Attitude Vs Arrogance : Start-up Challenges


We all have read that around 75 to 90 percent of the start-ups do not survive. It is not exactly easy to generalise what leads to businesses tumbling and failing as there are plethora of reasons. Few months back, I attended a seminar in Pune. It was on how to keep the organization motivated and how to strive for excellence. The speaker however did mention this: “We Indians are good at execution but not at initiatives.” I would like to share something I read and found absolutely apt.

What is the real difference between the start-ups that survived and the ones that didn’t?

“Leadership is everything; the ultimate responsibility will always lie with the person at the top,” says Royston Guest, founder of Pti Worldwide, the business-growth consultancy. “[There is always inspirational leadership] wherever you see a high-performing business delivering accelerated, sustained and profitable growth.”

But it works both ways, which is why head honchos will also receive the brunt of the blame when their start-ups fail.

One of the reasons Mr. Ratan Tata counts on, is the lack of an encouraging start-up ecosystem. “We don’t have an environment where somebody says, ‘you have a great idea and so you need to be supported.’ We have instead an attitude of ‘we don’t need to have this; we can do well with what we have.”

There are a number of challenges for Indian start-ups, from the stage of incorporation, stages of raising capital, hiring resources, scaling up and making an exit, government policies, globalisation, proper planning, etc. to name a few. We all may know what the problems are, but we need to understand in deep on what is in the core of these problems in order to solve it.

Team – Finding a good team is a first major challenge. Without a good team, your start-up won’t get the desired launch. Any start-up needs a team of dedicated people who know their work and do it at their own will.A good team helps bring in the stability when the start-up is in the growth period. To absorb and manage the pressures and be able to deliver, you need a good team.

Location –This is a major concern. Your start-up should be in a location where it can find the right potential market. India has a lot of diversity in terms of demography, geography and culture. It is a potential as well as a challenge.

Marketing Strategy – We all have seen big advertisements of flipkart, amazon, pepper fry etc. The product or service is no good if the target audience or target market does not know about it. It is one of the key areas. We can’t over-focus on marketing either. For example – Chinese mobile phone maker Leeco, spent above Rs.8 crores a month on advertisement. Later, the company had huge cash crunch and had to exit the Indian market.

Legal Constraints - Once a company has been founded, it’s significant for the members to get acquainted with all the legal constraints associated with the product(s) they are dealing with. We have had quite a number of cases recently with some of the start-ups founder facing jail time or allegations.

Funding –Adequate and appropriate funding is very necessary. This is dependent on business model and convincing the investor. Different types of funding are present and you can read more about it in our previous blog ‘Wings to Your Ideas’.

Proper mentoring –There are always setbacks and hard times in any business. For start-ups, this phase becomes very critical, because if it is not dealt in the right manner, the business may have to be shut. Here, proper mentoring is important. It helps entrepreneurs figure and rectify their mistakes, save them from such blunders in future and prepare them for the arduous journey of building an enterprise.

As per a report by INC. website and survey by CB Insights on 135 failed start-ups, Arrogance of entrepreneurs was the reason behind 85% of the failed stories. Arrogance causes startups to fail through:

No Market Need: 47%

Product Mis-Timed: 13%

Need or Lack of Business Model: 17%

Not Using Network/Advisors: 8%

They also mentioned a single line fix for the same - Temper your overconfidence with the humility to accept criticism without becoming defensive.

This says a lot about where the young are stumbling and there is a serious lack of proper grooming for upcoming entrepreneurs. The government needs to address such bottlenecks to minimise failures and ensure that the start-ups graduate to becoming scaleups.

Those who know and are interested in start-ups may have watched a web series by the name of TVF Pitchers. If we try to decode the message of the web series, you will indeed find that the challenges mentioned above were indeed tackled by them. And also why it is necessary to have a cool head for growing ahead in life.

So be confident yet humble, because ‘Pride is concerned with who is right, Humility is concerned with what is right’ – Ezra T Benson