Top 10 Reasons Why Startups Fail and How to Avoid Them

Starting a startup is not child’s play. The fact that a majority of them fail in the first 3 years makes it even more terrible. Smart entrepreneurs always learn from their past mistakes and learn from others mistakes too. This is what helps them to hustle! After analyzing and examining why startups fail, we identified the top 10 reasons why startups failed. 

Here is the list of reasons for failure and methods to avoid them:

1. No market need:

Startups fail when they are not delivering the goods and services that the market needs. 

It’s of no use if you have a lot of money, a good idea and good reputation but not fulfilling the needs of the people. 

How to avoid:

  • Essentially, customers should be interested in the model you are pitching. 

Lawyers want more clients. Not a swanky office.

2. Running out of cash:

Cash is like fuel to your business. If you are running out of cash, then your business is in trouble and you will not be able to take it any further. 

Cash flow helps in keeping the business alive. No matter how passionate you are or how great your idea is, you still need to pay your bills, clear your dues and pay your employees. 

Many startups run into problems when they have insufficient funds to run their operations resulting in loss for the company. Or the exact opposite scene is also possible, when a startup receives massive funding and they misallocate the funds. 

How to avoid:

  • Keeping a track of cash inflow and cash out flow. 
  • If funds are required, work well in advance to explore all the funding options and not delay it to the extent that it’s too late.  

3. Market problems:

Every company is driven by the market. It is essential to identify the correct market and find the right solutions for the needs of people. 

The success of a product also depends on the timing of it. 

The e-commerce industry wouldn’t be booming in the early 2000’s like today because the internet speed was really slow and the smartphone industry was still picking up. 

How to avoid:

  • Go out, talk to people and understand the market needs and demand before building a product. 
  • Research and understand your industry properly. It is easier to make changes in the initial level. This will help you save money too. 

4. Business model failure:

Business model is the backbone of every business and it contributes to the commercial and economical success of a business. 

Some companies are so involved in the idea implementation process, they overlook the business model.  

Lacking the skill to analyze and strategize business model is a major drawback. A bad business model can reduce the life span of a business drastically.  

How to avoid:

  • Analyze if your customer acquisition strategy is expandable. 
  • Analyze and estimate your sales and return on investment. 

5. Poor marketing:

Good marketing is understanding your target market and knowing how to get their attention. 

A great product can fail if it is not marketed well.

Knowing how to convert them to leads and ultimately into customers is very essential for the success of a business.

How to avoid:

  • Marketing should start at the initial stage of a product and not wait till it is completed.
  • Hire a good marketing agency that understands your vision. 

6. Poor management team:

Management is like the brain of the company. Having a diversely skilled group of people is essential for the success of a company.

Poor management can represent poor strategic decisions, communication gap between the top management and bottom level employees and bad hiring system.  

It is important for the team to be united and agree around a common vision and long term goals of a company.   

How to avoid: 

  • Communicate well with your employees.
  • Decisions should be backed by statistics and not experience always.

7. Loss of focus:

Founders are usually idea oriented and they mostly get carried away with ides. This could make them lose focus on the other key aspects of the business. 

There should be a fine balance between micro management and macro management as this could also be a reason for the employees to lose focus. 

How to avoid:

  • Don’t get carried away with new ideas. First concentrate on achieving the main goals of the business.  
  • Have a “To do list” and “To not do list”. This will help in eliminating the unnecessary things that are making you lose focus. 

8. Legal challenges:

Sometimes a startup could be doing really well but a legal complication could be the cause of shutting down the company. 

Every field can have different laws and it is important for startups to at least be aware of them. 

How to avoid:

  • Consult an experienced lawyer if required. This will save you a lot of time and money in the future.
  • Make sure your company and employees are compliant with the laws.

9. Disagreement among team members:

Conflict among team members is the last thing any startup would want to see. 

Everyone have their own opinions and their emotional behavior could lead to conflicts. This can destroy company culture and ultimately lead to the failure of a business. 

