• Failed Startup in India -
Over the past decade, India has seen a significant rise in the number of startups. With the government's push towards entrepreneurship and the growth of the digital economy, startups have become an essential part of India's economic landscape.
However, with the growth of startups, there has also been a rise in the number of failures.
In this blog, we will look at Failed Startup in India and Why Startup Failed, and the lessons we can learn from them.
1) Stayzilla -
Stayzilla was a startup that provided online booking services for budget accommodation. The company raised around $34 million in funding before shutting down in 2017. The reason for its failure was attributed to a lack of funds and inability to find a buyer for the company. The founders were also embroiled in a legal battle with their landlord, which added to their problems.
Lesson: Funding is essential for startups, but it is equally important to manage funds wisely. Startups need to have a clear plan for their expenses and revenue. Additionally, startups should have a backup plan in case of unforeseen circumstances.
2) TinyOwl -
TinyOwl was a food delivery startup that raised $27.2 million in funding. However, the company shut down in 2016 due to financial difficulties. The company's management was accused of mismanaging funds, which led to a shortage of cash. The founders were also criticized for expanding too quickly and not focusing enough on profitability.
Lesson: Startups should focus on profitability from the outset. Expanding too quickly can lead to a shortage of cash and put the entire company at risk. Startups should have a clear understanding of their expenses and revenue, and work towards achieving profitability as soon as possible.
3) AskMe -
AskMe was an e-commerce platform that raised around $150 million in funding. The company shut down in 2016 due to financial difficulties. The company's management was accused of mismanagement of funds and delayed payments to vendors. The founders were also criticized for expanding too quickly and not focusing on profitability.
Lesson: Startups should prioritize transparency and communication with their stakeholders, including investors, vendors, and customers. Delayed payments and mismanagement of funds can lead to a loss of trust, which can ultimately lead to the failure of the company.
4) PepperTap -
PepperTap was a grocery delivery startup that raised $51 million in funding. The company shut down in 2016 due to intense competition and a lack of funds. The founders were also criticized for expanding too quickly and not focusing on profitability.
Lesson: Startups should have a clear understanding of their competitive landscape and work towards differentiating themselves from their competitors. Additionally, startups should prioritize profitability from the outset and work towards achieving it.
5) Taskbob -
Taskbob was a home services startup that raised around $5 million in funding. The company shut down in 2017 due to a shortage of funds. The founders were also criticized for expanding too quickly and not focusing on profitability.
Lesson: Startups should focus on building a sustainable business model from the outset. Expanding too quickly can lead to a shortage of funds and put the entire company at risk.
6) Vebbler -
Vebbler was a photo-sharing startup that raised around $500,000 in funding. The company shut down in 2019 due to a lack of funds. The founders were also criticized for not being able to compete with larger players in the market.
Lesson: Startups should have a clear understanding of their competitive landscape and work towards differentiating themselves from their competitors. Additionally, startups should prioritize funding and ensure they have enough runway to achieve their goals.
7) Ruplee -
Ruplee was a mobile payments startup that raised around $1 million in funding. The company shut down in 2017 due to a lack of funds and intense competition in the mobile payments space. The founders were also criticized for not being able to scale their business quickly enough.
Lesson: Startups operating in a crowded market should work towards developing a unique value proposition and differentiating themselves from their competitors. Additionally, startups should prioritize scaling their business quickly enough to gain a foothold in the market.
8) Autoncab -
Autoncab was a cab booking startup that raised around $1.5 million in funding. The company shut down in 2016 due to a lack of funds and intense competition from larger players in the market. The founders were also criticized for not being able to develop a sustainable business model.
Lesson: Startups should focus on developing a sustainable business model that can withstand intense competition from larger players. Additionally, startups should prioritize funding and ensure they have enough runway to achieve their goals.
9) Housing.com -
Housing.com was a real estate portal that raised around $245 million in funding. The company shut down in 2016 due to financial difficulties and a lack of profitability. The founders were also criticized for expanding too quickly and not focusing on profitability.
Lesson: Startups should prioritize profitability from the outset and work towards achieving it. Additionally, startups should have a clear understanding of their expenses and revenue, and work towards developing a sustainable business model.
