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Kaustubh Katdare
Kaustubh Katdare • Aug 8, 2013

Why startups fail in India

Just read an interesting article by Mukund Mohan, the startup guy at Microsoft Ventures. Mukund works with startups and helps them grow. You may read the article here. He quotes an interview with Steve Hogan in which the main reason for failure of startups in the Silicon Valley is the founder being a 'solo' founder. That is company with just one founder and not two or more people in the founding team. Mukund compares it with his own experiences in Indian startup community. He finds that most of the startups he worked with and failed had issues between the founders. Quite the opposite of what it's in Silicon Valley. He gives a few examples.

1. First team: Working on B2B Marketplace: The two founders were related and after getting accepted in the Microsoft Ventures program they began contradicting each other's views on several aspects of the business. One founder was the self appointed 'domain expert' and the other was 'technical founder'. The 'domain expert' was an 'expert' only because she didn't have a technical background. The other didn't have experience in the relevant field either. After first few weeks of disagreement, they chose to part ways and keep their relationship intact.

2. Second team: Both founders were excellent in the technical domain - maybe the best you'd find. And their way of solving problems for customers was to come up with even more code. These two developers were reluctant to talk to the customers and engage in problem solving. They thought improving their code was the solution to all the problems their startup was facing!

3. Third team: The third was a strong team of founders and had already worked on a project for about a year. They had all the 'classy' degrees from top colleges and were solving a real pain point for the consumers. However, a few weeks into the startup and they blamed each other for not 'delivering'.

Mukund Mohan attributes the failure to
  1. lack of communication among the founders
  2. inability to stick together during the tough times (every startup has them)
  3. different ideas / versions of the products or services they were developing
  4. lack of customer research to consider viability of the product
I'd add my own experiences / views on it - but I'd like to have a few thoughts from our fellow CEans who're interested in startups or want to setup their own business in future.
It can have both positive and negative effects.If there is an ego or power problem between the founders how it can affect the sustainability of company.If two or more are present the others can help in recovering from hard times.

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