How to avoid:

  • When it comes to making a business decision, you should make decisions that are best for the growth of the business and rely on the collected data rather than going with the majority.   
  • Shareholder agreement and employee agreement should be in place to handle the matter professionally.

10 Burnouts:

Doing a startup is not easy. Even the most ambitious people burnout in the process. 

Because of the hectic schedule, they don’t have a good work-life balance. Hence, the risk of burning out is high.

Watching your buddies making good money in corporate jobs, posting pictures of family outings and parties could make you rethink about your decisions. 

A majority of the founders cannot take these burnouts and eventually quit.

How to avoid:

  • Make sure you have a good work-life balance.
  •  Health should be your first priority. 

Bad health = No peace of mind = Bad decisions = Downfall of company. 

A startup can experience several challenges presented above. However, it is better if the founders keep an open mind and learn from the failure of others. This can help them save a lot of money and time. 
So these are some of the reasons why startups fail. Hope you liked the article. ☺   


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What is Startup India?

Do you have an innovative idea that you want to pursue as a startup? Then Startup India is the right platform for you!

Startup India is a plan of action that is aimed at promoting and financing startups. It is an initiative of the Government of India. The campaign was first introduced by our Prime Minister Narendra Modi on 15th August, 2015. 

The Indian government has introduced over 50+ startup schemes in past few years. Each Startup scheme is aimed to promote the Indian startup ecosystem. 

India is expected to reach over 12,000 startups by 2020.

If you’re wondering “How Startup India is helping businesses?” Here is the answer to your question. 

  1. Easy access to funds

The Government of India has set aside Rs 10,000 crores to fund the startups as venture capital. 

The government is also giving guarantee to banks and other financial lenders for providing capital. 

2. Exemption from tax for 3 years

Startups will be exempted from income tax if they get a certification from the Inter Ministerial Board. 

3. Reduction in cost

Startups will enjoy 80% reduction in the cost of filing patents.

4. Easy process

Government of India has launched a website and a mobile app for registration of startups. Anyone interested in Starting a Startup (Provide link to How to start a startup) can fill a simple form on the website and upload the required documents. The full process can be completed online.

5. R&D Facilities and opportunities

New research centres will be set up to provide facilities and opportunities for startups in the R&D sector.

6. No time-consuming registrations

Numerous compliances have been simplified to save time and money for startups. 

7. Apply for tenders easily

Startups can apply for government tenders. They are exempted from the criteria of attaining a particular turnover. 

We have written a very interesting article about lean startup .

Follow the link to read that

http://liftmystartup.com/what-is-a-lean-startup/

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10 Successful Startups From Mumbai

Mumbai has been considered as the financial hub of the country for a long time. Even though Bengaluru is the most preferred choice for starting startups, Mumbai has caught the attention of everyone for its posh lifestyle and business scope in many sectors. 

Here are 10 tremendously successful Indian startups that grew from Mumbai.

1. Ola cabs

Founders: Bhavish Aggarwl and Ankit Bhati  

Founded in: 2010

Ola cabs is an Indian transportation network company offering taxi services and food delivery. 

Ola has raised funding from Sachin Bansal, Kia Motors and Hyundai, reaching a valuation of about $6.2 billion. 

Ola Electric has separately raised funding of INR 400 crore from Tiger Global and Matrix Partners India. 

2. Quikr

Founders: Pranay Chulet and Jiby Thomas 

Founded in: 2008

Quikr is an online advertising platform. Quikr is there in over 900 cities and users can sell their mobile phones, household goods, cars, real estate, services and also look for jobs! 

Quikr has raised $350 million so far from Tiger Global, Matrix Partners, Norwest Venture Partners, eBay, Nokia Growth Partners and others.

3. Pepperfry

Founders: Ambareesh Murty and Ashish Shah  

Founded in: 2011

Pepperfry is India’s number 1 online furniture platform. They sell furniture and home décor products, creating their own niche in the e-commerce market. 

Its stock includes more than 80,000 products which includes various furnishing and home décor products. 

Initially the company was funded by the founders itself. They managed to raise $100 million in 2015. 

