Why start-Ups Come To A Stop

India’s start-up ecosystem is booming. Policy framework is encouraging too. Then why aren’t there any Indian Googles and Apples? Here is a clear-eyed analysis

- Shweta Verma

The Indian start-up ecosystem seems to have everything going for it – great ideas, latest technologies, policy support, and, most importantly, investor funding. Then why is it that many start-ups are not able to make it beyond the first year of operations? Even among the ones that somehow manage to stay afloat, more than two-thirds close down within five years.

In the last few years, in particular, we have seen the launch of so many initiatives focused on start-ups, like Start-up India, Make in India, and Skill India, among others. Industry bodies like Nasscom are working closely with the government to create and promote a culture of entrepreneurship. According to a Nasscom report, India saw the emergence of over 1,600 tech start-ups and a record 12 unicorns in 2020, which is the highest ever added in a single calendar year.

Even COVID-19 has not deterred the growth of start-ups, says the industry body. On the contrary, it has accelerated digital adoption and the shift to online, thereby creating new opportunities for tech start-ups. There is significant momentum in the deep-tech space with increased interest from funding agencies to invest in such start-ups, states the report.

So, why are all these opportunities not being translated into successful businesses? What are the reasons behind the failure of so many start-ups?

LACK OF ENTREPRENEURIAL SKILLS