Why do startups fail in India? This is one hot favourite question asked “very often” on Quora.

Finally, Failure is something people are talking about and i am not complaining about it.

You know a topic needs to be approached with a fresh mindset when everyone is talking about it. Yet, no one wants to discuss it because we want to celebrate success.

Before i get down to listing the reasons for startup failures in India – here is what you must know : the much celebrated, hyped startup India scheme of government that was supposed to provide help to startups in India has failed miserably.

Quoting from the article ‘in a survey of 33,000 startups, over 80% say they have received no benefit from Startup India, and over 50% say that the single biggest challenge to business remains corruption / bureaucratic inefficiency.’

Well – if the government is hell bent on failing us, how about we at least stop living in the fantasy land and give them credit where it is due.

This is what i have done – ‘our prestigious govt’ is now the second most reason for failures of startups in India.

Moving forward – The failure of a business is a bitter truth we must all know. I mean, if we can celebrate success – why can’t we mourn (i am kidding). Let me rephrase it “Why can’t we learn from failures of startups”.

In the last 4 years, I have updated four lists of startups that failed in 2016 to 2019.

Here is the list for you:

And recently, i added another list from the Oz – List of Famous Failed Australian Startups and Businesses.

You might want to ask “Why a list of failures? – Why not a list of successes?”

Well! Isn’t the newspaper already filled with all startup success stories?

Haven’t we read enough of entrepreneurs exiting with millions of dollars?

You can call me a party popper or Cynical for picking up a topic, people rarely want to talk about but here is the reality – 8 out of 10 startups fail.

And there are very few which survive the first 3 years of a business.

With number being so lopsided towards failure, I ought to discuss failure more than success (do not forget – the name of the blog is lessons at startup. I am here to give you the lessons that I learned during my entrepreneurial journey. For me, the biggest learning have come from failures than successes)

In 2019, a lot of funded startups winded up their operations. Until then, every startup started with an innovative idea (most of them picked from USA) was funded and predictably, most of them has already started failing in last few years as little or no thought process was involved in the business expansion plans of these startups.

The question on everyone’s mind was “what is wrong with Indian startups? Why are they failing despite so much funding?”.

What astonished the VCs was the fact that some of the failed startups had the best of talent from IIMs and IITs as founders. and when they launched, they were in a market touted as the next big thing in Indian Industry.

Despite having a combo of “money-brain-market” at their disposal, the startups are failing.

I agree Money is important.

Running a startup without Money is like running a race on one leg.

You will never finish the race.

Why do most startups fail in India? Is funding the only reason for failure or there is more to it than we can see.

I have failed many startups ( I am going to be shameless in admitting my failures).

Obviously, money was one of the prominent factors for failure but it was not the only reason which led to the closure of some of the startups.

As a matter of fact, You will be surprised to know only one of them failed “mainly” because of Money troubles.