4. Justdial

Founders: V.S.S Mani 

Founded in: 1996

Justdial is marketed as India’s best local search engine as they provide search services across the country. They provide different services in India over the phone and online.

Justdial launched their web-based version in 2007 and their Android app in 2011.

In 2012, SAP ventures and Sequoia capital invested a total of $57 million in the company. 

5. Bookmyshow

Founders: Ashish Hemrajani, Parikshit Dar and Rajesh Balpande

Founded in: 1999

Bookmyshow is India’s largest online movie ticketing brand. Bigtree Entertainment Pvt. Ltd, the parent company of Bookmyshow received backing from Network18 group and Accel Partners. 

In 2018, the company raised $100 million in its Series D funding round. Bookmyshow is currently valued at $850 million. 

6. Nykaa

Founders: Falguni Nayar

Founded in: 2012

Nykaa is a beauty retailer online store. They sell cosmetic and wellness products. They opened their first physical store at T3 terminal, Indira Gandhi International Airport in November 2015.

The recent funding by TPG Growth has taken its valuation to $724 million. 

7. Toppr

Founders: Zishaan Hayath and Hemanth Goteti 

Founded in: 2013

Toppr is an online exam preparation platform. Initially, they catered to only IIT JEE students. Now they have expanded and offer materials to the medical students too. They also have materials for board and higher secondary examinations. 

The company has received $2 million seed funding from SAIF partners and Helion ventures. 

It recently raised $35 million in series C funding round which was led by eight roads ventures. 

8. Purple Squirrel

Founders: Aditya Gandhi and Sahiba Dhandhania 

Founded in: 2013

Purple Squirrel’s goal has been to bridge the gap between college learning and actual trends of various industries. The company provides industry driven education. 

The company works in collaboration with more than 350 businesses and 100 educational institutes. 

9. Bajaao

Founders: Ashutosh Pandey 

Founded in: 2005

Bajaao Music Pvt Ltd is an Indian online retailer of music instruments, studio equipment, DJ gear, lighting and pro audio equipment.

As the first online music store, impressive stock and good service, the startup was soon able to break even. 

As of today, Bajaao is India’s largest e-retailer for music instruments.

10. InCred

Founders: Bhupinder Singh

Founded in: 2016

InCred finance is a non-banking financial company in India. The company gives out home loans, education loans, consumer loans and SME lending. 

It recently raised INR 600 crore in a funding round led by FMO.

So, this was a list of some successful startups from Mumbai. Hope it was informative. 

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10 Successful Indian Startups that originated from Bangalore

Top Startups in bangalore

Bengaluru, also called Bangalore, is famously known as the Silicon Valley of India and IT capital of India because of its role as the nation’s leading Information Technology (IT) center. With Prime Minister’s ‘Make in India’ initiative, the city has emerged with many new players in the startup sector. Being the silicon valley of India, we have seen many startups emerging successfully from this city and making India proud on a global level. So, how can we not cover a list of the top startups that have originated from Bengaluru?

1. Flipkart: 

Flipkart is one of the oldest and well-known brands in the Indian e-commerce sector. It was founded in 2007 by IIT Delhi alumni Sachin Bansal and Binny Bansal. From an online bookstore from a 2 bedroom apartment to one of the biggest companies in India, it has set a terrific example of successful Indian startups. In May 2018, Flipkart was acquired by Walmart for $16 billion.

2. BigBasket:

Bigbasket is the largest online grocery supermarket in India. They sell fruits, vegetables, eggs, meat, fish, household products, personal care products, etc.  It was started by Hari Menon in 2011. The startup has been growing steadily irrespective of all the challenges. The company has managed to receive $150 million in funding and this has pushed it to the unicorn club. Bigbasket currently operates in 21 cities across the country. 

3. Zoomcar:

Zoomcar is a self –drive car rental company which was founded by David Back and Greg Moran in 2013. The company has raised over $20 million and plans to raise an additional $50 million this year to facilitate their expansion in other cities. From 7 cars to 2000 cars, the company has grown tremendously. The company operates in 45 cities across the country. 