10) Quickr -
Quickr was a classifieds platform that raised around $350 million in funding. The company shut down in 2021 due to a decline in revenue and profitability. The founders were also criticized for not being able to compete with larger players in the market.
Lesson: Startups should focus on developing a unique value proposition and differentiating themselves from their competitors. Additionally, startups should prioritize adapting to changing market conditions and consumer preferences.
In conclusion, the failure of these startups in India highlights the importance of managing funds wisely, prioritizing profitability, developing a unique value proposition, differentiating oneself from competitors, and adapting to changing market conditions. Startups that can effectively navigate these challenges have a greater chance of success and contributing to India's thriving startup ecosystem.
• Why Startup Failed
There are several reasons why startups fail in India, including:
Lack of Funds -
One of the most common reasons for startup failure is a lack of funds. Many startups fail to secure sufficient funding to continue operations, which ultimately leads to their failure.
Poor Management -
Another common reason for startup failure is poor management. Startups require effective leadership and management to make the right decisions and navigate challenges effectively. Without it, startups may fail to achieve their goals and survive in the market.
Intense Competition -
Startups operating in crowded markets face intense competition from established players, which can make it difficult for them to gain a foothold in the market. Startups must differentiate themselves from their competitors and offer a unique value proposition to succeed in such markets.
Inability to Scale -
Startups Startups that fail to scale their business quickly enough may struggle to achieve profitability or sustain operations in the long run. Scaling a business requires a clear understanding of market dynamics, customer preferences, and effective use of resources.
Lack of Market Demand -
Some startups fail because there is insufficient demand for their product or service in the market. Startups need to conduct thorough market research to identify and validate demand before launching their products or services.
Poor Product Development -
Startups that fail to develop a product or service that meets the needs of the target market may struggle to gain traction and grow. Startups must understand their customers' pain points and develop products or services that solve them effectively.
Legal and Regulatory Issues -
Startups may face legal and regulatory issues that can hinder their growth or lead to their failure. Startups must navigate these issues effectively to continue operating and growing.
Overall, startups in India face several challenges, and success requires effective management, sufficient funding, differentiation, scalability, and a clear understanding of market dynamics and customer preferences.
FAQ:
Q: List of unicorn startup that failed
Ans: Here are a few examples of unicorn startups (privately-held companies valued at over $1 billion) that have failed:
1) Theranos: A blood-testing company that claimed to have developed a new technology for conducting tests with just a few drops of blood. The company was eventually exposed as a fraud and its founder, Elizabeth Holmes, was charged with fraud.
2) Quibi: A mobile-first streaming service that raised $1.75 billion in funding but failed to attract enough subscribers to sustain itself.
3) Juicero: A company that made a $400 juicer that could only be used with its proprietary pre-packaged fruit and vegetable packs. The company shut down after it was discovered that the packs could be squeezed by hand.
4) Jawbone: A fitness tracker and wearable technology company that raised over $900 million in funding, but failed to compete with rivals like Fitbit.
5) Color: A genetic testing company that raised $278 million in funding, but struggled to attract customers and eventually shut down.
6) Homejoy: An on-demand home cleaning service that raised $38 million in funding, but shut down after facing legal challenges related to the classification of its workers as contractors.
7) Zirtual: A virtual assistant service that raised $5.5 million in funding, but had to shut down abruptly after running out of money.
8) Better Place: An electric car charging infrastructure company that raised over $850 million in funding, but was unable to gain traction in the market and went bankrupt.
9) Sprig: A meal delivery service that raised $56.7 million in funding, but had to shut down due to operational challenges.
10) Tilt: A social payment and crowdfunding platform that raised $62 million in funding, but failed to achieve profitability and was acquired by Airbnb at a discount.
Q: Which is the famous failed Startup
Ans : One of the most famous failed startups is Theranos, a blood-testing company that was once valued at $9 billion. The company claimed to have developed a technology that could run a wide range of blood tests using just a few drops of blood from a finger prick, but it was later revealed that the technology did not work as claimed. The founder and CEO, Elizabeth Holmes, was charged with fraud and the company shut down in 2018. The story of Theranos has been the subject of multiple books, documentaries, and a Hollywood film starring Jennifer Lawrence as Holmes.