India is the third largest start-up ecosystem in the world. In the year of 2019, every year two to three start-ups on average were being set up. The year-on-year growth in 2018 recorded to be 15 %. Women’s participation in the tech start-up stood up at 14%. India has been showing active engagement in start-up industry especially the ones belonging to technology. Despite of rich usage of artificial intelligence in retail and banking and machine learning in the same, the start-ups are not blooming to their potential. But India lacks innovation and creativity in entrepreneurship which was also estimated by a study conducted by IBM Institute of Business value and Oxford Economics. The report also said that due to lack of innovation, 90 percent of start-ups fail to thrive in Indian market that too within the first five years of launch. Out of all the failed start-ups, the most number come from logistics, e-commerce and food technology.
The problem is that Indian education system lacks encouragement to creativity and inn ovation. The issue is innate. The issue is related to our inability to think out of the box. You know, India is a developing country. People here have limited resources. This condition of limited resources restricts us from thinking out of the box. We are afraid of losing our resources. We have a fear of losing money and putting that hard earned cash at stake.
India is a place where around 5 million of start-ups take off every year according to a report put forward in 2019. But only 10% of those start-ups are successful in reaching the other side of the sea. The list consisting of such failed start-ups sadly includes names like Doodhwala, Dial-A-Celeb, , Doctalk, Yumist, Stayzilla, TurantDelivery, MrNeeds, RoomsTonite, CardBack, Finomena, Overcart, Koinex, Russsh and many more. It is so heart wrenching for an entrepreneur to witness the whole process of crumbling down of a start-up which incorporated a lot of paper-work within it. The reasons which are responsible for such erosions of capable start-ups in India include circumstances like extensive capital requirement, acute competition, inability to cope up with customer acquisition costs, unsatisfactory services, poor customer services, poor quality of products or services, credit crunch, and many more.
Start-ups have to meet all the prerequisites and demands to flourish. And a shortcoming in preparation can leave a life-long scar on the mindset. To properly execute a business, an entrepreneur must strictly follow a business plan. Underestimating an appropriate business plan can be a huge mistake. A business plan tells the path and related pros and cons of the idea. First it gives an idea of how it would go if the demands are met and second it also provides a plan B which could be life saving.
Being prepared for the incoming competition is one more requirement to master. Understanding competition is a crucial requirement because it broadens up the possibilities of creative ideas of other entrepreneurs which can outrun your idea. Keeping up with the competition is the key to survive in the market because most of the start-ups breathe their last soon due to tough competition. Adequate and intense market research can light the way for entrepreneurs for the path ahead.
Of all the reasons, the two most common reasons for the failure of Indian start-ups are financial inadequacy and lack of innovation. As per a report 77% of Indian start-ups are unsuccessful because they lack creativity, innovation and out of the box usage of technology. Even after the campaign ‘Make In India’, and many other encouraging programmes launched by the Ministry for Skill Development and Entrepreneurship, the campaigns are somehow unable to incorporate innovation and creativity into the business environment.
Indian start-ups need world class technical skills and global level ideas to thrive on the global platform. Business is a planned idea which should be sustained with awareness about the competition, vigilance about the feedback, and an eye for progression. That is the only way a business can pay you back manifold.