4. Myntra:

Myntra is an Indian fashion e-commerce company. It was started by IIT graduates Mukesh Bansal, Ashutosh Lawania and Vineet Saxena in 2007. It started out in the B2B sector to supply personalized gifts. The brand gradually moved towards B2C focusing on branded shoes, clothing, accessories and lifestyle products for women and men. In 2014, Myntra was acquired by Flipkart for $330 million. 

5. Practo:

Practo is a patient focused, unbiased, independent medical website with over 1,00,000 doctor profiles from across India and Singapore. Patients can book appointments with doctors that are listed on Practo’s website and also get online consultations. It was started by engineering graduates Shashank ND and Abhinav Lal in 2008. Today, their clientele base includes over 2 lakh doctors and 10,000 hospitals across 36 cities and 5 countries. The startup has raised over $124 million in funding so far. Practo has now expanded globally and made its entry in Brazil too.

6. Swiggy:

Swiggy is India’s largest online food ordering and delivering platform. It was founded by BITS Pilani alumni Srihrsha Majety and Nandan Reddy in 2014. Swiggy has its own delivery team members that pickup food from restaurants and directly deliver it to the customers. The company claims that this makes almost all restaurants accessible for its customers sitting at home. The customers can also track their delivery on real time which makes it a better user experience. This year, Swiggy has already got $35 million additional funding and they have expanded their operations beyond Bengaluru to cities like Mumbai, Delhi and Kolkata. 

7. Zivame:

Zivame is an online lingerie store for women. It offers a wide range of products for women including  lingerie, nightwear, activewear and shape wear. It was founded by Richa Kar and Kapil Karekar in 2011. It has raised $57.5 million of funding from different ventures. 

8. Ginger cup:

Ginger cup is a creative advertising agency. They are pioneers in cup branding. The company helps brands interact with their target audience by printing messages on their coffee/ tea cups. It helps to reach out to the target audience during coffee/ tea breaks. Their client base includes BookMyShow, OYO, Uber, etc. 

9. Moon frog:

Moon frog is one of India’s fastest growing mobile gaming companies. The company was founded by Tanay Tayal, Ankit jain, Kumar Puspesh, Oliver Jones and Dimple Kumar in 2013. Some of the popular games developed by Moon frog are Teen Patti Gold, Ludo club, Bahubali- The game and Alia Bhatt – Star life. Moon frog has attracted over $16 million in funding. 

10. HackerEarth:

HackerEarth is a software company that provides enterprise software solutions that help in innovation management and recruitment needs. HackerEarth was founded in 2012 by Vivek Prakash, an IIT graduate. Its big corporate clients include Adobe and Wipro.

With all these Startups emerging from Bengaluru and many more to come, Bengaluru could concrete its spot as the startup capital of India too! So this was a list of Successful Indian Startups that originated from Bengaluru. Hope you liked it. 

20 Future business ideas for 2020

Top 20 business ideas for 2020

Do you want to start a new startup or a business and profit from the upcoming trends? If yes, here are 20 future business ideas that are ideal for the future!

1.) Instagram consulting

Instagram is one of the most used social media applications as of today. According to reports, the social media app has about 1 billion users worldwide. Instagram has become the go to app for every marketer nowadays. Despite Instagram’s growing popularity, not all companies know what they are doing on the app.

2.) Smartphone repair services

In today’s digital world, almost everyone is dependent on a smartphone. Luckily, there are not many smart phone repairing service stations out there. This opens a wide opportunity to start the business now.

3. Web designing

It is essential for every business to establish their online presence in today’s digital world through websites. This has created a huge demand for web designers. Now is a right time to start a business in web design as it is the best time to tap the market. 

4. SEO Firm

This is related to web designing. There is a lot of demand for good SEO services as every business wants their website to rank on the first page of the search engine results page. 

5. Social media consulting

With the increase in the popularity of social networks like Facebook, Instagram and Twitter, every business is targeting them and trying to convert them into customers. This has led to a huge demand for social media consultants who advice and strategize on how to promote and market their products and services on social media. 

