The latest fad in India is start-ups. The Indian Business space is positively crawling with new companies, everywhere you look. There was once a time, when people were completely gaga over high-paying IT jobs but that trend is slowly diminishing due to the ill-effects of a corporate desk job that is becoming more and more evident to the youth.
Startups are the new dream for most IITs, IIMs and IAS. People today want to sit back, relax and rake in profits and stardom from being an entrepreneur because it sounds so fancy and exciting.
But sadly, this new craze isn’t working well for everyone. As it is, not everybody in India has an entrepreneurial bone in their body. Research suggests that over 90% of Indian start-ups fail miserably.
Not so surprisingly, tech start-ups among them have the highest rate of failure as compared to other Industries. In spite of funds running high, extreme competition and innovativeness, failure is evident in the air. The top two reasons why Indian start-ups are facing failure early on are as follows:
- An Unwanted Product:
The most obvious reason why start-ups don’t sell is because nobody wants to buy your product. But most companies convince themselves that by building new things and convincing people of their importance, they can carve a niche for themselves as great inventors. Lack of market need for a product is the biggest factor contributing towards failed ideas.
- Premature Scaling:
The second biggest destroyer of start-ups is spending too much of money early on in the process for marketing, hiring etc., even before you have secured a working business model and acquired further financing.
Indian start-ups need to stop and look into these possible reasons before they take the plunge into business. Productivity must take top priority if India hopes to make it big in the start-up world.