Yes, Indian Start-Ups Are Failing. Why That's Not All Bad.
"Take a long nap and a cold shower! This is my advice to everyone who asks me what they should do to become an entrepreneur," the founder of digital service provider Sulekha.com, Satya Prabhakar, tells me matter-of-factly. "It isn't easy and mega success isn't for everyone."
Really? Can that be true in a country where it seems every other person (specially if you have the Holy Grail of an IIT and IIM label) has a billion-dollar start-up idea and promises to change the world. "Disruption" and "unicorn" are now uber-cool in our vocabulary and so totally aspirational.
But often forgotten is this: anywhere between 6-7 of every 10 start-ups will fail; some in fact argue failure rate is as high as 90%. Ninety percent! Neil Patel writes in Forbes, "Entrepreneurs may even want to write their failure post-mortem before they launch their business." This, he says, prepares you for reality and hopefully also to work harder and smarter.
And this may just be the year some will heed this advice. 2016 began on a stellar note for India's entrepreneurs: a dedicated day to "celebrate" start-ups which included government ministers led by the Prime Minister, top global entrepreneurs sharing their learnings, and lessons and bigger banner headlines devoted to them. But after a year of monstrous valuations, big acquisitions and bigger hype, 2016 was never going to be an easy year.
The 'Start-Up India Action Plan' was unveiled by PM Modi at an event on January 16
The biggies like Flipkart and Zomato have struggled over valuations and there is pressure to perform, though perish, entrepreneurs argue, is never an option!
When online grocery platform PepperTap shut down in April this year, the alarm bells rang loud. Its founder Navneet Singh wrote a candid, forthright piece on what went wrong for a start-up that seemed to have ticked all the right boxes to become one of India's top three grocery delivery services, with some 20,000 orders delivered daily. The momentum at the top, he says, was intoxicating, but soon "losing cash on every order became a reality and the road to profitability was looking long (very long in fact) and arduous."
If last year's headlines were "How I got funding and rode the wave", this year has been more around 'What wrapping up my start-up taught me." But despite the odds, many say "once an entrepreneur, always an entrepreneur" is spot on. Pardeep Goyal, who has set up companies like SchoolGennie, a school management software, and currently works with a healthcare start-up writes in YourStory, "I have failed several times but I have never quit...I just realised that I got into the wrong business, at the wrong time, with some wrong people. So, I decided to take the financial and emotional hit of failure of the start-up. It was an epic failure. A case study, that has been published in Quartz and YourStory." But he adds, "Failure in my first business was the best thing that happened to my start-up career."
He's not alone, I put the big F, Failure that is, last week to a panel of young entrepreneurs. They included those who were forced to abandon their entrepreneurial dream and take up working to realise someone else's dream. They suffered setbacks, anxiety, unimaginable stress and endless sleepless nights, but insisted entrepreneurship was "in their blood."
"It's a brief hiatus", they argued, "we will start up again, failure has been our best teacher." And this is perhaps what does distinguish entrepreneurs from the rest of the pack. Failure, for them, isn't a bad word, and they don't shy away from admitting mistakes. In fact, Albinder Dhindsa, co-founder of Grofers, an online demand delivery service and Ishan Gupta, founder of EduKart, a higher education enrollment platform, say in once voice that they prefer to hire a "failed" entrepreneur over all others, hoping to learn from their experiences and benefit from an entrepreneur's "hunger to succeed."
That's not to say everyone is a forever entrepreneur. Many are once bitten, twice shy. Endless pressure, long hours with no work-life balance, and the constant challenge to stay ahead of the curve can be a real killer. And I haven't even factored in the struggle to get funding! Many quit, burnt out or just in some desperate need of a "regular" life. A perception-reality mismatch is often to blame.
Despite the many misgivings and rough rides, India remains a Start-Up Nation; in fact, we now rank third globally in the number of start-ups, around 4,200 in October last year. Will they all succeed? Of course not, the majority will fail, and we may never hear of them either. But some will stay the course despite stumbling and may just be the next big thing. They will then hopefully talk about how they did it, and could well encourage another generation of entrepreneurs, underscoring my firm belief that falling is not the same as failing.