6. Data crunching

Without big data, you are blind and deaf in the middle of a highway. The challenge isn’t just crunching the data but to gather all the required information and gaining useful insights that can be converted into business profits.

7. Space hotel

This is a part of space tourism and is targeted towards the upper strata of the society. There are a number of companies working on going to the space but not many people that are concentrating on space hotels. Hence, this is an opportunity for you to grab and make the most out of it.

8. Mobile marketing consultants

The number of people who surf the internet using mobile phones is increasing every day. Businesses are now realizing that they need to adapt a marketing strategy specifically for mobile marketing as they can target the right set of audience accordingly. This has led to a huge demand for mobile marketing consultants and hence a huge opportunity for them. 

9. Marriage counselling and therapy

Mental health is as important as your physical health. Marriage counselling and therapy, helps you resolve your conflicts and helps you get mental peace. This will help you lead a happier life. Statistics suggest that this field will grow 41% by 2020.

10. Services for retirees

Who doesn’t want to lead a good life even after retirement? And it is expected that more than 80% of people born in North America will be older than 50 by 2020. This is a huge opportunity for businesses targeting people above the age of 50. Such businesses include retirement recreation services, counselling, nutrition counselling and real estate. 

11. Home care for senior citizens

Due to the ever-aging population, any business that can cater to the needs of the senior citizens with respect to cooking, cleaning, grocery shopping, taking them out, physical therapy etc will be a great opportunity for the years to come. 

12. Kids friendly apps

Children are our greatest treasure. They are our future. According to a study, three quarter of kids have access to gadgets. This is a big business opportunity for someone who can design apps just for kids. If it is promoting education or good health, you could win their parents too. This will make them more loyal to your brand. 

13. Outsourcing agency

Every business is looking for an opportunity to cut down on their expenses and this is an opportunity for outsourcing agencies to seize. Businesses are trying to outsource some of their services to freelance contractors which used to be in house functions; such as HR, IT and accounting. If you can set up an outsourcing agency, then there is a great potential in the market. 

14. Accounting firm

Regardless of the size and nature of the business, every business requires an accountant. So, if you are an accounting guru, then consider starting an accounting firm as it could become a profitable venture if you have a good cliental base.  

15. Privacy protection firms

The need for data protection is growing rapidly. From credit card numbers to photos, everything is available online. There are many people out there who want to steal this information. It is the responsibility of the company to protect their customer’s information. Companies are looking for people to write security plans to prevent data breach. 

16. Food trucking

A truck is a lesser investment compared to a brick and mortar restaurant. And the failure rate of food trucks is 10 to 20 percent compared to restaurants which is about 60 to 90 percent. With the right space and some great recipes, you can have your food truck running. 

17. Car sharing business

Car sharing business is a lucrative business to target tourists who make only occasional use of a vehicle. They can rent cars for a short period of time, often by the hour. 

18. Computer engineering

The need for high end computer experts will never go out of fashion. Big companies need fast and secure networks. Computer experts are able to get the systems together. 

19. Car charging stations

With the electric vehicles industry emerging in the market, thousands of charging stations have to be built to cater the increasing customers. With the concept of going green and protecting the environment, the demand for electric vehicles is increasing. Thus, there will high demand for car charging stations too. 

20. Pet care

Almost every alternate person loves pets and they are more popular than ever. Everyone loves to have them around but due to their busy lifestyle, most of them have no time to take care of their pets. This makes pet care to be one of the best businesses to start. It includes services like keeping your pet when you’re at work or out of town, pet grooming and pet training.



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10 Elements of a Successful Business Idea

10 Elements of a Successful Business Idea

Ideas are the lifeblood of a business. Most successful startups always become big because of a good idea and not because of surplus funds. 

