If you need to know the true meaning of “failure” ask an entrepreneur. An entrepreneur is the one who makes mistakes which will give a feeling to a layman of being stupid. But a good entrepreneur learns from his mistakes and makes it a point he never ever repeats it. Inevitable happens if it is the other way around.

As an entrepreneur I have seen the ups and downs in the last 7 years. We as a company have made decisions which I may call brilliant and accumulated laurels but there have been instances where we have done blunders and suffered.

I would like to pen down a few reasons why startups fail or the reason for the failure of the startup

1. All are welcome to be the Co-Founder:

Big mistake most startups make is being top heavy. It’s all fun when you sit in one of the coffee days or at a park and discuss ideas. It gives you a lot of zeal during the first few months until the ego issues catch up. When you are top heavy not all get to have equal importance. In the process of settling things between co-founders the company loses its focus. Always select your co-founders judiciously so that you are light on top but who are multi-talented and multifaceted.

2. Product:

Most startups fail because they fail to launch the right product at the right time for the right market. Most start ups come up with cutting edge products but fail to hit the right market. A product should always be customer driven and not just technology driven. Any startup that has moved from being a good company to a great company has been for being customer focused.

3. Wrong person at the wrong place:

Continuing from point one, in a start up it is very important that right person is placed at the right place from the top to the bottom. As a company we always attribute the failure of an initiative to Sales team or to the engineering team. The real reason for the failure is usually ignored. Most common mistakes startups make is Marketing professional heading the Sales and a hard core technologist heading the support. It is most important to man the right position with the right personnel for the success of any start up

4. Funding:

The present generation of start up live and eat valuation. Gone are the days when the success of any company was tracked to profits. Most startups go behind short term goals leaving behind the actual purpose. Once you have secured the funding the biggest mistake a startup make it not utilising the funds judiciously. A huge amount goes into a plush office space which definitely gives them a few eyeballs followed by skyrocketing salaries to the work force which makes it tougher to sustain when the bank balance drys up. Startups fail to plan well with the funds for any kind of contingencies. Once the funds dried up there is inevitable need for more funds but you suffer because you have not done enough with the funds already raised to raise the second round and 9 out of 10 startup shutdown out of nowhere.

5.  Plan-B:

A startup should be agile and versatile as any human would be. The co founders and the team should be on an agile mode to move quickly from Plan-A to Plan-B or Plan-C if need be if Plan-A doesn’t work. You can not sit on the belief that you believe on the product and a miracle is awaited. The competition is so intense in the market that it will just eat you up. A good entrepreneur who heads a start up will quickly realise the need to move to Plan-B to succeed and if he doesn’t its dooms day for the entrepreneur and the startup alike.

All said and done if your startup clicks you have a great story to talk about and the startup ecosystem to come shall treat it as the bible to success. But a failed startup shall have a better story to talk about and teach a lesson to many entrepreneurs who aspire to be successful.


About the Author

Arun Raveendran is Director and Co-Founder at Foradian Technologies. He is also heading and nurturing the Enterprise Wing of Fedena which focuses on End to End offerings to Educational Institutions. He has won the Star Entrepreneur Award, awarded for leadership and contribution to the field of Entrepreneurship & Innovation.