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5 reasons why start-ups fail in India

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New Delhi: Prime Minister Narendra Modi’s highly publicised venture “Make in India” ushered in a new era in the Indian industrial sector with more and more start-ups sprouting up and contributing towards the development of the Indian economy.

While some of the start-ups flourished and went to the extent of challenging global giants like Microsoft, others perished or were limping towards an untimely death.

Despite the aspiration and the tenacity that the start-ups promise, they have some common flaws which trigger their downfall.

Lack of efficient workforce: Despite the presence of a pool of talent, selecting the exact fit becomes cumbersome for the start-ups. Fear of failure and uncertainty associated with the small companies deter talents. At the initial stage, the companies do not have the financial resources to rope in qualified people. The compromise that the companies make during talent acquisition later proves to be a thorn in their path of success.

Lack of training: Most employees learn tricks of the trade while working and being mentored properly. Since start-ups are lacking in resources the way big fish have, proper mentoring of the workers does not happen. This leads to a stagnancy and affect the productivity of the company. Most of the new small time organizations are brilliant with their ideas but have minimal professional experience. As a result, a gap is created which add to the woes of the organization.

Lack of marketing strategy: Constraints in the financial resources keep the start-ups away from spending too much on branding and marketing. As a result, even if the product is good it fails to reach the target customers. Hiring a marketing guy is also not possible for them. Moreover, the start-ups focus too much on the productivity and neglect their branding and marketing activities. The product, as a result, fails to get marketed.

The problem of copying: Most start-ups follow the models developed in the Western countries. In the process, they forget the environment they are working in. Instead of formulating a strategy focussed on the local needs, start-ups try to emulate companies of USA. This leads to a massive set back as what works in the US does not always work in India.

Strategic work plan, regular mentoring and adapting to the local situation might assist in the flourishing of the start-ups. But the government must formulate a policy and support them for developing a sustained economy.

Next Story

Facebook, T-Hub Empower 10 AI-driven Indian Startups

The other start-ups that were shortlisted include Greenturn Idea Factory, Sensegrass, Marut Drones, Shortlist Professionals and Innerhour

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Social Media, Facebook, Authenticity, Posts
The social media application, Facebook is displayed on Apple's App Store, July 30, 2019. VOA

Facebook and T-Hub, a Hyderabad-based global start-up catalyst, on Tuesday announced the completion of the second edition of their India Innovation Accelerator programme with 10 startups.

The top three startups — ftcash, Marut Drones and Innerhour — will receive further support for a month of Go-to-Market strategies, Facebook said in a statement.

“We are committed to support start-up and are focused on creating programmes like India Innovation Accelerator, with partners across the tech community to fuel startups, to build businesses of tomorrow,” said Manish Chopra, Director and Head of Partnerships, Facebook India.

The four-month accelerator programme supported a cohort of startups in diverse fields: empowerment of women and girls, agriculture, healthcare, education, climate change and resilient cities, etc.

Ravi Narayan, CEO, T-Hub, said that the country needs an innovation ecosystem that allows entrepreneurs to think beyond the limits and “empower them to address the critical challenges faced by two-thirds of the population in our country”.

artificial intelligence, nobel prize
“Artificial intelligence is now one of the fastest-growing areas in all of science and one of the most talked-about topics in society.” VOA

The 10 cohort start-ups included Mumbai-based ftcash which aims to empower micro-merchants and small businesses with the power of credit using digital payments.

While another start-up, StaTwig, is building Blockchain based solutions to ensure that every child is vaccinated with high quality vaccines, Signzy has built a digital trust infrastructure which enables completely secure digital on-boarding using the AI assisted on-boarding (RealKYC), Algorithmic Risk Intelligence (ARI), and Blockchain technology to store and verify consumer information.

Also Read: Children of Mothers Suffering Domestic Violence are 50% More Likely to Have Lower IQ

Blue Sky Analytics, a geospatial data intelligence start-up, and Pensieve that aims to democratise legal data and make it accessible to the common man were also selected.

The other start-ups that were shortlisted include Greenturn Idea Factory, Sensegrass, Marut Drones, Shortlist Professionals and Innerhour. (IANS)