why do 95% of Startups Fail in India

8 Reasons why do 95% of Startups Fail in India | 2023


Reasons why do 95% of Startups Fail in India

Have you ever wondered or thought about the growing startups? Has it ever crossed your mind that there are so many startups, but not all of them are successful? Many fail on their way to success, they don’t prosper to make it.

According to a report presented by the Oxford Economics and IBM Institute of Business Value, 90% of the start-ups face failures during the first five years, and another report by News18 states that the main reason for the failure of the start-ups is the lack of innovation.

The market evaluation of Indian startups has increased in the past four years, but it is believed by 77 percent of capitalist ventures that their business modules are not unique, a study titled Entrepreneurial India states.

Read More: businesscommunityindia

What might be the other reasons behind it? Why do 95% of startups fail in India? Well, no need to worry, today in this article, we are going to explore eight such reasons for the same.

Lack of Funds: To have sufficient funds for any start-up is one of their necessities, as the funds help the startup sustain and fulfill its financial requirements.

You can have great business or startup ideas in your head, but until you have funds, you cannot do anything. Even to start that business, you need funds. And after starting the business, you will require funds to keep it going.

There was a bike rental startup, in 2018, named Tazzo. They had to shut their startup, the reason being, according to one of their investors, they were lacking a profitable business modal, which exhausted all of their funds that further made them shut down Tazzo.

Lack of Focus: As replied by Bill Gates and Warren Buffet when were asked about their success, it was their focus. To understand this, let us take a look at an example. An example of a food delivery startup is Grubhub. Grubhub from the very beginning of its journey, its owner focused only on food delivery.

Even though they can order many other facilities like catering, picking up of food, etc. but they were focused just on delivery, and not on anything else. And gradually, the product, Grubhub, succeeded.

Leadership Gaps: To know how to lead a brand or startup is more vital than having good ideas. And, lack of leadership is yet another reason why startups fail. Entrepreneurs need to develop leadership skills for their products, not all, though. Some of them already have it.

Bad Partnership: A good partnership is required for the development and betterment of any product or startup, but most of the time it happens that the partnership is not that good, they often have conflicting views, which remain unresolved that further causing internal conflict between the partners.

Each of them thinks that they are working harder than the rest. And by this way, the product starts to dissolve.

They are not Experts: It happens that when people find themselves unable to find a job, they start their own business, instead. They have a vague idea about their business and what they want to do, they think that because they are doing better in a certain thing or work compared to their peers, they will become successful in making a living out of it, which does not help them.

Until they have business skills and expertise in the same, they will have to struggle.

Product Market Fit: This is a straightforward and modest reason why this much of startups fail in India, through their products they are not providing value to consumers and so the consumers are not buying it. In some cases, it also happens that there is no consumer for the product.

And sometimes, the product created by the company does not align with the required innovative idea on which that company is based. Oftentimes, startups try to fast-forward the development of their product or company and by doing so, they fail to create and implement innovative ideas for their product.

Lack of Agility: For startups to bring competitive advantage, agility is important. There are many issues that can be faced by startups, which they often do. Here, they have to solve those challenges by finding solutions. So it is vital for startups to be agile and adaptive, which will help them in progressing.

Failure of Business Model:  Just having a good product with an inspiring website and spending a huge amount of money on ads is not enough for a startup, they need to consider customer acquisition and retention fact that comes with a steep cost.

And for this, the startup needs to have an effective business model so that it can sustain and be profited.


In this blog, so far, we became aware of the reason for the failure of 95% of Indian startups, and also got to know some of the related data or facts, at the starting of this blog.

Read More: https://decisionmaker.in/marketing-strategies-to-surge-up-business-graphs/

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