1
Value Proposition
2
Customer Segmentation
3
Distribution Channel
4
Relation with Customers
5
Cost Structure
6
Key Activities
7
Important Resources
8
Your Partners
9
Revenue Streams
10
Scalability and Potential for Automation

                  Table of Content

1. Value Proposition:

A value proposition is a promise of a value a company guarantees to deliver to its customers. It is basically a product, service or feature that makes the company attractive to the customers and investors. It summarizes why a customer should buy your product or use your services. A value proposition should be directly communicated to the customers via the company’s web site or other advertising mediums. 

2. Customer Segmentation: 

Customer segmentation is dividing the customers into different segments like age, gender, geography, interests and salary. 

Customer segmentation can help you:

  • Develop effective strategies.
  • Provide better customer experience.
  • Better Ad targeting. 

3. Distribution channel:

Distribution channel is the path through which goods and services travel from the vendor to the consumer level. 

The distribution channel should be minimal as far a possible because it helps in getting the goods faster and at a lesser cost as there will not be many middlemen involved. 

This will help in increasing the company’s profits and customer satisfaction. 

4. Relation with Customers:

Cash is king but the customer is God. A satisfied customer is the best business strategy of all. Building good relationships with your customers is very important as it helps in understanding your customers’ needs. 

Providing what your customer needs will increase the profits of your business. This will help you gain more returning customers, referrals and more profit in the process. 

5. Cost Structure:

Cost structure is the fixed costs and variable costs that are required to operate your business. 

To maximize profits, businesses should find every possible way to minimize costs. While some fixed costs are vital for keeping the business running, a financial analyst should always review the financial statements to identify expenses that do not provide any additional value to the core business activities. 

6. Key Activities:

Key activities are basically the activities that a company must perform to succeed. 

For example, if your business focuses on the production of a product, you should focus more about the customer needs and produce accordingly to satisfy the customer needs. This will also help in increasing the net income of your business.

7. Important Resources:

Key resources are basically describing the important assets of a company. They are required to make a business work. Every company needs them and it is only through them that companies generate income and value proposition. Key resources can be financial, human, physical or intellectual. 

8. Your partners:

Team work makes the dream work. It’s not all about the money that a partner brings in. Potential partners must be trust worthy. Good friends who share common values and responsibilities make good partners. 

Look out for partners who have the abilities that you don’t have. This will help in making better decisions as the knowledge base is more diverse.  Remember that the beautiful rainbow is made out of different colors and same colors. 

9. Revenue Streams:

A revenue stream is basically the income of a business. Your net revenue is calculated as the gross revenue minus discounts or returns you had during that year. 

In business, a revenue stream is generally made up of either recurring revenue, transactional based revenue, project revenue, or service revenue. 

 10. Scalability and Potential for Automation:

It is important to keep up with the times and work towards what is best for the business. Automation helps in higher production at lower costs, more efficiency, better quality, more safety, and it helps in reducing the unnecessary expenditure of the business. 

Zomato Gold – What is it? How to install? And its Benefits

Zomato Gold is an initiative of the company to pamper its foodie customers.

It is the company’s premium plan that allows subscribers to have free food / drinks as a part of their orders in restaurants, bars and lounges across the country. 

Zomato has also expanded this offer for home deliveries also now. However, NRAI refuses to support Zomato Gold on food deliveries.

How to get Zomato Gold Membership?

  1. Open the Zomato website or app.
  2. Click on “Dining Out” or “Nightlife” tab.
  3. Click on the option, “Zomato Gold”.
  4. Purchase the plan that is best suited for you.   

List of cities where Zomato Gold membership is valid:

  • Bengaluru
  • Delhi/NCR
  • Mumbai
  • Pune
  • Chennai
  • Hyderabad
  • Kolkata
  • Jaipur
  • Chandigarh
  • Ahmedabad.

Advantages of Zomato Gold:

  • Zomato has partnered with more than 3500 restaurants in India. This gives all the foodies an opportunity to try new restaurants and new cuisines at an affordable price.
  • For benefits on food, you get the second most expensive dish in the order as a complimentary. 
  • For benefits on drinks, you get one complimentary drink for every drink you order, up to a maximum of 2 complimentary drinks. The complimentary drink will be the same as the first drink ordered.