hiring. Is that overpriced IIT/IIM graduate necessary for your success? Probably not. Keep your company lean and fit until growth means that you have to pile on the protein shakes and the muscle power. Don’t jump the gun and add flab instead of muscle. This fat will only drag you down in the end.

Looking at the stars, landing in a ditch - Most start-ups today are in the digital space. They look to expand too fast to other spaces and other ideas. They want to take over the country and the world as fast as they can. It is like a rocket without enough fuel. Until your current model is perfected and profitable, you cannot reach the moon and the stars. If you are too busy looking at the stars, you will, in all probability, land in a ditch. Focus on your core and keep the expansion for a later date. Aim to get on top of the tree before you aim to reach the stars.

The myth of Indian brand loyalty- Indians are rarely ever brand-loyal. Every Indian, no matter which country they are in, is looking for a discount. They will drop you like a hot cake, if they can get it cheaper someplace else. The trick is to stay unique in some way, no matter what you do and to stay reasonable. If you do have to charge, your product had better be worth it because we Indians are very good at sniffing out bad quality. Once that happens, everyone and their uncle and their uncle’s cousin knows better than to trust you. It’s simple. Perfect your product before you push it.

Too many solutions to one problem - Indian start-ups are often trying to solve an already solved problem or one that is being solved. When there are too many competitors, it adds to the problem and eventually some will have to bow out because there is not enough for everyone. There are so many upcoming cab apps, food delivery apps, clothing apps and so on. Uniqueness is paramount. It cannot be repeated enough unlike start-up ideas.

Letting go of the old - As India progresses, we assume that everything is a lot more digital that it really is. We still go to the sabziwalla and book tickets at counters. We are slow to change. While the change is happening, Indians are taking their own sweet time to get there. This change in our habits is much slower than the rate at which start-ups are coming up in the country. With no takers or not enough takers, many start-ups have to say goodbye.

These mistakes combined with others have caused the failures of many start-ups. Many that no one really heard of and some famous ones like Snapdeal and Stayzilla. Snapdeal tried to go too far, too fast. They over-hired and got fat instead of lean. They were attempting to reach the stars without first getting to the top of the tree. Now that they have hit the ground, they have had to let go of 500-600 employees. They have learnt the hard way, the importance of being lean. They have also said that they plan to perfect their core model, which is again what should have been their focus. Stayzilla had a similar problem. They stretched too far, too soon and realised that they did not have the resources or the contacts to maintain their expansion and were soon edged out.

While it is easy to put this all down in writing, when a start-up is first on its feet, it is a completely different situation. It is very easy to point fingers and hammer home the mistakes that these founders made. They have obviously realised what they did wrong and they know what to do next to fix these issues. They have had a very much-need wakeup call that they will never forget. These mistakes won’t be made again because they have seen what they do to start-ups.

The start-up environment in India is thriving with ideas and innovation. There are dark days and bright ones. Some days we fail. Some days we rise. In order to get anywhere, failure is a stop in the road. All major companies and corporations have struggled and fallen before they got to where they are. Many have failed even after they reached world-class status. All founders and entrepreneurs in India, balking at the thought of failing and looking at the shaking ground around them, need to realise that we are in an eco-system. And like an eco-system, we need each-other to survive. 

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  • Harrison Smith

    Once you offer discounts regularly or have trial periods being done every now and then, customers get used to using the service at a low cost, after which clients will always hesitate to give you the full price or if they do, they will always feel they have been overcharged.

  • Jason Cassell

    Once you define your brand positioning and service, you will be able to get better feedback from your clients in India or anywhere else in the world.

  • Kieron Thomson

    Bureaucracy and ambiguous laws are the biggest reasons why starting a business in India is extremely difficult.

  • Natalie Davies

    Doing business in India is so god damn unpredictable !

  • Sam Braley

    Good article, thanks for sharing.

  • Eric Donnelly

    India has a lot of potential

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Rajh V Iyer

Investment Expert

Rajh is a serial entrepreneur with ventures in knowledge process outsourcing, hospitality, retail, IT and e-commerce. He has over 25 years of corporate experience and expertise in key roles of leadership, strategy, planning & management. Rajh is especially skilled at developing new profit centers within scheduled timelines and costs while ensuring operational efficiencies through long-term strategic planning. His core expertise includes delivering customized and cost-effective solutions to meet the operational and financial goals of the organization and its stakeholders. Rajh holds an MBA in Marketing from the University of Mumbai. 

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