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Nearly one in every two new startups fails

There is a saying that there’s no shortcut to success, and there’s no magic formula that can create the “perfect” startup, Young entrepreneurs who went ahead and set up their own ventures, some went great and make their start up successful but while some fail and closed down.

From a recent study it is clear that  the startup ecosystem in India is witnessing a major shake up as around 50 percent of young entrepreneurs who went ahead and set up their own ventures in the last two years have already closed down.

There some of the major reasons despite having the great ideas your own venture fails. Since many startups offered multiple reasons for their failure.

  • Wrong timing for product introduction :-  Where everything else is perfect: You have a great idea, a theoretically brilliant business model, a talented team and enough funding to get the ball rolling. But if your idea comes too early and consumers aren’t ready for it, they won’t readily adopt your system. If your idea comes too late and there are already a number of different competitors in front of your target audience, you won’t be able to squeeze in. There is a necessary need for a good Market study.
  • Running out of in Finance  :– It is clear that finance plays a huge role in making a startup successful right from its inception until after investment rounds. Founders can be proud, and fail to listen or take advice at the detriment of their business. Finance professionals can help with the business plan, give you targets to aim for, manage the costs and help get in shape when further investment needed. Short on cash and unable to hire top-notch staff, startups can make up by painting a grand vision, aiming for a big goal and pumping in the required passion and motivation.
  • Wrong and not definite  business strategy :– Planning is everything you need to make, not having a perfect model of your own venture make things worst and closed down. The lack of the business model also caused failure for 17%. What is the growth plan in terms of markets and the cost of entering them?  what is the plan for coming months and years ?  Often founders will just do what it takes to get the product out there without asking themselves these key questions that should be in an overall plan.
  • No Efficency :-  Efficiency efforts are aimed at cutting down costs, enabling more effective business   communication, and improving the speed by which products or services are developed and delivered. It is about doing things better and faster without sacrificing the quality of outcomes.
  • Losing focus & Poor marketing :- We all started losing interest, the team was all wondering where this was eventually going. Getting sidetracked by distracting projects, personal issues, and/or general loss of focus was mentioned 13% as a contributor to failure. Also a poor marketing is also one of the reason of the failure Knowing your target audience and knowing how to get their attention and convert them to leads and ultimately customers is one of the most important skills of a successful business.
  • Pricing/Cost Issues  :-  Pricing is a dark art when it comes to startup success and startup performance highlight this difficulty in pricing a product was not too high or too low to make money in context of the particular costs of a company.


Rishabh Lawania, the founder of Xeler8, a startup tracker, said

“Augmented reality (AR) and virtual reality (VR) saw many failures last year. We’ve also spotted this trend of a few startups who’ve failed on one front trying their hands in a related field. Some startups who failed when they dabbed their hands in logistics and e-commerce are now taking to SaaS (software as a service) and analytics given their tech background.”

Competition among startups is becoming more intense as more and more companies.

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