The Indian startup ecosystem continues to expand and grow rapidly. Right from the Government support, increased participation of corporates, evolution of the investor landscape, incredible global exposure, and the growth of digital infrastructure in India- the various elements of the startup ecosystem are coming together in a melodious symphony.

According to a NASSCOM report, the Indian startup ecosystem has the potential to grow 4X by 2025, and the number of unicorns is expected to be 95-105. The cumulative valuation of these unicorns is expected to reach USD 350-390Bn.

Despite all the favorable factors, 90% of the startups fail in India within the five years of their inception, according to a report by IBM Institute for Business Value and Oxford Economics.

Wondering why startups fail? Here are some of the key reasons behind the high startup failure rate:

  1. Lack of Innovation

One of the crucial reasons why startups fail in India is their lack of innovation. Innovative business ideas help to attract customers, beat the competition, and resolves challenging situations.

Although India is said to have the third-largest ecosystem in the world, the country lacks meta-level start-ups like Facebook, Google, and Twitter. Indian startups must drive their business operations with innovation, rather than replicating global startups.

  1. Lack of Funds

There must be millions of creative ideas floating around. However, turning these ideas into reality requires funds. Insufficient fundraising is a roadblock that leads to the shutdown of many Indian startups.

For startups that manage to receive seed funding, the inability to raise follow-up funds becomes the major cause of startup failure. So the startups must think about having effective business and revenue models.

  1. Lack of Focus

Be it a product, its features, or the market positioning, few investors and mentors firmly believe that the founders of Indian startups often start spreading themselves too thin.

A startup is best suited to cater to a particular problem for a specific segment. Though the business dynamics will keep evolving and the focus will not remain the same forever, it is essential for founders to sharply define what exactly they want to build.

  1. Right Market for Products

One of the biggest reasons why startups fail in India- the consumer does not need its products. Many founders in India end up falling in love with their product without realizing if it solves the customer`s need. Thus, it is important to target the right market segment and gain an in-depth understanding of your customers.

  1. Lack of Strong Leadership

Startups in India are mostly driven by the vision of their founders and core team members. While the innovative idea is significant in the journey of a startup, the absence of strong leadership is another reason why startup fails in India.

While some entrepreneurs are born with strong leadership skills, others can develop them. If you do not have the leadership skills, you can delegate the role to someone who has a futuristic vision.

You can also find a mentor to help you build and develop leadership skills. You can also study and gain an in-depth knowledge of leadership skills with the Everything about Entrepreneurship course. Learn the essential strategies to become a strong leader for your startup by talking with the top industry experts. To know more click here: