Top 8 Problems Faced By Indian Startups

By Vivek Chakraverty 6 Min Read

The recent spate of activity by venture capitalists and angel investors from both the domestic and international arena in the Indian startup ecosystem bodes well for Indian startups.

The first half of 2017 attracted $5.56 Bn investment in this sector. Despite the sizeable investments made many Indians startups have had to shut shop for a variety of reasons. In this article, we examine the main reasons behind this as we list the top problems faced by an Indian startup.

1. Not Getting the Right Talent

India is an affordable talent storehouse especially when it comes IT, so it is a bit of a paradox that startups are unable to find the right manpower. The key to this conundrum is that not all are eager and excited to work in startups. Startups also need to hone in the timing of getting the right talent.

2. Inability To Bridge The Distance Between Revenue and Burn Rate

Startups should concentrate on managing the burn rate. Instead of losing focus on being funded, startups need to keep a careful eye on this burn rate. Due to increasing competition, a startup must be able to scale efficiently and with swiftness but not lose track of the entire ball game at the same time.

3. External Organizations

Along with the growth of startups, incubators, businesses and institutes which supposedly help startups have sprung along the nook and corner of India’s financial hubs.

They try to exert their influence in the startup scenario and end up doing more harm than good. Startups should not lose focus on the key issue of having a sustainable and profitable business.

4. Insufficient Mentoring Opportunities

One of the common complaints coming from startups is the lack of mentorship opportunities. There is no lack of talent and quality ideas with huge potential but they are not directed properly.

There are a large number of startups in India with good products but are found wanting when it comes to Industry. In such cases, the scenario would have been radically different if they had a good mentor from the word go.

5. The absence of Effective Branding Strategies

In the absence of a branding strategy which clicks startups are unable to flourish with ease. Branding demands utmost importance in a startup’s plans. But affordability is a key issue here.

Startups need to show more commitment to branding and marketing their brand well enough to be able to derive positive reactions from people towards your brand.

6. The Market is Fragmented

Perhaps the fragmented and unorganized nature of markets in India is the bane of Indian Startups and poses a major challenge to the eventual success of startups.

Another great hurdle is the lack of domain knowledge of business owners in the fields in which they are foraying. The changing nature of the behavior of Indian consumers maker the Indian market one with high levels of complexity and diversity.

Acquiring funding is getting easier but that does not mean that all funded startups are concentrating on going after bigger markets. Startups with a pan Indian presence are rare and most become stagnant and eventually close shop.

7. The Tendency to Replicate and Inadequate Infrastructure

Indian startups need to be at the forefront of Innovation and mere emulation of Silicon Valley will not sustain in the long run either in the viability of ideas or business models.

This tendency to emulate must be gotten rid off if India is to emerge as a startup powerhouse. One must at all times be context specific, and address the issues faced by the Indian populace with models reflecting our unique market.

India has huge potential for growth considering that the market remains largely untapped in many segments. But recent changes in policy are addressing this issue of a lack of infrastructure for Indian startups to thrive in.

8. Inability To Reinvent

The last major problem faced by Indian startups is the need for constant reinvention of the service or product as Indian audiences are not in the same book as their western counterparts when it comes to change. You need to match up to the expectations of customers which is also an opportunity. One needs to be able to provide the wow factor again and again.

But as they say, when there is a will there is a way and India is sure to generate indigenous solutions to these common pitfalls for startups today.

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