India has the third-largest ecosystem for startups, yet 80-90% of Indian startups fail within the first 5 years of their inception. Wondering why startups fail? We found some of the key reasons behind the same and ways in which entrepreneurs could challenge these startup failure situations. Here are 9 reasons why startups fail & steps you can take to avoid the same:

1. 9 Reasons why
Startups Fail and how
to Avoid it

2. 1. LACK OF INNOVATION
And how it leads to failures

3. “ Although India is said to have the
third-largest startup ecosystem, it
doesn’t have meta-level startups
such as some of the big names like
Google, Facebook, and Twitter.
Indian startups are also known for
replicating global startups, rather
than creating their own startup
models.
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4. How to avoid
▪ Avoid emulating existing successful global startup ideas
in India without proper research and understanding of
the Indian market.
▪ Think about the long-term sustenance of the idea before
venturing into ideas that are trending.
▪ Find the right resources to drive the startup with
innovation.
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5. 2) Lack of funds
And how options become limited

6. “To turn ideas into reality requires
finance. Those that do procure
funding need scalable and profitable
models to make the startup grow.
Lack of funding is one of the key
reasons why startups fail.
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7. What are the key factors to consider?
▪ Startups must have effective business and revenue
models.
▪ Startups must focus on revenue and profit as much as
products/services from the beginning.
▪ Funds must be spent judiciously.
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8. 3) Lack of focus
And how it affects decision making

9. “ Grubhub is a food delivery startup. From
the beginning, the company decided to
focus only on food delivery. There’s a lot of
other services that a company like that
could offer- pick up of food, catering, and
more, but the founders chose to focus on
just delivery. The result? They could
execute technically and operationally and
grow the business successfully
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10. Here’s how startups could maintain focus:
▪ Look for feedback, both, good and bad.
▪ Do not go all out. Decide and focus on one thing at a
time.
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11. 4) Product Market Fit
Does the market demand it?

12. “A large number of startups fail for
the simplest reason – the
consumers have no need for its
product. Does your product provide
value to consumers? Are there
consumers for your product?
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13. How can you avoid this?
▪ Gain an in-depth understanding of who your customers
are and what they feel about your product.
▪ Find new customers via word of mouth before jumping
into creating expensive marketing plans.
▪ Establish a relationship with your customers.
▪ You can’t please everyone, nor should you try to.
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14. 5) Leadership gaps
This gap can lead to a lot of problems

15. “ Most startups are driven by the
vision of its founders and core team
members. However, having a good
idea is far less important than
knowing how to lead a brand, a
company, and a team. Lack of vision
and strong leadership is another
common reason why startups fail.
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16. How can you avoid this?
▪ If you do not have leadership skills, delegate the role to
someone else who would do it better than you.
▪ Study leadership, practice it.
▪ Find a mentor to help you build leadership skills.
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17. 6) Lack of agility
Keeping yourself updates is important

18. “ Today, we live and function in an
always-on culture. One needs to,
always, keep up with the
complexities and changes. In such a
culture, agility can bring a
competitive advantage to startups.
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19. Startups can ensure agility by practicing the following:
▪ Continuous learning
▪ Having a fluid workforce
▪ Research and development
▪ Be willing to let your ideas change
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20. 7) Business model failure
You don’t get another shot with this

21. “ A good product, an impressive
website, and huge ad spends- a
number of entrepreneurs assume
that these factors are going to be
enough to attract customers and
business. They ignore the fact that
customer acquisition and customer
retention come at high costs.
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22. Here are two questions in order to build a suitable business
model:
▪ Does your startup have a scalable way to acquire
customers? Can you find one?
▪ Can you monetise those customers once acquired? Will
the revenue from that customer outdo the cost of
acquisition of that customer?
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23. 8) Lack of talent & competency
Shouldn’t be hasty with hiring

24. “ Startups spend a lot of time and
effort in recruiting the right
candidates. In situations of bad
hiring choices, startups may face
the challenge of replacing the hire
with a better candidate.
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25. What could startups do to tackle this issue?
▪ Plan their hiring processes with utmost care.
▪ Create alternative working methods such as work on
freelance-basis or on a project basis model with expert
professionals.
▪ Make hiring processes stricter and intense by giving the
candidates a real issue to solve.
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26. 9) Ignoring customers
Which you definitely don’t want to do

27. “ When startups are committed to
being customer-centric, their
decision-making becomes easy,
their focus gets narrowed down and
their popularity increases from
word of mouth – as explained in
an article in the Harvard Business
Review.
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28. Here’s what to do:
▪ Do not ignore customers.
▪ Address customer queries, concerns, and feedback.
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Thank
You